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                            CHAPTER 203-S.F.No. 1908 
                  An act relating to human services; appropriating 
                  money; changing provisions for health care, long-term 
                  care facilities, children's programs, child support 
                  enforcement, continuing care for disabled persons; 
                  creating a demonstration project for persons with 
                  disabilities; changing provisions for marriage; 
                  accelerating state payments; making technical 
                  amendments to welfare reform; amending Minnesota 
                  Statutes 1996, sections 13.46, subdivision 2; 13.99, 
                  by adding a subdivision; 16A.124, subdivision 4b; 
                  62D.04, subdivision 5; 62E.14, by adding a 
                  subdivision; 62J.69, subdivision 2, and by adding a 
                  subdivision; 62N.25, subdivision 2; 103I.101, 
                  subdivision 6; 103I.208; 103I.401, subdivision 1; 
                  144.0721, subdivision 3; 144.121, subdivision 1, and 
                  by adding subdivisions; 144.125; 144.223; 144.226, 
                  subdivision 1, and by adding a subdivision; 144.394; 
                  144A.071, subdivisions 1, 2, and 4a, as amended; 
                  144A.073, subdivision 2, and by adding a subdivision; 
                  145.925, subdivision 9; 151.40; 153A.17; 157.15, by 
                  adding subdivisions; 157.16, subdivision 3; 214.12, by 
                  adding a subdivision; 245.03, subdivision 2; 245.4882, 
                  subdivision 5; 245.493, subdivision 1, and by adding a 
                  subdivision; 245.652, subdivisions 1 and 2; 245.98, by 
                  adding a subdivision; 245A.11, subdivision 2a; 246.02, 
                  subdivision 2; 246.18, by adding a subdivision; 
                  252.025, subdivisions 1, 4, and by adding a 
                  subdivision; 252.28, by adding a subdivision; 252.32, 
                  subdivisions 1a, 3, 3a, 3c, and 5; 254.04; 254A.17, 
                  subdivision 3; 254B.01, subdivision 3; 254B.02, 
                  subdivisions 1 and 3; 254B.03, subdivision 1; 254B.04, 
                  subdivision 1; 254B.09, subdivisions 4, 5, and 7; 
                  256.01, subdivision 2, and by adding a subdivision; 
                  256.025, subdivisions 2 and 4; 256.045, subdivisions 
                  3, 3b, 4, 5, 7, 8, and 10; 256.476, subdivisions 2, 3, 
                  4, and 5; 256.82, subdivision 1, and by adding a 
                  subdivision; 256.87, subdivisions 1, 1a, 3, 5, and by 
                  adding a subdivision; 256.871, subdivision 6; 256.935; 
                  256.9354, subdivision 8, as added; 256.969, 
                  subdivision 1; 256.9695, subdivision 1; 256.9742; 
                  256.9744, subdivision 2; 256.978, subdivisions 1 and 
                  2; 256.9792, subdivisions 1 and 2; 256.998, 
                  subdivisions 1, 6, 7, and by adding subdivisions; 
                  256B.037, subdivision 1a; 256B.04, by adding a 
                  subdivision; 256B.055, subdivision 12; 256B.056, 
                  subdivisions 4 and 5; 256B.057, subdivisions 1, 1b, 
                  and 2; 256B.06, subdivision 5, as added; 256B.0625, 
                  subdivisions 13, 14, and by adding a subdivision; 
                  256B.0626; 256B.0627, subdivision 5, and by adding a 
                  subdivision; 256B.064, subdivisions 1a, 1c, and 2; 
                  256B.0644; 256B.0911, subdivisions 2 and 7; 256B.0912, 
                  by adding a subdivision; 256B.0913, subdivisions 7, 
                  10, 14, 15, and by adding a subdivision; 256B.0915, 
                  subdivisions 1b, 3, and by adding subdivisions; 
                  256B.0917, subdivisions 7 and 8; 256B.19, subdivision 
                  2a; 256B.421, subdivision 1; 256B.431, subdivisions 
                  3f, 25, and by adding a subdivision; 256B.433, by 
                  adding a subdivision; 256B.434, subdivisions 2, 3, 4, 
                  9, and 10; 256B.49, subdivision 1, and by adding a 
                  subdivision; 256B.69, subdivisions 2, 3a, 5, 5b, and 
                  by adding subdivisions; 256D.02, subdivision 12a, as 
                  amended; 256D.03, subdivisions 2, 2a, 3, as amended, 
                  and 6; 256D.05, subdivisions 1, as amended, and 8, as 
                  amended; 256D.36; 256E.06, by adding a subdivision; 
                  256F.04, subdivisions 1 and 2; 256F.05, subdivisions 
                  2, 3, 4, and 8; 256F.06, subdivisions 1 and 2; 
                  256F.11, subdivision 2; 256G.02, subdivision 6; 
                  256G.05, subdivision 2; 256I.05, subdivision 1a, and 
                  by adding a subdivision; 257.62, subdivisions 1 and 2; 
                  257.66, subdivision 3, and by adding a subdivision; 
                  257.70; 257.75, subdivisions 2, 3, 4, 5, and 7; 
                  299C.46, subdivision 3; 326.37, subdivision 1; 327.20, 
                  subdivision 1; 393.07, subdivision 2; 466.01, 
                  subdivision 1; 469.155, subdivision 4; 471.59, 
                  subdivision 11; 508.63; 508A.63; 517.01; 517.03; 
                  517.08, subdivision 1a; 517.20; 518.005, by adding a 
                  subdivision; 518.10; 518.148, subdivision 2; 518.17, 
                  subdivision 1; 518.171, subdivisions 1 and 4; 518.54, 
                  subdivision 6, and by adding a subdivision; 518.551, 
                  subdivisions 12 and 13; 518.5512, subdivision 2, and 
                  by adding subdivisions; 518.575; 518.68, subdivision 
                  2; 518C.101; 518C.205; 518C.207; 518C.304; 518C.305; 
                  518C.310; 518C.401; 518C.501; 518C.603; 518C.605; 
                  518C.608; 518C.611; 518C.612; 518C.701; 548.091, 
                  subdivisions 1a, 2a, 3a, and by adding subdivisions; 
                  550.37, subdivision 24; 626.556, subdivisions 10b, 
                  10d, 10e, 10f, 11c, and by adding a subdivision; 
                  626.558, subdivisions 1 and 2; and 626.559, 
                  subdivision 5; Laws 1995, chapter 207, article 6, 
                  section 115; article 8, section 41, subdivision 2; 
                  Laws 1997, chapter 7, article 1, section 75; Laws 
                  1997, chapter 85, article 1, sections 7, subdivision 
                  2; 8, subdivision 2; 12, subdivision 3; 16, 
                  subdivision 1; 26, subdivision 2; 32, subdivision 5; 
                  33; and 75; article 3, sections 28, subdivision 1; and 
                  42; Laws 1997, chapter 105, section 7; proposing 
                  coding for new law in Minnesota Statutes, chapters 
                  13B; 62J; 145A; 157; 252; 256; 256B; 256J; 257; 325F; 
                  518; 518C; and 552; repealing Minnesota Statutes 1996, 
                  sections 145.9256; 252.32, subdivision 4; 256.026; 
                  256.74, subdivisions 5 and 7; 256.82, subdivision 1; 
                  256.979, subdivision 9; 256B.057, subdivisions 2a and 
                  2b; 256B.0625, subdivision 13b; 256B.501, subdivision 
                  5c; 256F.05, subdivisions 5 and 7; 469.154, 
                  subdivision 6; 518.5511, subdivisions 5, 6, 7, 8, and 
                  9; 518.611; 518.613; 518.645; 518C.9011; and 609.375, 
                  subdivisions 3, 4, and 6; Minnesota Rules, part 
                  9505.1000. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                                 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 following 
        sections of this article, to be available for the fiscal years 
        indicated for each purpose.  The figures "1998" and "1999" where 
        used in this article, mean that the appropriation or 
        appropriations listed under them are available for the fiscal 
        year ending June 30, 1998, or June 30, 1999, respectively.  
        Where a dollar amount appears in parentheses, it means a 
        reduction of an appropriation.  
                                SUMMARY BY FUND 
        APPROPRIATIONS                                      BIENNIAL
                                  1998          1999           TOTAL
        General          $2,587,119,000 $2,738,148,000 $5,325,267,000
        State Government
        Special Revenue      31,911,000     32,150,000     64,061,000
        Metropolitan 
        Landfill Contingency
        Action Fund             193,000        193,000        386,000
        Trunk Highway         1,652,000      1,678,000      3,330,000
        TOTAL            $2,620,875,000 $2,772,169,000 $5,393,044,000
                                                   APPROPRIATIONS 
                                               Available for the Year 
                                                   Ending June 30 
                                                  1998         1999 
        Sec. 2.  COMMISSIONER OF 
        HUMAN SERVICES 
        Subdivision 1.  Total 
        Appropriation                     $2,511,210,000 $2,663,931,000
                      Summary by Fund
        General           2,510,757,000 2,663,469,000
        State Government
        Special Revenue         453,000       462,000
        Subd. 2.  Agency Management 
        General              25,446,000    24,294,000
        State Government
        Special Revenue         342,000       350,000
        The amounts that may be spent from the 
        appropriation for each purpose are as 
        follows: 
        (a) Financial Operations 
        General               7,683,000     6,518,000
        [RECEIPTS FOR SYSTEMS PROJECTS.] 
        Appropriations and federal receipts for 
        information system projects for MAXIS, 
        electronic benefit system, social 
        services information system, child 
        support enforcement, and Minnesota 
        medicaid information system (MMIS II) 
        must be deposited in the state system 
        account authorized in Minnesota 
        Statutes, section 256.014.  Money 
        appropriated for computer projects 
        approved by the information policy 
        office, 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. 
        [STATE-OPERATED SERVICES BILLING 
        SYSTEMS.] Of this appropriation, 
        $250,000 in fiscal year 1998 is to 
        modify the current state-operated 
        services billing and receipting system 
        to accommodate cost-per-service 
        charging.  As part of this project, the 
        commissioner shall develop cost 
        accounting methods to ensure that 
        regional treatment center chemical 
        dependency program charges are based on 
        actual costs. 
        (b) Legal & Regulation Operations 
        General               6,283,000     6,046,000
        State Government
        Special Revenue         342,000       350,000
        [CHILD CARE LICENSING; FIRE MARSHALL 
        ASSISTANCE.] Of this amount, $200,000 
        for the biennium is for the 
        commissioner to add two deputy state 
        fire marshall positions in the 
        licensing division.  These positions 
        are to improve the speed of licensing 
        child care programs, to provide 
        technical assistance to applicants and 
        providers regarding fire safety, and to 
        improve communication between licensing 
        staff and fire officials.  The state 
        fire marshall shall train and supervise 
        the positions.  The state fire marshall 
        and the department shall develop an 
        interagency agreement outlining the 
        responsibilities and authorities for 
        these positions, and continuation of 
        cooperation to inspect programs that 
        exceed the resources of these two 
        positions.  Unexpended funds for fiscal 
        year 1998 do not cancel but are 
        available to the commissioner for these 
        purposes for fiscal year 1999. 
        [MEALS REIMBURSEMENT FOR PROVIDERS.] 
        The commissioner shall transfer to the 
        commissioner of children, families, and 
        learning up to $10,000 in order to 
        provide reimbursement for meals to 
        providers licensed under Minnesota 
        Rules, parts 9502.0300 to 9502.0445, 
        who were not reimbursed by the 
        commissioner of children, families, and 
        learning in 1996 and 1997 under the 
        child and adult care food program in 
        title 7 of the Code of Federal 
        Regulations, subtitle B, chapter II, 
        subchapter A, part 226, because of 
        problems experienced with the 
        department of human services licensing 
        computer system.  This paragraph is 
        effective the day following final 
        enactment. 
        [AUTHORITY TO WAIVE STATUTES.] (a) In 
        response to the immediate and long-term 
        effects on individuals and public and 
        private entities of the unusually 
        severe conditions of the winter and 
        spring of 1997, the commissioner of 
        human services may waive or grant 
        variances to provisions in chapters 
        245A, 252, 256, 256B, 256D, 256E, 256G, 
        256I, 257, 259, 260, 518, and 626 
        governing:  the transference of funds 
        between grant accounts; rate setting or 
        other funding requirements or limits 
        for specific services; documentation or 
        reporting requirements; licensing 
        requirements; payments, including 
        MinnesotaCare premiums; emergency 
        assistance time limits; general 
        assistance citizenship requirements for 
        student residents; restrictions on 
        receipt of emergency general assistance 
        by AFDC recipients; and other 
        administrative procedures as needed to 
        ensure timely and continuous service to 
        persons receiving or eligible to 
        receive services administered by the 
        commissioner or by the counties under 
        supervision of the commissioner.  In 
        granting a waiver or variance, the 
        commissioner shall consider the impact 
        on the health and safety of vulnerable 
        persons.  Waivers or variances may be 
        restricted to specific geographical 
        areas and specific time periods. 
        (b) The commissioner shall notify the 
        chairs of the senate health and family 
        security committee, health and family 
        security budget division, human 
        resources finance committee, the house 
        health and human services committee, 
        health and human services finance 
        division, and ways and means committee 
        ten days prior to the effective date of 
        any waiver or variance granted under 
        paragraph (a). 
        (c) The appeal rights of applicants 
        for, or recipients of, public 
        assistance or a program of social 
        services under Minnesota Statutes, 
        section 256.045, are not affected by 
        this provision.  Counties and other 
        services providers do not have a right 
        to appeal the commissioner's decision 
        on whether to waive or grant a variance 
        from a statute under this provision. 
        (d) Expenditures under the waivers or 
        variances must not exceed the total 
        appropriation for the commissioner, 
        including any special appropriations 
        for flood relief.  The commissioner 
        shall issue a summary to the chairs of 
        the senate human resources finance and 
        house ways and means committees by 
        January 15, 1998, regarding variances 
        and waivers granted under the terms 
        under this provision. 
        (e) This provision shall be effective 
        the day following final enactment and 
        shall expire February 15, 1998. 
        (c) Management Operations 
        General              11,480,000    11,730,000
        [COMMUNICATION COSTS.] The commissioner 
        shall continue to operate the 
        department of human services 
        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 communication 
        systems.  Each account shall be used to 
        manage shared communication costs 
        necessary for the operation of 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 communication 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 of human services 
        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. 
        [ISSUANCE OPERATIONS CENTER.] Payments 
        to the commissioner from other 
        governmental units and private 
        enterprises for (1) services performed 
        by the issuance operations center, or 
        (2) reports generated by the payment 
        and eligibility systems must be 
        deposited in the state systems account 
        authorized in Minnesota Statutes, 
        section 256.014.  These payments are 
        appropriated to the commissioner for 
        the operation of the issuance center or 
        system, in accordance with Minnesota 
        Statutes, section 256.014. 
        Subd. 3.  Children's Grants
        General              38,127,000    40,177,000
        [INDIAN CHILD WELFARE ACT.] Of this 
        appropriation, $90,000 each year is to 
        provide grants according to Minnesota 
        Statutes, section 257.3571, subdivision 
        2a, to the Indian child welfare defense 
        corporation to promote statewide 
        compliance with the Indian Child 
        Welfare Act. 
        [CHILDREN'S MENTAL HEALTH.] Of this 
        appropriation, $600,000 in fiscal year 
        1998 and $800,000 in fiscal year 1999 
        is for the commissioner to award grants 
        to counties for children's mental 
        health services.  These grants may be 
        used to provide any of the following 
        services specified in Minnesota 
        Statutes, section 245.4871; family 
        community support services under 
        subdivision 17; day treatment services 
        under subdivision 10; case management 
        services under subdivision 3; 
        professional home-based family 
        treatment under subdivision 31; and 
        outpatient services under subdivision 
        29.  Grant funds must be used to 
        provide appropriate personnel and 
        services according to an individual 
        family community support plan under 
        Minnesota Statutes, section 245.4882, 
        subdivision 4, that must be developed, 
        evaluated, and changed where needed, 
        using a process that respects the 
        consumer's identified cultural 
        community and enhances consumer 
        empowerment, best interests and 
        outcomes which strengthens and supports 
        children and their families. 
        In awarding these grants to counties, 
        the commissioner shall work with the 
        state advisory council on mental health 
        to ensure that the process for awarding 
        funds addresses the unmet need for 
        services under Minnesota Statutes, 
        sections 245.487 to 245.4888.  The 
        commissioner shall also ensure that 
        these grant funds are not used to 
        replace existing funds, and that these 
        grant funds are used to enhance service 
        capacity at the community level 
        consistent with Minnesota Statutes, 
        sections 245.487 to 245.4888. 
        Subd. 4.  Children's Services Management
        General               3,541,000     2,072,000
        [SOCIAL SERVICES INFORMATION SYSTEM.] 
        Of this appropriation, $1,500,000 in 
        fiscal year 1998 is for training and 
        implementation costs related to the 
        social services information system.  
        Any unexpended funds shall not cancel 
        but shall be available for fiscal year 
        1999.  This appropriation shall not 
        become part of the base for the 
        biennium beginning July 1, 1999. 
        Subd. 5.  Basic Health Care Grants
                      Summary by Fund
        General             834,098,000   938,504,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) MA Basic Health Care Grants-
        Families and Children
        General             322,970,000   367,726,000
        [NOTICE ON CHANGES IN ASSET TEST.] The 
        commissioner shall provide a notice by 
        July 15, 1997, to all recipients 
        affected by the changes in this act in 
        asset standards for families with 
        children notifying them: 
        (1) what asset limits will apply to 
        them; 
        (2) when the new limits will apply; 
        (3) what options they have to spenddown 
        assets; and 
        (4) what options they have to enroll in 
        MinnesotaCare, including an explanation 
        of the MinnesotaCare premium structure. 
        (b) MA Basic Health Care Grants- 
        Elderly & Disabled
        General             337,659,000   400,408,000
        [PUBLIC HEALTH NURSE ASSESSMENT.] The 
        reimbursement for public health nurse 
        visits relating to the provision of 
        personal care services under Minnesota 
        Statutes, sections 256B.0625, 
        subdivision 19a, and 256B.0627, is 
        $204.36 for the initial assessment 
        visit and $102.18 for each reassessment 
        visit. 
        [SURCHARGE COMPLIANCE.] In the event 
        that federal financial participation in 
        the Minnesota medical assistance 
        program is reduced as a result of a 
        determination that Minnesota is out of 
        compliance with Public Law Number 
        102-234 or its implementing regulations 
        or with any other federal law designed 
        to restrict provider tax programs or 
        intergovernmental transfers, the 
        commissioner shall appeal the 
        determination to the fullest extent 
        permitted by law and may ratably reduce 
        all medical assistance and general 
        assistance medical care payments to 
        providers other than the state of 
        Minnesota in order to eliminate any 
        shortfall resulting from the reduced 
        federal funding.  Any amount later 
        recovered through the appeals process 
        shall be used to reimburse providers 
        for any ratable reductions taken. 
        [BLOOD PRODUCTS LITIGATION.] To the 
        extent permitted by federal law, 
        Minnesota Statutes, sections 256.015, 
        256B.042, 256B.056, and 256B.15 are 
        waived as necessary for the limited 
        purpose of resolving the state's claims 
        in connection with In re Factor VIII or 
        IX Concentrate Blood Products 
        Litigation, MDL-986, No. 93-C7452 
        (N.D.III.). 
        [DISTRIBUTION TO MEDICAL ASSISTANCE 
        PROVIDERS.] (a) Of the amount 
        appropriated to the medical assistance 
        account in fiscal year 1998, $5,000,000 
        plus the federal financial 
        participation amount shall be 
        distributed to medical assistance 
        providers according to the distribution 
        methodology of the medical education 
        research trust fund established under 
        Minnesota Statutes, section 62J.69. 
        (b) In fiscal year 1999, the prepaid 
        medical assistance and prepaid general 
        assistance medical care capitation rate 
        reduction amounts under Minnesota 
        Statutes, section 256B.69, subdivision 
        5c, and the federal financial 
        participation amount associated with 
        the medical assistance reduction, shall 
        be distributed to medical assistance 
        providers according to the distribution 
        methodology of the trust fund. 
        [AUGMENTATIVE AND ALTERNATIVE 
        COMMUNICATION SYSTEMS.] Augmentative 
        and alternative communication systems 
        and related components that are prior 
        authorized by the department through 
        pass through vendors during the period 
        from January 1, 1997, until the 
        augmentative and alternative 
        communication system purchasing program 
        or other alternatives are operational 
        shall be paid under the medical 
        assistance program at the actual price 
        charged the pass through vendor plus 20 
        percent to cover administrative costs 
        of prior authorization and billing and 
        shipping charges.  
        (c) General Assistance Medical Care
        General             173,469,000   170,370,000
        [HEALTH CARE ACCESS TRANSFERS TO 
        GENERAL FUND.] Funds shall be 
        transferred from the health care access 
        fund to the general fund in an amount 
        equal to the projected savings to 
        general assistance medical care (GAMC) 
        that would result from the transition 
        of GAMC parents and adults without 
        children to MinnesotaCare.  Based on 
        this projection, for state fiscal year 
        1998, the amount transferred from the 
        health care access fund to the general 
        fund shall be $13,700,000.  The amount 
        of transfer, if any, necessary for 
        state fiscal year 1999 shall be 
        determined on a pro rata basis. 
        [TUBERCULOSIS COST OF CARE.] Of the 
        general fund appropriation, $89,000 for 
        the biennium is for the cost of care 
        that is required to be paid by the 
        commissioner under Minnesota Statutes, 
        section 144.4872, to diagnose or treat 
        tuberculosis carriers. 
        Subd. 6.  Basic Health Care Management
        General              23,502,000    24,518,000
        [CONSUMER-OWNED HOUSING REVOLVING 
        ACCOUNT.] Effective the day following 
        final enactment, for the fiscal year 
        ending June 30, 1997, the commissioner 
        of human services may transfer $25,000 
        of the appropriation for basic health 
        care management to the commissioner of 
        the Minnesota housing finance agency to 
        establish an account to finance the 
        underwriting requirements of the 
        federal national mortgage association 
        pilot program for persons with 
        disabilities.  The Minnesota housing 
        finance agency may spend money from the 
        account for the purpose of assisting in 
        payment of delinquent mortgage payments 
        of persons participating in the federal 
        National Mortgage Association pilot 
        program for persons with disabilities.  
        Any unexpended balance in this account 
        does not cancel, but is available to 
        the commissioner of the Minnesota 
        housing finance agency for the ongoing 
        purposes of the account. 
        [PROVIDER REIMBURSEMENT FOR HEALTH CARE 
        SERVICES TO CRIME VICTIMS.] Of this 
        appropriation $25,000 each year is for 
        the commissioner to reimburse health 
        care providers for counseling, testing, 
        and early intervention services 
        provided to crime victims who requested 
        the services and who have experienced 
        significant exposure to the HIV virus, 
        as defined in Minnesota Statutes, 
        section 144.761, subdivision 7, as the 
        result of a crime. 
        (a) Health Care Policy Administration
        General               4,256,000     4,316,000
        [CONSUMER SATISFACTION SURVEY.] Any 
        federal matching money received through 
        the medical assistance program for the 
        consumer satisfaction 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. 
        (b) Health Care Operations
        General              19,246,000    20,202,000
        [PREPAID MEDICAL PROGRAMS.] The 
        nonfederal share of the prepaid medical 
        assistance program fund, which has been 
        appropriated to fund county managed 
        care advocacy and enrollment operating 
        costs, shall be disbursed as grants 
        using either a reimbursement or block 
        grant mechanism and may also be 
        transferred between grants and nongrant 
        administration costs with approval of 
        the commissioner of finance. 
        [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. 
        Subd. 7.  State-Operated Services
        General             207,174,000   203,429,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) RTC Facilities
        General             193,647,000   188,883,000
        [MITIGATION RELATED TO DD DOWNSIZING 
        AND MH PILOTS.] Money appropriated to 
        finance mitigation expenses related to 
        the downsizing of regional treatment 
        center developmental disabilities 
        programs and the establishment of 
        mental health pilot projects may be 
        transferred between fiscal years within 
        the biennium. 
        [FUNDING FOR GRAVE MARKERS.] Of this 
        appropriation, $200,000 for the 
        biennium ending June 30, 1999, is for 
        the commissioner to fund markers with 
        the names of individuals whose graves 
        are located at regional treatment 
        centers.  This appropriation is 
        available only after reasonable efforts 
        have been made to acquire funds from 
        private sources to fund the markers, 
        and after the private funds collected, 
        if any, have been exhausted.  Of the 
        $200,000, $5,000 shall be transferred 
        to Advocating Change Together for a 
        public awareness campaign to increase 
        public knowledge of the issues 
        surrounding developmental disabilities 
        and to encourage private contributions 
        to assist in the completion of this 
        project. 
        [RTC CHEMICAL DEPENDENCY PROGRAMS.] 
        When the operations of the regional 
        treatment center chemical dependency 
        fund created in Minnesota Statutes, 
        section 246.18, subdivision 2, are 
        impeded by projected cash deficiencies 
        resulting from delays in the receipt of 
        grants, dedicated income, or other 
        similar receivables, and when the 
        deficiencies would be corrected within 
        the budget period involved, the 
        commissioner of finance may transfer 
        general fund cash reserves into this 
        account as necessary to meet cash 
        demands.  The cash flow transfers must 
        be returned to the general fund in the 
        fiscal year that the transfer was 
        made.  Any interest earned on general 
        fund cash flow transfers accrues to the 
        general fund and not the regional 
        treatment center chemical dependency 
        fund. 
        [SHORT-TERM TREATMENT PROGRAM.] The 
        commissioner shall report to the 
        legislature by January 15, 1998, with 
        recommendations on the establishment of 
        a short-term treatment program of less 
        than 45 days to be administered by the 
        Anoka regional center to serve persons 
        with mental illness.  The report must 
        include a plan to qualify the program 
        for medical assistance reimbursement 
        and estimates of the capital bonding 
        and ongoing funding necessary to 
        operate the program. 
        [RTC PILOT PROJECTS.] The commissioner 
        may authorize regional treatment 
        centers to enter into contracts with 
        health plans that provide services to 
        publicly funded clients to provide 
        services within the diagnostic 
        categories related to mental illness 
        and chemical dependency, provided that 
        the revenue is sufficient to cover 
        actual costs.  Regional treatment 
        centers may establish revenue-based 
        acute care services to be provided 
        under these contracts, separate from 
        the appropriation-based services 
        otherwise provided at the regional 
        treatment center.  The appropriation to 
        regional treatment centers may be used 
        to cover start-up costs related to 
        these services, offset by revenue.  The 
        commissioner, in conjunction with the 
        commissioner of administration, is 
        authorized to modify state contract 
        procedures that would otherwise impede 
        pilot projects in order for the 
        facility to participate in managed care 
        activities.  The commissioner may 
        delegate the execution of these 
        contracts to the chief executive 
        officer of the regional treatment 
        center.  The commissioner shall report 
        to the legislature by January 15, 1998, 
        on pilot project development and 
        implementation. 
        [CAMBRIDGE REGIONAL HUMAN SERVICES 
        CENTER.] (a) The commissioner shall 
        maintain capacity at Cambridge regional 
        human services center and shall 
        continue to provide residential and 
        crisis services at Cambridge for 
        persons with complex behavioral and 
        social problems committed by the courts 
        from the Faribault regional center and 
        Cambridge regional human services 
        center catchment areas.  Campus 
        programs shall operate with the aim of 
        facilitating the return of individuals 
        with clinically complex behavior and 
        social problems to community settings 
        and shall maintain sufficient support 
        services on campus as needed by the 
        programs. 
        (b) The commissioner shall develop and 
        present a plan and recommendations to 
        the legislature by January 15, 1998, 
        for the second phase of the Minnesota 
        extended treatment options (METO) 
        program at Cambridge regional human 
        services center to serve persons with 
        developmental disabilities who pose a 
        public risk.  Phase two shall increase 
        the on-campus program capacity of METO 
        by at least 36 additional beds, unless 
        program configuration changes are 
        agreed to by the affected exclusive 
        bargaining representative. 
        [RTC RESTRUCTURING.] For purposes of 
        restructuring the regional treatment 
        centers and state nursing homes, any 
        regional treatment center or state 
        nursing home employee whose position is 
        to be eliminated shall be afforded the 
        options provided in applicable 
        collective bargaining agreements.  All 
        salary and mitigation allocations from 
        fiscal year 1998 shall be carried 
        forward into fiscal year 1999.  
        Provided there is no conflict with any 
        collective bargaining agreement, any 
        regional treatment center or state 
        nursing home position reduction must 
        only be accomplished through 
        mitigation, attrition, transfer, and 
        other measures as provided in state or 
        applicable collective bargaining 
        agreements and in Minnesota Statutes, 
        section 252.50, subdivision 11, and not 
        through layoff. 
        [RTC POPULATION.] If the resident 
        population at the regional treatment 
        centers is projected to be higher than 
        the estimates upon which the medical 
        assistance forecast and budget 
        recommendations for the 1998-1999 
        biennium were based, the amount of the 
        medical assistance appropriation that 
        is attributable to the cost of services 
        that would have been provided as an 
        alternative to regional treatment 
        center services, including resources 
        for community placements and waivered 
        services for persons with mental 
        retardation and related conditions, is 
        transferred to the residential 
        facilities appropriation. 
        [REPAIRS AND BETTERMENTS.] The 
        commissioner may transfer unencumbered 
        appropriation balances between fiscal 
        years for the state residential 
        facilities repairs and betterments 
        account and special equipment. 
        [PROJECT LABOR.] Wages for project 
        labor may be paid by the commissioner 
        of human services out of repairs and 
        betterments money if the individual is 
        to be engaged in a construction project 
        or a repair project of short-term and 
        nonrecurring nature.  Compensation for 
        project labor shall be based on the 
        prevailing wage rates, as defined in 
        Minnesota Statutes, section 177.42, 
        subdivision 6.  Project laborers are 
        excluded from the provisions of 
        Minnesota Statutes, sections 43A.22 to 
        43A.30, and shall not be eligible for 
        state-paid insurance and benefits. 
        [STATE-OPERATED SERVICES CD 
        CONSOLIDATION.] Notwithstanding the 
        provisions of Minnesota Statutes, 
        section 246.0135, paragraph (a), the 
        commissioner may consolidate the 
        extended plus chemical dependency 
        program operated by Moose Lake Regional 
        State-Operated Services at Cambridge 
        and the chemical dependency program 
        operated by Anoka-Metro Regional 
        Treatment Center at the Anoka 
        location.  With the concurrence of the 
        affected bargaining unit 
        representatives, this consolidation may 
        commence upon the date following 
        enactment. 
        [DEVELOPMENT OF ADULT MENTAL HEALTH 
        PILOT PROJECTS.] The commissioner shall 
        ensure that exclusive bargaining 
        representatives are informed about and 
        allowed to participate in all aspects 
        of the development of adult mental 
        health pilot projects.  Prior to 
        authorizing additional funding for any 
        county adult mental health pilot 
        project, the commissioner shall give 
        written assurance to the affected 
        exclusive bargaining representatives 
        that the mental health pilot project: 
        (1) does not infringe on existing 
        collective bargaining agreements or the 
        relationships between public employees 
        and their employers; 
        (2) will effectively use bargaining 
        unit employees; and 
        (3) will foster cooperative and 
        constructive labor and management 
        practices under Minnesota Statutes, 
        chapters 43A and 179A. 
        [RTC STAFFING LEVELS.] In order to 
        maintain adequate staffing levels 
        during reallocations, downsizing, or 
        transfer of regional center nonfiscal 
        resources, the commissioner must ensure 
        that any reallocation of positions 
        between regional centers does not 
        reduce required staffing at regional 
        center programs for adults and 
        adolescents with mental illness. 
        Each regional treatment center serving 
        persons with mental illness must have a 
        written staffing plan based on program 
        services and treatment plans that are 
        required for individuals with mental 
        illness at the regional center using 
        standards established by the 
        commissioner.  The written plan must 
        include a detailed account of the 
        staffing needed at the regional center 
        for the following inpatient and other 
        psychiatric programs: 
        (1) acute inpatient; 
        (2) long-term inpatient; 
        (3) adolescent programs; and 
        (4) mobile and other crisis services 
        and transitional services. 
        If requested, the regional treatment 
        center chief executive officer must 
        provide the exclusive bargaining 
        representative or any other interested 
        party with a copy of the staffing plan. 
        If the exclusive bargaining 
        representative or another interested 
        party believes that actual staffing or 
        planned staffing for a regional 
        treatment center is not adequate to 
        provide necessary treatment, they may 
        request the ombudsman for mental health 
        and mental retardation to investigate, 
        report findings, and make 
        recommendations under Minnesota 
        Statutes, chapter 245.  If an 
        investigation is requested in light of 
        such circumstances, the report and 
        recommendations must be completed no 
        less than 30 days before an actual 
        reallocation, downsizing of staff, or 
        transfer of nonfiscal resources from a 
        regional treatment center. 
        By November 1, 1997, the commissioner 
        shall begin to develop regional 
        treatment center staffing plans for 
        inpatient and other psychiatric 
        programs.  The commissioner will 
        consult with representatives of 
        exclusive bargaining representatives 
        during the development of these plans.  
        By February 1, 1998, the commissioner 
        shall prepare and transmit to the 
        legislature a report of the staffing 
        level standards for regional treatment 
        centers.  The commissioner may also 
        recommend any changes in statute, 
        rules, and appropriations needed to 
        implement the recommendations. 
        (b) State-Operated Community
        Services - MI Adults 
        General               3,907,000     3,976,000
        (c) State-Operated Community 
        Services - DD
        General               9,620,000    10,570,000
        Subd. 8.  Continuing Care and 
        Community Support Grants
        General           1,097,832,000 1,165,926,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Community Services Block Grants
            55,641,000     55,641,000 
        [CSSA TRADITIONAL APPROPRIATION.] 
        Notwithstanding Minnesota Statutes, 
        section 256E.06, subdivisions 1 and 2, 
        the appropriations available under that 
        section in fiscal years 1998 and 1999 
        must be distributed to each county 
        proportionately to the aid received by 
        the county in calendar year 1996.  The 
        commissioner, in consultation with 
        counties, shall study the formula 
        limitations in subdivision 2 of that 
        section, and report findings and any 
        recommendations for revision of the 
        CSSA formula and its formula limitation 
        provisions to the legislature by 
        January 15, 1998. 
        (b) Consumer Support Grants
             1,757,000      1,757,000 
        (c) Aging Adult Service Grants
             7,900,000      7,928,000 
        [OMBUDSMAN FOR OLDER MINNESOTANS.] Of 
        this appropriation, $150,000 in fiscal 
        year 1998 and $175,000 in fiscal year 
        1999 is for the board on aging's 
        ombudsman for older Minnesotans to 
        expand its activities relating to home 
        care services and other 
        noninstitutional services, and to 
        develop and implement a continuing 
        education program for ombudsman 
        volunteers.  This appropriation shall 
        become part of base-level funding for 
        the biennium beginning July 1, 1999. 
        [HEALTH INSURANCE COUNSELING.] (a) Of 
        this appropriation, $200,000 each year 
        is for the board on aging for the 
        purpose of health insurance counseling 
        and assistance grants to be awarded to 
        the area agencies on aging. 
        (b) Of the amount in paragraph (a), 
        $100,000 per year is for the area 
        agencies in regions participating in 
        the current health insurance counseling 
        pilot program.  The remaining funding 
        shall be distributed on a competitive 
        basis to area agencies on aging in 
        other regions based on criteria 
        developed jointly by the board on aging 
        and the area agencies on aging.  
        (c) The board shall explore 
        opportunities for obtaining alternative 
        funding from nonstate sources, 
        including contributions from 
        individuals seeking health insurance 
        counseling services. 
        [LIVING-AT-HOME/BLOCK NURSE PROGRAMS.] 
        Of this appropriation, $240,000 each 
        fiscal year is for the commissioner to 
        provide funding to 12 additional 
        living-at-home/block nurse programs; 
        $70,000 for the biennium is for the 
        commissioner to increase funding for 
        certain living-at-home/block nurse 
        programs so that funding for all 
        programs is at the same level for each 
        fiscal year; and $50,000 each fiscal 
        year is for the commissioner to provide 
        additional contract funding for the 
        organization awarded the contract for 
        the living-at-home/block nurse program. 
        [CONGREGATE AND HOME-DELIVERED MEALS.] 
        The supplemental funding for nutrition 
        programs serving counties where 
        congregate and home-delivered meals 
        were locally financed prior to 
        participation in the nutrition program 
        of the Older Americans Act shall be 
        awarded at no less than the same levels 
        as in fiscal year 1997. 
        [EPILEPSY LIVING SKILLS.] Of this 
        appropriation, $30,000 each year is for 
        the purposes of providing increased 
        funding for the living skills training 
        program for persons with intractable 
        epilepsy who need assistance in the 
        transition to independent living.  This 
        amount must be included in the base 
        amount for this program. 
        (d) Deaf and Hard-of-Hearing 
        Services Grants
             1,524,000      1,424,000 
        [ASSISTANCE DOGS.] Of this 
        appropriation, $50,000 for the biennium 
        is for the commissioner to provide 
        grants to Minnesota nonprofit 
        organizations that train or provide 
        assistance dogs for persons with 
        disabilities.  This appropriation shall 
        not become part of the base for the 
        biennium beginning July 1, 1999. 
        [GRANT FOR SERVICES TO DEAF-BLIND 
        CHILDREN AND PERSONS.] Of this 
        appropriation, $150,000 for the 
        biennium is for a grant to an 
        organization that provides services to 
        deaf-blind persons.  The grant must be 
        used to provide additional services to 
        deaf-blind children and their 
        families.  Such services may include 
        providing intervenors to assist 
        deaf-blind children in participating in 
        their communities, and family education 
        specialists to teach siblings and 
        parents skills to support the 
        deaf-blind child in the family.  The 
        commissioner shall use a 
        request-for-proposal process to award 
        the grants in this paragraph. 
        Of this appropriation, $150,000 for the 
        biennium is for a grant to an 
        organization that provides services to 
        deaf-blind persons.  The grant must be 
        used to provide assistance to 
        deaf-blind persons who are working 
        towards establishing and maintaining 
        independence.  The commissioner shall 
        use a request-for-proposal process to 
        award the grants in this paragraph. 
        An organization that receives a grant 
        under this provision may expend the 
        grant for any purpose authorized by 
        this provision, and in either year of 
        the biennium. 
        [GRANT FOR SERVICES TO DEAF PERSONS 
        WITH MENTAL ILLNESS.] Of this 
        appropriation, $100,000 the first year 
        and $50,000 the second year is for a 
        grant to a nonprofit agency that 
        currently serves deaf and 
        hard-of-hearing adults with mental 
        illness through residential programs 
        and supported housing outreach 
        activities.  The grant must be used to 
        continue or maintain community support 
        services for deaf and hard-of-hearing 
        adults with mental illness who use or 
        wish to use sign language as their 
        primary means of communication. 
        [ASSESSMENTS FOR DEAF, HARD-OF-HEARING 
        AND DEAF-BLIND CHILDREN.] Of this 
        appropriation, $150,000 each year is 
        for the commissioner to establish a 
        grant program for deaf, hard-of-hearing 
        and deaf-blind children in the state.  
        The grant program shall be used to 
        provide specialized statewide 
        psychological and social assessments, 
        family assessments, and school and 
        family consultation and training.  
        Services provided through this program 
        must be provided in cooperation with 
        the Minnesota resource center; the 
        department of children, families, and 
        learning; the St. Paul-Ramsey health 
        and wellness program serving deaf and 
        hard-of-hearing people; and greater 
        Minnesota community mental health 
        centers. 
        (e) Mental Health Grants
            48,796,000     49,896,000 
        [ADOLESCENT COMPULSIVE GAMBLING GRANT.] 
        $125,000 for fiscal year 1998 and 
        $125,000 for fiscal year 1999 shall be 
        transferred by the director of the 
        lottery from the lottery prize fund 
        created under Minnesota Statutes, 
        section 349A.10, subdivision 2, to the 
        general fund.  $125,000 for fiscal year 
        1998 and $125,000 for fiscal year 1999 
        is appropriated from the general fund 
        to the commissioner for the purposes of 
        a grant to a compulsive gambling 
        council located in St. Louis county for 
        a statewide compulsive gambling 
        prevention and education project for 
        adolescents. 
        [CAMP.] Of this appropriation, $30,000 
        for the biennium is from the mental 
        health special projects account, for 
        adults and children with mental illness 
        from across the state for a camping 
        program which utilizes the Boundary 
        Waters Canoe Area and is cooperatively 
        sponsored by client advocacy, mental 
        health treatment, and outdoor 
        recreation agencies. 
        (f) Developmental Disabilities
        Support Grants
             6,448,000      6,398,000 
        (g) Medical Assistance Long-Term 
        Care Waivers and Home Care
           249,512,000    299,186,000 
        [COUNTY WAIVERED SERVICES RESERVE.] 
        Notwithstanding the provisions of 
        Minnesota Statutes, section 256B.092, 
        subdivision 4, and Minnesota Rules, 
        part 9525.1830, subpart 2, the 
        commissioner may approve written 
        procedures and criteria for the 
        allocation of home- and community-based 
        waivered services funding for persons 
        with mental retardation or related 
        conditions which enables a county to 
        maintain a reserve resource account.  
        The reserve resource account may not 
        exceed five percent of the county 
        agency's total annual allocation of 
        home- and community-based waivered 
        services funds.  The reserve may be 
        utilized to ensure the county's ability 
        to meet the changing needs of current 
        recipients, to ensure the health and 
        safety needs of current recipients, or 
        to provide short-term emergency 
        intervention care to eligible waiver 
        recipients. 
        [REIMBURSEMENT INCREASES.] (a) 
        Effective for services rendered on or 
        after July 1, 1997, the commissioner 
        shall increase reimbursement or 
        allocation rates by five percent, and 
        county boards shall adjust provider 
        contracts as needed, for home and 
        community-based waiver services for 
        persons with mental retardation or 
        related conditions under Minnesota 
        Statutes, section 256B.501; home and 
        community-based waiver services for the 
        elderly under Minnesota Statutes, 
        section 256B.0915; community 
        alternatives for disabled individuals 
        waiver services under Minnesota 
        Statutes, section 256B.49; community 
        alternative care waiver services under 
        Minnesota Statutes, section 256B.49; 
        traumatic brain injury waiver services 
        under Minnesota Statutes, section 
        256B.49; nursing services and home 
        health services under Minnesota 
        Statutes, section 256B.0625, 
        subdivision 6a; personal care services 
        and nursing supervision of personal 
        care services under Minnesota Statutes, 
        section 256B.0625, subdivision 19a; 
        private duty nursing services under 
        Minnesota Statutes, section 256B.0625, 
        subdivision 7; day training and 
        habilitation services for adults with 
        mental retardation or related 
        conditions under Minnesota Statutes, 
        sections 252.40 to 252.47; physical 
        therapy services under Minnesota 
        Statutes, sections 256B.0625, 
        subdivision 8, and 256D.03, subdivision 
        4; occupational therapy services under 
        Minnesota Statutes, sections 256B.0625, 
        subdivision 8a, and 256D.03, 
        subdivision 4; speech-language therapy 
        services under Minnesota Statutes, 
        section 256D.03, subdivision 4, and 
        Minnesota Rules, part 9505.0390; 
        respiratory therapy services under 
        Minnesota Statutes, section 256D.03, 
        subdivision 4, and Minnesota Rules, 
        part 9505.0295; dental services under 
        Minnesota Statutes, sections 256B.0625, 
        subdivision 9, and 256D.03, subdivision 
        4; alternative care services under 
        Minnesota Statutes, section 256B.0913; 
        adult residential program grants under 
        Minnesota Rules, parts 9535.2000 to 
        9535.3000; adult and family community 
        support grants under Minnesota Rules, 
        parts 9535.1700 to 9535.1760; and 
        semi-independent living services under 
        Minnesota Statutes, section 252.275, 
        including SILS funding under county 
        social services grants formerly funded 
        under Minnesota Statutes, chapter 
        256I.  The commissioner shall also 
        increase prepaid medical assistance 
        program capitation rates as appropriate 
        to reflect the rate increases in this 
        paragraph.  Section 13, sunset of 
        uncodified language, does not apply to 
        this paragraph.  
        (b) It is the intention of the 
        legislature that the compensation 
        packages of staff within each service 
        be increased by five percent.  
        (h) Medical Assistance Long-Term
        Care Facilities
           570,291,000    598,115,000 
        [ICF/MR AND NURSING FACILITY 
        INFLATION.] The commissioner shall 
        grant inflation adjustments for nursing 
        facilities with rate years beginning 
        during the biennium according to 
        Minnesota Statutes, section 256B.431, 
        and shall grant inflation adjustments 
        for intermediate care facilities for 
        persons with mental retardation or 
        related conditions with rate years 
        beginning during the biennium according 
        to Minnesota Statutes, section 256B.501.
        [MORATORIUM EXCEPTIONS.] Of this 
        appropriation, $500,000 each year shall 
        be disbursed for the medical assistance 
        costs of moratorium exceptions approved 
        by the commissioner of health under 
        Minnesota Statutes, section 144A.073.  
        Unexpended money appropriated for 
        fiscal year 1998 does not cancel but is 
        available for fiscal year 1999.  
        (i) Alternative Care Grants  
        General              48,355,000    32,278,000
        [PREADMISSION SCREENING TRANSFER.] 
        Effective the day following final 
        enactment, up to $40,000 of the 
        appropriation for preadmission 
        screening and alternative care for 
        fiscal year 1997 may be transferred to 
        the health care administration account 
        to pay the state's share of county 
        claims for conducting nursing home 
        assessments for persons with mental 
        illness or mental retardation as 
        required by Public Law Number 100-203. 
        [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. 
        [PREADMISSION SCREENING AMOUNT.] The 
        preadmission screening payment to all 
        counties shall continue at the payment 
        amount in effect for fiscal year 1997. 
        [PAS/AC APPROPRIATION.] The 
        commissioner may expend the money 
        appropriated for preadmission screening 
        and the alternative care program for 
        these purposes in either year of the 
        biennium. 
        (j) Group Residential Housing
        General              65,974,000    69,562,000
        (k) Chemical Dependency
        Entitlement Grants
        General              36,634,000    38,741,000
        [CHEMICAL DEPENDENCY FUNDS TRANSFER.] 
        $11,340,000 from the consolidated 
        chemical dependency general reserve 
        fund available in fiscal year 1998 is 
        transferred to the general fund. 
        (l) Chemical Dependency 
        Nonentitlement Grants
        General               5,000,000     5,000,000
        Subd. 9.  Continuing Care and
        Community Support Management
        General              19,219,000    19,145,000
        State Government
        Special Revenue         111,000       112,000
        [REGION 10 QUALITY ASSURANCE 
        COMMISSION.] Of this appropriation, 
        $160,000 each year is for the 
        commissioner to allocate to the region 
        10 quality assurance commission for the 
        costs associated with the establishment 
        and operation of the quality assurance 
        pilot project, and for the commissioner 
        to provide grants to counties 
        participating in the alternative 
        quality assurance licensing system 
        under Minnesota Statutes, section 
        256B.0953.  $10,000 each year is for 
        the commissioner to contract with an 
        independent entity to conduct a 
        financial review under Minnesota 
        Statutes, section 256B.0955, paragraph 
        (e); and $5,000 each year is for the 
        commissioner to establish and implement 
        an ongoing evaluation process under 
        Minnesota Statutes, section 256B.0955, 
        paragraph (d).  This appropriation 
        shall not become part of base-level 
        funding for the biennium beginning July 
        1, 1999.  
        [JOINT PURCHASER DEMONSTRATION 
        PROJECT.] Of this appropriation, 
        $50,000 in fiscal year 1998 is for a 
        grant to the Goodhue and Wabasha public 
        health service board to be used for the 
        development and start-up operational 
        costs for a joint purchaser 
        demonstration project described in Laws 
        1995, chapter 207, article 6, section 
        119, in Goodhue and Wabasha counties.  
        This is a one-time appropriation and 
        shall not become part of the base for 
        the 2000-2001 biennial budget. 
        [PILOT PROJECT FOR ASSISTED LIVING 
        SERVICES FOR SENIOR CITIZENS IN PUBLIC 
        HOUSING.] Of this appropriation, 
        $75,000 in fiscal year 1998 is for a 
        pilot project to provide assisted 
        living services for unserved and 
        underserved frail elderly and disabled 
        persons with a focus on those who 
        experience language and cultural 
        barriers.  The project shall offer 
        frail elderly persons an opportunity to 
        receive community-based support 
        services in a public housing setting to 
        enable them to remain in their homes.  
        The project shall also serve younger 
        disabled persons on waiver programs who 
        live in public housing and would 
        otherwise be in nursing homes.  The 
        commissioner shall provide pilot 
        project funding to Hennepin county to 
        contract with the Korean service center 
        at the Cedars high-rises.  The center 
        shall agree to do the following: 
        (1) facilitate or provide needed 
        community support services while taking 
        advantage of current local, state, and 
        federal programs that provide services 
        to senior citizens and handicapped 
        individuals; 
        (2) negotiate appropriate agreements 
        with the Minneapolis public housing 
        authority and Hennepin county; 
        (3) ensure that all participants are 
        screened for eligibility for services 
        by Hennepin county; 
        (4) become a licensed home care service 
        provider or subcontract with a licensed 
        provider to deliver needed services; 
        (5) contract for meals to be provided 
        through its congregate dining program; 
        and 
        (6) form other partnerships as needed 
        to ensure the development of a 
        successful, culturally sensitive 
        program for meeting the needs of 
        Korean, Southeast Asian, and other 
        frail elderly and disabled persons 
        living in public housing in southeast 
        Minneapolis. 
        [PILOT PROJECT ON WOMEN'S MENTAL HEALTH 
        CRISIS SERVICES.] (a) Of this 
        appropriation, $200,000 in fiscal year 
        1998 is to develop a one-year pilot 
        project community-based crisis center 
        for women who are experiencing a mental 
        health crisis as a result of childhood 
        physical or sexual abuse.  The 
        commissioner shall provide pilot 
        project funding to Hennepin county to 
        contract with a four-bed adult foster 
        care facility to provide these services.
        (b) The commissioner shall apply to the 
        federal government for all necessary 
        waivers of medical assistance 
        requirements for funding of mental 
        health clinics so that the services in 
        paragraph (a) may be reimbursed by 
        medical assistance, upon legislative 
        approval, effective July 1, 1998. 
        [SNOW DAYS.] Of this appropriation, 
        $85,000 in fiscal year 1998 shall be 
        disbursed to reimburse day training and 
        habilitation providers for days during 
        which the provider was closed as a 
        result of severe weather conditions in 
        December 1996 to March 1997.  A day 
        training provider must request the aid 
        and provide relevant information to the 
        commissioner, including verfication of 
        the inability to make up days within 
        the provider's yearly budget program 
        calendar.  If the appropriation is 
        insufficient to reimburse for all 
        closed days reported by providers, the 
        commissioner shall disburse the funds 
        to those providers demonstrating the 
        greatest need, measured by the amount 
        of a provider's losses in proportion to 
        the provider's overall budget.  This 
        money shall be distributed no later 
        than September 15, 1997. 
        [DEVELOPMENTAL DISABILITIES PLANNING 
        GRANTS.] Of the appropriation for 
        developmental disabilities 
        demonstration projects, $125,000 in 
        fiscal year 1998 is for grants to 
        additional counties for planning 
        necessary to participate in the 
        projects. 
        Subd. 10.  Economic Support Grants
        General             223,031,000   208,140,000
        [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 grantee of 
        funding. 
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Assistance to Families Grants
        General              89,412,000   110,571,000
        (b) Work Grants              
        General              13,966,000    13,892,000
        [NEW CHANCE PROGRAM.] Of this 
        appropriation, $280,000 for the 
        biennium is for a grant to the new 
        chance program.  The new chance program 
        shall provide comprehensive services 
        through a private, nonprofit agency to 
        young parents in Hennepin county who 
        have dropped out of school and are 
        receiving public assistance.  The 
        program administrator shall report 
        annually to the commissioner on skills 
        development, education, job training, 
        and job placement outcomes for program 
        participants.  This appropriation is 
        available for either year of the 
        biennium.  Base level funding for the 
        biennium beginning July 1, 1999, for 
        this program shall be $140,000 per year.
        (c) Minnesota Family 
        Investment Plan
        General              23,704,000       -0-  
        [WELFARE REFORM CARRYOVER.] Unexpended 
        grant funds for the statewide 
        implementation of the Minnesota family 
        investment program-statewide and 
        employment and training programs and 
        for the work first and work focused 
        pilot programs appropriated in fiscal 
        year 1998 for the implementation of 
        welfare reform initiatives do not 
        cancel and are available to the 
        commissioner for these purposes in 
        fiscal year 1999. 
        (d) Aid to Families With     
        Dependent Children
        General               7,695,000       -0- 
        [AFDC SUPPLEMENTARY GRANTS.] Of the 
        appropriation for AFDC, the 
        commissioner shall provide 
        supplementary grants not to exceed 
        $200,000 a year for AFDC until the AFDC 
        program no longer exists.  The 
        commissioner shall include the 
        following costs in determining the 
        amount of the supplementary grants:  
        major home repairs, repair of major 
        home appliances, utility recaps, 
        supplementary dietary needs not covered 
        by medical assistance, and replacements 
        of furnishings and essential major 
        appliances. 
        [CASH BENEFITS IN ADVANCE.] The 
        commissioner, with the advance approval 
        of the commissioner of finance, is 
        authorized to issue cash assistance 
        benefits up to three days before the 
        first day of each month, including 
        three days before the start of each 
        state fiscal year.  Of the money 
        appropriated for cash assistance grants 
        for each fiscal year, up to three 
        percent of the annual state 
        appropriation is available to the 
        commissioner in the previous fiscal 
        year.  If that amount is insufficient 
        for the costs incurred, an additional 
        amount of the appropriation as needed 
        may be transferred with the advance 
        approval of the commissioner of 
        finance.  This paragraph is effective 
        the day following final enactment. 
        (e) Child Support Enforcement
        General               5,427,000     5,009,000
        [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 PAYMENT CENTER 
        RECOUPMENT ACCOUNT.] The child support 
        payment center is authorized to 
        establish an account to cover checks 
        issued in error or in cases where 
        insufficient funds are available to pay 
        the checks.  All recoupments against 
        payments from the account must be 
        deposited in the child support payment 
        center recoupment account and are 
        appropriated to the commissioner for 
        the purposes of the account.  Any 
        unexpended balance in the account does 
        not cancel, but is available until 
        expended.  For the period June 1, 1997, 
        through June 30, 1997, the commissioner 
        may transfer fiscal year 1997 general 
        fund administrative money to the child 
        support payment center recoupment 
        account to cover underfinanced and 
        unfunded checks during this period 
        only.  This paragraph is effective the 
        day following final enactment. 
        [CHILD SUPPORT ENFORCEMENT CARRYOVER.] 
        Unexpended funds for child support 
        enforcement grants and county 
        performance incentives for fiscal year 
        1998 do not cancel but are available to 
        the commissioner for these purposes for 
        fiscal year 1999. 
        [CHILD SUPPORT ENFORCEMENT 
        APPROPRIATIONS.] Of this appropriation 
        for the biennium ending June 30, 1999, 
        the commissioner shall transfer: 
        $150,000 to the attorney general for 
        the continuation of the public 
        education campaign specified in 
        Minnesota Statutes, section 8.35; and 
        $68,000 to the attorney general for the 
        purposes specified in Minnesota 
        Statutes, section 518.575.  Any balance 
        remaining in the first year does not 
        cancel, but is available in the second 
        year.* (The preceding text beginning 
        "[CHILD SUPPORT ENFORCEMENT 
        APPROPRIATIONS.]" was vetoed by the 
        governor.) 
        (f) General Assistance
        General              55,650,000    49,404,000
        [GA 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 his 
        or her parents or a legal guardian at 
        $203.  The commissioner may reduce this 
        amount in accordance with Laws 1997, 
        chapter 85, article 3, section 54. 
        (g) Minnesota Supplemental Aid
        General              25,572,000    27,659,000
        (h) Refugee Services         
        General               1,605,000     1,605,000
        Subd. 11.  Economic Support  
        Management
        General              38,787,000    37,264,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Economic Support Policy  
        Administration
        General              10,145,000     8,508,000
        [COMBINED MANUAL PRODUCTION COSTS.] The 
        commissioner may increase the fee 
        charged to, and may retain money 
        received from, individuals and private 
        entities in order to recover the 
        difference between the costs of 
        producing the department of human 
        services combined manual and the 
        subsidized price charged to individuals 
        and private entities on January 1, 
        1996.  This provision does not apply to 
        government agencies and nonprofit 
        agencies serving the legal or social 
        service needs of clients. 
        [PLAN FOR TRIBAL OPERATION OF FAMILY 
        ASSISTANCE PROGRAM.] Of this 
        appropriation, $75,000 each year is for 
        the commissioner to apportion to the 
        tribes to assist in the development of 
        a plan for providing state funds in 
        support of a family assistance program 
        administered by Indian tribes that have 
        a reservation in Minnesota and that 
        have federal approval to operate a 
        tribal program.  The commissioner and 
        the tribes shall collaborate in the 
        development of the plan.  The plan 
        shall be reported to the legislature no 
        later than February 15, 1998. 
        [ELIGIBILITY DETERMINATIONS FUNDING.] 
        Increased federal funds for the costs 
        of eligibility determination and other 
        permitted activities that are available 
        to the state through section 114 of the 
        Personal Responsibility and Work 
        Opportunity Reconciliation Act, Public 
        Law Number 104-193, are appropriated to 
        the commissioner. 
        (b) Economic Support Policy  
        Operations
        General              28,642,000    28,756,000
        [ELECTRONIC BENEFIT TRANSFER (EBT) 
        COUNTY ALLOCATION.] Of the amount 
        appropriated for electronic benefit 
        transfer, an allocation shall be made 
        each year to counties for EBT-related 
        expenses. One hundred percent of the 
        appropriation shall be allocated to 
        counties based on each county's average 
        monthly number of food stamp households 
        as a proportion of statewide average 
        monthly food stamp households for the 
        fiscal year ending June 30, 1996. 
        [FRAUD PREVENTION AND CONTROL FUNDING.] 
        Unexpended funds appropriated for the 
        provision of program integrity 
        activities for fiscal year 1998 are 
        also available to the commissioner to 
        fund fraud prevention and control 
        initiatives, and do not cancel but are 
        available to the commissioner for these 
        purposes for fiscal year 1999.  
        Unexpended funds may be transferred 
        between the fraud prevention 
        investigation program and fraud control 
        programs to promote the provisions of 
        Minnesota Statutes, sections 256.983 
        and 256.9861. 
        [TRIBAL OPERATION OF ASSISTANCE 
        PROGRAMS; FEASIBILITY CONSIDERED.] The 
        commissioner of human services, in 
        consultation with the federally-
        recognized Indian tribes, the 
        commissioner of children, families, and 
        learning and the commissioner of 
        economic security, shall explore and 
        report to the legislature, by February 
        15, 1998, on the feasibility of having 
        the federally-recognized Indian tribes 
        administer or operate state and 
        federally funded programs such as 
        MFIP-S, diversionary assistance, food 
        stamps, general assistance, emergency 
        assistance, child support enforcement, 
        and child care assistance. The 
        exploration shall consider the state 
        and federal funding needed for the 
        programs under consideration. 
        [COUNTY AID FOR SUPPLEMENTAL HOUSING 
        ASSISTANCE PROGRAM.] (a) $960,000 is 
        appropriated to the commissioner for 
        fiscal year 1998 to be allocated to 
        counties for the county aid for 
        supplemental assistance program 
        (CASHAP).  CASHAP is a statewide 
        program to help meet the housing needs 
        of legal noncitizens residing in 
        Minnesota on August 22, 1996, who 
        qualified for and received a loan 
        secured by a mortgage on their 
        principal residence, based in part on 
        the expectation of continued receipt of 
        SSI benefits, and who are terminated 
        from SSI benefits under the Personal 
        Responsibility and Work Opportunity 
        Reconciliation Act of 1996, Public Law 
        Number 104-193. 
        (b) The appropriation in paragraph (a) 
        shall be allocated to county social 
        services agencies based on each 
        county's proportion of the total 
        statewide number of legal noncitizens 
        residing in Minnesota on August 22, 
        1996, who are terminated from SSI 
        benefits under Public Law Number 
        104-193.  County agencies shall use 
        their allocation of CASHAP funds to 
        help meet the long-term housing needs 
        of the legal noncitizens described in 
        paragraph (a). 
        (c) If at any time federal SSI benefits 
        are restored for the legal noncitizens 
        described in paragraph (a), the 
        commissioner shall direct the county 
        agencies to redetermine the eligibility 
        of those legal noncitizens for SSI 
        benefits, and convert all legal 
        noncitizens eligible for SSI benefits 
        to the SSI program and utilize 
        available federal funds for those 
        eligible persons.  Legal noncitizens 
        who are converted to federal benefit 
        status are not eligible for assistance 
        under CASHAP.  Legal noncitizens who 
        apply for assistance under CASHAP 
        subsequent to the date that the federal 
        government restores SSI benefits to 
        legal noncitizens must first be 
        screened for federal benefit 
        eligibility. 
        (d) Funds appropriated for CASHAP but 
        not expended in fiscal year 1998 do not 
        cancel to the general fund, but are 
        transferred to the MFIP-S/TANF reserve 
        account created under Minnesota 
        Statutes, section 256J.03. 
        Subd. 12.  Federal TANF Funds       
        [FEDERAL TANF FUNDS.] Federal Temporary 
        Assistance for Needy Families block 
        grant funds authorized under title I of 
        Public Law Number 104-193, the Personal 
        Responsibility and Work Opportunity 
        Reconciliation Act of 1996, are 
        appropriated to the commissioner in 
        amounts up to $276,741,000 in fiscal 
        year 1998 and $265,795,000 in fiscal 
        year 1999.  
        Sec. 3.  COMMISSIONER OF HEALTH 
        Subdivision 1.  Total 
        Appropriation                         72,642,000     71,996,000
                      Summary by Fund
        General              50,589,000    49,733,000
        Metropolitan 
        Landfill Contingency
        Action Fund             193,000       193,000
        State Government
        Special Revenue      21,860,000    22,070,000
        Minnesota Resources     150,000       -0-    
        [LANDFILL CONTINGENCY.] The 
        appropriation from the metropolitan 
        landfill contingency action fund is for 
        monitoring well water supplies and 
        conducting health assessments in the 
        metropolitan area. 
        Subd. 2.  Health Systems
        and Special Populations               48,517,000     48,233,000
                      Summary by Fund
        General              39,295,000    38,998,000
        State Government
        Special Revenue       9,222,000     9,235,000
        [FEES; DRUG AND ALCOHOL COUNSELOR 
        LICENSE.] When setting fees for the 
        drug and alcohol counselor license, the 
        department is exempt from Minnesota 
        Statutes, section 16A.1285, subdivision 
        2. 
        [STATE VITAL STATISTICS REDESIGN 
        PROJECT ACCOUNT.] The amount 
        appropriated from the state government 
        special revenue fund for the vital 
        records redesign project shall be 
        available until expended for 
        development and implementation. 
        [WIC PROGRAM.] Of this appropriation, 
        $650,000 in 1998 is provided to 
        maintain services of the program, 
        $700,000 in 1998 and $700,000 in 1999 
        is added to the base level funding for 
        the WIC food program in order to 
        maintain the existing level of the 
        program, and $100,000 in 1998 is for 
        the commissioner to develop and 
        implement an outreach program to 
        apprise potential recipients of the WIC 
        food program of the importance of good 
        nutrition and the availability of the 
        program. 
        [WIC TRANSFERS.] General fund 
        appropriations for the women, infants, 
        and children (WIC) food supplement 
        program are available for either year 
        of the biennium.  Transfers of 
        appropriations between fiscal years 
        must be for the purpose of maximizing 
        federal funds or minimizing 
        fluctuations in the number of 
        participants.  
        [LOCAL PUBLIC HEALTH FINANCING.] Of the 
        general fund appropriation, $5,000,000 
        each year shall be disbursed for local 
        public health financing and shall be 
        distributed according to the community 
        health service subsidy formula in 
        Minnesota Statutes, section 145A.13.  
        [MINNESOTA CHILDREN WITH SPECIAL HEALTH 
        NEEDS CARRYOVER.] General fund 
        appropriations for treatment services 
        in the services for children with 
        special health care needs program are 
        available for either year of the 
        biennium. 
        [HEALTH CARE ASSISTANCE FOR DISABLED 
        CHILDREN INELIGIBLE FOR SSI.] 
        Notwithstanding the requirements of 
        Minnesota Rules, part 4705.0100, 
        subpart 14, children who:  (a) are 
        eligible for medical assistance as of 
        June 30, 1997, and become ineligible 
        for medical assistance due to changes 
        in supplemental security income 
        disability standards for children 
        enacted in (PRWORA) Public Law Number 
        104-193; and (b) are not eligible for 
        MinnesotaCare, are eligible for health 
        care services through Minnesota 
        services for children with special 
        health care needs under Minnesota 
        Rules, parts 4705.0100 to 4705.1600 for 
        the fiscal year ending June 30, 1998, 
        until eligibility for medical 
        assistance is reestablished.  The 
        commissioner of health shall report to 
        the legislature by March 1, 1998, on 
        the number of children eligible under 
        this provision, their health care 
        needs, family income as a percentage of 
        the federal poverty level, the extent 
        to which families have employer-based 
        health coverage, and recommendations on 
        how to meet the future needs of 
        children eligible under this provision. 
        [AMERICAN INDIAN DIABETES.] Of this 
        appropriation, $90,000 each year shall 
        be disbursed for a comprehensive 
        school-based intervention program 
        designed to reduce the risk factors 
        associated with diabetes among American 
        Indian school children in grades 1 
        through 4. The appropriation for 1998 
        may be carried forward to 1999.  The 
        appropriation for fiscal year 1999 is 
        available only if matched by $1 of 
        nonstate money for each $1 of the 
        appropriation and may be expended in 
        either year of the biennium.  The 
        commissioner shall convene an American 
        Indian diabetes prevention advisory 
        task force.  The task force must 
        include representatives from the 
        American Indian tribes located in the 
        state and urban American Indian 
        representatives.  The task force shall 
        advise the commissioner on the 
        adaptation of curricula and the 
        dissemination of information designed 
        to reduce the risk factors associated 
        with diabetes among American Indian 
        school children in grades 1 through 4.  
        The curricula and information must be 
        sensitive to traditional American 
        Indian values and culture and must 
        encourage full participation by the 
        American Indian community. 
        [HOME VISITING PROGRAMS.] (a) Of this 
        appropriation, $140,000 in 1998 and 
        $870,000 in 1999 is for the home 
        visiting programs for infant care under 
        Minnesota Statutes, section 145A.16.  
        These amounts are available until June 
        30, 1999. 
        (b) Of this appropriation, $225,000 in 
        1998 and $180,000 in 1999 is to 
        continue funding the home visiting 
        programs that received one-year funding 
        under Laws 1995, chapter 480, article 
        1, section 9.  This amount is available 
        until expended. 
        [FETAL ALCOHOL SYNDROME.] Of the 
        general fund appropriation, $625,000 
        each year of the biennium shall be 
        disbursed to prevent and reduce harm 
        from fetal alcohol syndrome and fetal 
        alcohol effect.  
        [COMPLAINT INVESTIGATIONS.] Of the 
        appropriation, $127,000 each year from 
        the state government special revenue 
        fund, and $75,000 each year from the 
        general fund, is for the commissioner 
        to conduct complaint investigations of 
        nursing facilities, hospitals and home 
        health care providers. 
        [COMPLEMENTARY MEDICINE STUDY.] (a) Of 
        the general fund appropriation, $20,000 
        in fiscal year 1998 shall be disbursed 
        for the commissioner of health, in 
        consultation with the commissioner of 
        commerce, to conduct a study based on 
        existing literature, information, and 
        data on the scope of complementary 
        medicine offered in this state.  The 
        commissioner shall: 
        (1) include the types of complementary 
        medicine therapies available in this 
        state; 
        (2) contact national and state 
        complementary medicine associations for 
        literature, information, and data; 
        (3) conduct a general literary review 
        for information and data on 
        complementary medicine; 
        (4) contact the departments of commerce 
        and human services for information on 
        existing registrations, licenses, 
        certificates, credentials, policies, 
        and regulations; and 
        (5) determine by sample, if 
        complementary medicine is currently 
        covered by health plan companies and 
        the extent of the coverage. 
        In conducting this review, the 
        commissioner shall consult with the 
        office of alternative medicine through 
        the National Institute of Health. 
        (b) The commissioner shall, in 
        consultation with the advisory 
        committee, report the study findings to 
        the legislature by January 15, 1998.  
        As part of the report, the commissioner 
        shall make recommendations on whether 
        the state should credential or regulate 
        any of the complementary medicine 
        providers. 
        (c) The commissioner shall appoint an 
        advisory committee to provide expertise 
        and advice on the study.  The committee 
        must include representation from the 
        following groups:  health care 
        providers, including providers of 
        complementary medicine; health plan 
        companies; and consumers.  The advisory 
        committee is governed by Minnesota 
        Statutes, section 15.059, for 
        membership terms and removal of members.
        (d) For purposes of this study, the 
        term "complementary medicine" includes, 
        but is not limited to, acupuncture, 
        homeopathy, manual healing, 
        macrobiotics, naturopathy, biofeedback, 
        mind/body control therapies, 
        traditional and ethnomedicine 
        therapies, structural manipulations and 
        energetic therapies, bioelectromagnetic 
        therapies, and herbal medicine. 
        [DOWN'S SYNDROME.] Of the general fund 
        appropriation, $15,000 in fiscal year 
        1998 shall be disbursed for a grant to 
        a nonprofit organization that provides 
        support to individuals with Down's 
        Syndrome and their families, for the 
        purpose of providing all obstetricians, 
        certified nurse-midwives, and family 
        physicians licensed to practice in this 
        state with informational packets on 
        Down's Syndrome.  The packets must 
        include, at a minimum, a fact sheet on 
        Down's Syndrome, a list of counseling 
        and support groups for families with 
        children with Down's Syndrome, and a 
        list of special needs adoption 
        resources.  The informational packets 
        must be made available to any pregnant 
        patient who has tested positive for 
        Down's Syndrome, either through a 
        screening test or amniocentesis. 
        [NEWBORN SCREENING FOR HEARING LOSS 
        PROGRAM IMPLEMENTATION PLAN.] (a) Of 
        the general fund appropriation, $18,000 
        in fiscal year 1998 shall be disbursed 
        to pay the costs of coordinating with 
        hospitals, the medical community, 
        audiologists, insurance companies, 
        parents, and deaf and hard-of-hearing 
        citizens to establish and implement a 
        voluntary plan for hospitals and other 
        health care facilities to screen all 
        infants for hearing loss. 
        (b) The plan to achieve universal 
        screening of infants for hearing loss 
        on a voluntary basis shall be 
        formulated by a department work group, 
        including the following representatives:
        (1) a representative of the health 
        insurance industry designated by the 
        health insurance industry; 
        (2) a representative of the Minnesota 
        Hospital and Healthcare Partnership; 
        (3) a total of two representatives from 
        the following physician groups 
        designated by the Minnesota Medical 
        Association:  pediatrics, family 
        practice, and ENT; 
        (4) two audiologists designated by the 
        Minnesota Speech-Language-Hearing 
        Association and the Minnesota Academy 
        of Audiology; 
        (5) a representative of hospital 
        neonatal nurseries; 
        (6) a representative of part H (IDEA) 
        early childhood special education; 
        (7) the commissioner of health or a 
        designee; 
        (8) a representative of the department 
        of human services; 
        (9) a public health nurse; 
        (10) a parent of a deaf or 
        hard-of-hearing child; 
        (11) a deaf or hard-of-hearing person; 
        and 
        (12) a representative of the Minnesota 
        commission serving deaf and 
        hard-of-hearing people. 
        Members of the work group shall not 
        collect a per diem or compensation as 
        provided in Minnesota Statutes, section 
        15.0575. 
        (c) The plan shall include measurable 
        goals and timetables for the 
        achievement of universal screening of 
        infants for hearing loss throughout the 
        state and shall include the design and 
        implementation of needed training to 
        assist hospitals and other health care 
        facilities screen infants for hearing 
        loss according to recognized standards 
        of care. 
        (d) The work group shall report to the 
        legislature by January 15, 1998, 
        concerning progress toward the 
        achievement of universal screening of 
        infants in Minnesota for the purpose of 
        assisting the legislature to determine 
        whether this goal can be accomplished 
        on a voluntary basis. 
        [INFANT HEARING SCREENING PROGRAM.] Of 
        the general fund appropriation, $25,000 
        in fiscal year 1998 shall be disbursed 
        for a grant to a hospital in Staples, 
        Minnesota, for the infant hearing 
        screening program. 
        [NURSING HOMES DAMAGED BY FLOODS.] The 
        commissioner shall conduct an expedited 
        process under Minnesota Statutes, 
        section 144A.073, solely to review 
        nursing home moratorium exceptions 
        necessary to repair or replace nursing 
        facilities damaged by spring flooding 
        in 1997.  The commissioner may not 
        issue a request for proposals for 
        moratorium projects not related to 
        spring flooding until this expedited 
        process is completed.  For facilities 
        that require total replacement and the 
        relocation of residents to other 
        facilities during construction, the 
        operating cost payment rates for the 
        new facility shall be determined using 
        the interim and settle-up payment 
        provisions of Minnesota Rules, part 
        9549.0057, and the reimbursement 
        provisions of Minnesota Statutes, 
        section 256B.431, except that 
        subdivision 25, paragraphs (b), clause 
        (3), and (d), shall not apply until the 
        second rate year after the settle-up 
        cost report is filed.  Property-related 
        reimbursement rates shall be determined 
        under Minnesota Rules, chapter 9549, 
        taking into account any federal or 
        state flood-related loans or grants 
        provided to a facility.  The medical 
        assistance costs of this paragraph 
        shall be paid from the amount made 
        available in section 2 of this article 
        for moratorium exceptions.  This 
        paragraph is effective the day 
        following final enactment and is not 
        subject to section 13 of this article. 
        Subd. 3.  Health Protection          20,875,000     20,588,000
                      Summary by Fund
        General               8,202,000     7,718,000
        Metro Landfill
        Contingency             193,000       193,000
        State Government 
        Special Revenue      12,480,000    12,677,000
        [HIV/AIDS PREVENTION.] (a) Of the 
        general fund appropriation, $500,000 in 
        fiscal year 1998 shall be disbursed to 
        provide funding for HIV/AIDS prevention 
        grants under Minnesota Statutes, 
        section 145.924.  
        (b) Of the general fund appropriation, 
        $100,000 each year shall be disbursed 
        for activities related to prevention of 
        perinatal transmission of HIV, a 
        statewide education campaign for 
        pregnant women and their health care 
        providers, and demonstration grants to 
        providers to develop procedures for 
        incorporating HIV awareness and 
        education into perinatal care. 
        (c) The appropriations in paragraphs 
        (a) and (b) shall not become part of 
        base-level funding for the biennium 
        beginning July 1, 1999. 
        [PLAN AND EVALUATION REQUIRED.] Of this 
        appropriation, $100,000 for the 
        biennium is for the commissioner to 
        plan for and evaluate the effects of 
        Minnesota Statutes, sections 151.40, 
        subdivision 18, paragraph (b), 
        325F.785, and 145.924.  The 
        commissioner shall submit an interim 
        report to the legislature by January 
        15, 1998, including a plan for 
        implementing the syringe access 
        initiative to prevent HIV as authorized 
        in Minnesota Statutes, sections 151.40, 
        325F.785, and 145.924.  The plan shall 
        include, but not be limited to, 
        strategies for coordinating the efforts 
        of the commissioner, community health 
        organizations, community-based HIV 
        service organizations, pharmacists, and 
        sellers as defined in Minnesota 
        Statutes, section 325F.785, and others 
        to provide information about the 
        prevention initiative, to maximize 
        opportunities to make referrals to 
        health services, to collect used 
        syringes, and to evaluate the 
        initiative's impact.  A final report, 
        including evaluation, is due by January 
        15, 2002.  The commissioner may seek 
        funding from federal, local, and 
        private sources for this purpose.  The 
        reports shall be presented to the house 
        judiciary and health and human services 
        committees and to the senate crime 
        prevention and health and family 
        security committees. 
        Subd. 4.  Management and
        Support Services                       3,250,000      3,175,000
                      Summary by Fund
        General               3,092,000     3,017,000
        State Government
        Special Revenue         158,000       158,000
        [HEALTH DEPARTMENT COMPUTER PROJECTS.] 
        Money appropriated for computer 
        projects approved by the information 
        policy office, funded by the 
        legislature, and approved by the 
        commissioner of finance does not cancel 
        but is available for development and 
        implementation. 
        [HOSPITAL CONVERSION.] Of the 
        appropriation from the general fund, 
        for the fiscal year ending June 30, 
        1998, the commissioner of health shall 
        provide $75,000 to a 28-bed hospital 
        located in Chisago county that is in 
        the process of closing and converting 
        to an outpatient and emergency services 
        facility, for the facility's EMS and 
        advanced life support services. 
        Sec. 4.  VETERANS NURSING   
        HOMES BOARD                           21,489,000     22,272,000 
        [SPECIAL REVENUE ACCOUNT.] The general 
        fund appropriations made to the 
        veterans homes board shall 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 veterans homes 
        board of directors for the operation of 
        board facilities and programs. 
        [SETTING THE COST OF CARE.] The 
        veterans homes board may set the cost 
        of care at the Fergus Falls facility 
        for fiscal year 1998 based on the cost 
        of average skilled nursing care 
        provided to residents of the 
        Minneapolis veterans home for fiscal 
        year 1998.  The board may set the cost 
        of care at the Fergus Falls facilities 
        for fiscal year 1999 based on the cost 
        of average skilled nursing care for 
        residents of the Minneapolis veterans 
        home for fiscal year 1999. 
        [LICENSED CAPACITY.] The department of 
        health shall not reduce the licensed 
        bed capacity for the Minneapolis 
        veterans home pending completion of the 
        project authorized by Laws 1990, 
        chapter 610, article 1, section 9, 
        subdivision 3. 
        [ALLOWANCE FOR FOOD.] The allowance for 
        food may be adjusted annually to 
        reflect changes in the producer price 
        index, as prepared by the United States 
        Bureau of Labor Statistics, with the 
        approval of the commissioner of 
        finance.  Adjustments for fiscal year 
        1998 and fiscal year 1999 must be based 
        on the June 1996 and June 1997 producer 
        price index respectively, but the 
        adjustment must be prorated if it would 
        require money in excess of the 
        appropriation. 
        Sec. 5.  HEALTH-RELATED BOARDS 
        Subdivision 1.  Total       
        Appropriation                          9,598,000      9,618,000 
        [STATE GOVERNMENT SPECIAL REVENUE 
        FUND.] The appropriations in this 
        section are from the state government 
        special revenue fund. 
        [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. 
        Subd. 2.  Board of Chiropractic 
        Examiners                                332,000        340,000
        Subd. 3.  Board of Dentistry             742,000        760,000
        Subd. 4.  Board of Dietetic
        and Nutrition Practice                    90,000         90,000
        Subd. 5.  Board of Marriage and 
        Family Therapy                           103,000        104,000
        Subd. 6.  Board of Medical  
        Practice                               3,672,000      3,711,000
        [HEALTH PROFESSIONAL SERVICES 
        ACTIVITY.] Of these appropriations, 
        $291,000 the first year and $296,000 
        the second year are for the Health 
        Professional Services Activity. 
        Subd. 7.  Board of Nursing             2,067,000      2,106,000
        [DISCIPLINE AND LICENSING SYSTEMS 
        PROJECT.] Of this appropriation, 
        $235,000 the first year and $235,000 
        the second year is to complete the 
        implementation of the discipline and 
        licensing systems project. 
        Subd. 8.  Board of Nursing 
        Home Administrators                      177,000        181,000
        Subd. 9.  Board of Optometry              82,000         85,000
        Subd. 10.  Board of Pharmacy           1,020,000      1,040,000
        [ADMINISTRATIVE SERVICES UNIT.] Of this 
        appropriation, $216,000 the first year 
        and $222,000 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 Podiatry              33,000         33,000
        Subd. 12.  Board of Psychology           424,000        436,000
        Subd. 13.  Board of Social Work          715,000        588,000
        Subd. 14.  Board of Veterinary 
        Medicine                                 141,000        144,000
        Sec. 6.  EMERGENCY MEDICAL
        SERVICES BOARD                         2,494,000      2,262,000 
                      Summary by Fund
        General                 842,000       584,000
        Trunk Highway         1,652,000     1,678,000
        [COMPREHENSIVE ADVANCED LIFE SUPPORT 
        (CALS).] Of this appropriation, 
        $200,000 in fiscal year 1998 shall be 
        disbursed to implement the 
        comprehensive advanced life support 
        (CALS) program or similar program and 
        $6,000 is for administrative costs of 
        implementing the CALS program. 
        [EMS BOARD DATA COLLECTION.] Of this 
        appropriation, $52,000 for the biennium 
        ending June 30, 1999, is from the 
        general fund to the emergency medical 
        services regulatory to be used as 
        start-up costs for the financial data 
        collection system. 
        Sec. 7.  COUNCIL ON DISABILITY           616,000        631,000
        Sec. 8.  OMBUDSMAN FOR MENTAL 
        HEALTH AND MENTAL RETARDATION          1,399,000      1,298,000
        [CARRYOVER.] $25,000 of the 
        appropriation from Laws 1995, chapter 
        207, article 1, section 7, does not 
        cancel but is available until June 30, 
        1999. 
        Sec. 9.  OMBUDSMAN
        FOR FAMILIES                             157,000        161,000
        Sec. 10.  TRANSFERS 
        Subdivision 1.  Grant Programs
        The commissioner of human services, 
        with the approval of the commissioner 
        of finance, and after notification of 
        the chair of the senate health and 
        family security budget division and the 
        chair of the house health and human 
        services finance division, may transfer 
        unencumbered appropriation balances for 
        the biennium ending June 30, 1999, 
        within fiscal years among the aid to 
        families with dependent children, 
        Minnesota family investment 
        program-statewide, Minnesota family 
        investment plan, 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. 
        Subd. 2.  Approval Required
        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 of finance shall inform 
        the chairs of the house health and 
        human services finance division and the 
        senate health and family security 
        budget division quarterly about 
        transfers made under this provision. 
        Subd. 3.  Transfer 
        Funding appropriated by the legislature 
        may not be transferred to a different 
        department than specified by the 
        legislature without legislative 
        authority. 
        Sec. 11.  PROVISIONS
        (a) Money appropriated to the 
        commissioner of human services for the 
        purchase of provisions within the item 
        "current expense" must be used solely 
        for that purpose.  Money provided and 
        not used for the purchase of provisions 
        must be canceled into the fund from 
        which appropriated, except that money 
        provided and not used for the purchase 
        of provisions because of population 
        decreases may be transferred and used 
        for the purchase of drugs and medical 
        and hospital supplies and equipment 
        with written approval of the governor 
        after consultation with the legislative 
        advisory commission. 
        (b) For fiscal year 1998, the allowance 
        for food may be adjusted to the 
        equivalent of the 75th percentile of 
        the comparable raw food costs for 
        community nursing homes as reported to 
        the commissioner of human services.  
        For fiscal year 1999 an adjustment may 
        be made to reflect the annual change in 
        the United States Bureau of Labor 
        Statistics producer price index as of 
        June 1998 with the approval of the 
        commissioner of finance.  The 
        adjustments for either year must be 
        prorated if they would require money in 
        excess of this appropriation. 
        Sec. 12.  CARRYOVER LIMITATION
        None of the appropriations in this act 
        which are allowed to be carried forward 
        from fiscal year 1998 to fiscal year 
        1999 shall become part of the base 
        level funding for the 2000-2001 
        biennial budget, unless specifically 
        directed by the legislature. 
        Sec. 13.  SUNSET OF UNCODIFIED LANGUAGE
        All uncodified language contained in 
        this article expires on June 30, 1999, 
        unless a different expiration date is 
        explicit. 
        Sec. 14.  COMMISSIONER OF 
        ADMINISTRATION                         1,270,000          -0- 
        [VETERANS HOMES IMPROVEMENTS.] Of this 
        appropriation, $1,270,000 for the 
        biennium is for the commissioner to 
        accomplish the repair and replacement 
        of sanitary sewers, fire protection 
        water mains, roof drains, and deep 
        sandstone tunnels at the Minneapolis 
        veterans home, Minneapolis campus. 
                                   ARTICLE 2 
                               HEALTH DEPARTMENT 
           Section 1.  [62J.49] [AMBULANCE SERVICES FINANCIAL DATA.] 
           Subdivision 1.  [ESTABLISHMENT.] The emergency medical 
        services regulatory board established under chapter 144 shall 
        establish a financial data collection system for all ambulance 
        services licensed in this state.  To establish the financial 
        database, the emergency medical services regulatory board may 
        contract with an entity that has experience in ambulance service 
        financial data collection. 
           Subd. 2.  [DATA CLASSIFICATION.] All financial data 
        collected by the emergency medical services regulatory board 
        shall be classified as nonpublic data under section 13.02, 
        subdivision 9. 
           Sec. 2.  Minnesota Statutes 1996, section 62J.69, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ALLOCATION AND FUNDING FOR MEDICAL EDUCATION AND 
        RESEARCH.] (a) The commissioner may establish a trust fund for 
        the purposes of funding medical education and research 
        activities in the state of Minnesota. 
           (b) By January 1, 1997, the commissioner may appoint an 
        advisory committee to provide advice and oversight on the 
        distribution of funds from the medical education and research 
        trust fund.  If a committee is appointed, the commissioner 
        shall:  (1) consider the interest of all stakeholders when 
        selecting committee members; (2) select members that represent 
        both urban and rural interest; and (3) select members that 
        include ambulatory care as well as inpatient perspectives.  The 
        commissioner shall appoint to the advisory committee 
        representatives of the following groups:  medical researchers, 
        public and private academic medical centers, managed care 
        organizations, Blue Cross and Blue Shield of Minnesota, 
        commercial carriers, Minnesota Medical Association, Minnesota 
        Nurses Association, medical product manufacturers, employers, 
        and other relevant stakeholders, including consumers.  The 
        advisory committee is governed by section 15.059, for membership 
        terms and removal of members and will sunset on June 30, 1999. 
           (c) Eligible applicants for funds are accredited medical 
        education teaching institutions, consortia, and 
        programs operating in Minnesota.  Applications must be submitted 
        by the sponsoring institution on behalf of the teaching program, 
        and must be received by September 30 of each year for 
        distribution by in January 1 of the following year.  An 
        application for funds must include the following: 
           (1) the official name and address of the sponsoring 
        institution, facility, and the official name and address of the 
        facility or program that is applying for funding program on 
        whose behalf the institution is applying for funding; 
           (2) the name, title, and business address of those persons 
        responsible for administering the funds; 
           (3) the total number, type, and specialty orientation of 
        eligible Minnesota-based trainees in each accredited medical 
        education program applying for which funds are being sought; 
           (4) audited clinical training costs per trainee for each 
        medical education program; 
           (5) a description of current sources of funding for medical 
        education costs including a description and dollar amount of all 
        state and federal financial support; 
           (6) other revenue received for the purposes of clinical 
        training; 
           (7) a statement identifying unfunded costs; and 
           (8) other supporting information the commissioner, with 
        advice from the advisory committee, determines is necessary for 
        the equitable distribution of funds. 
           (d) The commissioner shall distribute medical education 
        funds to all qualifying applicants based on the following basic 
        criteria:  (1) total medical education funds available; (2) 
        total eligible trainees in each eligible education program; and 
        (3) the statewide average cost per trainee, by type of trainee, 
        in each medical education program.  Funds distributed shall not 
        be used to displace current funding appropriations from federal 
        or state sources.  Funds shall be distributed to the sponsoring 
        institutions indicating the amount to be paid to each of the 
        sponsor's medical education programs based on the criteria in 
        this paragraph.  Sponsoring institutions which receive funds 
        from the trust fund must distribute approved funds to the 
        medical education program according to the commissioner's 
        approval letter.  Further, programs must distribute funds among 
        the sites of training based on the percentage of total program 
        training performed at each site. 
           (e) Medical education programs receiving funds from the 
        trust fund must submit annual cost and program reports through 
        the sponsoring institution based on criteria established by the 
        commissioner.  The reports must include:  
           (1) the total number of eligible trainees in the program; 
           (2) the type of programs and residencies funded, the 
        amounts of trust fund payments to each program, and within each 
        program, the percentage distributed to each training site; 
           (3) the average cost per trainee and a detailed breakdown 
        of the components of those costs; 
           (4) other state or federal appropriations received for the 
        purposes of clinical training; 
           (5) other revenue received for the purposes of clinical 
        training; and 
           (6) other information the commissioner, with advice from 
        the advisory committee, deems appropriate to evaluate the 
        effectiveness of the use of funds for clinical training.  
           The commissioner, with advice from the advisory committee, 
        will provide an annual summary report to the legislature on 
        program implementation due February 15 of each year. 
           (f) The commissioner is authorized to distribute funds made 
        available through: 
           (1) voluntary contributions by employers or other entities; 
           (2) allocations for the department of human services to 
        support medical education and research; and 
           (3) other sources as identified and deemed appropriate by 
        the legislature for inclusion in the trust fund. 
           (g) The advisory committee shall continue to study and make 
        recommendations on:  
           (1) the funding of medical research consistent with work 
        currently mandated by the legislature and under way at the 
        department of health; and 
           (2) the costs and benefits associated with medical 
        education and research. 
           Sec. 3.  Minnesota Statutes 1996, section 62J.69, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [MEDICAL ASSISTANCE AND GENERAL ASSISTANCE 
        SERVICE.] The commissioner of health, in consultation with the 
        medical education and research costs advisory committee, shall 
        develop a system to recognize those teaching programs which 
        serve higher numbers or high proportions of public program 
        recipients and shall report to the legislative commission on 
        health care access by January 15, 1998, on an allocation formula 
        to implement this system. 
           Sec. 4.  Minnesota Statutes 1996, section 103I.101, 
        subdivision 6, is amended to read: 
           Subd. 6.  [FEES FOR VARIANCES.] The commissioner shall 
        charge a nonrefundable application fee of $100 $120 to cover the 
        administrative cost of processing a request for a variance or 
        modification of rules adopted by the commissioner under this 
        chapter. 
           Sec. 5.  Minnesota Statutes 1996, section 103I.208, is 
        amended to read: 
           103I.208 [WELL NOTIFICATION FILING FEES AND PERMIT FEES.] 
           Subdivision 1.  [WELL NOTIFICATION FEE.] The well 
        notification fee to be paid by a property owner is:  
           (1) for a new well, $100 $120, which includes the state 
        core function fee; and 
           (2) for a well sealing, $20, which includes the state core 
        function fee; and 
           (3) for construction of a dewatering well, $100 $120, which 
        includes the state core function fee, for each well except a 
        dewatering project comprising five or more wells shall be 
        assessed a single fee of $500 $600 for the wells recorded on the 
        notification. 
           Subd. 1a.  [STATE CORE FUNCTION FEE.] The state core 
        function fee to be collected by the state and delegated boards 
        of health and used to support state core functions is: 
           (1) for a new well, $20; and 
           (2) for a well sealing, $5.  
           Subd. 2.  [PERMIT FEE.] The permit fee to be paid by a 
        property owner is:  
           (1) for a well that is not in use under a maintenance 
        permit, $100 annually; 
           (2) for construction of a monitoring well, $100 $120, which 
        includes the state core function fee; 
           (3) for a monitoring well that is unsealed under a 
        maintenance permit, $100 annually; 
           (4) for monitoring wells used as a leak detection device at 
        a single motor fuel retail outlet or petroleum bulk storage site 
        excluding tank farms, the construction permit fee is $100 $120, 
        which includes the state core function fee, per site regardless 
        of the number of wells constructed on the site, and the annual 
        fee for a maintenance permit for unsealed monitoring wells is 
        $100 per site regardless of the number of monitoring wells 
        located on site; 
           (5) for a groundwater thermal exchange device, in addition 
        to the notification fee for wells, $100 $120, which includes the 
        state core function fee; 
           (6) for a vertical heat exchanger, $100 $120; and 
           (7) for a dewatering well that is unsealed under a 
        maintenance permit, $100 annually for each well, except a 
        dewatering project comprising more than five wells shall be 
        issued a single permit for $500 annually for wells recorded on 
        the permit; and 
           (8) for excavating holes for the purpose of installing 
        elevator shafts, $120 for each hole. 
           Sec. 6.  Minnesota Statutes 1996, section 103I.401, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PERMIT REQUIRED.] (a) A person may not 
        construct an elevator shaft until a permit for the hole or 
        excavation is issued by the commissioner.  
           (b) The fee for excavating holes for the purpose of 
        installing elevator shafts is $100 for each hole. 
           (c) The elevator shaft permit preempts local permits except 
        local building permits, and counties and home rule charter or 
        statutory cities may not require a permit for elevator shaft 
        holes or excavations. 
           Sec. 7.  Minnesota Statutes 1996, section 144.121, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REGISTRATION; FEES.] The fee for the 
        registration for X-ray machines and radium other sources of 
        ionizing radiation required to be registered under rules adopted 
        by the state commissioner of health pursuant to section 144.12, 
        shall be in an amount prescribed by the commissioner as 
        described in subdivision 1a pursuant to section 144.122.  The 
        first fee for registration shall be due on January 1, 1975.  The 
        registration shall expire and be renewed as prescribed by the 
        commissioner pursuant to section 144.122. 
           Sec. 8.  Minnesota Statutes 1996, section 144.121, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [FEES FOR X-RAY MACHINES AND OTHER SOURCES OF 
        IONIZING RADIATION.] A facility with x-ray machines or other 
        sources of ionizing radiation must biennially pay an initial or 
        biennial renewal registration fee consisting of a base facility 
        fee of $132 and an additional fee for each x-ray machine or 
        other source of ionizing radiation as follows:  
             (1) medical or veterinary equipment                 $106
             (2) dental x-ray equipment                          $ 66
             (3) accelerator                                     $132
             (4) radiation therapy equipment                     $132
             (5) x-ray equipment not used on humans or animals   $106
             (6) devices with sources of ionizing radiation
                 not used on humans or animals                   $106
             (7) sources of radium                               $198
           Sec. 9.  Minnesota Statutes 1996, section 144.121, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [PENALTY FEE FOR LATE REGISTRATION.] 
        Applications for initial or renewal registrations submitted to 
        the commissioner after the time specified by the commissioner 
        shall be accompanied by a penalty fee of $20 in addition to the 
        fees prescribed in subdivision 1a. 
           Sec. 10.  Minnesota Statutes 1996, section 144.121, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [FEE FOR X-RAY MACHINES AND OTHER SOURCES OF 
        IONIZING RADIATION REGISTERED DURING LAST 12 MONTHS OF A 
        BIENNIAL REGISTRATION PERIOD.] The initial registration fee of 
        x-ray machines or other sources of radiation required to be 
        registered during the last 12 months of a biennial registration 
        period will be 50 percent of the applicable registration fee 
        prescribed in subdivision 1a. 
           Sec. 11.  Minnesota Statutes 1996, section 144.125, is 
        amended to read: 
           144.125 [TESTS OF INFANTS FOR INBORN METABOLIC ERRORS.] 
           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 and (2) the person required in pursuance of the 
        provisions of section 144.215, to register the birth of a child, 
        to cause to have administered to every infant or child in its 
        care tests for hemoglobinopathy, phenylketonuria, and other 
        inborn errors of metabolism in accordance with 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 the 
        results of the tests shall be performed at the times and in the 
        manner prescribed by the commissioner of health.  The 
        commissioner shall charge laboratory service fees for conducting 
        the tests of infants for inborn metabolic errors 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.  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. 
           Sec. 12.  Minnesota Statutes 1996, section 144.226, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WHICH SERVICES ARE FOR FEE.] The fees 
        for any of the following services shall be in the following or 
        an amount prescribed by rule of the commissioner: 
           (a) The fee for the issuance of a certified copy or 
        certification of a vital record, or a certification that the 
        record cannot be found; is $8.  No fee shall be charged for a 
        certified birth or death record that is reissued within one year 
        of the original issue, if the previously issued record is 
        surrendered. 
           (b) The fee for the replacement of a birth certificate; 
        record for all events except adoption is $20. 
           (c) The fee for the filing of a delayed registration of 
        birth or death; is $20. 
           (d) The alteration, correction, or completion fee for the 
        amendment of any vital record, provided that when requested more 
        than one year after the filing of the record is $20.  No fee 
        shall be charged for an alteration, correction, or 
        completion amendment requested within one year after the filing 
        of the certificate; and. 
           (e) The fee for the verification of information from or 
        noncertified copies of vital records is $8 when the applicant 
        furnishes the specific information to locate the record.  When 
        the applicant does not furnish specific information, the fee is 
        $20 per hour for staff time expended.  Specific information 
        shall include the correct date of the event and the correct name 
        of the registrant.  Fees charged shall approximate the costs 
        incurred in searching and copying the records.  The fee shall be 
        payable at time of application. 
           (f) The fee for issuance of a certified or noncertified 
        copy of any document on file pertaining to a vital record or a 
        certification that the record cannot be found is $8. 
           Sec. 13.  Minnesota Statutes 1996, section 144.226, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [VITAL RECORDS SURCHARGE.] In addition to any fee 
        prescribed under subdivision 1, there is a nonrefundable 
        surcharge of $3 for each certified and noncertified birth or 
        death record.  The local or state registrar shall forward this 
        amount to the state treasurer to be deposited into the state 
        government special revenue fund.  This surcharge shall not be 
        charged under those circumstances in which no fee for a birth or 
        death record is permitted under subdivision 1, paragraph (a).  
        This surcharge requirement expires June 30, 2002. 
           Sec. 14.  Minnesota Statutes 1996, section 144.394, is 
        amended to read: 
           144.394 [SMOKING PREVENTION HEALTH PROMOTION AND 
        EDUCATION.] 
           The commissioner may sell at market value, all nonsmoking 
        or tobacco use prevention advertising health promotion and 
        health education materials.  Proceeds from the sale of the 
        advertising materials are appropriated to the department of 
        health for its nonsmoking the program that developed the 
        material. 
           Sec. 15.  Minnesota Statutes 1996, section 145.925, 
        subdivision 9, is amended to read: 
           Subd. 9.  [RULES; REGIONAL FUNDING.] Notwithstanding any 
        rules to the contrary, including rules proposed in the State 
        Register on April 1, 1991, the commissioner, in allocating grant 
        funds for family planning special projects, shall not limit the 
        total amount of funds that can be allocated to an organization 
        that has submitted applications from more than one region, 
        except that no more than $75,000 may be allocated to any grantee 
        within a single region.  For two or more organizations who have 
        submitted a joint application, that limit is $75,000 for each 
        organization.  The commissioner shall allocate to an 
        organization receiving grant funds on July 1, 1997, at least the 
        same amount of grant funds for the 1998 to 1999 grant cycle as 
        the organization received for the 1996 to 1997 grant cycle, 
        provided the organization submits an application that meets 
        grant funding criteria.  This subdivision does not affect any 
        procedure established in rule for allocating special project 
        money to the different regions.  The commissioner shall revise 
        the rules for family planning special project grants so that 
        they conform to the requirements of this subdivision.  In 
        adopting these revisions, the commissioner is not subject to the 
        rulemaking provisions of chapter 14, but is bound by section 
        14.38, subdivision 7. 
           Sec. 16.  [145A.16] [UNIVERSALLY OFFERED HOME VISITING 
        PROGRAMS FOR INFANT CARE.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
        establish a grant program to fund universally offered home 
        visiting programs designed to serve all live births in 
        designated geographic areas.  The commissioner shall designate 
        the geographic area to be served by each program.  At least one 
        program must provide home visiting services to families within 
        the seven-county metropolitan area, and at least one program 
        must provide home visiting services to families outside the 
        metropolitan area.  The purpose of the program is to strengthen 
        families and to promote positive parenting and healthy child 
        development.  
           Subd. 2.  [STEERING COMMITTEE.] The commissioner shall 
        establish an ad hoc steering committee to develop and implement 
        a comprehensive plan for the universally offered home visiting 
        programs.  The members of the ad hoc steering committee shall 
        include, at a minimum, representatives of local public health 
        departments, public health nurses, other health care providers, 
        paraprofessionals, community-based family workers, 
        representatives of the state councils of color, representatives 
        of health insurance plans, and other individuals with expertise 
        in the field of home visiting, early childhood health and 
        development, and child abuse prevention.  
           Subd. 3.  [PROGRAM REQUIREMENTS.] The commissioner shall 
        award grants using a request for proposal system.  Existing home 
        visiting programs or a family services collaborative established 
        under section 256F.13 may apply for the grants.  Health 
        information and assessment, counseling, social support, 
        educational services, and referral to community resources must 
        be offered to all families, regardless of need or risk, 
        beginning prenatally or as soon after birth as possible, and 
        continuing as needed.  Each program applying for a grant must 
        have access to adequate community resources to complement the 
        home visiting services and must be designed to: 
           (1) identify all newborn infants within the geographic area 
        served by the program.  Identification may be made prenatally or 
        at the time of birth; 
           (2) offer a home visit by a trained home visitor.  The 
        offer of a home visit must be made in a way that guarantees that 
        the existence of the pregnancy is not revealed to any other 
        individual without the written consent of the pregnant female.  
        If home visiting is accepted, the first visit must occur 
        prenatally or as soon after birth as possible and must include a 
        public health nursing assessment by a public health nurse; 
           (3) offer, at a minimum, information on infant care, child 
        growth and development, positive parenting, the prevention of 
        disease and exposure to environmental hazards, and support 
        services available in the community; 
           (4) provide information on and referral to health care 
        services, if needed, including information on health care 
        coverage for which the individual or family may be eligible and 
        information on family planning, pediatric preventive services, 
        immunizations, and developmental assessments, and information on 
        the availability of public assistance programs as appropriate; 
           (5) recruit home visit workers who will represent, to the 
        extent possible, all the races, cultures, and languages spoken 
        by eligible families in the designated geographic areas; and 
           (6) train and supervise home visitors in accordance with 
        the requirements established under subdivision 5.  
           Subd. 4.  [COORDINATION.] To minimize duplication, a 
        program receiving a grant must establish a coalition that 
        includes parents, health care providers who provide services to 
        families with young children in the service area, and 
        representatives of local schools, governmental and nonprofit 
        agencies, community-based organizations, health insurance plans, 
        and local hospitals.  A program may use a family services 
        collaborative as the coalition if a collaborative is established 
        in the area served by the program.  The coalition must designate 
        the roles of all provider agencies, family identification 
        methods, referral mechanisms, and payment responsibilities 
        appropriate for the existing systems in the program's service 
        area.  The coalition must also coordinate with other programs 
        offered by school boards under section 121.882, subdivision 2b, 
        and programs offered under section 145A.15.  
           Subd. 5.  [TRAINING.] The commissioner shall establish 
        training requirements for home visitors and minimum requirements 
        for supervision by a public health nurse.  The requirements for 
        nurses must be consistent with chapter 148.  Training must 
        include child development, positive parenting techniques, and 
        diverse cultural practices in child rearing and family systems.  
        A program may use grant money to train home visitors. 
           Subd. 6.  [EVALUATION.] (a) The commissioner shall evaluate 
        the effectiveness of the home visiting programs, taking into 
        consideration the following goals:  
           (1) appropriate child growth, development, and access to 
        health care; 
           (2) appropriate utilization of preventive health care and 
        medical care for acute illnesses; 
           (3) lower rates of substantiated child abuse and neglect; 
           (4) up-to-date immunizations; 
           (5) a reduction in unintended pregnancies; 
           (6) increasing families' understanding of lead poisoning 
        prevention; 
           (7) lower rates of unintentional injuries; and 
           (8) fewer hospitalizations and emergency room visits.  
           (b) The commissioner shall compare overall outcomes of 
        universally offered home visiting programs with targeted home 
        visiting programs and report the findings to the legislature.  
        The report must also include information on how home visiting 
        programs will coordinate activities and preventive services 
        provided by health plans and other organizations. 
           (c) The commissioner shall report to the legislature by 
        February 15, 1998, on the comprehensive plan for the universally 
        offered home visiting programs and recommend any draft 
        legislation needed to implement the plan.  The commissioner 
        shall report to the legislature biennially beginning December 
        15, 2001, on the effectiveness of the universally offered home 
        visiting programs.  In the report due December 15, 2001, the 
        commissioner shall include recommendations on the feasibility 
        and cost of expanding the program statewide.  
           Subd. 7.  [TECHNICAL ASSISTANCE.] The commissioner shall 
        provide administrative and technical assistance to each program, 
        including assistance conducting short- and long-term evaluations 
        of the home visiting program required under subdivision 6.  The 
        commissioner may request research and evaluation support from 
        the University of Minnesota.  
           Subd. 8.  [MATCHING FUNDS.] The commissioner and the grant 
        programs shall seek to supplement any state funding with private 
        and other nonstate funding sources, including other grants and 
        insurance coverage for services provided.  Program funding may 
        be used only to supplement, not to replace, existing funds being 
        used for home visiting.  
           Subd. 9.  [PAYMENT FOR HOME VISITING SERVICES.] Any health 
        plan that provides services to families or individuals enrolled 
        in medical assistance, general assistance medical care, or the 
        MinnesotaCare program must contract with the programs receiving 
        grants under this section and the programs established under 
        section 145A.15 that are providing home visiting services in the 
        area served by the health plan to provide home visiting services 
        covered under medical assistance, general assistance medical 
        care, or the MinnesotaCare program to their enrollees.  A health 
        plan may require a home visiting program to comply with the 
        health plan's requirements on the same basis as the health 
        plan's other participating providers. 
           Sec. 17.  Minnesota Statutes 1996, section 151.40, is 
        amended to read: 
           151.40 [POSSESSION AND SALE OF HYPODERMIC SYRINGES AND 
        NEEDLES.] 
           Subdivision 1.  [GENERALLY.] Except as otherwise provided 
        in subdivision 2, it shall be is unlawful for any person to 
        possess, control, manufacture, sell, furnish, dispense, or 
        otherwise dispose of hypodermic syringes or needles or any 
        instrument or implement which can be adapted for subcutaneous 
        injections, except by the following persons when acting in the 
        course of their practice or employment: licensed practitioners, 
        registered pharmacies and their employees or agents, licensed 
        pharmacists, licensed doctors of veterinary medicine or their 
        assistants, registered nurses, registered medical technologists, 
        medical interns, licensed drug wholesalers, their employees or 
        agents, licensed hospitals, licensed nursing homes, bona fide 
        hospitals where animals are treated, licensed morticians, 
        syringe and needle manufacturers, their dealers and agents, 
        persons engaged in animal husbandry, clinical laboratories, 
        persons engaged in bona fide research or education or industrial 
        use of hypodermic syringes and needles provided such persons 
        cannot use hypodermic syringes and needles for the 
        administration of drugs to human beings unless such drugs are 
        prescribed, dispensed, and administered by a person lawfully 
        authorized to do so, persons who administer drugs pursuant to an 
        order or direction of a licensed doctor of medicine or of a 
        licensed doctor of osteopathy duly licensed to practice medicine.
           Subd. 2.  [SALES OF LIMITED QUANTITIES OF CLEAN NEEDLES AND 
        SYRINGES.] (a) A registered pharmacy or its agent or a licensed 
        pharmacist may sell, without a prescription, unused hypodermic 
        needles and syringes in quantities of ten or fewer, provided the 
        pharmacy or pharmacist complies with all of the requirements of 
        this subdivision. 
           (b) At any location where hypodermic needles and syringes 
        are kept for retail sale under this subdivision, the needles and 
        syringes shall be stored in a manner that makes them available 
        only to authorized personnel and not openly available to 
        customers. 
           (c) No registered pharmacy or licensed pharmacist may 
        advertise to the public the availability for retail sale, 
        without a prescription, of hypodermic needles or syringes in 
        quantities of ten or fewer. 
           (d) A registered pharmacy or licensed pharmacist that sells 
        hypodermic needles or syringes under this subdivision may give 
        the purchaser the materials developed by the commissioner of 
        health under section 325F.785. 
           (e) A registered pharmacy or licensed pharmacist that sells 
        hypodermic needles or syringes must certify to the commissioner 
        of health participation in an activity, including but not 
        limited to those developed under section 325F.785, that supports 
        proper disposal of used hypodermic needles or syringes. 
           Sec. 18.  Minnesota Statutes 1996, 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 $280 $165 for audiologists 
        registered under section 148.511 and $490 for all others, the 
        examination fee is $200 for the written portion and $200 for the 
        practical portion each time one or the other is taken, and the 
        trainee application fee is $100, except that the certification 
        application fee for a registered audiologist is $280 minus the 
        audiologist registration fee of $101.  In addition, both 
        certification and examination fees are subject to 
        Notwithstanding the policy set forth in section 16A.1285, 
        subdivision 2, a surcharge of $60 $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, over a five-year period, the commissioner's 
        accumulated direct expenditures for administering the 
        requirements of this chapter, but not registration of hearing 
        instrument dispensers under section 214.13, before November 1, 
        1994.  The penalty fee for late submission of a renewal 
        application is $70 $200.  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. 19.  Minnesota Statutes 1996, section 157.15, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [CRITICAL CONTROL POINT.] "Critical control 
        point" means a point or procedure in a specific food system 
        where loss of control may result in an unacceptable health risk. 
           Sec. 20.  Minnesota Statutes 1996, section 157.15, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [HACCP PLAN.] "Hazard analysis critical control 
        point (HACCP) plan" means a written document that delineates the 
        formal procedures for following the HACCP principles developed 
        by the National Advisory Committee on Microbiological Criteria 
        for Foods. 
           Sec. 21.  Minnesota Statutes 1996, section 157.15, is 
        amended by adding a subdivision to read: 
           Subd. 18.  [HAZARD.] "Hazard" means any biological, 
        chemical, or physical property that may cause an unacceptable 
        consumer health risk.  
           Sec. 22.  Minnesota Statutes 1996, section 157.16, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ESTABLISHMENT FEES; DEFINITIONS.] (a) The 
        following fees are required for food and beverage service 
        establishments, hotels, motels, lodging establishments, and 
        resorts licensed under this chapter.  Food and beverage service 
        establishments must pay the highest applicable fee under 
        paragraph (e), clause (1), (2), (3), or (4), and establishments 
        serving alcohol must pay the highest applicable fee under 
        paragraph (e), clause (6) or (7). 
           (b) All food and beverage service establishments, except 
        special event food stands, and all hotels, motels, lodging 
        establishments, and resorts shall pay an annual base fee of $100.
           (c) A special event food stand shall pay a flat fee of $60 
        annually.  "Special event food stand" means a fee category where 
        food is prepared or served in conjunction with celebrations, 
        county fairs, or special events from a special event food stand 
        as defined in section 157.15. 
           (d) A special event food stand-limited shall pay a flat fee 
        of $30. 
           (e) In addition to the base fee in paragraph (b), each food 
        and beverage service establishment, other than a special event 
        food stand, and each hotel, motel, lodging establishment, and 
        resort shall pay an additional annual fee for each fee category 
        as specified in this paragraph: 
           (1) Limited food menu selection, $30.  "Limited food menu 
        selection" means a fee category that provides one or more of the 
        following: 
           (i) prepackaged food that receives heat treatment and is 
        served in the package; 
           (ii) frozen pizza that is heated and served; 
           (iii) a continental breakfast such as rolls, coffee, juice, 
        milk, and cold cereal; 
           (iv) soft drinks, coffee, or nonalcoholic beverages; or 
           (v) cleaning for eating, drinking, or cooking utensils, 
        when the only food served is prepared off site. 
           (2) Small menu selection with limited equipment 
        establishment, including boarding establishments, $55.  
        "Small menu selection with limited equipment establishment" 
        means a fee category that has no salad bar and meets one or more 
        of the following: 
           (i) possesses food service equipment that consists of no 
        more than a deep fat fryer, a grill, two hot holding containers, 
        and one or more microwave ovens; 
           (ii) serves dipped ice cream or soft serve frozen desserts; 
           (iii) serves breakfast in an owner-occupied bed and 
        breakfast establishment; or 
           (iv) is a boarding establishment; or 
           (v) meets the equipment criteria in clause (3), item (i) or 
        (ii), and has a maximum patron seating capacity of not more than 
        50.  
           (3) Small Medium establishment with full menu selection, 
        $150.  "Small Medium establishment with full menu selection" 
        means a fee category that meets one or more of the following: 
           (i) possesses food service equipment that includes a range, 
        oven, steam table, salad bar, or salad preparation area; 
           (ii) possesses food service equipment that includes more 
        than one deep fat fryer, one grill, or two hot holding 
        containers; or 
           (iii) is an establishment where food is prepared at one 
        location and served at one or more separate locations. 
           Establishments meeting criteria in clause (2), item (v), 
        are not included in this fee category.  
           (4) Large establishment with full menu selection, $250.  
        "Large establishment with full menu selection" means either: 
           (i) a fee category that (A) meets the criteria in clause 
        (3), items (i) or (ii), for a small medium establishment with 
        full menu selection, (B) seats more than 175 people, and (C) 
        offers the full menu selection an average of five or more days a 
        week during the weeks of operation; or 
           (ii) a fee category that (A) meets the criteria in clause 
        (3), item (iii), for a small medium establishment with full menu 
        selection, and (B) prepares and serves 500 or more meals per day.
           (5) Other food and beverage service, including food carts, 
        mobile food units, seasonal temporary food stands, and seasonal 
        permanent food stands, $30. 
           (6) Beer or wine table service, $30.  "Beer or wine table 
        service" means a fee category where the only alcoholic beverage 
        service is beer or wine, served to customers seated at tables. 
           (7) Alcoholic beverage service, other than beer or wine 
        table service, $75. 
           "Alcohol beverage service, other than beer or wine table 
        service" means a fee category where alcoholic mixed drinks are 
        served or where beer or wine are served from a bar. 
           (8) Lodging per sleeping accommodation unit, $4, including 
        hotels, motels, lodging establishments, and resorts, up to a 
        maximum of $400.  "Lodging per sleeping accommodation unit" 
        means a fee category including the number of guest rooms, 
        cottages, or other rental units of a hotel, motel, lodging 
        establishment, or resort; or the number of beds in a dormitory. 
           (9) First public swimming pool, $100; each additional 
        public swimming pool, $50.  "Public swimming pool" means a fee 
        category that has the meaning given in Minnesota Rules, part 
        4717.0250, subpart 8. 
           (10) First spa, $50; each additional spa, $25.  "Spa pool" 
        means a fee category that has the meaning given in Minnesota 
        Rules, part 4717.0250, subpart 9. 
           (11) Private sewer or water, $30.  "Individual private 
        water" means a fee category with a water supply other than a 
        community public water supply as defined in Minnesota Rules, 
        chapter 4720.  "Individual private sewer" means a fee category 
        with an individual sewage treatment system which uses subsurface 
        treatment and disposal. 
           (f) A fee is not required for a food and beverage service 
        establishment operated by a school as defined in sections 120.05 
        and 120.101. 
           (g) A fee of $150 for review of the construction plans must 
        accompany the initial license application for food and beverage 
        service establishments, hotels, motels, lodging establishments, 
        or resorts. 
           (h) When existing food and beverage service establishments, 
        hotels, motels, lodging establishments, or resorts are 
        extensively remodeled, a fee of $150 must be submitted with the 
        remodeling plans. 
           (i) Seasonal temporary food stands, special event food 
        stands, and special event food stands-limited are not required 
        to submit construction or remodeling plans for review. 
           Sec. 23.  [157.215] [PILOT PROJECT.] 
           The commissioner of health is authorized to issue a request 
        for participation to the regulated food and beverage service 
        establishment industry and to select up to 25 pilot projects 
        utilizing HACCP quality assurance principles for monitoring risk.
           Sec. 24.  Minnesota Statutes 1996, section 214.12, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [FETAL ALCOHOL SYNDROME.] The board of medical 
        practice and the board of nursing shall require by rule that 
        family practitioners, pediatricians, obstetricians and 
        gynecologists, and other licensees who have primary 
        responsibility for diagnosing and treating fetal alcohol 
        syndrome in pregnant women or children receive education on the 
        subject of fetal alcohol syndrome and fetal alcohol effects, 
        including how to:  (1) screen pregnant women for alcohol abuse; 
        (2) identify affected children; and (3) provide referral 
        information on needed services. 
           Sec. 25.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 14, is amended to read: 
           Subd. 14.  [DIAGNOSTIC, SCREENING, AND PREVENTIVE 
        SERVICES.] (a) Medical assistance covers diagnostic, screening, 
        and preventive services.  
           (b) "Preventive services" include services related to 
        pregnancy, including: 
           (1) services for those conditions which may complicate a 
        pregnancy and which may be available to a pregnant woman 
        determined to be at risk of poor pregnancy outcome; 
           (2) prenatal HIV risk assessment, education, counseling, 
        and testing; and 
           (3) alcohol abuse assessment, education, and counseling on 
        the effects of alcohol usage while pregnant.  Preventive 
        services available to a woman at risk of poor pregnancy outcome 
        may differ in an amount, duration, or scope from those available 
        to other individuals eligible for medical assistance. 
           (c) "Screening services" include, but are not limited to, 
        blood lead tests. 
           Sec. 26.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 5c.  [MEDICAL EDUCATION AND RESEARCH TRUST FUND.] (a) 
        Beginning in January 1999 and each year thereafter: 
           (1) the commissioner of human services shall transfer an 
        amount equal to the reduction in the prepaid medical assistance 
        and prepaid general assistance medical care payments resulting 
        from clause (2), excluding nursing facility and elderly waiver 
        payments, to the medical education and research trust fund 
        established under section 62J.69; 
           (2) the county medical assistance and general assistance 
        medical care capitation base rate prior to plan specific 
        adjustments shall be reduced 6.3 percent for Hennepin county, 
        two percent for the remaining metropolitan counties, and 1.6 
        percent for nonmetropolitan Minnesota counties; and 
           (3) the amount calculated under clause (1) shall not be 
        adjusted for subsequent changes to the capitation payments for 
        periods already paid.  
           (b) This subdivision shall be effective upon approval of a 
        federal waiver which allows federal financial participation in 
        the medical education and research trust fund. 
           Sec. 27.  [325F.785] [SALES OF HIV HOME COLLECTION KITS AND 
        HYPODERMIC SYRINGES AND NEEDLES.] 
           Subdivision 1.  [INFORMATION TO PURCHASERS.] A seller may 
        provide each purchaser of an HIV home collection kit or 
        hypodermic syringes and needles as authorized in section 151.40, 
        at the time of purchase, with written information about the 
        telephone numbers for public HIV counseling and testing sites, 
        the state's HIV hotline, disposal of used syringes, and general 
        HIV prevention and care. 
           Subd. 2.  [ASSISTANCE FOR SELLERS.] The commissioner of 
        health shall provide technical assistance and materials to 
        pharmacies and to sellers related to compliance with sections 
        151.40 and 325F.785.  The commissioner, in consultation with 
        organizations specializing in HIV prevention, shall provide 
        printed materials, including the written information described 
        under subdivision 1, at no charge to pharmacies that sell 
        hypodermic needles or syringes under section 151.40, and sellers 
        of HIV home collection kits under this section.  A pharmacy or 
        seller may request and the commissioner may authorize use of 
        other methods for providing written information to purchasers.  
        The commissioner may use funds appropriated under section 
        145.924, to provide technical assistance and materials. 
           Sec. 28.  Minnesota Statutes 1996, section 326.37, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RULES.] The state commissioner of health 
        may, by rule, prescribe minimum standards which shall be 
        uniform, and which standards shall thereafter be effective for 
        all new plumbing installations, including additions, extensions, 
        alterations, and replacements connected with any water or sewage 
        disposal system owned or operated by or for any municipality, 
        institution, factory, office building, hotel, apartment 
        building, or any other place of business regardless of location 
        or the population of the city or town in which located.  
        Notwithstanding the provisions of Minnesota Rules, part 
        4715.3130, as they apply to review of plans and specifications, 
        the commissioner may allow plumbing construction, alteration, or 
        extension to proceed without approval of the plans or 
        specifications by the commissioner. 
           The commissioner shall administer the provisions of 
        sections 326.37 to 326.45 and for such purposes may employ 
        plumbing inspectors and other assistants. 
           Sec. 29.  Minnesota Statutes 1996, section 327.20, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RULES.] No domestic animals or house pets 
        of occupants of manufactured home parks or recreational camping 
        areas shall be allowed to run at large, or commit any nuisances 
        within the limits of a manufactured home park or recreational 
        camping area.  Each manufactured home park or recreational 
        camping area licensed under the provisions of sections 327.10, 
        327.11, 327.14 to 327.28 shall, among other things, provide for 
        the following, in the manner hereinafter specified: 
           (1) A responsible attendant or caretaker shall be in charge 
        of every manufactured home park or recreational camping area at 
        all times, who shall maintain the park or area, and its 
        facilities and equipment in a clean, orderly and sanitary 
        condition.  In any manufactured home park containing more than 
        50 lots, the attendant, caretaker, or other responsible park 
        employee, shall be readily available at all times in case of 
        emergency.  
           (2) All manufactured home parks shall be well drained and 
        be located so that the drainage of the park area will not 
        endanger any water supply.  No waste water from manufactured 
        homes or recreational camping vehicles shall be deposited on the 
        surface of the ground.  All sewage and other water carried 
        wastes shall be discharged into a municipal sewage system 
        whenever available.  When a municipal sewage system is not 
        available, a sewage disposal system acceptable to the state 
        commissioner of health shall be provided. 
           (3) No manufactured home shall be located closer than three 
        feet to the side lot lines of a manufactured home park, if the 
        abutting property is improved property, or closer than ten feet 
        to a public street or alley.  Each individual site shall abut or 
        face on a driveway or clear unoccupied space of not less than 16 
        feet in width, which space shall have unobstructed access to a 
        public highway or alley.  There shall be an open space of at 
        least ten feet between the sides of adjacent manufactured homes 
        including their attachments and at least three feet between 
        manufactured homes when parked end to end.  The space between 
        manufactured homes may be used for the parking of motor vehicles 
        and other property, if the vehicle or other property is parked 
        at least ten feet from the nearest adjacent manufactured home 
        position.  The requirements of this paragraph shall not apply to 
        recreational camping areas and variances may be granted by the 
        state commissioner of health in manufactured home parks when the 
        variance is applied for in writing and in the opinion of the 
        commissioner the variance will not endanger the health, safety, 
        and welfare of manufactured home park occupants. 
           (4) An adequate supply of water of safe, sanitary quality 
        shall be furnished at each manufactured home park or 
        recreational camping area.  The source of the water supply shall 
        first be approved by the state department of health.  
           (5) All plumbing shall be installed in accordance with the 
        rules of the state commissioner of health and the provisions of 
        the Minnesota plumbing code. 
           (6) In the case of a manufactured home park with less than 
        ten manufactured homes, a plan for the sheltering or the safe 
        evacuation to a safe place of shelter of the residents of the 
        park in times of severe weather conditions, such as tornadoes, 
        high winds, and floods.  The shelter or evacuation plan shall be 
        developed with the assistance and approval of the municipality 
        where the park is located and shall be posted at conspicuous 
        locations throughout the park.  The park owner shall provide 
        each resident with a copy of the approved shelter or evacuation 
        plan, as provided by section 327C.01, subdivision 1c.  Nothing 
        in this paragraph requires the department of health to review or 
        approve any shelter or evacuation plan developed by a park.  
        Failure of a municipality to approve a plan submitted by a park 
        shall not be grounds for action against the park by the 
        department of health if the park has made a good faith effort to 
        develop the plan and obtain municipal approval.  
           (7) A manufactured home park with ten or more manufactured 
        homes, licensed prior to March 1, 1988, shall provide a safe 
        place of shelter for park residents or a plan for the evacuation 
        of park residents to a safe place of shelter within a reasonable 
        distance of the park for use by park residents in times of 
        severe weather, including tornadoes and high winds.  The shelter 
        or evacuation plan must be approved by the municipality by March 
        1, 1989.  The municipality may require the park owner to 
        construct a shelter if it determines that a safe place of 
        shelter is not available within a reasonable distance from the 
        park.  A copy of the municipal approval and the plan shall be 
        submitted by the park owner to the department of health.  The 
        park owner shall provide each resident with a copy of the 
        approved shelter or evacuation plan, as provided by section 
        327C.01, subdivision 1c.  
           (8) A manufactured home park with ten or more manufactured 
        homes, receiving a primary license after March 1, 1988, must 
        provide the type of shelter required by section 327.205, except 
        that for manufactured home parks established as temporary, 
        emergency housing in a disaster area declared by the President 
        of the United States or the governor, an approved evacuation 
        plan may be provided in lieu of a shelter for a period not 
        exceeding 18 months. 
           (9) For the purposes of this subdivision, "park owner" and 
        "resident" have the meaning given them in section 327C.01. 
           Sec. 30.  [GRANT PROGRAM FOR JUVENILE ASSESSMENT CENTERS.] 
           Subdivision 1.  [PROGRAM DESCRIBED.] The commissioner of 
        health shall administer a pilot project grant program to award 
        grants to no more than three judicial districts to develop and 
        implement plans to create juvenile assessment centers.  A 
        juvenile assessment center is a 24-hour centralized receiving, 
        processing, and intervention facility for children who are 
        accused of committing delinquent acts or status offenses or who 
        are alleged to have been victims of abuse or neglect. 
           Subd. 2.  [WORKING GROUPS AUTHORIZED; PLANS REQUIRED.] The 
        chief judge of a judicial district or the judge's designee may 
        convene a working group consisting of individuals experienced in 
        providing services to children.  A working group shall consist 
        of, but is not limited to, representatives from substance abuse 
        programs, domestic abuse programs, child protection agencies, 
        mental health providers, mental health collaboratives, law 
        enforcement agencies, schools, health service providers, and 
        higher education institutions.  The working group shall 
        cooperatively develop a plan to create a juvenile assessment 
        center in the judicial district.  Juvenile assessment centers 
        must provide initial screening for children, including intake 
        and needs assessments, substance abuse screening, physical and 
        mental health screening, fetal alcohol syndrome and fetal 
        alcohol exposure screening, and diagnostic educational testing, 
        as appropriate.  The entities involved in the assessment center 
        shall make the resources for the provision of these assessments 
        available at the same level to which they are available to the 
        general public.  The plan must include, but is not limited to, 
        recommended screening tools to assess children to determine 
        their needs and assets; protocols to determine how children 
        should enter the center, what will happen at the center, and 
        what will happen after the child leaves the center; methods to 
        share information in a manner consistent with existing law; and 
        information on how the center will collaborate with a higher 
        educational institution that has expertise in the research, 
        programming, and evaluation of children's services.  The plan 
        may also address the provision of services to children. 
           Subd. 3.  [COOPERATION WITH WORKING GROUPS.] The 
        commissioner may provide technical assistance to the working 
        groups and judicial districts.  If the working groups identify 
        any necessary changes in data privacy laws that would facilitate 
        the operation of the assessment centers, the commissioner may 
        recommend these changes to the legislature. 
           Subd. 4.  [AWARDING OF GRANTS.] By January 1, 1998, the 
        commissioner shall award grants under this section to judicial 
        districts to develop plans to create juvenile assessment 
        centers.  Each district awarded a planning grant shall submit 
        its plan to the commissioner.  The commissioner shall review the 
        plans and award grants to districts whose plans have been 
        approved to develop an assessment center. 
           Subd. 5.  [REPORT.] By January 15, 1999, the commissioner 
        shall report to the legislature on the planning and 
        implementation grants awarded under this section. 
           Sec. 31.  [FUNDING SOURCES FOR THE MEDICAL EDUCATION AND 
        RESEARCH TRUST FUND.] 
           (a) The commissioner of health, in consultation with the 
        medical education and research costs advisory committee, shall 
        continue to consider additional broad-based funding sources, and 
        shall recommend potential sources of funding to the legislature 
        by February 15, 1998. 
           (b) The commissioner of health, in consultation with the 
        commissioner of human services, shall examine the 
        appropriateness of transferring an educational component from 
        the MinnesotaCare rates to the medical education and research 
        trust fund, and the appropriate amount and timing of any such 
        transfer.  The commissioner shall report recommendations on the 
        feasibility of including MinnesotaCare funding in the trust fund 
        to the legislature by February 15, 1998. 
           Sec. 32.  [RULE CHANGE; RADIOGRAPHIC ABSORPTIONMETRY.] 
           Upon review and recommendation by the health technology 
        advisory committee regarding the impact on patients the 
        commissioner of health shall examine the appropriateness of, and 
        if appropriate, may amend Minnesota Rules, part 4730.1210, 
        subpart 2, item G, to permit the use of direct exposure x-ray 
        film in radiographic absorptionmetry for the diagnosis and 
        management of osteoporosis.  The commissioner may use the 
        rulemaking procedures under Minnesota Statutes, section 14.388. 
           Sec. 33.  [MINORITY HEALTH INITIATIVE.] 
           Subdivision 1.  [PURPOSE.] The purpose of this section is 
        to plan for the expansion and increase of information and 
        statistical research on minority health in Minnesota.  The plan 
        must build upon the recommendations of the 1997 populations of 
        color in Minnesota health status report. 
           Subd. 2.  [REPORT TO THE LEGISLATURE.] (a) The commissioner 
        of health, through the office of minority health, shall prepare 
        and transmit to the legislature, according to Minnesota 
        Statutes, section 3.195, and no later than January 15, 1998, a 
        written report addressing the following: 
           (1) identifying the legal and administrative barriers that 
        hinder the sharing of information on minority health issues 
        among executive branch agencies, and recommending remedies to 
        these barriers; 
           (2) assessing the current database of information on 
        minority health issues, evaluating data collection standards and 
        procedures in the department of health, identifying minority 
        health issues that should be given priority for increased 
        research to close the gaps and disparities including cancer 
        incidence among populations of color, and recommending methods 
        for expanding the current database of information on minority 
        health; and 
           (3) planning a grant program targeted at supporting 
        minority health and wellness programs that focus on prevention 
        of illness and disease, health education, and health promotion. 
           (b) As part of the report in paragraph (a), the 
        commissioner, through the office of minority health, shall study 
        how the department of health could be better organized to 
        accomplish the tasks specified in paragraph (a) and shall 
        propose an organizational structure to accomplish these tasks. 
           (c) The commissioner, through the office of minority 
        health, may appoint advisory committees as appropriate to 
        accomplish the tasks in paragraphs (a) and (b).  The terms, 
        compensation, and removal of members are governed by Minnesota 
        Statutes, section 15.059, except that members do not receive per 
        diem compensation. 
           Sec. 34.  [STUDY OF HIV AND HBV PREVENTION PROGRAM.] 
           The commissioner of health shall evaluate the effectiveness 
        of the HIV and HBV prevention program established under 
        Minnesota Statutes, sections 214.17 to 214.25.  The commissioner 
        shall evaluate the effectiveness of the program in maintaining 
        public confidence in the safety of health care provider 
        settings, educating the public about HIV infection risk in such 
        settings, prevention of HIV and HBV infections, and fairly and 
        efficiently working with affected health care providers.  The 
        results in Minnesota shall be compared to similar efforts in 
        other states.  The commissioner shall present recommendations to 
        the legislature by January 15, 1998, on whether the program 
        should be continued, and whether modifications to the program 
        are necessary if a recommendation is made to continue the 
        program. 
           Sec. 35.  [REPORT REQUIRED; CALS PROGRAM.] 
           The emergency medical services regulatory board, by 
        December 1, 1999, shall report to the chairs of the house health 
        and human services finance division and the senate health and 
        family security budget division on the implementation of the 
        comprehensive advanced life support (CALS) program or similar 
        program. 
           Sec. 36.  [FAMILY PLANNING GRANT REVIEW.] 
           The commissioner of health shall conduct a review of the 
        family planning special projects grant process and shall report 
        the results of its review to the legislature by February 15, 
        1998. 
           Sec. 37.  [REPEALER.] 
           Minnesota Statutes 1996, section 145.9256, is repealed. 
           Sec. 38.  [EFFECTIVE DATE.] 
           Sections 4 to 6, 17, and 27, subdivision 1 are effective 
        July 1, 1998. 
                                   ARTICLE 3 
                           LONG-TERM CARE FACILITIES
           Section 1.  Minnesota Statutes 1996, section 144A.071, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FINDINGS.] The legislature declares that a 
        moratorium on the licensure and medical assistance certification 
        of new nursing home beds and construction projects that exceed 
        the lesser of $500,000 or 25 percent of a facility's appraised 
        value $750,000 is necessary to control nursing home expenditure 
        growth and enable the state to meet the needs of its elderly by 
        providing high quality services in the most appropriate manner 
        along a continuum of care.  
           Sec. 2.  Minnesota Statutes 1996, section 144A.071, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MORATORIUM.] The commissioner of health, in 
        coordination with the commissioner of human services, shall deny 
        each request for new licensed or certified nursing home or 
        certified boarding care beds except as provided in subdivision 3 
        or 4a, or section 144A.073.  "Certified bed" means a nursing 
        home bed or a boarding care bed certified by the commissioner of 
        health for the purposes of the medical assistance program, under 
        United States Code, title 42, sections 1396 et seq.  
           The commissioner of human services, in coordination with 
        the commissioner of health, shall deny any request to issue a 
        license under section 252.28 and chapter 245A to a nursing home 
        or boarding care home, if that license would result in an 
        increase in the medical assistance reimbursement amount.  
           In addition, the commissioner of health must not approve 
        any construction project whose cost exceeds $500,000, or 25 
        percent of the facility's appraised value, whichever is less, 
        $750,000 unless: 
           (a) any construction costs exceeding the lesser of $500,000 
        or 25 percent of the facility's appraised value $750,000 are not 
        added to the facility's appraised value and are not included in 
        the facility's payment rate for reimbursement under the medical 
        assistance program; or 
           (b) the project: 
           (1) has been approved through the process described in 
        section 144A.073; 
           (2) meets an exception in subdivision 3 or 4a; 
           (3) is necessary to correct violations of state or federal 
        law issued by the commissioner of health; 
           (4) is necessary to repair or replace a portion of the 
        facility that was damaged by fire, lightning, groundshifts, or 
        other such hazards, including environmental hazards, provided 
        that the provisions of subdivision 4a, clause (a), are met; 
           (5) as of May 1, 1992, the facility has submitted to the 
        commissioner of health written documentation evidencing that the 
        facility meets the "commenced construction" definition as 
        specified in subdivision 1a, clause (d), or that substantial 
        steps have been taken prior to April 1, 1992, relating to the 
        construction project.  "Substantial steps" require that the 
        facility has made arrangements with outside parties relating to 
        the construction project and include the hiring of an architect 
        or construction firm, submission of preliminary plans to the 
        department of health or documentation from a financial 
        institution that financing arrangements for the construction 
        project have been made; or 
           (6) is being proposed by a licensed nursing facility that 
        is not certified to participate in the medical assistance 
        program and will not result in new licensed or certified beds. 
           Prior to the final plan approval of any construction 
        project, the commissioner of health shall be provided with an 
        itemized cost estimate for the project construction costs.  If a 
        construction project is anticipated to be completed in phases, 
        the total estimated cost of all phases of the project shall be 
        submitted to the commissioner and shall be considered as one 
        construction project.  Once the construction project is 
        completed and prior to the final clearance by the commissioner, 
        the total project construction costs for the construction 
        project shall be submitted to the commissioner.  If the final 
        project construction cost exceeds the dollar threshold in this 
        subdivision, the commissioner of human services shall not 
        recognize any of the project construction costs or the related 
        financing costs in excess of this threshold in establishing the 
        facility's property-related payment rate. 
           The dollar thresholds for construction projects are as 
        follows:  for construction projects other than those authorized 
        in clauses (1) to (6), the dollar threshold is $500,000 or 25 
        percent of appraised value, whichever is less $750,000.  For 
        projects authorized after July 1, 1993, under clause (1), the 
        dollar threshold is the cost estimate submitted with a proposal 
        for an exception under section 144A.073, plus inflation as 
        calculated according to section 256B.431, subdivision 3f, 
        paragraph (a).  For projects authorized under clauses (2) to 
        (4), the dollar threshold is the itemized estimate project 
        construction costs submitted to the commissioner of health at 
        the time of final plan approval, plus inflation as calculated 
        according to section 256B.431, subdivision 3f, paragraph (a). 
           The commissioner of health shall adopt rules to implement 
        this section or to amend the emergency rules for granting 
        exceptions to the moratorium on nursing homes under section 
        144A.073.  
           Sec. 3.  Minnesota Statutes 1996, section 144A.073, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUEST FOR PROPOSALS.] At the authorization by 
        the legislature of additional medical assistance expenditures 
        for exceptions to the moratorium on nursing homes, the 
        interagency committee shall publish in the State Register a 
        request for proposals for nursing home projects to be licensed 
        or certified under section 144A.071, subdivision 4a, clause 
        (c).  The public notice of this funding and the request for 
        proposals must specify how the approval criteria will be 
        prioritized by the advisory review panel, the interagency 
        long-term care planning committee, and the commissioner.  The 
        notice must describe the information that must accompany a 
        request and state that proposals must be submitted to the 
        interagency committee within 90 days of the date of 
        publication.  The notice must include the amount of the 
        legislative appropriation available for the additional costs to 
        the medical assistance program of projects approved under this 
        section.  If no money is appropriated for a year, the 
        interagency committee shall publish a notice to that effect, and 
        no proposals shall be requested.  If money is appropriated, the 
        interagency committee shall initiate the application and review 
        process described in this section at least twice each biennium 
        and up to four times each biennium, according to dates 
        established by rule.  Authorized funds shall be allocated 
        proportionally to the number of processes.  Funds not encumbered 
        by an earlier process within a biennium shall carry forward to 
        subsequent iterations of the process.  Authorization for 
        expenditures does not carry forward into the following 
        biennium.  To be considered for approval, a proposal must 
        include the following information: 
           (1) whether the request is for renovation, replacement, 
        upgrading, conversion, or relocation; 
           (2) a description of the problem the project is designed to 
        address; 
           (3) a description of the proposed project; 
           (4) an analysis of projected costs of the nursing facility 
        proposal, which are not required to exceed the cost threshold 
        referred to in section 144A.071, subdivision 1, to be considered 
        under this section, including initial construction and 
        remodeling costs; site preparation costs; financing costs, 
        including the current estimated long-term financing costs of the 
        proposal, which consists of estimates of the amount and sources 
        of money, reserves if required under the proposed funding 
        mechanism, annual payments schedule, interest rates, length of 
        term, closing costs and fees, insurance costs, and any completed 
        marketing study or underwriting review; and estimated operating 
        costs during the first two years after completion of the 
        project; 
           (5) for proposals involving replacement of all or part of a 
        facility, the proposed location of the replacement facility and 
        an estimate of the cost of addressing the problem through 
        renovation; 
           (6) for proposals involving renovation, an estimate of the 
        cost of addressing the problem through replacement; 
           (7) the proposed timetable for commencing construction and 
        completing the project; 
           (8) a statement of any licensure or certification issues, 
        such as certification survey deficiencies; 
           (9) the proposed relocation plan for current residents if 
        beds are to be closed so that the department of human services 
        can estimate the total costs of a proposal; and 
           (10) other information required by permanent rule of the 
        commissioner of health in accordance with subdivisions 4 and 8. 
           Sec. 4.  Minnesota Statutes 1996, section 144A.073, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [BUDGET REQUEST.] The commissioner of human 
        services, in consultation with the commissioner of finance, 
        shall include in each biennial budget request a line item for 
        the nursing home moratorium exception process.  If the 
        commissioner of human services does not request funding for this 
        item, the commissioner of human services must justify the 
        decision in the budget pages. 
           Sec. 5.  Minnesota Statutes 1996, section 252.28, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [LICENSING EXCEPTION.] Notwithstanding the 
        provisions of subdivision 3, the commissioner may license 
        service sites, each accommodating up to six residents moving 
        from a 48-bed intermediate care facility for persons with mental 
        retardation or related conditions located in Dakota county that 
        is closing under section 252.292. 
           Sec. 6.  Minnesota Statutes 1996, section 256B.421, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] For the purposes of this section 
        and sections 256B.41, 256B.411, 256B.431, 256B.432, 
        256B.433, 256B.434, 256B.47, 256B.48, 256B.50, and 256B.502, the 
        following terms and phrases shall have the meaning given to them.
           Sec. 7.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 25, is amended to read: 
           Subd. 25.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
        BEGINNING JULY 1, 1995.] The nursing facility reimbursement 
        changes in paragraphs (a) to (h) shall apply in the sequence 
        specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 
        this section, beginning July 1, 1995. 
           (a) The eight-cent adjustment to care-related rates in 
        subdivision 22, paragraph (e), shall no longer apply. 
           (b) For rate years beginning on or after July 1, 1995, the 
        commissioner shall limit a nursing facility's allowable 
        operating per diem for each case mix category for each rate year 
        as in clauses (1) to (3). 
           (1) For the rate year beginning July 1, 1995, the 
        commissioner shall group nursing facilities into two groups, 
        freestanding and nonfreestanding, within each geographic group, 
        using their operating cost per diem for the case mix A 
        classification.  A nonfreestanding nursing facility is a nursing 
        facility whose other operating cost per diem is subject to the 
        hospital attached, short length of stay, or the rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities in each grouping by their allowable case mix 
        A operating cost per diem.  In calculating a nursing facility's 
        operating cost per diem for this purpose, the commissioner shall 
        exclude the raw food cost per diem related to providing special 
        diets that are based on religious beliefs, as determined in 
        subdivision 2b, paragraph (h).  For those nursing facilities in 
        each grouping whose case mix A operating cost per diem: 
           (i) is at or below the median minus 1.0 standard deviation 
        of the array, the commissioner shall limit the nursing 
        facility's allowable operating cost per diem for each case mix 
        category to the lesser of the prior reporting year's allowable 
        operating cost per diems plus the inflation factor as 
        established in paragraph (f), clause (2), increased by six 
        percentage points, or the current reporting year's corresponding 
        allowable operating cost per diem; 
           (ii) is between minus .5 standard deviation and minus 1.0 
        standard deviation below the median of the array, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diems 
        plus the inflation factor as established in paragraph (f), 
        clause (2), increased by four percentage points, or the current 
        reporting year's corresponding allowable operating cost per 
        diem; or 
           (iii) is equal to or above minus .5 standard deviation 
        below the median of the array, the commissioner shall limit the 
        nursing facility's allowable operating cost per diem for each 
        case mix category to the lesser of the prior reporting year's 
        allowable operating cost per diems plus the inflation factor as 
        established in paragraph (f), clause (2), increased by three 
        percentage points, or the current reporting year's corresponding 
        allowable operating cost per diem. 
           (2) For the rate year beginning on July 1, 1996, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diems 
        plus the inflation factor as established in paragraph (f), 
        clause (2), increased by one percentage point or the current 
        reporting year's corresponding allowable operating cost per 
        diems; and 
           (3) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the reporting year prior to the current reporting year's 
        allowable operating cost per diems plus the inflation factor as 
        established in paragraph (f), clause (2), or the current 
        reporting year's corresponding allowable operating cost per 
        diems. 
           (c) For rate years beginning on July 1, 1995, the 
        commissioner shall limit the allowable operating cost per diems 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (b) to each nursing facility's operating 
        cost per diems, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diems are 
        subject to hospital attached, short length of stay, or rule 80 
        limits.  All other nursing facilities shall be considered 
        freestanding nursing facilities.  The commissioner shall then 
        array all nursing facilities within each grouping by their 
        allowable case mix A operating cost per diems.  In calculating a 
        nursing facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  For those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diems by two percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diems by one percent. 
           (d) For rate years beginning on or after July 1, 1996, the 
        commissioner shall limit the allowable operating cost per diems 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (b) to each nursing facility's operating 
        cost per diems, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diems are 
        subject to hospital attached, short length of stay, or rule 80 
        limits.  All other nursing facilities shall be considered 
        freestanding nursing facilities.  The commissioner shall then 
        array all nursing facilities within each grouping by their 
        allowable case mix A operating cost per diems.  In calculating a 
        nursing facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  In those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diems by three percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diems by two percent. 
           (e) For rate years beginning on or after July 1, 1995, the 
        commissioner shall determine a nursing facility's efficiency 
        incentive by first computing the allowable difference, which is 
        the lesser of $4.50 or the amount by which the facility's other 
        operating cost limit exceeds its nonadjusted other operating 
        cost per diem for that rate year.  The commissioner shall 
        compute the efficiency incentive by: 
           (1) subtracting the allowable difference from $4.50 and 
        dividing the result by $4.50; 
           (2) multiplying 0.20 by the ratio resulting from clause 
        (1), and then; 
           (3) adding 0.50 to the result from clause (2); and 
           (4) multiplying the result from clause (3) times the 
        allowable difference. 
           The nursing facility's efficiency incentive payment shall 
        be the lesser of $2.25 or the product obtained in clause (4). 
           (f) For rate years beginning on or after July 1, 1995, the 
        forecasted price index for a nursing facility's allowable 
        operating cost per diems shall be determined under clauses (1) 
        to (3) using the change in the Consumer Price Index-All Items 
        (United States city average) (CPI-U) or the change in the 
        Nursing Home Market Basket, both as forecasted by Data Resources 
        Inc., whichever is applicable.  The commissioner shall use the 
        indices as forecasted in the fourth quarter of the calendar year 
        preceding the rate year, subject to subdivision 2l, paragraph 
        (c).  If, as a result of federal legislative or administrative 
        action, the methodology used to calculate the Consumer Price 
        Index-All Items (United States city average) (CPI-U) changes, 
        the commissioner shall develop a conversion factor or other 
        methodology to convert the CPI-U index factor that results from 
        the new methodology to an index factor that approximates, as 
        closely as possible, the index factor that would have resulted 
        from application of the original CPI-U methodology prior to any 
        changes in methodology.  The commissioner shall use the 
        conversion factor or other methodology to calculate an adjusted 
        inflation index.  The adjusted inflation index must be used to 
        calculate payment rates under this section instead of the CPI-U 
        index specified in paragraph (d).  If the commissioner is 
        required to develop an adjusted inflation index, the 
        commissioner shall report to the legislature as part of the next 
        budget submission the fiscal impact of applying this index. 
           (1) The CPI-U forecasted index for allowable operating cost 
        per diems shall be based on the 21-month period from the 
        midpoint of the nursing facility's reporting year to the 
        midpoint of the rate year following the reporting year. 
           (2) The Nursing Home Market Basket forecasted index for 
        allowable operating costs and per diem limits shall be based on 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (3) For rate years beginning on or after July 1, 1996, the 
        forecasted index for operating cost limits referred to in 
        subdivision 21, paragraph (b), shall be based on the CPI-U for 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (g) After applying these provisions for the respective rate 
        years, the commissioner shall index these allowable operating 
        costs per diems by the inflation factor provided for in 
        paragraph (f), clause (1), and add the nursing facility's 
        efficiency incentive as computed in paragraph (e). 
           (h)(1) A nursing facility licensed for 302 beds on 
        September 30, 1993, that was approved under the moratorium 
        exception process in section 144A.073 for a partial replacement, 
        and completed the replacement project in December 1994, is 
        exempt from paragraphs (b) to (d) for rate years beginning on or 
        after July 1, 1995. 
           (2) For the rate year beginning July 1, 1997, after 
        computing this nursing facility's payment rate according to 
        section 256B.434, the commissioner shall make a one-year rate 
        adjustment of $8.62 to the facility's contract payment rate for 
        the rate effect of operating cost changes associated with the 
        facility's 1994 downsizing project. 
           (3) For rate years beginning on or after July 1, 1997, the 
        commissioner shall add 35 cents to the facility's base property 
        related payment rate for the rate effect of reducing its 
        licensed capacity to 290 beds from 302 beds and shall add 83 
        cents to the facility's real estate tax and special assessment 
        payment rate for payments in lieu of real estate taxes.  The 
        adjustments in this clause shall remain in effect for the 
        duration of the facility's contract under section 256B.434. 
           (i) Notwithstanding Laws 1996, chapter 451, article 3, 
        section 11, paragraph (h), for the rate years beginning on July 
        1, 1996, July 1, 1997, and July 1, 1998, a nursing facility 
        licensed for 40 beds effective May 1, 1992, with a subsequent 
        increase of 20 Medicare/Medicaid certified beds, effective 
        January 26, 1993, in accordance with an increase in licensure is 
        exempt from paragraphs (b) to (d). 
           Sec. 8.  Minnesota Statutes 1996, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 26.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
        BEGINNING JULY 1, 1997.] The nursing facility reimbursement 
        changes in paragraphs (a) to (f) shall apply in the sequence 
        specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and 
        this section, beginning July 1, 1997. 
           (a) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit a nursing facility's allowable 
        operating per diem for each case mix category for each rate year.
        The commissioner shall group nursing facilities into two groups, 
        freestanding and nonfreestanding, within each geographic group, 
        using their operating cost per diem for the case mix A 
        classification.  A nonfreestanding nursing facility is a nursing 
        facility whose other operating cost per diem is subject to the 
        hospital attached, short length of stay, or the rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities in each grouping by their allowable case mix 
        A operating cost per diem.  In calculating a nursing facility's 
        operating cost per diem for this purpose, the commissioner shall 
        exclude the raw food cost per diem related to providing special 
        diets that are based on religious beliefs, as determined in 
        subdivision 2b, paragraph (h).  For those nursing facilities in 
        each grouping whose case mix A operating cost per diem: 
           (1) is at or below the median of the array, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diem 
        as specified in Laws 1996, chapter 451, article 3, section 11, 
        paragraph (h), plus the inflation factor as established in 
        paragraph (d), clause (2), increased by two percentage points, 
        or the current reporting year's corresponding allowable 
        operating cost per diem; or 
           (2) is above the median of the array, the commissioner 
        shall limit the nursing facility's allowable operating cost per 
        diem for each case mix category to the lesser of the prior 
        reporting year's allowable operating cost per diem as specified 
        in Laws 1996, chapter 451, article 3, section 11, paragraph (h), 
        plus the inflation factor as established in paragraph (d), 
        clause (2), increased by one percentage point, or the current 
        reporting year's corresponding allowable operating cost per diem.
           (b) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit the allowable operating cost per diem 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (a) to each nursing facility's operating 
        cost per diem, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diem are subject 
        to hospital attached, short length of stay, or rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities within each grouping by their allowable case 
        mix A operating cost per diem.  In calculating a nursing 
        facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  For those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diem by three percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diem by two percent.  
        However, in no case shall a nursing facility's operating cost 
        per diem be reduced below its grouping's limit established at 
        0.5 standard deviations above the median. 
           (c) For rate years beginning on or after July 1, 1997, the 
        commissioner shall determine a nursing facility's efficiency 
        incentive by first computing the allowable difference, which is 
        the lesser of $4.50 or the amount by which the facility's other 
        operating cost limit exceeds its nonadjusted other operating 
        cost per diem for that rate year.  The commissioner shall 
        compute the efficiency incentive by: 
           (1) subtracting the allowable difference from $4.50 and 
        dividing the result by $4.50; 
           (2) multiplying 0.20 by the ratio resulting from clause 
        (1), and then; 
           (3) adding 0.50 to the result from clause (2); and 
           (4) multiplying the result from clause (3) times the 
        allowable difference. 
           The nursing facility's efficiency incentive payment shall 
        be the lesser of $2.25 or the product obtained in clause (4). 
           (d) For rate years beginning on or after July 1, 1997, the 
        forecasted price index for a nursing facility's allowable 
        operating cost per diem shall be determined under clauses (1) 
        and (2) using the change in the Consumer Price Index-All Items 
        (United States city average) (CPI-U) as forecasted by Data 
        Resources, Inc.  The commissioner shall use the indices as 
        forecasted in the fourth quarter of the calendar year preceding 
        the rate year, subject to subdivision 2l, paragraph (c).  
           (1) The CPI-U forecasted index for allowable operating cost 
        per diem shall be based on the 21-month period from the midpoint 
        of the nursing facility's reporting year to the midpoint of the 
        rate year following the reporting year. 
           (2) For rate years beginning on or after July 1, 1997, the 
        forecasted index for operating cost limits referred to in 
        subdivision 21, paragraph (b), shall be based on the CPI-U for 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (e) After applying these provisions for the respective rate 
        years, the commissioner shall index these allowable operating 
        cost per diem by the inflation factor provided for in paragraph 
        (d), clause (1), and add the nursing facility's efficiency 
        incentive as computed in paragraph (c). 
           (f) For rate years beginning on or after July 1, 1997, the 
        total operating cost payment rates for a nursing facility shall 
        be the greater of the total operating cost payment rates 
        determined under this section or the total operating cost 
        payment rates in effect on June 30, 1997, subject to rate 
        adjustments due to field audit or rate appeal resolution.  This 
        provision shall not apply to subsequent field audit adjustments 
        of the nursing facility's operating cost rates for rate years 
        beginning on or after July 1, 1997. 
           (g) For the rate years beginning on July 1, 1997, and July 
        1, 1998, a nursing facility licensed for 40 beds effective May 
        1, 1992, with a subsequent increase of 20 Medicare/Medicaid 
        certified beds, effective January 26, 1993, in accordance with 
        an increase in licensure is exempt from paragraphs (a) and (b). 
           (h) For a nursing facility whose construction project was 
        authorized according to section 144A.073, subdivision 5, 
        paragraph (g), the operating cost payment rates for the third 
        location shall be determined based on Minnesota Rules, part 
        9549.0057.  Paragraphs (a) and (b) shall not apply until the 
        second rate year after the settle-up cost report is filed.  
        Notwithstanding subdivision 2b, paragraph (g), real estate taxes 
        and special assessments payable by the third location, a 
        501(c)(3) nonprofit corporation, shall be included in the 
        payment rates determined under this subdivision for all 
        subsequent rate years. 
           (i) For the rate year beginning July 1, 1997, the 
        commissioner shall compute the payment rate for a nursing 
        facility licensed for 94 beds on September 30, 1996, that 
        applied in October 1993 for approval of a total replacement 
        under the moratorium exception process in section 144A.073, and 
        completed the approved replacement in June 1995, with other 
        operating cost spend-up limit under paragraph (a), increased by 
        $3.98, and after computing the facility's payment rate according 
        to this section, the commissioner shall make a one-year positive 
        rate adjustment of $3.19 for operating costs related to the 
        newly constructed total replacement, without application of 
        paragraphs (a) and (b).  The facility's per diem, before the 
        $3.19 adjustment, shall be used as the prior reporting year's 
        allowable operating cost per diem for payment rate calculation 
        for the rate year beginning July 1, 1998.  A facility described 
        in this paragraph is exempt from paragraph (b) for the rate 
        years beginning July 1, 1997, and July 1, 1998. 
           (j) For the purpose of applying the limit stated in 
        paragraph (a), a nursing facility in Kandiyohi county licensed 
        for 86 beds that was granted hospital-attached status on 
        December 1, 1994, shall have the prior year's allowable 
        care-related per diem increased by $3.207 and the prior year's 
        other operating cost per diem increased by $4.777 before adding 
        the inflation in paragraph (d), clause (2), for the rate year 
        beginning on July 1, 1997. 
           (k) For the purpose of applying the limit stated in 
        paragraph (a), a 117 bed nursing facility located in Pine county 
        shall have the prior year's allowable other operating cost per 
        diem increased by $1.50 before adding the inflation in paragraph 
        (d), clause (2), for the rate year beginning on July 1, 1997. 
           (l) For the purpose of applying the limit under paragraph 
        (a), a nursing facility in Hibbing licensed for 192 beds shall 
        have the prior year's allowable other operating cost per diem 
        increased by $2.67 before adding the inflation in paragraph (d), 
        clause (2), for the rate year beginning July 1, 1997. 
           Sec. 9.  Minnesota Statutes 1996, section 256B.433, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [EXEMPTION FROM REQUIREMENT FOR SEPARATE THERAPY 
        BILLING.] The provisions of subdivision 3 do not apply to 
        nursing facilities that are reimbursed according to the 
        provisions of section 256B.431 and are located in a county 
        participating in the prepaid medical assistance program. 
           Sec. 10.  Minnesota Statutes 1996, section 256B.434, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DURATION AND TERMINATION OF CONTRACTS.] (a) 
        Subject to available resources, the commissioner may begin to 
        execute contracts with nursing facilities November 1, 1995. 
           (b) All contracts entered into under this section are for a 
        term of four years one year.  Either party may terminate a 
        contract effective July 1 of any year by providing written 
        notice to the other party no later than April 1 of that year at 
        any time without cause by providing 30 calendar days advance 
        written notice to the other party.  The decision to terminate a 
        contract is not appealable.  If neither party provides written 
        notice of termination by April 1, the contract is automatically 
        renewed for the next rate year the contract shall be 
        renegotiated for additional one-year terms, for up to a total of 
        four consecutive one-year terms.  The provisions of the contract 
        shall be renegotiated annually by the parties prior to the 
        expiration date of the contract.  The parties may voluntarily 
        renegotiate the terms of the contract at any time by mutual 
        agreement. 
           (c) If a nursing facility fails to comply with the terms of 
        a contract, the commissioner shall provide reasonable notice 
        regarding the breach of contract and a reasonable opportunity 
        for the facility to come into compliance.  If the facility fails 
        to come into compliance or to remain in compliance, the 
        commissioner may terminate the contract.  If a contract is 
        terminated, the contract payment remains in effect for the 
        remainder of the rate year in which the contract was terminated, 
        but in all other respects the provisions of this section do not 
        apply to that facility effective the date the contract is 
        terminated.  The contract shall contain a provision governing 
        the transition back to the cost-based reimbursement system 
        established under section 256B.431, subdivision 25, and 
        Minnesota Rules, parts 9549.0010 to 9549.0080.  A contract 
        entered into under this section may be amended by mutual 
        agreement of the parties. 
           Sec. 11.  Minnesota Statutes 1996, section 256B.434, 
        subdivision 9, is amended to read: 
           Subd. 9.  [MANAGED CARE CONTRACTS FOR OTHER SERVICES.] 
        Beginning July 1, 1995, the commissioner may contract with 
        nursing facilities that have entered into alternative payment 
        demonstration project contracts under this section to provide 
        medical assistance services other than nursing facility care to 
        residents of the facility under a prepaid, managed care payment 
        system.  For purposes of contracts entered into under this 
        subdivision, the commissioner may waive one or more of the 
        requirements for payment for ancillary services in section 
        256B.433.  Managed care contracts for other services may be 
        entered into at any time during the duration of a nursing 
        facility's alternative payment demonstration project contract, 
        and the terms of the managed care contracts need not coincide 
        with the terms of the alternative payment demonstration project 
        contract. 
           Sec. 12.  Minnesota Statutes 1996, 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. 
           (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 health care financing administration 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. 
           Sec. 13.  Minnesota Statutes 1996, section 256I.05, is 
        amended by adding a subdivision to read: 
           Subd. 1d.  [SUPPLEMENTARY SERVICE RATES FOR CERTAIN 
        FACILITIES SERVING PERSONS WITH MENTAL ILLNESS OR CHEMICAL 
        DEPENDENCY.] Notwithstanding the provisions of subdivisions 1a 
        and 1c for the fiscal year ending June 30, 1998, a county agency 
        may negotiate a supplementary service rate in addition to the 
        board and lodging rate for facilities licensed and registered by 
        the Minnesota department of health under section 157.17 prior to 
        December 31, 1994, if the facility meets the following criteria: 
           (1) at least 75 percent of the residents have a primary 
        diagnosis of mental illness, chemical dependency, or both, and 
        have related special needs; 
           (2) the facility provides 24-hour, on-site, year-round 
        supportive services by qualified staff capable of intervention 
        in a crisis of persons with late-state inebriety or mental 
        illness who are vulnerable to abuse or neglect; 
           (3) the services at the facility include, but are not 
        limited to: 
           (i) secure central storage of medication; 
           (ii) reminders and monitoring of medication for 
        self-administration; 
           (iii) support for developing an individual medical and 
        social service plan, updating the plan, and monitoring 
        compliance with the plan; and 
           (iv) assistance with setting up meetings, appointments, and 
        transportation to access medical, chemical health, and mental 
        health service providers; 
           (4) each resident has a documented need for at least one of 
        the services provided; 
           (5) each resident has been offered an opportunity to apply 
        for admission to a licensed residential treatment program for 
        mental illness, chemical dependency, or both, have refused that 
        offer, and the offer and their refusal has been documented to 
        writing; and 
           (6) the residents are not eligible for home and 
        community-based services waivers because of their unique need 
        for community support. 
           The total supplementary service rate must not exceed $575. 
           Sec. 14.  Laws 1997, chapter 7, article 1, section 75, is 
        amended to read: 
           Sec. 75.  [REPEALER; SECTION 144A.61, SUBDIVISION 6 NOTE.] 
           Laws 1989, chapter 282, article 3, section 28, subdivision 
        6, is repealed. 
           Sec. 15.  Minnesota Statutes 1996, section 144A.071, 
        subdivision 4a, as amended by Laws 1997, chapter 105, section 1, 
        is amended to read: 
           Subd. 4a.  [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 
        best interest of the state to ensure that nursing homes and 
        boarding care homes continue to meet the physical plant 
        licensing and certification requirements by permitting certain 
        construction projects.  Facilities should be maintained in 
        condition to satisfy the physical and emotional needs of 
        residents while allowing the state to maintain control over 
        nursing home expenditure growth. 
           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: 
           (a) to license or certify beds in a new facility 
        constructed to replace a facility or to make repairs in an 
        existing facility that was destroyed or damaged after June 30, 
        1987, by fire, lightning, or other hazard provided:  
           (i) destruction was not caused by the intentional act of or 
        at the direction of a controlling person of the facility; 
           (ii) at the time the facility was destroyed or damaged the 
        controlling persons of the facility maintained insurance 
        coverage for the type of hazard that occurred in an amount that 
        a reasonable person would conclude was adequate; 
           (iii) the net proceeds from an insurance settlement for the 
        damages caused by the hazard are applied to the cost of the new 
        facility or repairs; 
           (iv) the new facility is constructed on the same site as 
        the destroyed facility or on another site subject to the 
        restrictions in section 144A.073, subdivision 5; 
           (v) the number of licensed and certified beds in the new 
        facility does not exceed the number of licensed and certified 
        beds in the destroyed facility; and 
           (vi) the commissioner determines that the replacement beds 
        are needed to prevent an inadequate supply of beds. 
        Project construction costs incurred for repairs authorized under 
        this clause shall not be considered in the dollar threshold 
        amount defined in subdivision 2; 
           (b) to license or certify beds that are moved from one 
        location to another within a nursing home facility, provided the 
        total costs of remodeling performed in conjunction with the 
        relocation of beds does not exceed 25 percent of the appraised 
        value of the facility or $500,000, whichever is less $750,000; 
           (c) to license or certify beds in a project recommended for 
        approval under section 144A.073; 
           (d) to license or certify beds that are moved from an 
        existing state nursing home to a different state facility, 
        provided there is no net increase in the number of state nursing 
        home beds; 
           (e) to certify and license as nursing home beds boarding 
        care beds in a certified boarding care facility if the beds meet 
        the standards for nursing home licensure, or in a facility that 
        was granted an exception to the moratorium under section 
        144A.073, and if the cost of any remodeling of the facility does 
        not exceed 25 percent of the appraised value of the facility or 
        $500,000, whichever is less $750,000.  If boarding care beds are 
        licensed as nursing home beds, the number of boarding care beds 
        in the facility must not increase beyond the number remaining at 
        the time of the upgrade in licensure.  The provisions contained 
        in section 144A.073 regarding the upgrading of the facilities do 
        not apply to facilities that satisfy these requirements; 
           (f) to license and certify up to 40 beds transferred from 
        an existing facility owned and operated by the Amherst H. Wilder 
        Foundation in the city of St. Paul to a new unit at the same 
        location as the existing facility that will serve persons with 
        Alzheimer's disease and other related disorders.  The transfer 
        of beds may occur gradually or in stages, provided the total 
        number of beds transferred does not exceed 40.  At the time of 
        licensure and certification of a bed or beds in the new unit, 
        the commissioner of health shall delicense and decertify the 
        same number of beds in the existing facility.  As a condition of 
        receiving a license or certification under this clause, the 
        facility must make a written commitment to the commissioner of 
        human services that it will not seek to receive an increase in 
        its property-related payment rate as a result of the transfers 
        allowed under this paragraph; 
           (g) to license and certify nursing home beds to replace 
        currently licensed and certified boarding care beds which may be 
        located either in a remodeled or renovated boarding care or 
        nursing home facility or in a remodeled, renovated, newly 
        constructed, or replacement nursing home facility within the 
        identifiable complex of health care facilities in which the 
        currently licensed boarding care beds are presently located, 
        provided that the number of boarding care beds in the facility 
        or complex are decreased by the number to be licensed as nursing 
        home beds and further provided that, if the total costs of new 
        construction, replacement, remodeling, or renovation exceed ten 
        percent of the appraised value of the facility or $200,000, 
        whichever is less, the facility makes a written commitment to 
        the commissioner of human services that it will not seek to 
        receive an increase in its property-related payment rate by 
        reason of the new construction, replacement, remodeling, or 
        renovation.  The provisions contained in section 144A.073 
        regarding the upgrading of facilities do not apply to facilities 
        that satisfy these requirements; 
           (h) to license as a nursing home and certify as a nursing 
        facility a facility that is licensed as a boarding care facility 
        but not certified under the medical assistance program, but only 
        if the commissioner of human services certifies to the 
        commissioner of health that licensing the facility as a nursing 
        home and certifying the facility as a nursing facility will 
        result in a net annual savings to the state general fund of 
        $200,000 or more; 
           (i) to certify, after September 30, 1992, and prior to July 
        1, 1993, existing nursing home beds in a facility that was 
        licensed and in operation prior to January 1, 1992; 
           (j) to license and certify new nursing home beds to replace 
        beds in a facility condemned as part of an economic 
        redevelopment plan in a city of the first class, provided the 
        new facility is located within one mile of the site of the old 
        facility.  Operating and property costs for the new facility 
        must be determined and allowed under existing reimbursement 
        rules; 
           (k) to license and certify up to 20 new nursing home beds 
        in a community-operated hospital and attached convalescent and 
        nursing care facility with 40 beds on April 21, 1991, that 
        suspended operation of the hospital in April 1986.  The 
        commissioner of human services shall provide the facility with 
        the same per diem property-related payment rate for each 
        additional licensed and certified bed as it will receive for its 
        existing 40 beds; 
           (l) to license or certify beds in renovation, replacement, 
        or upgrading projects as defined in section 144A.073, 
        subdivision 1, so long as the cumulative total costs of the 
        facility's remodeling projects do not exceed 25 percent of the 
        appraised value of the facility or $500,000, whichever is less 
        $750,000; 
           (m) to license and certify beds that are moved from one 
        location to another for the purposes of converting up to five 
        four-bed wards to single or double occupancy rooms in a nursing 
        home that, as of January 1, 1993, was county-owned and had a 
        licensed capacity of 115 beds; 
           (n) to allow a facility that on April 16, 1993, was a 
        106-bed licensed and certified nursing facility located in 
        Minneapolis to layaway all of its licensed and certified nursing 
        home beds.  These beds may be relicensed and recertified in a 
        newly-constructed teaching nursing home facility affiliated with 
        a teaching hospital upon approval by the legislature.  The 
        proposal must be developed in consultation with the interagency 
        committee on long-term care planning.  The beds on layaway 
        status shall have the same status as voluntarily delicensed and 
        decertified beds, except that beds on layaway status remain 
        subject to the surcharge in section 256.9657.  This layaway 
        provision expires July 1, 1997 1998; 
           (o) to allow a project which will be completed in 
        conjunction with an approved moratorium exception project for a 
        nursing home in southern Cass county and which is directly 
        related to that portion of the facility that must be repaired, 
        renovated, or replaced, to correct an emergency plumbing problem 
        for which a state correction order has been issued and which 
        must be corrected by August 31, 1993; 
           (p) to allow a facility that on April 16, 1993, was a 
        368-bed licensed and certified nursing facility located in 
        Minneapolis to layaway, upon 30 days prior written notice to the 
        commissioner, up to 30 of the facility's licensed and certified 
        beds by converting three-bed wards to single or double 
        occupancy.  Beds on layaway status shall have the same status as 
        voluntarily delicensed and decertified beds except that beds on 
        layaway status remain subject to the surcharge in section 
        256.9657, remain subject to the license application and renewal 
        fees under section 144A.07 and shall be subject to a $100 per 
        bed reactivation fee.  In addition, at any time within three 
        years of the effective date of the layaway, the beds on layaway 
        status may be: 
           (1) relicensed and recertified upon relocation and 
        reactivation of some or all of the beds to an existing licensed 
        and certified facility or facilities located in Pine River, 
        Brainerd, or International Falls; provided that the total 
        project construction costs related to the relocation of beds 
        from layaway status for any facility receiving relocated beds 
        may not exceed the dollar threshold provided in subdivision 2 
        unless the construction project has been approved through the 
        moratorium exception process under section 144A.073; 
           (2) relicensed and recertified, upon reactivation of some 
        or all of the beds within the facility which placed the beds in 
        layaway status, if the commissioner has determined a need for 
        the reactivation of the beds on layaway status. 
           The property-related payment rate of a facility placing 
        beds on layaway status must be adjusted by the incremental 
        change in its rental per diem after recalculating the rental per 
        diem as provided in section 256B.431, subdivision 3a, paragraph 
        (d).  The property-related payment rate for a facility 
        relicensing and recertifying beds from layaway status must be 
        adjusted by the incremental change in its rental per diem after 
        recalculating its rental per diem using the number of beds after 
        the relicensing to establish the facility's capacity day 
        divisor, which shall be effective the first day of the month 
        following the month in which the relicensing and recertification 
        became effective.  Any beds remaining on layaway status more 
        than three years after the date the layaway status became 
        effective must be removed from layaway status and immediately 
        delicensed and decertified; 
           (q) to license and certify beds in a renovation and 
        remodeling project to convert 13 three-bed wards into 13 two-bed 
        rooms and 13 single-bed rooms, expand space, and add 
        improvements in a nursing home that, as of January 1, 1994, met 
        the following conditions:  the nursing home was located in 
        Ramsey county; was not owned by a hospital corporation; had a 
        licensed capacity of 64 beds; and had been ranked among the top 
        15 applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process; 
           (r) to license and certify beds in a renovation and 
        remodeling project to convert 12 four-bed wards into 24 two-bed 
        rooms, expand space, and add improvements in a nursing home 
        that, as of January 1, 1994, met the following conditions:  the 
        nursing home was located in Ramsey county; had a licensed 
        capacity of 154 beds; and had been ranked among the top 15 
        applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process; 
           (s) (r) to license and certify up to 117 beds that are 
        relocated from a licensed and certified 138-bed nursing facility 
        located in St. Paul to a hospital with 130 licensed hospital 
        beds located in South St. Paul, provided that the nursing 
        facility and hospital are owned by the same or a related 
        organization and that prior to the date the relocation is 
        completed the hospital ceases operation of its inpatient 
        hospital services at that hospital.  After relocation, the 
        nursing facility's status under section 256B.431, subdivision 
        2j, shall be the same as it was prior to relocation.  The 
        nursing facility's property-related payment rate resulting from 
        the project authorized in this paragraph shall become effective 
        no earlier than April 1, 1996.  For purposes of calculating the 
        incremental change in the facility's rental per diem resulting 
        from this project, the allowable appraised value of the nursing 
        facility portion of the existing health care facility physical 
        plant prior to the renovation and relocation may not exceed 
        $2,490,000; 
           (t) (s) to license and certify two beds in a facility to 
        replace beds that were voluntarily delicensed and decertified on 
        June 28, 1991; 
           (u) (t) to allow 16 licensed and certified beds located on 
        July 1, 1994, in a 142-bed nursing home and 21-bed boarding care 
        home facility in Minneapolis, notwithstanding the licensure and 
        certification after July 1, 1995, of the Minneapolis facility as 
        a 147-bed nursing home facility after completion of a 
        construction project approved in 1993 under section 144A.073, to 
        be laid away upon 30 days' prior written notice to the 
        commissioner.  Beds on layaway status shall have the same status 
        as voluntarily delicensed or decertified beds except that they 
        shall remain subject to the surcharge in section 256.9657.  The 
        16 beds on layaway status may be relicensed as nursing home beds 
        and recertified at any time within five years of the effective 
        date of the layaway upon relocation of some or all of the beds 
        to a licensed and certified facility located in Watertown, 
        provided that the total project construction costs related to 
        the relocation of beds from layaway status for the Watertown 
        facility may not exceed the dollar threshold provided in 
        subdivision 2 unless the construction project has been approved 
        through the moratorium exception process under section 144A.073. 
           The property-related payment rate of the facility placing 
        beds on layaway status must be adjusted by the incremental 
        change in its rental per diem after recalculating the rental per 
        diem as provided in section 256B.431, subdivision 3a, paragraph 
        (d).  The property-related payment rate for the facility 
        relicensing and recertifying beds from layaway status must be 
        adjusted by the incremental change in its rental per diem after 
        recalculating its rental per diem using the number of beds after 
        the relicensing to establish the facility's capacity day 
        divisor, which shall be effective the first day of the month 
        following the month in which the relicensing and recertification 
        became effective.  Any beds remaining on layaway status more 
        than five years after the date the layaway status became 
        effective must be removed from layaway status and immediately 
        delicensed and decertified; 
           (v) (u) to license and certify beds that are moved within 
        an existing area of a facility or to a newly-constructed 
        addition which is built for the purpose of eliminating three- 
        and four-bed rooms and adding space for dining, lounge areas, 
        bathing rooms, and ancillary service areas in a nursing home 
        that, as of January 1, 1995, was located in Fridley and had a 
        licensed capacity of 129 beds; 
           (w) (v) to relocate 36 beds in Crow Wing county and four 
        beds from Hennepin county to a 160-bed facility in Crow Wing 
        county, provided all the affected beds are under common 
        ownership; 
           (x) (w) to license and certify a total replacement project 
        of up to 49 beds located in Norman county that are relocated 
        from a nursing home destroyed by flood and whose residents were 
        relocated to other nursing homes.  The operating cost payment 
        rates for the new nursing facility shall be determined based on 
        the interim and settle-up payment provisions of Minnesota Rules, 
        part 9549.0057, and the reimbursement provisions of section 
        256B.431, except that subdivision 25 26, paragraphs (a) and (b), 
        clause (3), and (d), shall not apply until the second rate year 
        after the settle-up cost report is filed.  Property-related 
        reimbursement rates shall be determined under section 256B.431, 
        taking into account any federal or state flood-related loans or 
        grants provided to the facility; or 
           (y) (x) to license and certify a total replacement project 
        of up to 129 beds located in Polk county that are relocated from 
        a nursing home destroyed by flood and whose residents were 
        relocated to other nursing homes.  The operating cost payment 
        rates for the new nursing facility shall be determined based on 
        the interim and settle-up payment provisions of Minnesota Rules, 
        part 9549.0057, and the reimbursement provisions of section 
        256B.431, except that subdivision 25 26, paragraphs (a) and (b), 
        clause (3), and (d), shall not apply until the second rate year 
        after the settle-up cost report is filed.  Property-related 
        reimbursement rates shall be determined under section 256B.431, 
        taking into account any federal or state flood-related loans or 
        grants provided to the facility; or 
           (y) to license and certify beds in a renovation and 
        remodeling project to convert 13 three-bed wards into 13 two-bed 
        rooms and 13 single-bed rooms, expand space, and add 
        improvements in a nursing home that, as of January 1, 1994, met 
        the following conditions:  the nursing home was located in 
        Ramsey county, was not owned by a hospital corporation, had a 
        licensed capacity of 64 beds, and had been ranked among the top 
        15 applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process. 
           Sec. 16.  Laws 1997, chapter 105, section 7, is amended to 
        read: 
           Sec. 7.  [FLOOD-RELATED DISASTER APPROPRIATION.] 
           (a) $20,000,000 is appropriated from the budget reserve in 
        the general fund to the commissioner of public safety for:  (1) 
        the state costs associated with the total replacement projects 
        in Norman and Polk counties specified in section 1; and (2) 
        reimbursements to counties, cities, and towns and to individuals 
        or families for individual/family grants which may be used for 
        costs related to flooding in 1997.  This appropriation is added 
        to the $3,000,000 appropriation in Laws 1997, chapter 12, for 
        flood-related purposes. 
           (b) Of this amount, the commissioner of public safety shall 
        transfer to the commissioner of human services the amount needed 
        to pay the state costs associated with the projects in Norman 
        and Polk counties specified in section 1, not to exceed $492,700.
           Sec. 17.  [STUDY OF NURSING FACILITY CONVERSION.] 
           The commissioner, in consultation with the commissioner of 
        health, shall report to the legislature by January 15, 1998, 
        with recommendations for the establishment of a project to 
        reduce the number of nursing facilities and the number of 
        nursing facility beds in Minnesota.  The report shall include:  
        (1) goals for the number of facility and bed reductions; (2) 
        strategies for voluntary and involuntary bed closures; and (3) 
        criteria for selecting nursing facilities as candidates for 
        closure.  In developing the recommendations, the commissioner 
        shall consult with an advisory task force that includes nursing 
        industry representatives, nursing facility resident advocates, 
        county representatives, and other interested parties. 
           Sec. 18.  [RATE CLARIFICATION.] 
           For the rate years beginning October 1, 1997, and October 
        1, 1998, the commissioner of human services shall exempt 
        intermediate care facilities for persons with mental retardation 
        (ICF/MR) from reductions to the payment rates under Minnesota 
        Statutes, section 256B.501, subdivision 5b, paragraph (d), 
        clause (6), if the facility: 
           (1) has had a settle-up payment rate established in the 
        reporting year preceding the rate year for the one-time rate 
        adjustment; 
           (2) is a newly established facility; 
           (3) is an A to B conversion that has been converted under 
        Minnesota Statutes, section 252.292, since rate year 1990; 
           (4) has a payment rate subject to a community conversion 
        project under Minnesota Statutes, section 252.292; 
           (5) has a payment rate established under Minnesota 
        Statutes, section 245A.12 or 245A.13; or 
           (6) is a facility created by the relocation of more than 25 
        percent of the capacity of a related facility during the 
        reporting year. 
           Sec. 19.  [ICF/MR REIMBURSEMENT OCTOBER 1, 1997, TO OCTOBER 
        1, 1999.] 
           (a) Notwithstanding any contrary provision in Minnesota 
        Statutes, section 256B.501, for the rate years beginning October 
        1, 1997, and October 1, 1998, the commissioner of human services 
        shall, for purposes of the spend-up limit, array facilities 
        within each grouping established under Minnesota Statutes, 
        section 256B.501, subdivision 5b, paragraph (d), clause (4), by 
        each facility's cost per resident day.  A facility's cost per 
        resident day shall be determined by dividing its allowable 
        historical general operating cost for the reporting year by the 
        facility's resident days for the reporting year.  Facilities 
        with a cost per resident day at or above the median shall be 
        limited to the lesser of: 
           (1) the current reporting year's cost per resident day; or 
           (2) the prior report year's cost per resident day plus the 
        inflation factor established under Minnesota Statutes, section 
        256B.501, subdivision 3c, clause (2), increased by three 
        percentage points. 
        In no case shall the amount of this reduction exceed:  three 
        percent for a facility with a licensed capacity greater than 16 
        beds; two percent for a facility with a licensed capacity of 
        nine to 16 beds; and one percent for a facility with a licensed 
        capacity of eight or fewer beds. 
           (b) The commissioner shall not apply the limits established 
        under Minnesota Statutes, section 256B.501, subdivision 5b, 
        paragraph (d), clause (8), for the rate years beginning October 
        1, 1997, and October 1, 1998. 
           Sec. 20.  [EFFECTIVE DATE.] 
           Section 16 is effective the day following final enactment. 
                                   ARTICLE 4 
                                  HEALTH CARE 
           Section 1.  Minnesota Statutes 1996, section 62D.04, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PARTICIPATION; GOVERNMENT PROGRAMS.] Health 
        maintenance organizations shall, as a condition of receiving and 
        retaining a certificate of authority, participate in the medical 
        assistance, general assistance medical care, and MinnesotaCare 
        programs.  A health maintenance organization is required to 
        submit proposals in good faith that meet the requirements of the 
        request for proposal provided that the requirements can be 
        reasonably met by a health maintenance organization to serve 
        individuals eligible for the above programs in a geographic 
        region of the state if, at the time of publication of a request 
        for proposal, the percentage of recipients in the public 
        programs in the region who are enrolled in the health 
        maintenance organization is less than the health maintenance 
        organization's percentage of the total number of individuals 
        enrolled in health maintenance organizations in the same 
        region.  Geographic regions shall be defined by the commissioner 
        of human services in the request for proposals. 
           Sec. 2.  Minnesota Statutes 1996, section 62N.25, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSURE REQUIREMENTS GENERALLY.] To be 
        licensed and to operate as a community integrated service 
        network, an applicant must satisfy the requirements of chapter 
        62D, and all other legal requirements that apply to entities 
        licensed under chapter 62D, except as exempted or modified in 
        this section.  Community networks must, as a condition of 
        licensure, comply with rules adopted under section 256B.0644 
        that apply to entities governed by chapter 62D section 62D.04, 
        subdivision 5.  A community integrated service network that 
        phases in its net worth over a three-year period is not required 
        to respond to requests for proposals under section 256B.0644 
        62D.04, subdivision 5, during the first 12 months of licensure.  
        These community networks are not prohibited from responding to 
        requests for proposals, however, if they choose to do so during 
        that time period.  After the initial 12 months of licensure, 
        these community networks are required to respond to the requests 
        for proposals as required under section 256B.0644 62D.04, 
        subdivision 5.  
           Sec. 3.  Minnesota Statutes 1996, section 144.0721, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LEVEL OF CARE CRITERIA; MODIFICATIONS.] The 
        commissioner shall seek appropriate federal waivers to implement 
        this subdivision.  Notwithstanding any laws or rules to the 
        contrary, effective July 1, 1996 1998, Minnesota's level of care 
        criteria for admission of any person to a nursing facility 
        licensed under chapter 144A, or a boarding care home licensed 
        under sections 144.50 to 144.56, are modified as follows: 
           (1) the resident reimbursement classifications and 
        terminology established by rule under sections 256B.41 to 
        256B.48 are the basis for applying the level of care criteria 
        changes; 
           (2) an applicant to a certified nursing facility or 
        certified boarding care home who is dependent in zero, one, or 
        two case mix activities of daily living, is classified as a case 
        mix A, and is independent in orientation and self-preservation, 
        is reclassified as a high function class A person and is not 
        eligible for admission to Minnesota certified nursing facilities 
        or certified boarding care homes; 
           (3) applicants in clause (2) who are dependent in one or 
        two case mix activities of daily living, who are eligible for 
        assistance as determined under sections 256B.055 and 256B.056 or 
        meet eligibility criteria for section 256B.0913 are eligible for 
        a service allowance under section 256B.0913, subdivision 15, and 
        are not eligible for services under sections 256B.0913, 
        subdivisions 1 to 14, and 256B.0915.  Applicants in clause (2) 
        shall have the option of receiving personal care assistant and 
        home health aide services under section 256B.0625, if otherwise 
        eligible, or of receiving the service allowance option, but not 
        both.  Applicants in clause (2) shall have the option of 
        residing in community settings under sections 256I.01 to 
        256I.06, if otherwise eligible, or receiving the services 
        allowance option under section 256B.0913, subdivision 15, but 
        not both; 
           (4) residents of a certified nursing facility or certified 
        boarding care home who were admitted before July 1, 1996 1998, 
        or individuals receiving services under section 256B.0913, 
        subdivisions 1 to 14, or 256B.0915, before July 1, 1996 1998, 
        are not subject to the new level of care criteria unless the 
        resident is discharged home or to another service setting other 
        than a certified nursing facility or certified boarding care 
        home and applies for admission to a certified nursing facility 
        or certified boarding care home after June 30, 1996 1998; 
           (5) the local screening teams under section 256B.0911 shall 
        make preliminary determinations concerning may determine the 
        existence of extraordinary circumstances which render 
        nonadmission to a certified nursing or certified boarding care 
        home a serious threat to the health and safety of applicants in 
        clause (2) and may authorize an admission for a short-term stay 
        at to a certified nursing facility or certified boarding care 
        home in accordance with a treatment and discharge plan for up to 
        30 days per year; and 
           (6) an individual deemed ineligible for admission to 
        Minnesota certified nursing facilities is entitled to an appeal 
        under section 256.045, subdivision 3. 
           If the commissioner determines upon appeal that an 
        applicant in clause (2) presents extraordinary circumstances 
        including but not limited to the absence or inaccessibility of 
        suitable alternatives, contravening family circumstances, and or 
        protective service issues, the applicant may be eligible for 
        admission to Minnesota certified nursing facilities or certified 
        boarding care homes. 
           Sec. 4.  Minnesota Statutes 1996, section 254A.17, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STATEWIDE DETOXIFICATION TRANSPORTATION 
        PROGRAM.] The commissioner shall provide grants to counties, 
        Indian reservations, other nonprofit agencies, or local 
        detoxification programs for provision of transportation of 
        intoxicated individuals to detoxification programs, to open 
        shelters, and to secure shelters as defined in section 254A.085 
        and, shelters serving intoxicated persons, including long-term 
        supportive housing facilities for chronic inebriates, and 
        hospital emergency rooms.  In state fiscal years 1994, 1995, and 
        1996, funds shall be allocated to counties in proportion to each 
        county's allocation in fiscal year 1993.  In subsequent fiscal 
        years, funds shall be allocated among counties annually in 
        proportion to each county's average number of detoxification 
        admissions for the prior two years, except that no county shall 
        receive less than $400.  Unless a county has approved a grant of 
        funds under this section, the commissioner shall make quarterly 
        payments of detoxification funds to a county only after 
        receiving an invoice describing the number of persons 
        transported and the cost of transportation services for the 
        previous quarter.  The commissioner shall make an annual payment 
        to counties for provision of transportation under this section.  
        If appropriations are not sufficient to pay the allowed maximum 
        per trip, the commissioner shall reduce the maximum payment per 
        trip until payments do not exceed the appropriation.  A county 
        must make a good faith effort to provide the transportation 
        service through the most cost-effective community-based agencies 
        or organizations eligible to provide the service.  The program 
        administrator and all staff of the program must report to the 
        office of the ombudsman for mental health and mental retardation 
        within 24 hours of its occurrence, any serious injury, as 
        defined in section 245.91, subdivision 6, or the death of a 
        person admitted to the shelter.  The ombudsman shall acknowledge 
        in writing the receipt of all reports made to the ombudsman's 
        office under this section.  Acknowledgment must be mailed to the 
        facility and to the county social service agency within five 
        working days of the day the report was made.  In addition, the 
        program administrator and staff of the program must comply with 
        all of the requirements of section 626.557, the vulnerable 
        adults act. 
           Sec. 5.  Minnesota Statutes 1996, section 254B.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CHEMICAL DEPENDENCY SERVICES.] "Chemical 
        dependency services" means a planned program of care for the 
        treatment of chemical dependency or chemical abuse to minimize 
        or prevent further chemical abuse by the person.  Diagnostic, 
        evaluation, prevention, referral, detoxification, and aftercare 
        services that are not part of a program of care licensable as a 
        residential or nonresidential chemical dependency treatment 
        program are not chemical dependency services for purposes of 
        this section.  For pregnant and postpartum women, chemical 
        dependency services include halfway house services, after-care 
        services, psychological services, and case management. 
           Sec. 6.  Minnesota Statutes 1996, section 254B.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CHEMICAL DEPENDENCY TREATMENT ALLOCATION.] 
        The chemical dependency funds appropriated for allocation shall 
        be placed in a special revenue account.  For the fiscal year 
        beginning July 1, 1987, funds shall be transferred to operate 
        the vendor payment, invoice processing, and collections system 
        for one year.  The commissioner shall annually transfer funds 
        from the chemical dependency fund to pay for operation of the 
        drug and alcohol abuse normative evaluation system and to pay 
        for all costs incurred by adding two positions for licensing of 
        chemical dependency treatment and rehabilitation programs 
        located in hospitals for which funds are not otherwise 
        appropriated.  For each year of the biennium ending June 30, 
        1999, the commissioner shall allocate funds to the American 
        Indian chemical dependency tribal account for treatment of 
        American Indians by eligible vendors under section 254B.05, 
        equal to the amount allocated in fiscal year 1997.  The 
        commissioner shall annually divide the money available in the 
        chemical dependency fund that is not held in reserve by counties 
        from a previous allocation, or allocated to the American Indian 
        chemical dependency tribal account.  Twelve Six percent of the 
        remaining money must be reserved for the nonreservation American 
        Indian chemical dependency allocation for treatment of American 
        Indians by eligible vendors under section 254B.05, subdivision 
        1.  The remainder of the money must be allocated among the 
        counties according to the following formula, using state 
        demographer data and other data sources determined by the 
        commissioner: 
           (a) For purposes of this formula, American Indians and 
        children under age 14 are subtracted from the population of each 
        county to determine the restricted population. 
           (b) The amount of chemical dependency fund expenditures for 
        entitled persons for services not covered by prepaid plans 
        governed by section 256B.69 in the previous year is divided by 
        the amount of chemical dependency fund expenditures for entitled 
        persons for all services to determine the proportion of exempt 
        service expenditures for each county. 
           (c) The prepaid plan months of eligibility is multiplied by 
        the proportion of exempt service expenditures to determine the 
        adjusted prepaid plan months of eligibility for each county. 
           (d) The adjusted prepaid plan months of eligibility is 
        added to the number of restricted population fee for service 
        months of eligibility for aid to families with dependent 
        children, general assistance, and medical assistance and divided 
        by the county restricted population to determine county per 
        capita months of covered service eligibility. 
           (e) The number of adjusted prepaid plan months of 
        eligibility for the state is added to the number of fee for 
        service months of eligibility for aid to families with dependent 
        children, general assistance, and medical assistance for the 
        state restricted population and divided by the state restricted 
        population to determine state per capita months of covered 
        service eligibility. 
           (f) The county per capita months of covered service 
        eligibility is divided by the state per capita months of covered 
        service eligibility to determine the county welfare caseload 
        factor. 
           (g) The median married couple income for the most recent 
        three-year period available for the state is divided by the 
        median married couple income for the same period for each county 
        to determine the income factor for each county. 
           (h) The county restricted population is multiplied by the 
        sum of the county welfare caseload factor and the county income 
        factor to determine the adjusted population. 
           (i) $15,000 shall be allocated to each county.  
           (j) The remaining funds shall be allocated proportional to 
        the county adjusted population. 
           Sec. 7.  Minnesota Statutes 1996, section 254B.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) Persons eligible for 
        benefits under Code of Federal Regulations, title 25, part 20, 
        persons eligible for medical assistance benefits under sections 
        256B.055, 256B.056, and 256B.057, subdivisions 1, 2, 5, and 6, 
        or who meet the income standards of section 256B.056, 
        subdivision 4, and persons eligible for general assistance 
        medical care under section 256D.03, subdivision 3, are entitled 
        to chemical dependency fund services.  State money appropriated 
        for this paragraph must be placed in a separate account 
        established for this purpose. 
           (b) A person not entitled to services under paragraph (a), 
        but with family income that is less than 60 percent of the state 
        median income for a family of like size and composition, shall 
        be eligible to receive chemical dependency fund services within 
        the limit of funds available after persons entitled to services 
        under paragraph (a) have been served.  A county may spend money 
        from its own sources to serve persons under this paragraph.  
        State money appropriated for this paragraph must be placed in a 
        separate account established for this purpose. 
           (c) Persons whose income is between 60 percent and 115 
        percent of the state median income shall be eligible for 
        chemical dependency services on a sliding fee basis, within the 
        limit of funds available, after persons entitled to services 
        under paragraph (a) and persons eligible for services under 
        paragraph (b) have been served.  Persons eligible under this 
        paragraph must contribute to the cost of services according to 
        the sliding fee scale established under subdivision 3.  A county 
        may spend money from its own sources to provide services to 
        persons under this paragraph.  State money appropriated for this 
        paragraph must be placed in a separate account established for 
        this purpose. 
           (d) Notwithstanding the provisions of paragraphs (b) and 
        (c), state funds appropriated to serve persons who are not 
        entitled under the provisions of paragraph (a), shall be 
        expended for chemical dependency treatment services for 
        nonentitled but eligible persons who have children in their 
        household, are pregnant, or are younger than 18 years old.  
        These persons may have household incomes up to 60 percent of the 
        state median income.  Any funds in addition to the amounts 
        necessary to serve the persons identified in this paragraph 
        shall be expended according to the provisions of paragraphs (b) 
        and (c).  
           Sec. 8.  Minnesota Statutes 1996, section 254B.09, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TRIBAL ALLOCATION.] Forty-two and one-half 
        Eighty-five percent of the American Indian chemical dependency 
        tribal account must be allocated to the federally recognized 
        American Indian tribal governing bodies that have entered into 
        an agreement under subdivision 2 as follows:  $10,000 must be 
        allocated to each governing body and the remainder must be 
        allocated in direct proportion to the population of the 
        reservation according to the most recently available estimates 
        from the federal Bureau of Indian Affairs.  When a tribal 
        governing body has not entered into an agreement with the 
        commissioner under subdivision 2, the county may use funds 
        allocated to the reservation to pay for chemical dependency 
        services for a current resident of the county and of the 
        reservation. 
           Sec. 9.  Minnesota Statutes 1996, section 254B.09, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TRIBAL RESERVE ACCOUNT.] The commissioner shall 
        reserve 7.5 15 percent of the American Indian chemical 
        dependency tribal account.  The reserve must be allocated to 
        those tribal units that have used all money allocated under 
        subdivision 4 according to agreements made under subdivision 2 
        and to counties submitting invoices for American Indians under 
        subdivision 1 when all money allocated under subdivision 4 has 
        been used.  An American Indian tribal governing body or a county 
        submitting invoices under subdivision 1 may receive not more 
        than 30 percent of the reserve account in a year.  The 
        commissioner may refuse to make reserve payments for persons not 
        eligible under section 254B.04, subdivision 1, if the tribal 
        governing body responsible for treatment placement has exhausted 
        its allocation.  Money must be allocated as invoices are 
        received. 
           Sec. 10.  Minnesota Statutes 1996, section 254B.09, 
        subdivision 7, is amended to read: 
           Subd. 7.  [NONRESERVATION INDIAN ACCOUNT.] Fifty percent of 
        The nonreservation American Indian chemical dependency 
        allocation must be held in reserve by the commissioner in an 
        account for treatment of Indians not residing on lands of a 
        reservation receiving money under subdivision 4.  This money 
        must be used to pay for services certified by county invoice to 
        have been provided to an American Indian eligible recipient.  
        Money allocated under this subdivision may be used for payments 
        on behalf of American Indian county residents only if, in 
        addition to other placement standards, the county certifies that 
        the placement was appropriate to the cultural orientation of the 
        client.  Any funds for treatment of nonreservation Indians 
        remaining at the end of a fiscal year shall be reallocated under 
        section 254B.02. 
           Sec. 11.  Minnesota Statutes 1996, section 256.045, 
        subdivision 7, is amended to read: 
           Subd. 7.  [JUDICIAL REVIEW.] Except for a prepaid health 
        plan, any party who is aggrieved by an order of the commissioner 
        of human services, or the commissioner of health in appeals 
        within the commissioner's jurisdiction under subdivision 3b, may 
        appeal the order to the district court of the county responsible 
        for furnishing assistance, or, in appeals under subdivision 3b, 
        the county where the maltreatment occurred, by serving a written 
        copy of a notice of appeal upon the commissioner and any adverse 
        party of record within 30 days after the date the commissioner 
        issued the order, the amended order, or order affirming the 
        original order, and by filing the original notice and proof of 
        service with the court administrator of the district court.  
        Service may be made personally or by mail; service by mail is 
        complete upon mailing; no filing fee shall be required by the 
        court administrator in appeals taken pursuant to this 
        subdivision, with the exception of appeals taken under 
        subdivision 3b.  The commissioner may elect to become a party to 
        the proceedings in the district court.  Except for appeals under 
        subdivision 3b, any party may demand that the commissioner 
        furnish all parties to the proceedings with a copy of the 
        decision, and a transcript of any testimony, evidence, or other 
        supporting papers from the hearing held before the human 
        services referee, by serving a written demand upon the 
        commissioner within 30 days after service of the notice of 
        appeal.  Any party aggrieved by the failure of an adverse party 
        to obey an order issued by the commissioner under subdivision 5 
        may compel performance according to the order in the manner 
        prescribed in sections 586.01 to 586.12. 
           Sec. 12.  Minnesota Statutes 1996, section 256.476, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them: 
           (a) "County board" means the county board of commissioners 
        for the county of financial responsibility as defined in section 
        256G.02, subdivision 4, or its designated representative.  When 
        a human services board has been established under sections 
        402.01 to 402.10, it shall be considered the county board for 
        the purposes of this section. 
           (b) "Family" means the person's birth parents, adoptive 
        parents or stepparents, siblings or stepsiblings, children or 
        stepchildren, grandparents, grandchildren, niece, nephew, aunt, 
        uncle, or spouse.  For the purposes of this section, a family 
        member is at least 18 years of age. 
           (c) "Functional limitations" means the long-term inability 
        to perform an activity or task in one or more areas of major 
        life activity, including self-care, understanding and use of 
        language, learning, mobility, self-direction, and capacity for 
        independent living.  For the purpose of this section, the 
        inability to perform an activity or task results from a mental, 
        emotional, psychological, sensory, or physical disability, 
        condition, or illness. 
           (d) "Informed choice" means a voluntary decision made by 
        the person or the person's legal representative, after becoming 
        familiarized with the alternatives to: 
           (1) select a preferred alternative from a number of 
        feasible alternatives; 
           (2) select an alternative which may be developed in the 
        future; and 
           (3) refuse any or all alternatives. 
           (e) "Local agency" means the local agency authorized by the 
        county board to carry out the provisions of this section. 
           (f) "Person" or "persons" means a person or persons meeting 
        the eligibility criteria in subdivision 3. 
           (g) "Responsible individual" "Authorized representative" 
        means an individual designated by the person or their legal 
        representative to act on their behalf.  This individual may be a 
        family member, guardian, representative payee, or other 
        individual designated by the person or their legal 
        representative, if any, to assist in purchasing and arranging 
        for supports.  For the purposes of this section, a responsible 
        individual an authorized representative is at least 18 years of 
        age. 
           (h) "Screening" means the screening of a person's service 
        needs under sections 256B.0911 and 256B.092. 
           (i) "Supports" means services, care, aids, home 
        modifications, or assistance purchased by the person or the 
        person's family.  Examples of supports include respite care, 
        assistance with daily living, and adaptive aids.  For the 
        purpose of this section, notwithstanding the provisions of 
        section 144A.43, supports purchased under the consumer support 
        program are not considered home care services. 
           (j) "Program of origination" means the program the 
        individual transferred from when approved for the consumer 
        support grant program. 
           Sec. 13.  Minnesota Statutes 1996, 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 is eligible for and 
        has been approved to receive services under alternative care 
        services as determined under section 256B.0913 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 responsible individual 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 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.  A person or person's 
        family is not eligible for a consumer support grant if their 
        income is at a level where they are required to pay a parental 
        fee under sections 252.27, 256B.055, subdivision 12, and 256B.14 
        and rules adopted under those sections for medical assistance 
        services to a disabled child living with at least one parent.  
           (d) The commissioner may limit the participation of nursing 
        facility residents, residents of intermediate care facilities 
        for persons with mental retardation, and the 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. 
           (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. 14.  Minnesota Statutes 1996, 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 board chooses to participate in the 
        program, 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 
        5, paragraph (f). 
           (b) Support grants to a person or a person's family may 
        will be provided through a monthly subsidy or lump sum payment 
        basis 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, 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 or alternative care program. 
           (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. 15.  Minnesota Statutes 1996, 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 alternative 
        care program, personal care attendant, home health aide, or 
        nursing facility services, the amount of funds transferred by 
        the commissioner between the developmental disability family 
        support program account, the alternative care 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 expended on those 
        individuals for those programs and services; or, in situations 
        where an individual is unable to obtain the support needed from 
        the program of origination due to the unavailability of service 
        providers at the time or the location where the supports are 
        needed, the allocation will be based on the county's best 
        estimate of the nonfederal dollars that would have been expended 
        if the services had been available; 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 alternative care account and 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 shall use up to five percent of each 
        county's allocation, as adjusted, for payments to that county 
        for administrative expenses, to be paid as a proportionate 
        addition to reported direct service expenditures. 
           (d) (f) Except as provided in this paragraph, the county 
        allocation for each individual or individual's family cannot 
        exceed 80 percent of the total nonfederal dollars expended on 
        the individual by the program of origination except for the 
        developmental disabilities family support grant program which 
        can be approved up to 100 percent of the nonfederal dollars and 
        in situations as described in paragraph (b), clause (3).  In 
        situations where exceptional need exists or the individual's 
        need for support increases, up to 100 percent of the nonfederal 
        dollars expended may be allocated to the county.  Allocations 
        that exceed 80 percent of the nonfederal dollars expended on the 
        individual by the program of origination must be approved by the 
        commissioner.  The remainder of the amount expended on the 
        individual by the program of origination will be used in the 
        following proportions:  half will be made available to the 
        consumer support grant program and participating counties for 
        consumer training, resource development, and other costs, and 
        half will be returned to the state general fund. 
           (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. 
           Sec. 16.  Minnesota Statutes 1996, section 256.969, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HOSPITAL COST INDEX.] (a) The hospital 
        cost index shall be the change in the Consumer Price Index-All 
        Items (United States city average) (CPI-U) forecasted by Data 
        Resources, Inc.  The commissioner shall use the indices as 
        forecasted in the third quarter of the calendar year prior to 
        the rate year.  The hospital cost index may be used to adjust 
        the base year operating payment rate through the rate year on an 
        annually compounded basis.  
           (b) For fiscal years beginning on or after July 1, 1993, 
        the commissioner of human services shall not provide automatic 
        annual inflation adjustments for hospital payment rates under 
        medical assistance, nor under general assistance medical care, 
        except that the inflation adjustments under paragraph (a) for 
        medical assistance, excluding general assistance medical care, 
        shall apply through calendar year 1997 1999.  The commissioner 
        of finance shall include as a budget change request in each 
        biennial detailed expenditure budget submitted to the 
        legislature under section 16A.11 annual adjustments in hospital 
        payment rates under medical assistance and general assistance 
        medical care, based upon the hospital cost index. 
           Sec. 17.  Minnesota Statutes 1996, section 256.9695, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPEALS.] A hospital may appeal a decision 
        arising from the application of standards or methods under 
        section 256.9685, 256.9686, or 256.969, if an appeal would 
        result in a change to the hospital's payment rate or payments.  
        Both overpayments and underpayments that result from the 
        submission of appeals shall be implemented.  Regardless of any 
        appeal outcome, relative values shall not be recalculated.  The 
        appeal shall be heard by an administrative law judge according 
        to sections 14.57 to 14.62, or upon agreement by both parties, 
        according to a modified appeals procedure established by the 
        commissioner and the office of administrative hearings.  In any 
        proceeding under this section, the appealing party must 
        demonstrate by a preponderance of the evidence that the 
        commissioner's determination is incorrect or not according to 
        law. 
           (a) To appeal a payment rate or payment determination or a 
        determination made from base year information, the hospital 
        shall file a written appeal request to the commissioner within 
        60 days of the date the payment rate determination was mailed.  
        The appeal request shall specify:  (i) the disputed items; (ii) 
        the authority in federal or state statute or rule upon which the 
        hospital relies for each disputed item; and (iii) the name and 
        address of the person to contact regarding the appeal.  Facts to 
        be considered in any appeal of base year information are limited 
        to those in existence at the time the payment rates of the first 
        rate year were established from the base year information.  In 
        the case of Medicare settled appeals, the 60-day appeal period 
        shall begin on the mailing date of the notice by the Medicare 
        program or the date the medical assistance payment rate 
        determination notice is mailed, whichever is later. 
           (b) To appeal a payment rate or payment change that results 
        from a difference in case mix between the base year and a rate 
        year, the procedures and requirements of paragraph (a) apply.  
        However, the appeal must be filed with the commissioner within 
        120 days after the end of a rate year.  A case mix appeal must 
        apply to the cost of services to all medical assistance patients 
        that received inpatient services from the hospital during the 
        rate year appealed.  For case mix appeals filed after January 1, 
        1997, the difference in case mix and the corresponding payment 
        adjustment must exceed a threshold of five percent. 
           Sec. 18.  Minnesota Statutes 1996, section 256B.04, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [COMPREHENSIVE HEALTH SERVICES SYSTEM.] The 
        commissioner shall carry out the duties in this section with the 
        participation of the boards of county commissioners, and with 
        full consideration for the interests of counties, to plan and 
        implement a unified, accountable, comprehensive health services 
        system that: 
           (1) promotes accessible and quality health care for all 
        Minnesotans; 
           (2) assures provision of adequate health care within 
        limited state and county resources; 
           (3) avoids shifting funding burdens to county tax 
        resources; 
           (4) provides statewide eligibility, benefit, and service 
        expectations; 
           (5) manages care, develops risk management strategies, and 
        contains cost in all health and human services; and 
           (6) supports effective implementation of publicly funded 
        health and human services for all areas of the state. 
           Sec. 19.  Minnesota Statutes 1996, section 256B.055, 
        subdivision 12, is amended to read: 
           Subd. 12.  [DISABLED CHILDREN.] (a) A person is eligible 
        for medical assistance if the person is under age 19 and 
        qualifies as a disabled individual under United States Code, 
        title 42, section 1382c(a), and would be eligible for medical 
        assistance under the state plan if residing in a medical 
        institution, and the child requires a level of care provided in 
        a hospital, nursing facility, or intermediate care facility for 
        persons with mental retardation or related conditions, for whom 
        home care is appropriate, provided that the cost to medical 
        assistance under this section is not more than the amount that 
        medical assistance would pay for if the child resides in an 
        institution.  After the child is determined to be eligible under 
        this section, the commissioner shall review the child's 
        disability under United States Code, title 42, section 1382c(a) 
        and level of care defined under this section no more often than 
        annually and may elect, based on the recommendation of health 
        care professionals under contract with the state medical review 
        team, to extend the review of disability and level of care up to 
        a maximum of four years.  The commissioner's decision on the 
        frequency of continuing review of disability and level of care 
        is not subject to administrative appeal under section 256.045.  
        Nothing in this subdivision shall be construed as affecting 
        other redeterminations of medical assistance eligibility under 
        this chapter and annual cost-effective reviews under this 
        section.  
           (b) For purposes of this subdivision, "hospital" means an 
        institution as defined in section 144.696, subdivision 3, 
        144.55, subdivision 3, or Minnesota Rules, part 4640.3600, and 
        licensed pursuant to sections 144.50 to 144.58.  For purposes of 
        this subdivision, a child requires a level of care provided in a 
        hospital if the child is determined by the commissioner to need 
        an extensive array of health services, including mental health 
        services, for an undetermined period of time, whose health 
        condition requires frequent monitoring and treatment by a health 
        care professional or by a person supervised by a health care 
        professional, who would reside in a hospital or require frequent 
        hospitalization if these services were not provided, and the 
        daily care needs are more complex than a nursing facility level 
        of care.  
           A child with serious emotional disturbance requires a level 
        of care provided in a hospital if the commissioner determines 
        that the individual requires 24-hour supervision because the 
        person exhibits recurrent or frequent suicidal or homicidal 
        ideation or behavior, recurrent or frequent psychosomatic 
        disorders or somatopsychic disorders that may become life 
        threatening, recurrent or frequent severe socially unacceptable 
        behavior associated with psychiatric disorder, ongoing and 
        chronic psychosis or severe, ongoing and chronic developmental 
        problems requiring continuous skilled observation, or severe 
        disabling symptoms for which office-centered outpatient 
        treatment is not adequate, and which overall severely impact the 
        individual's ability to function. 
           (c) For purposes of this subdivision, "nursing facility" 
        means a facility which provides nursing care as defined in 
        section 144A.01, subdivision 5, licensed pursuant to sections 
        144A.02 to 144A.10, which is appropriate if a person is in 
        active restorative treatment; is in need of special treatments 
        provided or supervised by a licensed nurse; or has unpredictable 
        episodes of active disease processes requiring immediate 
        judgment by a licensed nurse.  For purposes of this subdivision, 
        a child requires the level of care provided in a nursing 
        facility if the child is determined by the commissioner to meet 
        the requirements of the preadmission screening assessment 
        document under section 256B.0911 and the home care independent 
        rating document under section 256B.0627, subdivision 5, 
        paragraph (f), item (iii), adjusted to address age-appropriate 
        standards for children age 18 and under, pursuant to section 
        256B.0627, subdivision 5, paragraph (d), clause (2). 
           (d) For purposes of this subdivision, "intermediate care 
        facility for persons with mental retardation or related 
        conditions" or "ICF/MR" means a program licensed to provide 
        services to persons with mental retardation under section 
        252.28, and chapter 245A, and a physical plant licensed as a 
        supervised living facility under chapter 144, which together are 
        certified by the Minnesota department of health as meeting the 
        standards in Code of Federal Regulations, title 42, part 483, 
        for an intermediate care facility which provides services for 
        persons with mental retardation or persons with related 
        conditions who require 24-hour supervision and active treatment 
        for medical, behavioral, or habilitation needs.  For purposes of 
        this subdivision, a child requires a level of care provided in 
        an ICF/MR if the commissioner finds that the child has mental 
        retardation or a related condition in accordance with section 
        256B.092, is in need of a 24-hour plan of care and active 
        treatment similar to persons with mental retardation, and there 
        is a reasonable indication that the child will need ICF/MR 
        services. 
           (e) For purposes of this subdivision, a person requires the 
        level of care provided in a nursing facility if the person 
        requires 24-hour monitoring or supervision and a plan of mental 
        health treatment because of specific symptoms or functional 
        impairments associated with a serious mental illness or disorder 
        diagnosis, which meet severity criteria for mental health 
        established by the commissioner based on standards developed for 
        the Wisconsin Katie Beckett program and published in July 1994 
        March 1997 as the Minnesota Mental Health Level of Care for 
        Children and Adolescents with Severe Emotional Disorders. 
           (f) The determination of the level of care needed by the 
        child shall be made by the commissioner based on information 
        supplied to the commissioner by the parent or guardian, the 
        child's physician or physicians, and other professionals as 
        requested by the commissioner.  The commissioner shall establish 
        a screening team to conduct the level of care determinations 
        according to this subdivision. 
           (g) If a child meets the conditions in paragraph (b), (c), 
        (d), or (e), the commissioner must assess the case to determine 
        whether: 
           (1) the child qualifies as a disabled individual under 
        United States Code, title 42, section 1382c(a), and would be 
        eligible for medical assistance if residing in a medical 
        institution; and 
           (2) the cost of medical assistance services for the child, 
        if eligible under this subdivision, would not be more than the 
        cost to medical assistance if the child resides in a medical 
        institution to be determined as follows: 
           (i) for a child who requires a level of care provided in an 
        ICF/MR, the cost of care for the child in an institution shall 
        be determined using the average payment rate established for the 
        regional treatment centers that are certified as ICFs/MR; 
           (ii) for a child who requires a level of care provided in 
        an inpatient hospital setting according to paragraph (b), 
        cost-effectiveness shall be determined according to Minnesota 
        Rules, part 9505.3520, items F and G; and 
           (iii) for a child who requires a level of care provided in 
        a nursing facility according to paragraph (c) or (e), 
        cost-effectiveness shall be determined according to Minnesota 
        Rules, part 9505.3040, except that the nursing facility average 
        rate shall be adjusted to reflect rates which would be paid for 
        children under age 16.  The commissioner may authorize an amount 
        up to the amount medical assistance would pay for a child 
        referred to the commissioner by the preadmission screening team 
        under section 256B.0911. 
           (h) Children eligible for medical assistance services under 
        section 256B.055, subdivision 12, as of June 30, 1995, must be 
        screened according to the criteria in this subdivision prior to 
        January 1, 1996.  Children found to be ineligible may not be 
        removed from the program until January 1, 1996.  
           Sec. 20.  Minnesota Statutes 1996, section 256B.056, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INCOME.] To be eligible for medical assistance, 
        a person must not have, or anticipate receiving, semiannual 
        income in excess of 120 percent of the income standards by 
        family size used in the aid to families with dependent children 
        program, except that families and children may have an income up 
        to 133-1/3 percent of the AFDC income standard.  In computing 
        income to determine eligibility of persons who are not residents 
        of long-term care facilities, the commissioner shall disregard 
        increases in income as required by Public Law Numbers 94-566, 
        section 503; 99-272; and 99-509.  Veterans aid and attendance 
        benefits and Veterans Administration unusual medical expense 
        payments are considered income to the recipient. 
           Sec. 21.  Minnesota Statutes 1996, section 256B.056, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXCESS INCOME.] A person who has excess income 
        is eligible for medical assistance if the person has expenses 
        for medical care that are more than the amount of the person's 
        excess income, computed by deducting incurred medical expenses 
        from the excess income to reduce the excess to the income 
        standard specified in subdivision 4.  The person shall elect to 
        have the medical expenses deducted at the beginning of a 
        one-month budget period or at the beginning of a six-month 
        budget period.  Until June 30, 1993, or the date the Medicaid 
        Management Information System (MMIS) upgrade is implemented, 
        whichever occurs last, The commissioner shall allow persons 
        eligible for assistance on a one-month spenddown basis under 
        this subdivision to elect to pay the monthly spenddown amount in 
        advance of the month of eligibility to the local state agency in 
        order to maintain eligibility on a continuous basis.  If the 
        recipient does not pay the spenddown amount on or before 
        the 10th 20th of the month, the recipient is ineligible for this 
        option for the following month.  The local agency must deposit 
        spenddown payments into its treasury and issue a monthly payment 
        to the state agency with the necessary individual account 
        information.  The local agency shall code the client eligibility 
        Medicaid Management Information System (MMIS) to indicate that 
        the spenddown obligation has been satisfied for the month 
        paid recipient has elected this option.  The state agency shall 
        convey this information recipient eligibility information 
        relative to the collection of the spenddown to providers through 
        eligibility cards which list no remaining spenddown obligation.  
        After the implementation of the MMIS upgrade, the Electronic 
        Verification System (EVS).  A recipient electing advance payment 
        must pay the state agency the monthly spenddown amount on or 
        before the 10th 20th of the month in order to be eligible for 
        this option in the following month.  
           Sec. 22.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] An infant 
        less than one year of age or a pregnant woman 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.  For 
        purposes of this subdivision, "countable family income" means 
        the amount of income considered available using the methodology 
        of the AFDC program, except for the earned income disregard and 
        employment deductions.  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 exceeds 275 
        percent of the federal poverty guideline will be deducted for 
        pregnant women and infants less than one year of age.  
        Eligibility for a pregnant woman or infant less than one year of 
        age under this subdivision must be determined without regard to 
        asset standards established in section 256B.056, subdivision 3.  
           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. 
           Sec. 23.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [PREGNANT WOMEN AND INFANTS; EXPANSION.] This 
        subdivision supersedes subdivision 1 as long as the Minnesota 
        health care reform waiver remains in effect.  When the waiver 
        expires, the commissioner of human services shall publish a 
        notice in the State Register and notify the revisor of 
        statutes.  An infant less than two years 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.  For purposes of this subdivision, "countable 
        family income" means the amount of income considered available 
        using the methodology of the AFDC program, except for the earned 
        income disregard and employment deductions.  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 exceeds 275 percent of the federal poverty guideline 
        will be deducted for pregnant women and infants less than two 
        years of age.  Eligibility for a pregnant woman or infant less 
        than two years of age under this subdivision must be determined 
        without regard to asset standards established in section 
        256B.056, subdivision 3.  
           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 second 
        birthday, as long as the child remains in the woman's household. 
           Sec. 24.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHILDREN.] A child one through five years of age 
        in a family whose countable income is less than 133 percent of 
        the federal poverty guidelines for the same family size, is 
        eligible for medical assistance.  A child six through 18 years 
        of age, who was born after September 30, 1983, in a family whose 
        countable income is less than 100 percent of the federal poverty 
        guidelines for the same family size is eligible for medical 
        assistance.  Eligibility for children under this subdivision 
        must be determined without regard to asset standards established 
        in section 256B.056, subdivision 3.  
           Sec. 25.  Minnesota Statutes 1996, 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.  The commissioner, after receiving recommendations from 
        professional medical associations and professional pharmacist 
        associations, 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.  Committee 
        members shall serve three-year terms and shall serve without 
        compensation.  Members may be reappointed once.  
           (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 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 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; and 
           (3) 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 
        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.  The formulary shall not include:  
           (i) drugs or products for which there is no federal 
        funding; 
           (ii) 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, and vitamins for children under 
        the age of seven and pregnant or nursing women;, and 
           (iii) 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; 
           (iv) (iii) anorectics; and 
           (v) (iv) drugs for which medical value has not been 
        established. 
           The commissioner shall publish conditions for prohibiting 
        payment for specific drugs after considering the formulary 
        committee's recommendations.  
           (c) 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 pharmacy dispensing fee shall be $3.85 $3.65.  
        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 percent.  
        The maximum allowable cost of a multisource drug may be set by 
        the commissioner and it shall be comparable to, but no higher 
        than, the maximum amount paid by other third-party payors in 
        this state who have maximum allowable cost programs.  
        Establishment of the amount of payment for drugs shall not be 
        subject to the requirements of the administrative procedure 
        act.  An additional dispensing fee of $.30 may be added to the 
        dispensing fee paid to pharmacists for legend drug prescriptions 
        dispensed to residents of long-term care facilities when a unit 
        dose blister card system, approved by the department, is used.  
        Under this type of dispensing system, the pharmacist must 
        dispense a 30-day supply of drug.  The National Drug Code (NDC) 
        from the drug container used to fill the blister card must be 
        identified on the claim to the department.  The unit dose 
        blister card containing the drug must meet the packaging 
        standards set forth in Minnesota Rules, part 6800.2700, that 
        govern the return of unused drugs to the pharmacy for reuse.  
        The pharmacy provider will be required to credit the department 
        for the actual acquisition cost of all unused drugs that are 
        eligible for reuse.  Over-the-counter medications must be 
        dispensed in the manufacturer's unopened package.  The 
        commissioner may permit the drug clozapine to be dispensed in a 
        quantity that is less than a 30-day supply.  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.  
           Sec. 26.  Minnesota Statutes 1996, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 31a.  [AUGMENTATIVE AND ALTERNATIVE COMMUNICATION 
        SYSTEMS.] (a) Medical assistance covers augmentative and 
        alternative communication systems consisting of electronic or 
        nonelectronic devices and the related components necessary to 
        enable a person with severe expressive communication limitations 
        to produce or transmit messages or symbols in a manner that 
        compensates for that disability. 
           (b) By January 1, 1998, the commissioner, in cooperation 
        with the commissioner of administration, shall establish an 
        augmentative and alternative communication system purchasing 
        program within a state agency or by contract with a qualified 
        private entity.  The purpose of this service is to facilitate 
        ready availability of the augmentative and alternative 
        communication systems needed to meet the needs of persons with 
        severe expressive communication limitations in an efficient and 
        cost-effective manner.  This program shall: 
           (1) coordinate purchase and rental of augmentative and 
        alternative communication systems; 
           (2) negotiate agreements with manufacturers and vendors for 
        purchase of components of these systems, for warranty coverage, 
        and for repair service; 
           (3) when efficient and cost-effective, maintain and 
        refurbish if needed, an inventory of components of augmentative 
        and alternative communication systems for short- or long-term 
        loan to recipients; 
           (4) facilitate training sessions for service providers, 
        consumers, and families on augmentative and alternative 
        communication systems; and 
           (5) develop a recycling program for used augmentative and 
        alternative communications systems to be reissued and used for 
        trials and short-term use, when appropriate. 
           The availability of components of augmentative and 
        alternative communication systems through this program is 
        subject to prior authorization requirements established under 
        subdivision 25. 
           Reimbursement rates established by this purchasing program 
        are not subject to Minnesota Rules, part 9505.0445, item S or T. 
           Sec. 27.  Minnesota Statutes 1996, section 256B.0626, is 
        amended to read: 
           256B.0626 [ESTIMATION OF 50TH PERCENTILE OF PREVAILING 
        CHARGES.] 
           (a) The 50th percentile of the prevailing charge for the 
        base year identified in statute must be estimated by the 
        commissioner in the following situations: 
           (1) there were less than ten five billings in the calendar 
        year specified in legislation governing maximum payment rates; 
           (2) the service was not available in the calendar year 
        specified in legislation governing maximum payment rates; 
           (3) the payment amount is the result of a provider appeal; 
           (4) the procedure code description has changed since the 
        calendar year specified in legislation governing maximum payment 
        rates, and, therefore, the prevailing charge information 
        reflects the same code but a different procedure description; or 
           (5) the 50th percentile reflects a payment which is grossly 
        inequitable when compared with payment rates for procedures or 
        services which are substantially similar. 
           (b) When one of the situations identified in paragraph (a) 
        occurs, the commissioner shall use the following methodology to 
        reconstruct a rate comparable to the 50th percentile of the 
        prevailing rate: 
           (1) refer to information which exists for the first nine 
        four billings in the calendar year specified in legislation 
        governing maximum payment rates; or 
           (2) refer to surrounding or comparable procedure codes; or 
           (3) refer to the 50th percentile of years subsequent to the 
        calendar year specified in legislation governing maximum payment 
        rates, and reduce that amount by applying an appropriate 
        Consumer Price Index formula; or 
           (4) refer to relative value indexes; or 
           (5) refer to reimbursement information from other third 
        parties, such as Medicare. 
           Sec. 28.  Minnesota Statutes 1996, section 256B.0627, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
        payments for home care services shall be limited according to 
        this subdivision.  
           (a)  [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A 
        recipient may receive the following home care services during a 
        calendar year: 
           (1) any initial assessment; and 
           (2) up to two reassessments per year done to determine a 
        recipient's need for personal care services; and 
           (3) up to five skilled nurse visits.  
           (b)  [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care 
        services above the limits in paragraph (a) must receive the 
        commissioner's prior authorization, except when: 
           (1) the home care services were required to treat an 
        emergency medical condition that if not immediately treated 
        could cause a recipient serious physical or mental disability, 
        continuation of severe pain, or death.  The provider must 
        request retroactive authorization no later than five working 
        days after giving the initial service.  The provider must be 
        able to substantiate the emergency by documentation such as 
        reports, notes, and admission or discharge histories; 
           (2) the home care services were provided on or after the 
        date on which the recipient's eligibility began, but before the 
        date on which the recipient was notified that the case was 
        opened.  Authorization will be considered if the request is 
        submitted by the provider within 20 working days of the date the 
        recipient was notified that the case was opened; 
           (3) a third-party payor for home care services has denied 
        or adjusted a payment.  Authorization requests must be submitted 
        by the provider within 20 working days of the notice of denial 
        or adjustment.  A copy of the notice must be included with the 
        request; 
           (4) the commissioner has determined that a county or state 
        human services agency has made an error; or 
           (5) the professional nurse determines an immediate need for 
        up to 40 skilled nursing or home health aide visits per calendar 
        year and submits a request for authorization within 20 working 
        days of the initial service date, and medical assistance is 
        determined to be the appropriate payer. 
           (c)  [RETROACTIVE AUTHORIZATION.] A request for retroactive 
        authorization will be evaluated according to the same criteria 
        applied to prior authorization requests.  
           (d)  [ASSESSMENT AND SERVICE PLAN.] Assessments under 
        section 256B.0627, subdivision 1, paragraph (a), shall be 
        conducted initially, and at least annually thereafter, in person 
        with the recipient and result in a completed service plan using 
        forms specified by the commissioner.  Within 30 days of 
        recipient or responsible party request for home care services, 
        the assessment, the service plan, and other information 
        necessary to determine medical necessity such as diagnostic or 
        testing information, social or medical histories, and hospital 
        or facility discharge summaries shall be submitted to the 
        commissioner.  For personal care services: 
           (1) The amount and type of service authorized based upon 
        the assessment and service plan will follow the recipient if the 
        recipient chooses to change providers.  
           (2) If the recipient's medical need changes, the 
        recipient's provider may assess the need for a change in service 
        authorization and request the change from the county public 
        health nurse.  Within 30 days of the request, the public health 
        nurse will determine whether to request the change in services 
        based upon the provider assessment, or conduct a home visit to 
        assess the need and determine whether the change is appropriate. 
           (3) To continue to receive personal care services when the 
        recipient displays no significant change, the county public 
        health nurse has the option to review with the commissioner, or 
        the commissioner's designee, the service plan on record and 
        receive authorization for up to an additional 12 months at a 
        time for up to three years. 
           (e)  [PRIOR AUTHORIZATION.] The commissioner, or the 
        commissioner's designee, shall review the assessment, the 
        service plan, and any additional information that is submitted.  
        The commissioner shall, within 30 days after receiving a 
        complete request, assessment, and service plan, authorize home 
        care services as follows:  
           (1)  [HOME HEALTH SERVICES.] All home health services 
        provided by a licensed nurse or a home health aide must be prior 
        authorized by the commissioner or the commissioner's designee.  
        Prior authorization must be based on medical necessity and 
        cost-effectiveness when compared with other care options.  When 
        home health services are used in combination with personal care 
        and private duty nursing, the cost of all home care services 
        shall be considered for cost-effectiveness.  The commissioner 
        shall limit nurse and home health aide visits to no more than 
        one visit each per day. 
           (2)  [PERSONAL CARE SERVICES.] (i) All personal care 
        services and registered nurse supervision must be prior 
        authorized by the commissioner or the commissioner's designee 
        except for the assessments established in paragraph (a).  The 
        amount of personal care services authorized must be based on the 
        recipient's home care rating.  A child may not be found to be 
        dependent in an activity of daily living if because of the 
        child's age an adult would either perform the activity for the 
        child or assist the child with the activity and the amount of 
        assistance needed is similar to the assistance appropriate for a 
        typical child of the same age.  Based on medical necessity, the 
        commissioner may authorize: 
           (A) up to two times the average number of direct care hours 
        provided in nursing facilities for the recipient's comparable 
        case mix level; or 
           (B) up to three times the average number of direct care 
        hours provided in nursing facilities for recipients who have 
        complex medical needs or are dependent in at least seven 
        activities of daily living and need physical assistance with 
        eating or have a neurological diagnosis; or 
           (C) up to 60 percent of the average reimbursement rate, as 
        of July 1, 1991, for care provided in a regional treatment 
        center for recipients who have Level I behavior, plus any 
        inflation adjustment as provided by the legislature for personal 
        care service; or 
           (D) up to the amount the commissioner would pay, as of July 
        1, 1991, plus any inflation adjustment provided for home care 
        services, for care provided in a regional treatment center for 
        recipients referred to the commissioner by a regional treatment 
        center preadmission evaluation team.  For purposes of this 
        clause, home care services means all services provided in the 
        home or community that would be included in the payment to a 
        regional treatment center; or 
           (E) up to the amount medical assistance would reimburse for 
        facility care for recipients referred to the commissioner by a 
        preadmission screening team established under section 256B.0911 
        or 256B.092; and 
           (F) a reasonable amount of time for the provision of 
        nursing supervision of personal care services.  
           (ii) The number of direct care hours shall be determined 
        according to the annual cost report submitted to the department 
        by nursing facilities.  The average number of direct care hours, 
        as established by May 1, 1992, shall be calculated and 
        incorporated into the home care limits on July 1, 1992.  These 
        limits shall be calculated to the nearest quarter hour. 
           (iii) The home care rating shall be determined by the 
        commissioner or the commissioner's designee based on information 
        submitted to the commissioner by the county public health nurse 
        on forms specified by the commissioner.  The home care rating 
        shall be a combination of current assessment tools developed 
        under sections 256B.0911 and 256B.501 with an addition for 
        seizure activity that will assess the frequency and severity of 
        seizure activity and with adjustments, additions, and 
        clarifications that are necessary to reflect the needs and 
        conditions of recipients who need home care including children 
        and adults under 65 years of age.  The commissioner shall 
        establish these forms and protocols under this section and shall 
        use an advisory group, including representatives of recipients, 
        providers, and counties, for consultation in establishing and 
        revising the forms and protocols. 
           (iv) A recipient shall qualify as having complex medical 
        needs if the care required is difficult to perform and because 
        of recipient's medical condition requires more time than 
        community-based standards allow or requires more skill than 
        would ordinarily be required and the recipient needs or has one 
        or more of the following: 
           (A) daily tube feedings; 
           (B) daily parenteral therapy; 
           (C) wound or decubiti care; 
           (D) postural drainage, percussion, nebulizer treatments, 
        suctioning, tracheotomy care, oxygen, mechanical ventilation; 
           (E) catheterization; 
           (F) ostomy care; 
           (G) quadriplegia; or 
           (H) other comparable medical conditions or treatments the 
        commissioner determines would otherwise require institutional 
        care.  
           (v) A recipient shall qualify as having Level I behavior if 
        there is reasonable supporting evidence that the recipient 
        exhibits, or that without supervision, observation, or 
        redirection would exhibit, one or more of the following 
        behaviors that cause, or have the potential to cause: 
           (A) injury to the recipient's own body; 
           (B) physical injury to other people; or 
           (C) destruction of property. 
           (vi) Time authorized for personal care relating to Level I 
        behavior in subclause (v), items (A) to (C), shall be based on 
        the predictability, frequency, and amount of intervention 
        required. 
           (vii) A recipient shall qualify as having Level II behavior 
        if the recipient exhibits on a daily basis one or more of the 
        following behaviors that interfere with the completion of 
        personal care services under subdivision 4, paragraph (a): 
           (A) unusual or repetitive habits; 
           (B) withdrawn behavior; or 
           (C) offensive behavior. 
           (viii) A recipient with a home care rating of Level II 
        behavior in subclause (vii), items (A) to (C), shall be rated as 
        comparable to a recipient with complex medical needs under 
        subclause (iv).  If a recipient has both complex medical needs 
        and Level II behavior, the home care rating shall be the next 
        complex category up to the maximum rating under subclause (i), 
        item (B). 
           (3)  [PRIVATE DUTY NURSING SERVICES.] All private duty 
        nursing services shall be prior authorized by the commissioner 
        or the commissioner's designee.  Prior authorization for private 
        duty nursing services shall be based on medical necessity and 
        cost-effectiveness when compared with alternative care options.  
        The commissioner may authorize medically necessary private duty 
        nursing services in quarter-hour units when: 
           (i) the recipient requires more individual and continuous 
        care than can be provided during a nurse visit; or 
           (ii) the cares are outside of the scope of services that 
        can be provided by a home health aide or personal care assistant.
           The commissioner may authorize: 
           (A) up to two times the average amount of direct care hours 
        provided in nursing facilities statewide for case mix 
        classification "K" as established by the annual cost report 
        submitted to the department by nursing facilities in May 1992; 
           (B) private duty nursing in combination with other home 
        care services up to the total cost allowed under clause (2); 
           (C) up to 16 hours per day if the recipient requires more 
        nursing than the maximum number of direct care hours as 
        established in item (A) and the recipient meets the hospital 
        admission criteria established under Minnesota Rules, parts 
        9505.0500 to 9505.0540.  
           The commissioner may authorize up to 16 hours per day of 
        medically necessary private duty nursing services or up to 24 
        hours per day of medically necessary private duty nursing 
        services until such time as the commissioner is able to make a 
        determination of eligibility for recipients who are 
        cooperatively applying for home care services under the 
        community alternative care program developed under section 
        256B.49, or until it is determined by the appropriate regulatory 
        agency that a health benefit plan is or is not required to pay 
        for appropriate medically necessary health care services.  
        Recipients or their representatives must cooperatively assist 
        the commissioner in obtaining this determination.  Recipients 
        who are eligible for the community alternative care program may 
        not receive more hours of nursing under this section than would 
        otherwise be authorized under section 256B.49. 
           (4)  [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is 
        ventilator-dependent, the monthly medical assistance 
        authorization for home care services shall not exceed what the 
        commissioner would pay for care at the highest cost hospital 
        designated as a long-term hospital under the Medicare program.  
        For purposes of this clause, home care services means all 
        services provided in the home that would be included in the 
        payment for care at the long-term hospital.  
        "Ventilator-dependent" means an individual who receives 
        mechanical ventilation for life support at least six hours per 
        day and is expected to be or has been dependent for at least 30 
        consecutive days.  
           (f)  [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner 
        or the commissioner's designee shall determine the time period 
        for which a prior authorization shall be effective.  If the 
        recipient continues to require home care services beyond the 
        duration of the prior authorization, the home care provider must 
        request a new prior authorization.  Under no circumstances, 
        other than the exceptions in paragraph (b), shall a prior 
        authorization be valid prior to the date the commissioner 
        receives the request or for more than 12 months.  A recipient 
        who appeals a reduction in previously authorized home care 
        services may continue previously authorized services, other than 
        temporary services under paragraph (h), pending an appeal under 
        section 256.045.  The commissioner must provide a detailed 
        explanation of why the authorized services are reduced in amount 
        from those requested by the home care provider.  
           (g)  [APPROVAL OF HOME CARE SERVICES.] The commissioner or 
        the commissioner's designee shall determine the medical 
        necessity of home care services, the level of caregiver 
        according to subdivision 2, and the institutional comparison 
        according to this subdivision, the cost-effectiveness of 
        services, and the amount, scope, and duration of home care 
        services reimbursable by medical assistance, based on the 
        assessment, primary payer coverage determination information as 
        required, the service plan, the recipient's age, the cost of 
        services, the recipient's medical condition, and diagnosis or 
        disability.  The commissioner may publish additional criteria 
        for determining medical necessity according to section 256B.04. 
           (h)  [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] 
        The agency nurse, the independently enrolled private duty nurse, 
        or county public health nurse may request a temporary 
        authorization for home care services by telephone.  The 
        commissioner may approve a temporary level of home care services 
        based on the assessment, and service or care plan information, 
        and primary payer coverage determination information as required.
        Authorization for a temporary level of home care services 
        including nurse supervision is limited to the time specified by 
        the commissioner, but shall not exceed 45 days, unless extended 
        because the county public health nurse has not completed the 
        required assessment and service plan, or the commissioner's 
        determination has not been made.  The level of services 
        authorized under this provision shall have no bearing on a 
        future prior authorization. 
           (i)  [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] 
        Home care services provided in an adult or child foster care 
        setting must receive prior authorization by the department 
        according to the limits established in paragraph (a). 
           The commissioner may not authorize: 
           (1) home care services that are the responsibility of the 
        foster care provider under the terms of the foster care 
        placement agreement and administrative rules.  Requests for home 
        care services for recipients residing in a foster care setting 
        must include the foster care placement agreement and 
        determination of difficulty of care; 
           (2) personal care services when the foster care license 
        holder is also the personal care provider or personal care 
        assistant unless the recipient can direct the recipient's own 
        care, or case management is provided as required in section 
        256B.0625, subdivision 19a; 
           (3) personal care services when the responsible party is an 
        employee of, or under contract with, or has any direct or 
        indirect financial relationship with the personal care provider 
        or personal care assistant, unless case management is provided 
        as required in section 256B.0625, subdivision 19a; 
           (4) home care services when the number of foster care 
        residents is greater than four unless the county responsible for 
        the recipient's foster placement made the placement prior to 
        April 1, 1992, requests that home care services be provided, and 
        case management is provided as required in section 256B.0625, 
        subdivision 19a; or 
           (5) home care services when combined with foster care 
        payments, other than room and board payments that exceed the 
        total amount that public funds would pay for the recipient's 
        care in a medical institution. 
           Sec. 29.  Minnesota Statutes 1996, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [PERSONAL CARE ASSISTANT SERVICES.] Recipients of 
        personal care assistant services may share staff and the 
        commissioner shall provide a rate system for shared personal 
        care assistant services.  The rate system shall not exceed 1-1/2 
        the amount paid for providing services to one person, and shall 
        increase incrementally by one-half the cost of serving a single 
        person, for each person served.  A personal care assistant may 
        not serve more than three children in a single setting. 
           Nothing in this subdivision shall be construed to reduce 
        the total number of hours authorized for an individual recipient.
           Sec. 30.  Minnesota Statutes 1996, section 256B.064, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [GROUNDS FOR MONETARY RECOVERY AND SANCTIONS 
        AGAINST VENDORS.] The commissioner may seek monetary recovery 
        and impose sanctions against vendors of medical care for any of 
        the following:  fraud, theft, or abuse in connection with the 
        provision of medical care to recipients of public assistance; a 
        pattern of presentment of false or duplicate claims or claims 
        for services not medically necessary; a pattern of making false 
        statements of material facts for the purpose of obtaining 
        greater compensation than that to which the vendor is legally 
        entitled; suspension or termination as a Medicare vendor; and 
        refusal to grant the state agency access during regular business 
        hours to examine all records necessary to disclose the extent of 
        services provided to program recipients; and any reason for 
        which a vendor could be excluded from participation in the 
        Medicare program under section 1128, 1128A, or 1866(b)(2) of the 
        Social Security Act.  The determination of services not 
        medically necessary may be made by the commissioner in 
        consultation with a peer advisory task force appointed by the 
        commissioner on the recommendation of appropriate professional 
        organizations.  The task force expires as provided in section 
        15.059, subdivision 5. 
           Sec. 31.  Minnesota Statutes 1996, section 256B.064, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [METHODS OF MONETARY RECOVERY.] The commissioner 
        may obtain monetary recovery for the conduct described in 
        subdivision 1a by the following from a vendor who has been 
        improperly paid either as a result of conduct described in 
        subdivision 1a or as a result of a vendor or department error, 
        regardless of whether the error was intentional.  The 
        commissioner may obtain monetary recovery using methods, 
        including but not limited to the following:  assessing and 
        recovering money erroneously improperly paid and debiting from 
        future payments any money erroneously improperly paid, except 
        that.  Patterns need not be proven as a precondition to monetary 
        recovery for of erroneous or false claims, duplicate claims, 
        claims for services not medically necessary, or claims based on 
        false statements.  The commissioner may shall charge interest on 
        money to be recovered if the recovery is to be made by 
        installment payments or debits, except when the monetary 
        recovery is of an overpayment that resulted from a department 
        error.  The interest charged shall be the rate established by 
        the commissioner of revenue under section 270.75.  
           Sec. 32.  Minnesota Statutes 1996, section 256B.064, 
        subdivision 2, is amended to read: 
           Subd. 2.  [IMPOSITION OF MONETARY RECOVERY AND SANCTIONS.] 
        (a) The commissioner shall determine monetary amounts to be 
        recovered and the sanction to be imposed upon a vendor of 
        medical care for conduct described by subdivision 1a.  Except in 
        the case of a conviction for conduct described in subdivision 1a 
        as provided in paragraph (b), neither a monetary recovery nor a 
        sanction will be sought imposed by the commissioner without 
        prior notice and an opportunity for a hearing, pursuant 
        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) 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. 33.  Minnesota Statutes 1996, section 256B.0644, is 
        amended to read: 
           256B.0644 [PARTICIPATION REQUIRED FOR REIMBURSEMENT UNDER 
        OTHER STATE HEALTH CARE PROGRAMS.] 
           A vendor of medical care, as defined in section 256B.02, 
        subdivision 7, and a health maintenance organization, as defined 
        in chapter 62D, must participate as a provider or contractor in 
        the medical assistance program, general assistance medical care 
        program, and MinnesotaCare as a condition of participating as a 
        provider in health insurance plans and programs or contractor 
        for state employees established under section 43A.18, the public 
        employees insurance program under section 43A.316, for health 
        insurance plans offered to local statutory or home rule charter 
        city, county, and school district employees, the workers' 
        compensation system under section 176.135, and insurance plans 
        provided through the Minnesota comprehensive health association 
        under sections 62E.01 to 62E.16.  The limitations on insurance 
        plans offered to local government employees shall not be 
        applicable in geographic areas where provider participation is 
        limited by managed care contracts with the department of human 
        services.  For providers other than health maintenance 
        organizations, participation in the medical assistance program 
        means that (1) the provider accepts new medical assistance, 
        general assistance medical care, and MinnesotaCare patients or, 
        (2) for providers other than dental services providers, at least 
        20 percent of the provider's patients are covered by medical 
        assistance, general assistance medical care, and MinnesotaCare 
        as their primary source of coverage, or (3) for dental services 
        providers, at least ten percent of the provider's patients are 
        covered by medical assistance, general assistance medical care, 
        and MinnesotaCare as their primary source of coverage.  The 
        commissioner shall establish participation requirements for 
        health maintenance organizations.  The commissioner shall 
        provide lists of participating medical assistance providers on a 
        quarterly basis to the commissioner of employee relations, the 
        commissioner of labor and industry, and the commissioner of 
        commerce.  Each of the commissioners shall develop and implement 
        procedures to exclude as participating providers in the program 
        or programs under their jurisdiction those providers who do not 
        participate in the medical assistance program.  The commissioner 
        of employee relations shall implement this section through 
        contracts with participating health and dental carriers. 
           Sec. 34.  Minnesota Statutes 1996, section 256B.0911, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REIMBURSEMENT FOR CERTIFIED NURSING FACILITIES.] 
        (a) Medical assistance reimbursement for nursing facilities 
        shall be authorized for a medical assistance recipient only if a 
        preadmission screening has been conducted prior to admission or 
        the local county agency has authorized an exemption.  Medical 
        assistance reimbursement for nursing facilities shall not be 
        provided for any recipient who the local screener has determined 
        does not meet the level of care criteria for nursing facility 
        placement or, if indicated, has not had a level II PASARR 
        evaluation completed unless an admission for a recipient with 
        mental illness is approved by the local mental health authority 
        or an admission for a recipient with mental retardation or 
        related condition is approved by the state mental retardation 
        authority.  The county preadmission screening team may deny 
        certified nursing facility admission using the level of care 
        criteria established under section 144.0721 and deny medical 
        assistance reimbursement for certified nursing facility care.  
        Persons receiving care in a certified nursing facility or 
        certified boarding care home who are reassessed by the 
        commissioner of health according to section 144.0722 and 
        determined to no longer meet the level of care criteria for a 
        certified nursing facility or certified boarding care home may 
        no longer remain a resident in the certified nursing facility or 
        certified boarding care home and must be relocated to the 
        community if the persons were admitted on or after July 1, 1996 
        1998.  
           (b) Persons receiving services under section 256B.0913, 
        subdivisions 1 to 14, or 256B.0915 who are reassessed and found 
        to not meet the level of care criteria for admission to a 
        certified nursing facility or certified boarding care home may 
        no longer receive these services if persons were admitted to the 
        program on or after July 1, 1996 1998.  The commissioner shall 
        make a request to the health care financing administration for a 
        waiver allowing screening team approval of Medicaid payments for 
        certified nursing facility care.  An individual has a choice and 
        makes the final decision between nursing facility placement and 
        community placement after the screening team's recommendation, 
        except as provided in paragraphs (b) and (c).  
           (b) (c) The local county mental health authority or the 
        state mental retardation authority under Public Law Numbers 
        100-203 and 101-508 may prohibit admission to a nursing 
        facility, if the individual does not meet the nursing facility 
        level of care criteria or needs specialized services as defined 
        in Public Law Numbers 100-203 and 101-508.  For purposes of this 
        section, "specialized services" for a person with mental 
        retardation or a related condition means "active treatment" as 
        that term is defined in Code of Federal Regulations, title 42, 
        section 483.440(a)(1). 
           (c) (d) Upon the receipt by the commissioner of approval by 
        the Secretary of Health and Human Services of the waiver 
        requested under paragraph (a), the local screener shall deny 
        medical assistance reimbursement for nursing facility care for 
        an individual whose long-term care needs can be met in a 
        community-based setting and whose cost of community-based home 
        care services is less than 75 percent of the average payment for 
        nursing facility care for that individual's case mix 
        classification, and who is either: 
           (i) a current medical assistance recipient being screened 
        for admission to a nursing facility; or 
           (ii) an individual who would be eligible for medical 
        assistance within 180 days of entering a nursing facility and 
        who meets a nursing facility level of care. 
           (d) (e) Appeals from the screening team's recommendation or 
        the county agency's final decision shall be made according to 
        section 256.045, subdivision 3. 
           Sec. 35.  Minnesota Statutes 1996, section 256B.0912, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [RATE CONSOLIDATION AND EQUALIZATION.] (a) The 
        commissioner of human services shall use one maximum 
        reimbursement rate for personal care services rendered after 
        June 30, 1997, regardless of whether the services are provided 
        through the medical assistance program, the alternative care 
        program, and the elderly, the community alternatives for 
        disabled individuals, the community alternative care, and the 
        traumatic brain injury waiver programs.  The maximum 
        reimbursement rate to be paid must be the reimbursement rate 
        paid for personal care services received under the medical 
        assistance program on June 30, 1997. 
           (b) The maximum reimbursement rates for behavior 
        programming and cognitive therapy services provided through the 
        traumatic brain injury waiver must be equivalent to the medical 
        assistance reimbursement rates for mental health services. 
           Sec. 36.  Minnesota Statutes 1996, section 256B.0913, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CASE MANAGEMENT.] The lead agency shall appoint 
        a social worker from the county agency or a registered nurse 
        from the county public health nursing service of the local board 
        of health to be the case manager for any person receiving 
        services funded by the alternative care program. 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 ensure the health and 
        safety of the individual client and is responsible for the 
        cost-effectiveness of the alternative care individual care 
        plan.  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. 37.  Minnesota Statutes 1996, 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 
        180-day eligible clients. 
           (b) Prior to 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.  The 
        allocation for fiscal year 1992 shall be calculated using a base 
        that is adjusted to exclude the medical assistance share of 
        alternative care expenditures.  The adjusted base is calculated 
        by multiplying each county's allocation for fiscal year 1991 by 
        the percentage of county alternative care expenditures for 
        180-day eligible clients.  The percentage is determined based on 
        expenditures for services rendered in fiscal year 1989 or 
        calendar year 1989, whichever is greater. 
           (c) If the county expenditures for 180-day eligible clients 
        are 95 percent or more of its 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 county expenditures for 180-day eligible clients 
        are less than 95 percent of its 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) For fiscal year 1992 only, a county may receive an 
        increased allocation if annualized service costs for the month 
        of May 1991 for 180-day eligible clients are greater than the 
        allocation otherwise determined.  A county may apply for this 
        increase by reporting projected expenditures for May to the 
        commissioner by June 1, 1991.  The amount of the allocation may 
        exceed the amount calculated in paragraph (b).  The projected 
        expenditures for May must be based on actual 180-day eligible 
        client caseload and the individual cost of clients' care plans.  
        If a county does not report its expenditures for May, the amount 
        in paragraph (c) or (d) shall be used. 
           (f) Calculations for paragraphs (c) and (d) are to be made 
        as follows:  for each county, the determination of 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 by June 1 of that year.  Calculations for 
        paragraphs (c) and (d) must also include the funds transferred 
        to the consumer support grant program for clients who have 
        transferred to that program from April 1 through March 31 in the 
        base year.  
           Sec. 38.  Minnesota Statutes 1996, section 256B.0913, 
        subdivision 15, is amended to read: 
           Subd. 15.  [SERVICE ALLOWANCE FUND AVAILABILITY.] (a) 
        Effective July 1, 1996 1998, the commissioner may use 
        alternative care funds for services to high function class A 
        persons as defined in section 144.0721, subdivision 3, clause 
        (2).  The county alternative care grant allocation will be 
        supplemented with a special allocation amount based on the 
        projected number of eligible high function class A's and 
        computed on the basis of $240 per month per projected eligible 
        person.  Individual monthly expenditures under the service 
        allowance option are permitted to be either greater or less than 
        the amount of $240 per month based on individual need.  County 
        allocations shall be adjusted periodically based on the actual 
        provision of services to high function class A persons.  The 
        allocation will be distributed by a population based formula and 
        shall not exceed the proportion of projected savings made 
        available under section 144.0721, subdivision 3. 
           (b) Counties shall have the option of providing services, 
        cash service allowances, vouchers, or a combination of these 
        options to high function class A persons defined in section 
        144.0721, subdivision 3, clause (2).  High function class A 
        persons may choose services from among the categories of 
        services listed under subdivision 5, except for case management 
        services. 
           (c) If the special allocation under this section to a 
        county is not sufficient to serve all persons who qualify 
        for alternative care services the service allowance, the county 
        is not required to provide any alternative care services to a 
        high function class A person but shall establish a waiting list 
        to provide services as special allocation funding becomes 
        available. 
           Sec. 39.  Minnesota Statutes 1996, section 256B.0913, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [CONVERSION OF ENROLLMENT.] Upon approval of the 
        elderly waiver amendments described in section 42, persons 
        currently receiving services shall have their eligibility for 
        the elderly waiver program determined under section 256B.0915.  
        Persons currently receiving alternative care services whose 
        income is under the special income standard according to Code of 
        Federal Regulations, title 42, section 435.236, who are eligible 
        for the elderly waiver program shall be transferred to that 
        program and shall receive priority access to elderly waiver 
        slots for six months after implementation of this subdivision.  
        Persons currently enrolled in the alternative care program who 
        are not eligible for the elderly waiver program shall continue 
        to be eligible for the alternative care program as long as 
        continuous eligibility is maintained.  Continued eligibility for 
        the alternative care program shall be reviewed every six 
        months.  Persons who apply for the alternative care program 
        after approval of the elderly waiver amendments in section 42 
        are not eligible for alternative care if they would qualify for 
        the elderly waiver, with or without a spenddown.  
           Sec. 40.  Minnesota Statutes 1996, section 256B.0915, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [PROVIDER QUALIFICATIONS AND STANDARDS.] The 
        commissioner must enroll qualified providers of elderly case 
        management services under the home and community-based waiver 
        for the elderly under section 1915(c) of the Social Security 
        Act.  The enrollment process shall ensure the provider's ability 
        to meet the qualification requirements and standards in this 
        subdivision and other federal and state requirements of this 
        service.  An elderly 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 for alternative care program 
        administration under section 256B.0913; 
           (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) (2) administrative capacity and experience in serving 
        the target population for whom it will provide services and in 
        ensuring quality of services under state and federal 
        requirements; 
           (4) the legal authority to provide preadmission screening 
        under section 256B.0911, subdivision 4; 
           (5) (3) a financial management system that provides 
        accurate documentation of services and costs under state and 
        federal requirements; 
           (6) (4) the capacity to document and maintain individual 
        case records under state and federal requirements; and 
           (7) (5) 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. 41.  Minnesota Statutes 1996, section 256B.0915, is 
        amended by adding a subdivision to read: 
           Subd. 1d.  [POSTELIGIBILITY TREATMENT OF INCOME AND 
        RESOURCES FOR ELDERLY WAIVER.] (a) Notwithstanding the 
        provisions of section 256B.056, the commissioner shall make the 
        following amendment to the medical assistance elderly waiver 
        program effective July 1, 1997, or upon federal approval, 
        whichever is later. 
           A recipient's maintenance needs will be an amount equal to 
        the Minnesota supplemental aid equivalent rate as defined in 
        section 256I.03, subdivision 5, plus the medical assistance 
        personal needs allowance as defined in section 256B.35, 
        subdivision 1, paragraph (a), when applying posteligibility 
        treatment of income rules to the gross income of elderly waiver 
        recipients, except for individuals whose income is in excess of 
        the special income standard according to Code of Federal 
        Regulations, title 42, section 435.236. 
           (b) The commissioner of human services shall secure 
        approval of additional elderly waiver slots sufficient to serve 
        persons who will qualify under the revised income standard 
        described in paragraph (a) before implementing section 
        256B.0913, subdivision 16. 
           Sec. 42.  Minnesota Statutes 1996, section 256B.0915, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LIMITS OF CASES, RATES, REIMBURSEMENT, 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) The monthly limit for the cost of waivered services to 
        an individual waiver client shall be the statewide average 
        payment rate of the case mix resident class to which the waiver 
        client would be assigned under the medical assistance case mix 
        reimbursement system.  If medical supplies and equipment or 
        adaptations are or will be purchased for an elderly waiver 
        services recipient, the costs may be prorated on a monthly basis 
        throughout the year in which they are purchased.  If the monthly 
        cost of a recipient's other waivered services exceeds the 
        monthly limit established in this paragraph, the annual cost of 
        the waivered services shall be determined.  In this event, the 
        annual cost of waivered services shall not exceed 12 times the 
        monthly limit calculated in this paragraph.  The statewide 
        average payment rate is calculated by determining the statewide 
        average monthly nursing home rate, effective July 1 of the 
        fiscal year in which the cost is incurred, less the statewide 
        average monthly income of nursing home residents who are age 65 
        or older, and who are medical assistance recipients in the month 
        of March of the previous state fiscal year.  The annual cost 
        divided by 12 of elderly or disabled waivered services for a 
        person who is a nursing facility resident at the time of 
        requesting a determination of eligibility for elderly or 
        disabled waivered services shall not exceed be the greater of 
        the monthly payment for:  (i) 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; or 
        (ii) the statewide average payment of the case mix resident 
        class to which the resident would be assigned under the medical 
        assistance case mix reimbursement system, provided that the 
        limit under this clause only applies to persons discharged from 
        a nursing facility and found eligible for waivered services on 
        or after July 1, 1997.  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 
           (2) cost of skilled nursing, home health aide, and personal 
        care services reimbursable by medical assistance.  
           (c) 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. 
           (d) For both the elderly waiver and the nursing facility 
        disabled waiver, a county may purchase extended supplies and 
        equipment without prior approval from the commissioner when 
        there is no other funding source and the supplies and equipment 
        are specified in the individual's care plan as medically 
        necessary to enable the individual to remain in the community 
        according to the criteria in Minnesota Rules, part 9505.0210, 
        items A and 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.  
           (e) For the fiscal year beginning on July 1, 1993, and for 
        subsequent fiscal years, the commissioner of human services 
        shall not provide automatic annual inflation adjustments for 
        home and community-based waivered services.  The commissioner of 
        finance shall include as a budget change request in each 
        biennial detailed expenditure budget submitted to the 
        legislature under section 16A.11, annual adjustments in 
        reimbursement rates for home and community-based waivered 
        services, based on the forecasted percentage change in the Home 
        Health Agency Market Basket of Operating Costs, for the fiscal 
        year beginning July 1, compared to the previous fiscal year, 
        unless otherwise adjusted by statute.  The Home Health Agency 
        Market Basket of Operating Costs is published by Data Resources, 
        Inc.  The forecast to be used is the one published for the 
        calendar quarter beginning January 1, six months prior to the 
        beginning of the fiscal year for which rates are set.  The adult 
        foster care rate shall be considered a difficulty of care 
        payment and shall not include room and board. 
           (f) The adult foster care daily rate for the elderly and 
        disabled waivers shall be negotiated between the county agency 
        and the foster care provider.  The rate established under this 
        section shall not exceed the state average monthly nursing home 
        payment for the case mix classification to which the individual 
        receiving foster care is assigned; the rate must allow for other 
        waiver and medical assistance home care services to be 
        authorized by the case manager. 
           (g) The assisted living and residential care service rates 
        for elderly and community alternatives for disabled individuals 
        (CADI) waivers shall be made to the vendor as a monthly rate 
        negotiated with the county agency.  The rate shall not exceed 
        the nonfederal share of the greater of either the statewide or 
        any of the geographic groups' weighted average monthly medical 
        assistance nursing facility payment rate of the case mix 
        resident class to which the elderly or disabled client would be 
        assigned under Minnesota Rules, parts 9549.0050 to 9549.0059.  
        For alternative care assisted living projects established under 
        Laws 1988, chapter 689, article 2, section 256, monthly rates 
        may not exceed 65 percent of the greater of either the statewide 
        or any of the geographic groups' weighted average monthly 
        medical assistance nursing facility payment rate for the case 
        mix resident class to which the elderly or disabled client would 
        be assigned under Minnesota Rules, parts 9549.0050 to 
        9549.0059.  The rate may not cover direct rent or food costs. 
           (h) The county shall negotiate individual rates with 
        vendors and may be reimbursed for actual costs up to the greater 
        of the county's current approved rate or 60 percent of the 
        maximum rate in fiscal year 1994 and 65 percent of the maximum 
        rate in fiscal year 1995 for each service within each program. 
           (i) On July 1, 1993, the commissioner shall increase the 
        maximum rate for home-delivered meals to $4.50 per meal. 
           (j) 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) Beginning July 1, 1991, the state shall reimburse 
        counties according to the payment schedule in section 256.025 
        for the county share of costs incurred under this subdivision on 
        or after January 1, 1991, for individuals who are receiving 
        medical assistance. 
           (l) For the community alternatives for disabled individuals 
        waiver, and nursing facility disabled waivers, county may use 
        waiver funds for the cost of minor adaptations to a client's 
        residence or vehicle without prior approval from the 
        commissioner if there is no other source of funding and the 
        adaptation: 
           (1) is necessary to avoid institutionalization; 
           (2) has no utility apart from the needs of the client; and 
           (3) meets the criteria in Minnesota Rules, part 9505.0210, 
        items A and B.  
        For purposes of this subdivision, "residence" means the client's 
        own home, the client's family residence, or a family foster 
        home.  For purposes of this subdivision, "vehicle" means the 
        client's vehicle, the client's family vehicle, or the client's 
        family foster home vehicle. 
           (m) The commissioner shall establish a maximum rate unit 
        for baths provided by an adult day care provider that are not 
        included in the provider's contractual daily or hourly rate.  
        This maximum rate must equal the home health aide extended rate 
        and shall be paid for baths provided to clients served under the 
        elderly and disabled waivers. 
           Sec. 43.  Minnesota Statutes 1996, section 256B.0915, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [PREPAID ELDERLY WAIVER SERVICES.] An individual 
        for whom a prepaid health plan is liable for nursing home 
        services or elderly waiver services according to section 
        256B.69, subdivision 6a, is not eligible to receive 
        county-administered elderly waiver services under this section. 
           Sec. 44.  Minnesota Statutes 1996, section 256B.0917, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CONTRACT.] (a) The commissioner of human 
        services shall execute a contract with an organization 
        experienced in establishing and operating community-based 
        programs that have used the principles listed in subdivision 8, 
        paragraph (b), in order to meet the independent living and 
        health needs of senior citizens aged 65 and over and provide 
        community-based long-term care for senior citizens in their 
        homes Living at Home/Block Nurse Program, Inc. (LAH/BN, Inc.).  
        The organization contract shall require LAH/BN, Inc. to: 
           (1) assist the commissioner in developing develop criteria 
        for and in awarding award grants to establish community-based 
        organizations that will implement living-at-home/block nurse 
        programs throughout the state; 
           (2) assist the commissioner in awarding award grants to 
        enable current living-at-home/block nurse programs to continue 
        to implement the combined living-at-home/block nurse program 
        model; 
           (3) serve as a state technical assistance center to assist 
        and coordinate the living-at-home/block nurse programs 
        established; and 
           (4) develop the implementation plan required by subdivision 
        10 manage contracts with individual living-at-home/block nurse 
        programs. 
           (b) The contract shall be effective July 1, 1997, and 
        section 16B.17 shall not apply. 
           Sec. 45.  Minnesota Statutes 1996, section 256B.0917, 
        subdivision 8, is amended to read: 
           Subd. 8.  [LIVING-AT-HOME/BLOCK NURSE PROGRAM GRANT.] (a) 
        The commissioner, in cooperation with the organization awarded 
        the contract under subdivision 7, shall develop and administer a 
        grant program to establish or expand up to 15 27 community-based 
        organizations that will implement living-at-home/block nurse 
        programs that are designed to enable senior citizens to live as 
        independently as possible in their homes and in their 
        communities.  At least seven one-half of the programs must be in 
        counties outside the seven-county metropolitan area.  The 
        living-at-home/block nurse program funds shall be available to 
        the four to six SAIL projects established under this section. 
        Nonprofit organizations and units of local government are 
        eligible to apply for grants to establish the community 
        organizations that will implement living-at-home/block nurse 
        programs.  In awarding grants, the commissioner organization 
        awarded the contract under subdivision 7 shall give preference 
        to nonprofit organizations and units of local government from 
        communities that: 
           (1) have high nursing home occupancy rates; 
           (2) have a shortage of health care professionals; and 
           (3) are located in counties adjacent to, or are located in, 
        counties with existing living-at-home/block nurse programs; and 
           (4) meet other criteria established by the commissioner 
        LAH/BN, Inc., in consultation with the organization under 
        contract commissioner. 
           (b) Grant applicants must also meet the following criteria: 
           (1) the local community demonstrates a readiness to 
        establish a community model of care, including the formation of 
        a board of directors, advisory committee, or similar group, of 
        which at least two-thirds is comprised of community citizens 
        interested in community-based care for older persons; 
           (2) the program has sponsorship by a credible, 
        representative organization within the community; 
           (3) the program has defined specific geographic boundaries 
        and defined its organization, staffing and coordination/delivery 
        of services; 
           (4) the program demonstrates a team approach to 
        coordination and care, ensuring that the older adult 
        participants, their families, the formal and informal providers 
        are all part of the effort to plan and provide services; and 
           (5) the program provides assurances that all community 
        resources and funding will be coordinated and that other funding 
        sources will be maximized, including a person's own resources. 
           (c) Grant applicants must provide a minimum of five percent 
        of total estimated development costs from local community 
        funding.  Grants shall be awarded for two-year four-year 
        periods, and the base amount shall not exceed $40,000 $80,000 
        per applicant for the grant period.  The commissioner, in 
        consultation with the organization under contract, may increase 
        the grant amount for applicants from communities that have 
        socioeconomic characteristics that indicate a higher level of 
        need for development assistance.  Subject to the availability of 
        funding, grants and grant renewals awarded or entered into on or 
        after July 1, 1997, shall be renewed by LAH/BN, Inc. every four 
        years, unless LAH/BN, Inc. determines that the grant recipient 
        has not satisfactorily operated the living-at-home/block nurse 
        program in compliance with the requirements of paragraphs (b) 
        and (d).  Grants provided to living-at-home/block nurse programs 
        under this paragraph may be used for both program development 
        and the delivery of services. 
           (d) Each living-at-home/block nurse program shall be 
        designed by representatives of the communities being served to 
        ensure that the program addresses the specific needs of the 
        community residents.  The programs must be designed to: 
           (1) incorporate the basic community, organizational, and 
        service delivery principles of the living-at-home/block nurse 
        program model; 
           (2) provide senior citizens with registered nurse directed 
        assessment, provision and coordination of health and personal 
        care services on a sliding fee basis as an alternative to 
        expensive nursing home care; 
           (3) provide information, support services, homemaking 
        services, counseling, and training for the client and family 
        caregivers; 
           (4) encourage the development and use of respite care, 
        caregiver support, and in-home support programs, such as adult 
        foster care and in-home adult day care; 
           (5) encourage neighborhood residents and local 
        organizations to collaborate in meeting the needs of senior 
        citizens in their communities; 
           (6) recruit, train, and direct the use of volunteers to 
        provide informal services and other appropriate support to 
        senior citizens and their caregivers; and 
           (7) provide coordination and management of formal and 
        informal services to senior citizens and their families using 
        less expensive alternatives.  
           Sec. 46.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 3f, is amended to read: 
           Subd. 3f.  [PROPERTY COSTS AFTER JULY 1, 1988.] (a)  
        [INVESTMENT PER BED LIMIT.] For the rate year beginning July 1, 
        1988, the replacement-cost-new per bed limit must be $32,571 per 
        licensed bed in multiple bedrooms and $48,857 per licensed bed 
        in a single bedroom.  For the rate year beginning July 1, 1989, 
        the replacement-cost-new per bed limit for a single bedroom must 
        be $49,907 adjusted according to Minnesota Rules, part 
        9549.0060, subpart 4, item A, subitem (1).  Beginning January 1, 
        1990, the replacement-cost-new per bed limits must be adjusted 
        annually as specified in Minnesota Rules, part 9549.0060, 
        subpart 4, item A, subitem (1).  Beginning January 1, 1991, the 
        replacement-cost-new per bed limits will be adjusted annually as 
        specified in Minnesota Rules, part 9549.0060, subpart 4, item A, 
        subitem (1), except that the index utilized will be the Bureau 
        of the Census:  Composite fixed-weighted price index as 
        published in the Survey of Current Business C30 Report, Value of 
        New Construction Put in Place. 
           (b)  [RENTAL FACTOR.] For the rate year beginning July 1, 
        1988, the commissioner shall increase the rental factor as 
        established in Minnesota Rules, part 9549.0060, subpart 8, item 
        A, by 6.2 percent rounded to the nearest 100th percent for the 
        purpose of reimbursing nursing facilities for soft costs and 
        entrepreneurial profits not included in the cost valuation 
        services used by the state's contracted appraisers.  For rate 
        years beginning on or after July 1, 1989, the rental factor is 
        the amount determined under this paragraph for the rate year 
        beginning July 1, 1988. 
           (c)  [OCCUPANCY FACTOR.] For rate years beginning on or 
        after July 1, 1988, in order to determine property-related 
        payment rates under Minnesota Rules, part 9549.0060, for all 
        nursing facilities except those whose average length of stay in 
        a skilled level of care within a nursing facility is 180 days or 
        less, the commissioner shall use 95 percent of capacity days.  
        For a nursing facility whose average length of stay in a skilled 
        level of care within a nursing facility is 180 days or less, the 
        commissioner shall use the greater of resident days or 80 
        percent of capacity days but in no event shall the divisor 
        exceed 95 percent of capacity days. 
           (d)  [EQUIPMENT ALLOWANCE.] For rate years beginning on 
        July 1, 1988, and July 1, 1989, the commissioner shall add ten 
        cents per resident per day to each nursing facility's 
        property-related payment rate.  The ten-cent property-related 
        payment rate increase is not cumulative from rate year to rate 
        year.  For the rate year beginning July 1, 1990, the 
        commissioner shall increase each nursing facility's equipment 
        allowance as established in Minnesota Rules, part 9549.0060, 
        subpart 10, by ten cents per resident per day.  For rate years 
        beginning on or after July 1, 1991, the adjusted equipment 
        allowance must be adjusted annually for inflation as in 
        Minnesota Rules, part 9549.0060, subpart 10, item E.  For the 
        rate period beginning October 1, 1992, the equipment allowance 
        for each nursing facility shall be increased by 28 percent.  For 
        rate years beginning after June 30, 1993, the allowance must be 
        adjusted annually for inflation. 
           (e)  [POST CHAPTER 199 RELATED-ORGANIZATION DEBTS AND 
        INTEREST EXPENSE.] For rate years beginning on or after July 1, 
        1990, Minnesota Rules, part 9549.0060, subpart 5, item E, shall 
        not apply to outstanding related organization debt incurred 
        prior to May 23, 1983, provided that the debt was an allowable 
        debt under Minnesota Rules, parts 9510.0010 to 9510.0480, the 
        debt is subject to repayment through annual principal payments, 
        and the nursing facility demonstrates to the commissioner's 
        satisfaction that the interest rate on the debt was less than 
        market interest rates for similar arms-length transactions at 
        the time the debt was incurred.  If the debt was incurred due to 
        a sale between family members, the nursing facility must also 
        demonstrate that the seller no longer participates in the 
        management or operation of the nursing facility.  Debts meeting 
        the conditions of this paragraph are subject to all other 
        provisions of Minnesota Rules, parts 9549.0010 to 9549.0080. 
           (f)  [BUILDING CAPITAL ALLOWANCE FOR NURSING FACILITIES 
        WITH OPERATING LEASES.] For rate years beginning on or after 
        July 1, 1990, a nursing facility with operating lease costs 
        incurred for the nursing facility's buildings shall receive its 
        building capital allowance computed in accordance with Minnesota 
        Rules, part 9549.0060, subpart 8.  
           Sec. 47.  Minnesota Statutes 1996, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [PREVOCATIONAL AND SUPPORTED EMPLOYMENT 
        SERVICES.] The commissioner shall seek to amend the community 
        alternatives for disabled individuals waivers and the traumatic 
        brain injury waivers to include prevocational and supported 
        employment services. 
           Sec. 48.  Minnesota Statutes 1996, 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 an individual, agency, 
        organization, or group of these entities a health maintenance 
        organization or community integrated service network authorized 
        and operating under chapter 62D or 62N that participates in the 
        demonstration project according to criteria, standards, methods, 
        and other requirements established for the project and approved 
        by the commissioner.  Notwithstanding the above, Itasca county 
        may continue to participate as a demonstration provider until 
        July 1, 2000. 
           (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. 
           Sec. 49.  Minnesota Statutes 1996, section 256B.69, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
        implementing the general assistance medical care, or medical 
        assistance prepayment program within a county, must include the 
        county board in the process of development, approval, and 
        issuance of the request for proposals to provide services to 
        eligible individuals within the proposed county.  County boards 
        must be given reasonable opportunity to make recommendations 
        regarding the development, issuance, review of responses, and 
        changes needed in the request for proposals.  The commissioner 
        must provide county boards the opportunity to review each 
        proposal based on the identification of community needs under 
        chapters 145A and 256E and county advocacy activities.  If a 
        county board finds that a proposal does not address certain 
        community needs, the county board and commissioner shall 
        continue efforts for improving the proposal and network prior to 
        the approval of the contract.  The county board shall make 
        recommendations regarding the approval of local networks and 
        their operations to ensure adequate availability and access to 
        covered services.  The provider or health plan must respond 
        directly to county advocates and the state prepaid medical 
        assistance ombudsperson regarding service delivery and must be 
        accountable to the state regarding contracts with medical 
        assistance and general assistance medical care funds.  The 
        county board may recommend a maximum number of participating 
        health plans after considering the size of the enrolling 
        population; ensuring adequate access and capacity; considering 
        the client and county administrative complexity; and considering 
        the need to promote the viability of locally developed health 
        plans.  The county board or a single entity representing a group 
        of county boards and the commissioner shall mutually select 
        health plans for participation at the time of initial 
        implementation of the prepaid medical assistance program in that 
        county or group of counties and at the time of contract renewal. 
        The commissioner shall also seek input for contract requirements 
        from the county or single entity representing a group of county 
        boards at each contract renewal and incorporate those 
        recommendations into the contract negotiation process.  The 
        commissioner, in conjunction with the county board, shall 
        actively seek to develop a mutually agreeable timetable prior to 
        the development of the request for proposal, but counties must 
        agree to initial enrollment beginning on or before January 1, 
        1999, in either the prepaid medical assistance and general 
        assistance medical care programs or county-based purchasing 
        under section 256B.692.  At least 90 days before enrollment in 
        the medical assistance and general assistance medical care 
        prepaid programs begins in a county in which the prepaid 
        programs have not been established, the commissioner shall 
        provide a report to the chairs of senate and house committees 
        having jurisdiction over state health care programs which 
        verifies that the commissioner complied with the requirements 
        for county involvement that are specified in this subdivision. 
           (b) The commissioner shall seek a federal waiver to allow a 
        fee-for-service plan option to MinnesotaCare enrollees.  The 
        commissioner shall develop an increase of the premium fees 
        required under section 256.9356 up to 20 percent of the premium 
        fees for the enrollees who elect the fee-for-service option.  
        Prior to implementation, the commissioner shall submit this fee 
        schedule to the chair and ranking minority member of the senate 
        health care committee, the senate health care and family 
        services funding division, the house of representatives health 
        and human services committee, and the house of representatives 
        health and human services finance division. 
           (c) At the option of the county board, the board may 
        develop contract requirements related to the achievement of 
        local public health goals to meet the health needs of medical 
        assistance and general assistance medical care enrollees.  These 
        requirements must be reasonably related to the performance of 
        health plan functions and within the scope of the medical 
        assistance and general assistance medical care benefit sets.  If 
        the county board and the commissioner mutually agree to such 
        requirements, the department shall include such requirements in 
        all health plan contracts governing the prepaid medical 
        assistance and general assistance medical care programs in that 
        county at initial implementation of the program in that county 
        and at the time of contract renewal.  The county board may 
        participate in the enforcement of the contract provisions 
        related to local public health goals. 
           (d) For counties in which prepaid medical assistance and 
        general assistance medical care programs have not been 
        established, the commissioner shall not implement those programs 
        if a county board submits acceptable and timely preliminary and 
        final proposals under section 256B.692, until county-based 
        purchasing is no longer operational in that county.  For 
        counties in which prepaid medical assistance and general 
        assistance medical care programs are in existence on or after 
        September 1, 1997, the commissioner must terminate contracts 
        with health plans according to section 256B.692, subdivision 5, 
        if the county board submits and the commissioner accepts 
        preliminary and final proposals according to that subdivision.  
        The commissioner is not required to terminate contracts that 
        begin on or after September 1, 1997, according to section 
        256B.692 until two years have elapsed from the date of initial 
        enrollment. 
           (e) In the event that a county board or a single entity 
        representing a group of county boards and the commissioner 
        cannot reach agreement regarding:  (i) the selection of 
        participating health plans in that county; (ii) contract 
        requirements; or (iii) implementation and enforcement of county 
        requirements including provisions regarding local public health 
        goals, the commissioner shall resolve all disputes after taking 
        into account the recommendations of a three-person mediation 
        panel.  The panel shall be composed of one designee of the 
        president of the association of Minnesota counties, one designee 
        of the commissioner of human services, and one designee of the 
        commissioner of health. 
           (f) If a county which elects to implement county-based 
        purchasing ceases to implement county-based purchasing, it is 
        prohibited from assuming the responsibility of county-based 
        purchasing for a period of five years from the date it 
        discontinues purchasing. 
           Sec. 50.  Minnesota Statutes 1996, 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.  
        Notwithstanding section 62D.02, subdivision 1, payments for 
        services rendered as part of the project may be made to 
        providers that are not licensed health maintenance organizations 
        on a risk-based, prepaid capitation basis.  
           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. 
           Sec. 51.  Minnesota Statutes 1996, section 256B.69, 
        subdivision 5b, is amended to read: 
           Subd. 5b.  [PROSPECTIVE REIMBURSEMENT RATES.] For prepaid 
        medical assistance and general assistance medical care program 
        contract rates set by the commissioner under subdivision 5 and 
        effective on or after January 1, 1997, through December 31, 
        1998, capitation rates for nonmetropolitan counties shall on a 
        weighted average be no less than 85 88 percent of the capitation 
        rates for metropolitan counties, excluding Hennepin county.  The 
        commissioner shall make a pro rata adjustment in capitation 
        rates paid to counties other than nonmetropolitan counties in 
        order to make this provision budget neutral.  
           Sec. 52.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 5d.  [MODIFICATION OF PAYMENT DATES EFFECTIVE JANUARY 
        1, 2001.] Effective for services rendered on or after January 1, 
        2001, capitation payments under this section and under section 
        256D.03 shall be made no earlier than the first day after the 
        month of service. 
           Sec. 53.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [NURSING HOME SERVICES.] (a) Notwithstanding 
        Minnesota Rules, part 9500.1457, subpart 1, item B, 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.  Liability for coverage of 
        nursing facility services by a participating health plan is 
        limited to 365 days for any person enrolled under the prepaid 
        medical assistance program. 
           (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 waiver governing that demonstration 
        project. 
           Sec. 54.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 6b.  [ELDERLY WAIVER SERVICES.] 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.  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 waiver 
        governing that demonstration project.  
           Sec. 55.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 24.  [ENROLLMENT EXEMPTION.] Persons eligible for 
        services under section 256B.0915 who have income in excess of 
        the level permitted under section 256B.056 without a spenddown 
        but below the MSA equivalent rate as defined in section 256I.03, 
        subdivision 5, plus the medical assistance personal needs 
        allowance as defined in section 256B.35, subdivision 1, 
        paragraph (a), shall be exempt from mandatory enrollment in the 
        prepaid medical assistance program under this section unless 
        otherwise directed by the legislature, except for those persons 
        who were initially enrolled in the prepaid medical assistance 
        program while residing in a nursing home or whose income changed 
        after initial enrollment in the prepaid medical assistance 
        program.  Nothing in this subdivision shall require persons who 
        are required to enroll in the prepaid medical assistance program 
        to disenroll from that program or from the Minnesota senior 
        health options project after initial enrollment. 
           Sec. 56.  [256B.692] [COUNTY-BASED PURCHASING.] 
           Subdivision 1.  [IN GENERAL.] County boards or groups of 
        county boards may elect to purchase or provide health care 
        services on behalf of persons eligible for medical assistance 
        and general assistance medical care who would otherwise be 
        required to or may elect to participate in the prepaid medical 
        assistance or prepaid general assistance medical care programs 
        according to sections 256B.69 and 256D.03.  Counties that elect 
        to purchase or provide health care under this section must 
        provide all services included in prepaid managed care programs 
        according to sections 256B.69, subdivisions 1 to 22, and 
        256D.03.  County-based purchasing under this section is governed 
        by section 256B.69, unless otherwise provided for under this 
        section. 
           Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] 
        Notwithstanding chapters 62D and 62N, a county that elects to 
        purchase medical assistance and general assistance medical care 
        in return for a fixed sum without regard to the frequency or 
        extent of services furnished to any particular enrollee is not 
        required to obtain a certificate of authority under chapter 62D 
        or 62N.  A county that elects to purchase medical assistance and 
        general assistance medical care services under this section must 
        satisfy the commissioner of health that the requirements of 
        chapter 62D, applicable to health maintenance organizations, or 
        chapter 62N, applicable to community integrated service 
        networks, will be met.  A county must also assure the 
        commissioner of health that the requirements of section 72A.201 
        will be met.  All enforcement and rulemaking powers available 
        under chapters 62D and 62N are hereby granted to the 
        commissioner of health with respect to counties that purchase 
        medical assistance and general assistance medical care services 
        under this section. 
           Subd. 3.  [REQUIREMENTS OF THE COUNTY BOARD.] A county 
        board that intends to purchase or provide health care under this 
        section, which may include purchasing all or part of these 
        services from health plans or individual providers on a 
        fee-for-service basis, or providing these services directly, 
        must demonstrate the ability to follow and agree to the 
        following requirements: 
           (1) purchase all covered services for a fixed payment from 
        the state that does not exceed the estimated state and federal 
        cost that would have occurred under the prepaid medical 
        assistance and general assistance medical care programs; 
           (2) ensure that covered services are accessible to all 
        enrollees and that enrollees have a reasonable choice of 
        providers, health plans, or networks when possible.  If the 
        county is also a provider of service, the county board shall 
        develop a process to ensure that providers employed by the 
        county are not the sole referral source and are not the sole 
        provider of health care services if other providers, which meet 
        the same quality and cost requirements are available; 
           (3) issue payments to participating vendors or networks in 
        a timely manner; 
           (4) establish a process to ensure and improve the quality 
        of care provided; 
           (5) provide appropriate quality and other required data in 
        a format required by the state; 
           (6) provide a system for advocacy, enrollee protection, and 
        complaints and appeals that is independent of care providers or 
        other risk bearers and complies with section 256B.69; 
           (7) for counties within the seven-county metropolitan area, 
        ensure that the implementation and operation of the Minnesota 
        senior health options demonstration project, authorized under 
        section 256B.69, subdivision 23, will not be impeded; 
           (8) ensure that all recipients that are enrolled in the 
        prepaid medical assistance or general assistance medical care 
        program will be transferred to county-based purchasing without 
        utilizing the department's fee-for-service claims payment 
        system; 
           (9) ensure that all recipients who are required to 
        participate in county-based purchasing are given sufficient 
        information prior to enrollment in order to make informed 
        decisions; and 
           (10) ensure that the state and the medical assistance and 
        general assistance medical care recipients will be held harmless 
        for the payment of obligations incurred by the county if the 
        county, or a health plan providing services on behalf of the 
        county, or a provider participating in county-based purchasing 
        becomes insolvent, and the state has made the payments due to 
        the county under this section. 
           Subd. 4.  [PAYMENTS TO COUNTIES.] The commissioner shall 
        pay counties that are purchasing or providing health care under 
        this section a per capita payment for all enrolled recipients.  
        Payments shall not exceed payments that otherwise would have 
        been paid to health plans under medical assistance and general 
        assistance medical care for that county or region.  This payment 
        is in addition to any administrative allocation to counties for 
        education, enrollment, and advocacy.  The state of Minnesota and 
        the United States Department of Health and Human Services are 
        not liable for any costs incurred by a county that exceed the 
        payments to the county made under this subdivision.  A county 
        whose costs exceed the payments made by the state, or any 
        affected enrollees or creditors of that county, shall have no 
        rights under chapter 61B or section 62D.181.  A county may 
        assign risk for the cost of care to a third party. 
           Subd. 5.  [COUNTY PROPOSALS.] (a) On or before September 1, 
        1997, a county board that wishes to purchase or provide health 
        care under this section must submit a preliminary proposal that 
        substantially demonstrates the county's ability to meet all the 
        requirements of this section in response to criteria for 
        proposals issued by the department on or before July 1, 1997.  
        Counties submitting preliminary proposals must establish a local 
        planning process that involves input from medical assistance and 
        general assistance medical care recipients, recipient advocates, 
        providers and representatives of local school districts, labor, 
        and tribal government to advise on the development of a final 
        proposal and its implementation.  
           (b) The county board must submit a final proposal on or 
        before July 1, 1998, that demonstrates the ability to meet all 
        the requirements of this section, including beginning enrollment 
        on January 1, 1999.  
           (c) After January 1, 1999, for a county in which the 
        prepaid medical assistance program is in existence, the county 
        board must submit a preliminary proposal at least 15 months 
        prior to termination of health plan contracts in that county and 
        a final proposal six months prior to the health plan contract 
        termination date in order to begin enrollment after the 
        termination.  Nothing in this section shall impede or delay 
        implementation or continuation of the prepaid medical assistance 
        and general assistance medical care programs in counties for 
        which the board does not submit a proposal, or submits a 
        proposal that is not in compliance with this section. 
           (d) The commissioner is not required to terminate contracts 
        for the prepaid medical assistance and prepaid general 
        assistance medical care programs that begin on or after 
        September 1, 1997, in a county for which a county board has 
        submitted a proposal under this paragraph, until two years have 
        elapsed from the date of initial enrollment in the prepaid 
        medical assistance and prepaid general assistance medical care 
        programs. 
           Subd. 6.  [COMMISSIONER'S AUTHORITY.] The commissioner may: 
           (1) reject any preliminary or final proposal that 
        substantially fails to meet the requirements of this section, or 
        that the commissioner determines would substantially impair the 
        state's ability to purchase health care services in other areas 
        of the state, or would substantially impair an enrollee's choice 
        of care systems when reasonable choice is possible, or would 
        substantially impair the implementation and operation of the 
        Minnesota senior health options demonstration project authorized 
        under section 256B.69, subdivision 23; and 
           (2) assume operation of a county's purchasing of health 
        care for enrollees in medical assistance and general assistance 
        medical care in the event that the contract with the county is 
        terminated. 
           Subd. 7.  [DISPUTE RESOLUTION.] In the event the 
        commissioner rejects a proposal under subdivision 6, the county 
        board may request the recommendation of a three-person mediation 
        panel.  The commissioner shall resolve all disputes after taking 
        into account the recommendations of the mediation panel.  The 
        panel shall be composed of one designee of the president of the 
        association of Minnesota counties, one designee of the 
        commissioner of human services, and one designee of the 
        commissioner of health. 
           Subd. 8.  [APPEALS.] A county that conducts county-based 
        purchasing shall be considered to be a prepaid health plan for 
        purposes of section 256.045. 
           Subd. 9.  [FEDERAL APPROVAL.] The commissioner shall 
        request any federal waivers and federal approval required to 
        implement this section.  County-based purchasing shall not be 
        implemented without obtaining all federal approval required to 
        maintain federal matching funds in the medical assistance 
        program. 
           Subd. 10.  [REPORT TO THE LEGISLATURE.] The commissioner 
        shall submit a report to the legislature by February 1, 1998, on 
        the preliminary proposals submitted on or before September 1, 
        1997. 
           Sec. 57.  Minnesota Statutes 1996, 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, and: 
           (1) who is receiving assistance under section 256D.05, or 
        who is having a payment made on the person's behalf under 
        sections 256I.01 to 256I.06; or 
           (2)(i) who is a resident of Minnesota; and whose equity in 
        assets is not in excess of $1,000 per assistance unit.  No asset 
        test shall be applied to children and their parents living in 
        the same household.  Exempt assets, the reduction of excess 
        assets, and the waiver of excess assets must conform to the 
        medical assistance program in chapter 256B, 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 
           (ii) who has countable income not in excess of the 
        assistance standards established in section 256B.056, 
        subdivision 4, or whose excess income is spent down pursuant to 
        section 256B.056, subdivision 5, using a six-month budget 
        period, except that a one-month budget period must be used for 
        recipients residing in a long-term care facility.  The method 
        for calculating earned income disregards and deductions for a 
        person who resides with a dependent child under age 21 shall be 
        as specified in section 256.74, subdivision 1 follow section 
        256B.056, subdivision 1a.  However, if a disregard of $30 and 
        one-third of the remainder described in section 256.74, 
        subdivision 1, clause (4), has been applied to the wage earner's 
        income, the disregard shall not be applied again until the wage 
        earner's income has not been considered in an eligibility 
        determination for general assistance, general assistance medical 
        care, medical assistance, or aid to families with dependent 
        children, or MFIP-S for 12 consecutive months.  The earned 
        income and work expense deductions for a person who does not 
        reside with a dependent child under age 21 shall be the same as 
        the method used to determine eligibility for a person under 
        section 256D.06, subdivision 1, except the disregard of the 
        first $50 of earned income is not allowed; or 
           (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 health care financing administration 
        to be an institution for mental diseases. 
           (b) Eligibility is available for the month of application, 
        and for three months prior to application if the person was 
        eligible in those prior months.  A redetermination of 
        eligibility must occur every 12 months.  
           (c) General assistance medical care 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.  
           (d) 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. 
           (e) In determining the amount of assets of an individual, 
        there shall be included any asset or interest in an asset, 
        including an asset excluded under paragraph (a), that was given 
        away, sold, or disposed of for less than fair market value 
        within the 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. 
           (f)(1) Beginning October 1, 1993, an undocumented alien or 
        a nonimmigrant is ineligible for general assistance medical care 
        other than emergency services.  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 alien is an individual who 
        resides in the United States without the approval or 
        acquiescence of the Immigration and Naturalization Service. 
           (2) This subdivision 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 an alien who 
        is aged, blind, or disabled as defined in United States Code, 
        title 42, section 1382c(a)(1). 
           (3) For purposes of paragraph (f), "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. 
           Sec. 58.  Minnesota Statutes 1996, section 256G.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  [EXCLUDED TIME.] "Excluded time" means: 
           (a) any period an applicant spends in a hospital, 
        sanitarium, nursing home, shelter other than an emergency 
        shelter, halfway house, foster home, semi-independent living 
        domicile or services program, residential facility offering 
        care, board and lodging facility or other institution for the 
        hospitalization or care of human beings, as defined in section 
        144.50, 144A.01, or 245A.02, subdivision 14; maternity home, 
        battered women's shelter, or correctional facility; or any 
        facility based on an emergency hold under sections 253B.05, 
        subdivisions 1 and 2, and 253B.07, subdivision 6; 
           (b) any period an applicant spends on a placement basis in 
        a training and habilitation program, including a rehabilitation 
        facility or work or employment program as defined in section 
        268A.01; or receiving personal care assistant services pursuant 
        to section 256B.0627, subdivision 4; semi-independent living 
        services provided under section 252.275, and Minnesota Rules, 
        parts 9525.0500 to 9525.0660; day training and habilitation 
        programs, and community-based services and assisted living 
        services; and 
           (c) any placement for a person with an indeterminate 
        commitment, including independent living.  
           Sec. 59.  Minnesota Statutes 1996, 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 general 
        assistance, general assistance medical care, and Minnesota 
        supplemental aid programs only 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. 
           Sec. 60.  Minnesota Statutes 1996, section 256I.05, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [SUPPLEMENTARY RATES.] (a) 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.  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. 61.  Minnesota Statutes 1996, section 469.155, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REFINANCING HEALTH FACILITIES.] It may issue 
        revenue bonds to pay, purchase, or discharge all or any part of 
        the outstanding indebtedness of a contracting party engaged 
        primarily in the operation of one or more nonprofit hospitals or 
        nursing homes previously incurred in the acquisition or 
        betterment of its existing hospital or nursing home facilities 
        to the extent deemed necessary by the governing body of the 
        municipality or redevelopment agency; this may include any 
        unpaid interest on the indebtedness accrued or to accrue to the 
        date on which the indebtedness is finally paid, and any premium 
        the governing body of the municipality or redevelopment agency 
        determines to be necessary to be paid to pay, purchase, or 
        defease the outstanding indebtedness.  If revenue bonds are 
        issued for this purpose, the refinancing and the existing 
        properties of the contracting party shall be deemed to 
        constitute a project under section 469.153, subdivision 2, 
        clause (d).  Revenue bonds may not be issued pursuant to this 
        subdivision unless the application for approval of the project 
        pursuant to section 469.154 shows that a reduction in debt 
        service charges is estimated to result and will be reflected in 
        charges to patients and third-party payors.  Proceeds of revenue 
        bonds issued pursuant to this subdivision may not be used for 
        any purpose inconsistent with the provisions of chapter 256B.  
        Nothing in this subdivision prohibits the use of revenue bond 
        proceeds to pay outstanding indebtedness of a contracting party 
        to the extent permitted by law on March 28, 1978.  
           Sec. 62.  Laws 1995, chapter 207, article 6, section 115, 
        is amended to read: 
           Sec. 115.  [CONTINUATION OF PILOT PROJECTS.] 
           The alternative care pilot projects authorized in Laws 
        1993, First Special Session chapter 1, article 5, section 133, 
        shall not expire on June 30, 1995, but shall continue until June 
        30, 1997 2001, except that the three percent rate increases 
        authorized in Laws 1993, First Special Session chapter 1, 
        article 1, section 2, subdivision 4, and any subsequent rate 
        increases shall be incorporated in average monthly cost 
        effective July 1, 1995.  Beginning July 1, 1997, a county may 
        spend up to ten percent of grant funds for needed client 
        services that are not listed under Minnesota Statutes, section 
        256B.0913, subdivision 5.  The commissioner shall allow 
        additional counties at their option to implement the alternative 
        care program within the parameters established in Laws 1993, 
        First Special Session chapter 1, article 5, section 133.  If 
        more than five counties exercise this option, the commissioner 
        may require counties to make this change on a phased schedule if 
        necessary in order to implement this provision within the limit 
        of available resources.  For newly participating counties, the 
        previous fiscal year shall be the base year. 
           Sec. 63.  [NEED FOR NONSTANDARD WHEELCHAIRS.] 
           The commissioner of human services, in consultation with 
        the System of Technology to Achieve Results (STAR) program, 
        shall present a report to the legislature by January 1, 1998, on 
        the need for nonstandard wheelchairs for recipients residing in 
        long-term care facilities.  A standard wheelchair is a manual 
        wheelchair that is 16 to 20 inches wide and 18 inches deep with 
        sling seat and back upholstery and a seat height of 19-1/2 
        inches.  The report shall: 
           (1) determine how many medical assistance recipients who 
        reside in long-term care facilities cannot independently operate 
        a standard wheelchair, but can safely and independently operate 
        a power or other nonstandard wheelchair; 
           (2) determine how many medical assistance recipients who 
        reside in long-term care facilities require a wheelchair to be 
        permanently modified by the addition of an item to accommodate 
        their health needs; 
           (3) determine how many medical assistance recipients who 
        reside in long-term care facilities have seating or positioning 
        needs which cannot be accommodated in a standard wheelchair; 
           (4) determine the average cost of a nonstandard wheelchair; 
           (5) determine the capability of long-term care facilities 
        to provide nonstandard wheelchairs to meet medical assistance 
        recipients needs; and 
           (6) determine to what extent in the past four years the 
        department of health has enforced regulations or rules relating 
        to a long-term care facility's obligation to meet the mobility 
        needs of residents. 
           Sec. 64.  [STUDY OF ELDERLY WAIVER EXPANSION.] 
           The commissioner of human services shall appoint a task 
        force that includes representatives of counties, health plans, 
        consumers, and legislators to study the impact of the expansion 
        of the elderly waiver program under section 4 and to make 
        recommendations for any changes in law necessary to facilitate 
        an efficient and equitable relationship between the elderly 
        waiver program and the Minnesota senior health options project.  
        Based on the results of the task force study, the commissioner 
        may seek any federal waivers needed to improve the relationship 
        between the elderly waiver and the Minnesota senior health 
        options project.  The commissioner shall report the results of 
        the task force study to the legislature by January 15, 1998. 
           Sec. 65.  [DEVELOPMENT OF APPEALS PROCESS.] 
           The commissioner of human services, in consultation with 
        elderly advocates and nursing facility representatives, shall 
        develop and present to the legislature by January 15, 1998, an 
        appeals process for persons affected by the changes in nursing 
        facility level of care criteria scheduled to take effect on July 
        1, 1998. 
           Sec. 66.  [PERSONAL CARE SERVICES STUDY.] 
           The commissioner of human services shall formulate 
        recommendations on how to allow recipients of medical assistance 
        who have been diagnosed with autism or other disabilities to use 
        personal care services with more flexibility to meet individual 
        client needs and preferences.  The commissioner may convene an 
        advisory task force as authorized under Minnesota Statutes, 
        section 15.014, subdivision 2, to assist in formulating these 
        recommendations.  If a task force is convened, it shall be 
        comprised of department of human services staff from the adult 
        mental health, children's mental health, home- and 
        community-based services, and developmental disabilities 
        divisions, as well as consumers of personal care services, 
        advocates, and providers of personal care attendant services.  A 
        report with recommendations that outlines how consumer-centered 
        planning and flexible use of funds can be implemented by July 1, 
        1998, must be presented to the legislature by December 15, 1997. 
           Sec. 67.  [INTEGRATION OF MINNESOTACARE WITH COUNTY-BASED 
        PURCHASING.] 
           The commissioner of human services shall develop a plan to 
        integrate the MinnesotaCare program with county-based purchasing.
        The plan must be designed to provide more choice to 
        MinnesotaCare enrollees and to ensure that they have health care 
        options in addition to county-based purchasing.  The plan must 
        permit a county that elects to implement county-based purchasing 
        to elect to purchase or provide health services on behalf of 
        persons eligible for the MinnesotaCare program.  The 
        commissioner shall submit the plan to the legislature by 
        February 1, 1998. 
           Sec. 68.  [OMBUDSPERSON SERVICES.] 
           The commissioner of human services shall make 
        recommendations to the legislature by January 15, 1998, on how 
        the ombudsperson services and prepayment coordinator services 
        established in Minnesota Statutes, section 256B.69, subdivisions 
        20 and 21, could be reorganized to ensure that the ombudsman and 
        county prepayment coordinator are independent of the department 
        of human services, county authorities, health plans, or other 
        health care providers.  The commissioner must seek input from 
        recipients, advocates, and counties in reorganizing the 
        ombudsman and county advocate system. 
           Sec. 69.  [WAIVER REQUEST.] 
           The commissioner of human services shall seek federal 
        approval to amend the health care reform waiver to extend the 
        postpartum period of medical assistance eligibility for chemical 
        dependency after-care services. 
           Sec. 70.  [WAIVER MODIFICATION.] 
           The commissioner of human services shall seek federal 
        approval for any modifications to the health care reform waiver 
        necessary to implement the asset standard changes in sections 21 
        to 23, and 28.  
           Sec. 71.  [REPORT ON RULE 101 CHANGE.] 
           The commissioner shall report to the legislature any 
        increase in participation of dental services providers in the 
        public assistance programs due to the change in the provider 
        participation requirements under the 1997 amendments to 
        Minnesota Statutes, section 256B.0644, by January 15, 1999. 
           Sec. 72.  [SUNSET.] 
           The 1997 amendments to Minnesota Statutes, section 
        256B.0644, in section 33, expire on June 30, 1999. 
           Sec. 73.  [REPEALER.] 
           (a) Minnesota Statutes 1996, sections 256B.057, 
        subdivisions 2a and 2b; and 469.154, subdivision 6, are repealed.
           (b) Minnesota Statutes 1996, section 256B.0625, subdivision 
        13b, is repealed the day following final enactment. 
           (c) Minnesota Rules, part 9505.1000, is repealed. 
           Sec. 74.  [EFFECTIVE DATE.] 
           (a) Sections 12 to 15, 28, and 37 are effective the day 
        following final enactment. 
           (b) Sections 43, 53, and 54 are effective July 1, 1999. 
                                   ARTICLE 5 
                              CHILDREN'S PROGRAMS 
           Section 1.  Minnesota Statutes 1996, section 245.4882, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIALIZED RESIDENTIAL TREATMENT SERVICES.] The 
        commissioner of human services shall continue efforts to further 
        interagency collaboration to develop a comprehensive system of 
        services, including family community support and specialized 
        residential treatment services for children.  The services shall 
        be designed for children with emotional disturbance who exhibit 
        violent or destructive behavior and for whom local treatment 
        services are not feasible due to the small number of children 
        statewide who need the services and the specialized nature of 
        the services required.  The services shall be located in 
        community settings.  If no appropriate services are available in 
        Minnesota or within the geographical area in which the residents 
        of the county normally do business, the commissioner is 
        responsible, effective July 1, 1997, for 50 percent of the 
        nonfederal costs of out-of-state treatment of children for whom 
        no appropriate resources are available in Minnesota.  Counties 
        are eligible to receive enhanced state funding under this 
        section only if they have established juvenile screening teams 
        under section 260.151, subdivision 3, and if the out-of-state 
        treatment has been approved by the commissioner.  By January 1, 
        1995, the commissioners of human services and corrections shall 
        jointly develop a plan, including a financing strategy, for 
        increasing the in-state availability of treatment within a 
        secure setting.  By July 1, 1994, the commissioner of human 
        services shall also: 
           (1) conduct a study and develop a plan to meet the needs of 
        children with both a developmental disability and severe 
        emotional disturbance; and 
           (2) study the feasibility of expanding medical assistance 
        coverage to include specialized residential treatment for the 
        children described in this subdivision.  
           Sec. 2.  Minnesota Statutes 1996, section 245.493, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENTS TO QUALIFY AS A LOCAL 
        CHILDREN'S MENTAL HEALTH COLLABORATIVE.] In order to qualify as 
        a local children's mental health collaborative and be eligible 
        to receive start-up funds, the representatives of the local 
        system of care, including entities provided under section 
        245.4875, subdivision 6, and nongovernmental entities such as 
        parents of children in the target population; parent and 
        consumer organizations; community, civic, and religious 
        organizations; private and nonprofit mental and physical health 
        care providers; culturally specific organizations; local 
        foundations; and businesses, or at a minimum one county, one 
        school district or special education cooperative, and one mental 
        health entity, and, by July 1, 1998, one juvenile justice or 
        corrections entity, must agree to the following: 
           (1) to establish a local children's mental health 
        collaborative and develop an integrated service system; and 
           (2) to commit resources to providing services through the 
        local children's mental health collaborative. 
           Sec. 3.  Minnesota Statutes 1996, section 245.493, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [DUTIES OF CERTAIN COORDINATING BODIES.] 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 121.8355, may assume the duties of a 
        community transition interagency committee established under 
        section 120.17, subdivision 16; an interagency early 
        intervention committee established under 120.1701, subdivision 
        5; a local advisory council established under section 245.4875, 
        subdivision 5; or a local coordinating council established under 
        section 245.4875, subdivision 6. 
           Sec. 4.  Minnesota Statutes 1996, 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; and 
           (f) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds. 
           (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 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. 
           (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 proposed comprehensive plan, including estimated 
        project costs and the proposed order establishing the waiver, 
        shall be filed with the secretary of the senate and chief clerk 
        of the house of representatives at least 60 days prior to its 
        effective date. 
           (b) The secretary of health, education, and welfare of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity. 
           (c) A comprehensive plan, including estimated project 
        costs, shall be approved by the legislative advisory commission 
        and filed with the commissioner of administration.  
           (13) In accordance with 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, 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 AFDC programs, 
        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 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 
        pursuant 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. 
           Sec. 5.  Minnesota Statutes 1996, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [CHILD WELFARE REFORM PILOTS.] The commissioner 
        of human services shall encourage local reforms in the delivery 
        of child welfare services and is authorized to approve local 
        pilot programs which focus on reforming the child protection and 
        child welfare systems in Minnesota.  Authority to approve pilots 
        includes authority to waive existing state rules as needed to 
        accomplish reform efforts.  Notwithstanding section 626.556, 
        subdivision 10, 10b, or 10d, the commissioner may authorize 
        programs to use alternative methods of investigating and 
        assessing reports of child maltreatment, provided that the 
        programs comply with the provisions of section 626.556 dealing 
        with the rights of individuals who are subjects of reports or 
        investigations, including notice and appeal rights and data 
        practices requirements.  Pilot programs must be required to 
        address responsibility for safety and protection of children, be 
        time limited, and include evaluation of the pilot program. 
           Sec. 6.  Minnesota Statutes 1996, section 256.045, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STATE AGENCY HEARINGS.] (a) State agency 
        hearings are available for the following:  (1) any person 
        applying for, receiving or having received public assistance or 
        a program of social services granted by the state agency or a 
        county agency under sections 252.32, 256.031 to 256.036, and 
        256.72 to 256.879, chapters 256B, 256D, 256E, 261, or the 
        federal Food Stamp Act whose application for assistance is 
        denied, not acted upon with reasonable promptness, or whose 
        assistance is suspended, reduced, terminated, or claimed to have 
        been incorrectly paid; (2) any patient or relative aggrieved by 
        an order of the commissioner under section 252.27; (3) a party 
        aggrieved by a ruling of a prepaid health plan; (4) any 
        individual or facility determined by a lead agency to have 
        maltreated a vulnerable adult under section 626.557 after they 
        have exercised their right to administrative reconsideration 
        under section 626.557; (5) any person whose claim for foster 
        care payment pursuant to a placement of the child resulting from 
        a child protection assessment under section 626.556 is denied or 
        not acted upon with reasonable promptness, regardless of funding 
        source; (6) any person to whom a right of appeal pursuant to 
        this section is given by other provision of law; or (7) an 
        applicant aggrieved by an adverse decision to an application for 
        a hardship waiver under section 256B.15; or (8) an individual or 
        facility determined to have maltreated a minor under section 
        626.556, after the individual or facility has exercised the 
        right to administrative reconsideration under section 626.556.  
        The failure to exercise the right to an administrative 
        reconsideration shall not be a bar to a hearing under this 
        section if federal law provides an individual the right to a 
        hearing to dispute a finding of maltreatment.  Individuals and 
        organizations specified in this section may contest the 
        specified action, decision, or final disposition before the 
        state agency by submitting a written request for a hearing to 
        the state agency within 30 days after receiving written notice 
        of the action, decision, or final disposition, or within 90 days 
        of such written notice if the applicant, recipient, patient, or 
        relative shows good cause why the request was not submitted 
        within the 30-day time limit. 
           The hearing for an individual or facility under clause (4) 
        or (8) is the only administrative appeal to the final lead 
        agency disposition determination specifically, including a 
        challenge to the accuracy and completeness of data under section 
        13.04.  Hearings requested under clause (4) apply only to 
        incidents of maltreatment that occur on or after October 1, 
        1995.  Hearings requested by nursing assistants in nursing homes 
        alleged to have maltreated a resident prior to October 1, 1995, 
        shall be held as a contested case proceeding under the 
        provisions of chapter 14.  Hearings requested under clause (8) 
        apply only to incidents of maltreatment that occur on or after 
        July 1, 1997.  A hearing for an individual or facility under 
        clause (8) is only available when there is no juvenile court or 
        adult criminal action pending.  If such action is filed in 
        either court while an administrative review is pending, the 
        administrative review must be suspended until the judicial 
        actions are completed.  If the juvenile court action or criminal 
        charge is dismissed or the criminal action overturned, the 
        matter may be considered in an administrative hearing. 
           For purposes of this section, bargaining unit grievance 
        procedures are not an administrative appeal. 
           The scope of hearings involving claims to foster care 
        payments under clause (5) shall be limited to the issue of 
        whether the county is legally responsible for a child's 
        placement under court order or voluntary placement agreement 
        and, if so, the correct amount of foster care payment to be made 
        on the child's behalf and shall not include review of the 
        propriety of the county's child protection determination or 
        child placement decision. 
           (b) Except for a prepaid health plan, A vendor of medical 
        care as defined in section 256B.02, subdivision 7, or a vendor 
        under contract with a county agency to provide social services 
        under section 256E.08, subdivision 4, is not a party and may not 
        request a hearing under this section, except if assisting a 
        recipient as provided in subdivision 4. 
           (c) An applicant or recipient is not entitled to receive 
        social services beyond the services included in the amended 
        community social services plan developed under section 256E.081, 
        subdivision 3, if the county agency has met the requirements in 
        section 256E.081. 
           Sec. 7.  Minnesota Statutes 1996, section 256.045, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [STANDARD OF EVIDENCE FOR MALTREATMENT 
        HEARINGS.] The state human services referee shall determine that 
        maltreatment has occurred if a preponderance of evidence exists 
        to support the final disposition under section sections 626.556 
        and 626.557. 
           The state human services referee shall recommend an order 
        to the commissioner of health or human services, as applicable, 
        who shall issue a final order.  The commissioner shall affirm, 
        reverse, or modify the final disposition.  Any order of the 
        commissioner issued in accordance with this subdivision is 
        conclusive upon the parties unless appeal is taken in the manner 
        provided in subdivision 7.  In any licensing appeal under 
        chapter 245A and sections 144.50 to 144.58 and 144A.02 to 
        144A.46, the commissioner's findings determination as to whether 
        maltreatment occurred is conclusive. 
           Sec. 8.  Minnesota Statutes 1996, section 256.045, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CONDUCT OF HEARINGS.] (a) All hearings held 
        pursuant to subdivision 3, 3a, 3b, or 4a shall be conducted 
        according to the provisions of the federal Social Security Act 
        and the regulations implemented in accordance with that act to 
        enable this state to qualify for federal grants-in-aid, and 
        according to the rules and written policies of the commissioner 
        of human services.  County agencies shall install equipment 
        necessary to conduct telephone hearings.  A state human services 
        referee may schedule a telephone conference hearing when the 
        distance or time required to travel to the county agency offices 
        will cause a delay in the issuance of an order, or to promote 
        efficiency, or at the mutual request of the parties.  Hearings 
        may be conducted by telephone conferences unless the applicant, 
        recipient, former recipient, person, or facility contesting 
        maltreatment objects.  The hearing shall not be held earlier 
        than five days after filing of the required notice with the 
        county or state agency.  The state human services referee shall 
        notify all interested persons of the time, date, and location of 
        the hearing at least five days before the date of the hearing.  
        Interested persons may be represented by legal counsel or other 
        representative of their choice, including a provider of therapy 
        services, at the hearing and may appear personally, testify and 
        offer evidence, and examine and cross-examine witnesses.  The 
        applicant, recipient, former recipient, person, or facility 
        contesting maltreatment shall have the opportunity to examine 
        the contents of the case file and all documents and records to 
        be used by the county or state agency at the hearing at a 
        reasonable time before the date of the hearing and during the 
        hearing.  In cases alleging discharge for maltreatment, In 
        hearings under subdivision 3, paragraph (a), clauses (4) and 
        (8), either party may subpoena the private data relating to the 
        investigation memorandum prepared by the lead agency under 
        section 626.556 or 626.557 that is not otherwise accessible 
        under section 13.04, provided the name identity of the reporter 
        may not be disclosed. 
           (b) The private data obtained by subpoena in a hearing 
        under subdivision 3, paragraph (a), clause (4) or (8), must be 
        subject to a protective order which prohibits its disclosure for 
        any other purpose outside the hearing provided for in this 
        section without prior order of the district court.  Disclosure 
        without court order is punishable by a sentence of not more than 
        90 days imprisonment or a fine of not more than $700, or both.  
        These restrictions on the use of private data do not prohibit 
        access to the data under section 13.03, subdivision 6.  Except 
        for appeals under subdivision 3, paragraph (a), clauses (4), 
        (5), and (8), upon request, the county agency shall provide 
        reimbursement for transportation, child care, photocopying, 
        medical assessment, witness fee, and other necessary and 
        reasonable costs incurred by the applicant, recipient, or former 
        recipient in connection with the appeal, except in appeals 
        brought under subdivision 3b.  All evidence, except that 
        privileged by law, commonly accepted by reasonable people in the 
        conduct of their affairs as having probative value with respect 
        to the issues shall be submitted at the hearing and such hearing 
        shall not be "a contested case" within the meaning of section 
        14.02, subdivision 3.  The agency must present its evidence 
        prior to or at the hearing, and may not submit evidence after 
        the hearing except by agreement of the parties at the hearing, 
        provided the recipient petitioner has the opportunity to respond.
           Sec. 9.  Minnesota Statutes 1996, section 256.045, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ORDERS OF THE COMMISSIONER OF HUMAN SERVICES.] 
        This subdivision does not apply to appeals under subdivision 
        3b.  A state human services referee shall conduct a hearing on 
        the appeal and shall recommend an order to the commissioner of 
        human services.  The recommended order must be based on all 
        relevant evidence and must not be limited to a review of the 
        propriety of the state or county agency's action.  A referee may 
        take official notice of adjudicative facts.  The commissioner of 
        human services may accept the recommended order of a state human 
        services referee and issue the order to the county agency and 
        the applicant, recipient, former recipient, or prepaid health 
        plan.  The commissioner on refusing to accept the recommended 
        order of the state human services referee, shall notify the 
        county petitioner, the agency and the applicant, recipient, 
        former recipient, or prepaid health plan of that fact and shall 
        state reasons therefor and shall allow each party ten days' time 
        to submit additional written argument on the matter.  After the 
        expiration of the ten-day period, the commissioner shall issue 
        an order on the matter to the county petitioner, the agency and 
        the applicant, recipient, former recipient, or prepaid health 
        plan. 
           A party aggrieved by an order of the commissioner may 
        appeal under subdivision 7, or request reconsideration by the 
        commissioner within 30 days after the date the commissioner 
        issues the order.  The commissioner may reconsider an order upon 
        request of any party or on the commissioner's own motion.  A 
        request for reconsideration does not stay implementation of the 
        commissioner's order.  Upon reconsideration, the commissioner 
        may issue an amended order or an order affirming the original 
        order. 
           Any order of the commissioner issued under this subdivision 
        shall be conclusive upon the parties unless appeal is taken in 
        the manner provided by subdivision 7.  Any order of the 
        commissioner is binding on the parties and must be implemented 
        by the state agency or, a county agency, or a prepaid health 
        plan according to subdivision 3a, until the order is reversed by 
        the district court, or unless the commissioner or a district 
        court orders monthly assistance or aid or services paid or 
        provided under subdivision 10. 
           Except for a prepaid health plan, A vendor of medical care 
        as defined in section 256B.02, subdivision 7, or a vendor under 
        contract with a county agency to provide social services under 
        section 256E.08, subdivision 4, is not a party and may not 
        request a hearing or seek judicial review of an order issued 
        under this section, unless assisting a recipient as provided in 
        subdivision 4.  A prepaid health plan is a party to an appeal 
        under subdivision 3a, but cannot seek judicial review of an 
        order issued under this section. 
           Sec. 10.  Minnesota Statutes 1996, section 256.045, 
        subdivision 8, is amended to read: 
           Subd. 8.  [HEARING.] Any party may obtain a hearing at a 
        special term of the district court by serving a written notice 
        of the time and place of the hearing at least ten days prior to 
        the date of the hearing.  Except for appeals under subdivision 
        3b, The court may consider the matter in or out of chambers, and 
        shall take no new or additional evidence unless it determines 
        that such evidence is necessary for a more equitable disposition 
        of the appeal. 
           Sec. 11.  Minnesota Statutes 1996, section 256.82, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [DIFFICULTY OF CARE ASSESSMENT PILOT 
        PROJECT.] Notwithstanding any law to the contrary, the 
        commissioner of human services shall conduct a two-year 
        statewide pilot project beginning July 1, 1997, to conduct a 
        difficulty of care assessment process which both assesses an 
        individual child's current functioning and identifies needs in a 
        variety of life situations.  The pilot project must take into 
        consideration existing difficulty of care payments so that, to 
        the extent possible, no child for whom a difficulty of care rate 
        is currently established will be adversely affected.  The pilot 
        project must include an evaluation and an interim report to the 
        legislature by January 15, 1999. 
           Sec. 12.  Minnesota Statutes 1996, section 256F.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FAMILY PRESERVATION FUND.] The 
        commissioner shall establish a family preservation fund to 
        assist counties in providing placement prevention and family 
        reunification services.  This fund shall include a basic grant 
        for family preservation services, a placement earnings grant 
        under section 256.8711, subdivision 6b, paragraph (a), and a 
        development grant under section 256.8711, subdivision 6a, to 
        assist counties in developing and expanding their family 
        preservation core services as defined in section 256F.03, 
        subdivision 10.  Beginning with calendar year 1998, after each 
        annual or quarterly calculation, these three component grants 
        shall be added together and treated as a single family 
        preservation grant. 
           Sec. 13.  Minnesota Statutes 1996, section 256F.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FORMS AND INSTRUCTIONS.] The commissioner shall 
        provide necessary forms and instructions to the counties for 
        their community social services plan, as required in section 
        256E.09, that incorporate the information necessary to apply for 
        a family preservation fund grant, and to exercise county options 
        under section 256F.05, subdivisions 7, paragraph (a), or 
        subdivision 8, paragraph (c).  
           Sec. 14.  Minnesota Statutes 1996, section 256F.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MONEY AVAILABLE FOR THE BASIC GRANT FAMILY 
        PRESERVATION.] Money appropriated for family preservation under 
        sections 256F.04 to 256F.07, together with an amount as 
        determined by the commissioner of title IV-B funds distributed 
        to Minnesota according to the Social Security Act, United States 
        Code, title 42, chapter 7, subchapter IV, part B, section 621, 
        must be distributed to counties on a calendar year basis 
        according to the formula in subdivision 3. 
           Sec. 15.  Minnesota Statutes 1996, section 256F.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BASIC GRANT FORMULA.] (a) The amount of money 
        allocated to counties under subdivision 2 shall first be 
        allocated in amounts equal to each county's guaranteed floor 
        according to paragraph (b), and second, any remaining available 
        funds allocated as follows: 
           (1) 90 50 percent of the funds shall be allocated based on 
        the population of the county under age 19 years as compared to 
        the state as a whole as determined by the most recent data from 
        the state demographer's office; and 
           (2) ten 20 percent of funds shall be allocated based on the 
        county's percentage share of the unduplicated number of families 
        who received family preservation services under section 256F.03, 
        subdivision 5, paragraphs (a), (b), (c), and (e), in the most 
        recent calendar year available as determined by the 
        commissioner; 
           (3) ten percent of the funds shall be allocated based on 
        the county's percentage share of the unduplicated number of 
        children in substitute care in the most recent calendar year 
        available as determined by the commissioner; 
           (4) ten percent of the funds shall be allocated based on 
        the county's percentage share of the number of determined 
        maltreatment reports in the most recent calendar year available 
        as determined by the commissioner; 
           (5) five percent of the funds shall be allocated based on 
        the county's percentage share of the number of American Indian 
        children under age 18 residing in the county in the most recent 
        calendar year as determined by the commissioner; and 
           (6) five percent of the funds shall be allocated based on 
        the county's percentage share of the number of minority children 
        of color receiving children's case management services as 
        defined by the commissioner based on the most recent data as 
        determined by the commissioner. 
           (b) Each county's basic grant guaranteed floor shall be 
        calculated as follows: 
           (1) 90 percent of the county's allocation received in the 
        preceding calendar year.  For calendar year 1996 only, the 
        allocation received in the preceding calendar year shall be 
        determined by the commissioner based on the funding previously 
        distributed as separate grants under sections 256F.04 to 256F.07 
        or $25,000, whichever is greater; and 
           (2) when the amounts of funds available for allocation is 
        less than the amount available in the previous year, each 
        county's previous year allocation shall be reduced in proportion 
        to the reduction in the statewide funding, for the purpose of 
        establishing the guaranteed floor. 
           (c) The commissioner shall regularly review the use of 
        family preservation fund allocations by county.  The 
        commissioner may reallocate unexpended or unencumbered money at 
        any time among those counties that have expended or are 
        projected to expend their full allocation. 
           (d) For the period of July 1, 1997, to December 31, 1998, 
        only, each county shall receive an 18-month allocation.  For the 
        purposes of determining the guaranteed floor for this 18-month 
        allocation, the allocation received in the preceding calendar 
        year shall be determined by the commissioner based on the 
        funding previously distributed separately under sections 
        256.8711 and 256F.04. 
           Sec. 16.  Minnesota Statutes 1996, section 256F.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PAYMENTS.] The commissioner shall make grant 
        payments to each county whose biennial community social services 
        plan has been approved under section 256F.04, subdivision 2.  
        The basic grant under subdivisions 2 and 3 and the development 
        grant under section 256.8711, subdivision 6a, shall be paid to 
        counties in four installments per year.  The commissioner may 
        certify the payments for the first three months of a calendar 
        year.  Subsequent payments shall be based on reported 
        expenditures and may be adjusted for anticipated spending 
        patterns.  The placement earnings grant under section 256.8711, 
        subdivision 6b, paragraph (a), shall be based on earnings and 
        coordinated with the other payments.  In calendar years 1996 and 
        1997, the placement earnings grant and the development grant 
        shall be distributed separately from the basic grant, except as 
        provided in subdivision 7, paragraph (a).  Beginning with 
        calendar year 1998, after each annual or quarterly calculation, 
        these three component grants shall be added together into a 
        single family preservation fund grant and treated as a single 
        grant. 
           Sec. 17.  Minnesota Statutes 1996, section 256F.05, 
        subdivision 8, is amended to read: 
           Subd. 8.  [USES OF FAMILY PRESERVATION FUND GRANTS.] For 
        both basic grants and single family preservation fund grants:  
        (a) A county which has not demonstrated that year that its 
        family preservation core services are developed as provided in 
        subdivision 1a, must use its family preservation fund grant 
        exclusively for family preservation services defined in section 
        256F.03, subdivision 5, paragraphs (a), (b), (c), and (e). 
           (b) A county which has demonstrated that year that its 
        family preservation core services are developed becomes eligible 
        either to continue using its family preservation fund grant as 
        provided in paragraph (a), or to exercise the expanded service 
        option under paragraph (c). 
           (c) The expanded service option permits an eligible county 
        to use its family preservation fund grant for child welfare 
        preventative preventive services as defined in section 256F.10, 
        subdivision 7, paragraph (d).  For purposes of this section, 
        child welfare preventive services are those services directed 
        toward a specific child or family that further the goals of 
        section 256F.01 and include assessments, family preservation 
        services, service coordination, community-based treatment, 
        crisis nursery services when the parents retain custody and 
        there is no voluntary placement agreement with a child-placing 
        agency, respite care except when it is provided under a medical 
        assistance waiver, home-based services, and other related 
        services.  For purposes of this section, child welfare 
        preventive services shall not include shelter care or other 
        placement services under the authority of the court or public 
        agency to address an emergency.  To exercise this option, an 
        eligible county must notify the commissioner in writing of its 
        intention to do so no later than 30 days into the quarter during 
        which it intends to begin or in its county plan, as provided in 
        section 256F.04, subdivision 2.  Effective with the first day of 
        that quarter, the county must maintain its base level of 
        expenditures for child welfare preventative preventive services 
        and use the family preservation fund to expand them.  The base 
        level of expenditures for a county shall be that established 
        under section 256F.10, subdivision 7.  For counties which have 
        no such base established, a comparable base shall be established 
        with the base year being the calendar year ending at least two 
        calendar quarters before the first calendar quarter in which the 
        county exercises its expanded service option.  The commissioner 
        shall, at the request of the counties, reduce, suspend, or 
        eliminate either or both of a county's obligations to continue 
        the base level of expenditures and to expand child welfare 
        preventative preventive services based on conditions described 
        in section 256F.10, subdivision 7, paragraph (b) or (c) under 
        extraordinary circumstances.  
           (d) Each county's placement earnings and development grant 
        shall be determined under section 256.8711, but after each 
        annual or quarterly calculation, if added to that county's basic 
        grant, the three component grants shall be treated as a single 
        family preservation fund grant. 
           Sec. 18.  Minnesota Statutes 1996, section 256F.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESPONSIBILITIES.] A county board may, 
        alone or in combination with other county boards, apply for a 
        family preservation fund grant as provided in section 256F.04, 
        subdivision 2.  Upon approval of the grant, the county board may 
        contract for or directly provide family-based and other eligible 
        services.  A county board may contract with or directly provide 
        eligible services to children and families through a local 
        collaborative. 
           Sec. 19.  Minnesota Statutes 1996, section 256F.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEVELOPING FAMILY PRESERVATION CORE SERVICES.] A 
        county board shall endeavor to develop and expand its family 
        preservation core services.  When a county can demonstrate that 
        its family preservation core services are developed as provided 
        in section 256F.05, subdivision 1a, a county board becomes 
        eligible to exercise the expanded service option under section 
        256F.05, subdivision 8, paragraph (c).  For calendar years 1996 
        and 1997, the county board also becomes eligible to request that 
        its basic, placement earnings, and development grants be added 
        into a single grant under section 256F.05, subdivision 7, 
        paragraph (a). 
           Sec. 20.  Minnesota Statutes 1996, section 256F.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FUND DISTRIBUTION.] In distributing funds, the 
        commissioner shall give priority consideration to agencies and 
        organizations with experience in working with abused or 
        neglected children and their families, and with children at high 
        risk of abuse and neglect and their families, and serve 
        communities which demonstrate the greatest need for these 
        services.  Funds shall be distributed to crisis nurseries 
        according to a formula developed by the commissioner in 
        consultation with the Minnesota crisis nursery association.  
        This formula shall include funding for all existing crisis 
        nursery programs that meet program requirements as specified in 
        paragraph (a), and consideration of factors reflecting the need 
        for services in each service area, including, but not limited 
        to, the number of children 18 years of age and under living in 
        the service area, the percent of children 18 years of age and 
        under living in poverty in the service area, and factors 
        reflecting the cost of providing services, including, but not 
        limited to, the number of days of service provided in the 
        previous year.  At least 25 percent of available funds for state 
        fiscal year 1998 shall be set aside to accomplish any of the 
        following:  establish new crisis nursery programs; increase 
        statewide availability of crisis nursery services; and enhance 
        or expand services at existing crisis nursery programs. 
           (a) The crisis nurseries must:  
           (1) be available 24 hours a day, seven days a week; 
           (2) provide services for children up to three days at any 
        one time; 
           (3) make referrals for parents to counseling services and 
        other community resources to help alleviate the underlying cause 
        of the precipitating stress or crisis; 
           (4) provide services without a fee for a maximum of 30 days 
        in any year; 
           (5) provide services to children from birth to 12 years of 
        age; 
           (6) provide an initial assessment and intake interview 
        conducted by a skilled professional who will identify the 
        presenting problem and make an immediate referral to an 
        appropriate agency or program to prevent maltreatment and 
        out-of-home placement of children; 
           (7) maintain the clients' confidentiality to the extent 
        required by law, and also comply with statutory reporting 
        requirements which may mandate a report to child protective 
        services; 
           (8) contain a volunteer component; 
           (9) provide preservice training and ongoing training to 
        providers and volunteers; 
           (10) evaluate the services provided by documenting use of 
        services, the result of family referrals made to community 
        resources, and how the services reduced the risk of 
        maltreatment; 
           (11) provide age appropriate programming; 
           (12) provide developmental assessments; 
           (13) provide medical assessments as determined by using a 
        risk screening tool; 
           (14) meet United States Department of Agriculture 
        regulations concerning meals and provide three meals a day and 
        three snacks during a 24-hour period; and 
           (15) provide appropriate sleep and nap arrangements for 
        children.  
           (b) The crisis nurseries are encouraged to provide:  
           (1) on-site support groups for facility model programs, or 
        agency sponsored parent support groups for volunteer family 
        model programs; 
           (2) parent education classes or programs that include 
        parent-child interaction; and 
           (3) opportunities for parents to volunteer, if appropriate, 
        to assist with child care in a supervised setting in order to 
        enhance their parenting skills and self-esteem, in addition to 
        providing them the opportunity to give something back to the 
        program.  
           (c) Parents shall retain custody of their children during 
        placement in a crisis facility.  
           The crisis nurseries are encouraged to include one or more 
        parents who have used the crisis nursery services on the 
        program's multidisciplinary advisory board. 
           Sec. 21.  [257.85] [RELATIVE CUSTODY ASSISTANCE.] 
           Subdivision 1.  [CITATION.] This section may be cited as 
        the "Relative Custody Assistance Act." 
           Subd. 2.  [SCOPE.] The provisions of this section apply to 
        those situations in which the legal and physical custody of a 
        child is established with a relative according to section 
        260.191, subdivision 3b, by a court order issued on or after 
        July 1, 1997.  
           Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
        terms defined in this subdivision have the meanings given them. 
           (a) "AFDC or MFIP standard" means the monthly standard of 
        need used to calculate assistance under the AFDC program, the 
        transitional standard used to calculate assistance under the 
        MFIP-S program, or, if neither of those is applicable, the 
        analogous transitional standard used to calculate assistance 
        under the MFIP or MFIP-R programs. 
           (b) "Local agency" means the local social service agency 
        with legal custody of a child prior to the transfer of permanent 
        legal and physical custody to a relative. 
           (c) "Permanent legal and physical custody" means permanent 
        legal and physical custody ordered by a Minnesota juvenile court 
        under section 260.191, subdivision 3b. 
           (d) "Relative" means an individual, other than a parent, 
        who is related to a child by blood, marriage, or adoption. 
           (e) "Relative custodian" means a relative of a child for 
        whom the relative has permanent legal and physical custody. 
           (f) "Relative custody assistance agreement" means an 
        agreement entered into between a local agency and the relative 
        of a child who has been or will be awarded permanent legal and 
        physical custody of the child. 
           (g) "Relative custody assistance payment" means a monthly 
        cash grant made to a relative custodian pursuant to a relative 
        custody assistance agreement and in an amount calculated under 
        subdivision 7. 
           (h) "Remains in the physical custody of the relative 
        custodian" means that the relative custodian is providing 
        day-to-day care for the child and that the child lives with the 
        relative custodian; absence from the relative custodian's home 
        for a period of more than 120 days raises a presumption that the 
        child no longer remains in the physical custody of the relative 
        custodian. 
           Subd. 4.  [DUTIES OF LOCAL AGENCY.] (a) When a local agency 
        seeks a court order under section 260.191, subdivision 3b, to 
        establish permanent legal and physical custody of a child with a 
        relative, or if such an order is issued by the court, the local 
        agency shall perform the duties in this subdivision. 
           (b) As soon as possible after the local agency determines 
        that it will seek to establish permanent legal and physical 
        custody of the child with a relative or, if the agency did not 
        seek to establish custody, as soon as possible after the 
        issuance of the court order establishing custody, the local 
        agency shall inform the relative about the relative custody 
        assistance program, including eligibility criteria and payment 
        levels.  Anytime prior to, but not later than seven days after, 
        the date the court issues the order establishing permanent legal 
        and physical custody of the child with a relative, the local 
        agency shall determine whether the eligibility criteria in 
        subdivision 6 are met to allow the relative to receive relative 
        custody assistance.  Not later than seven days after determining 
        whether the eligibility criteria are met, the local agency shall 
        inform the relative custodian of its determination and of the 
        process for appealing that determination under subdivision 9. 
           (c) If the local agency determines that the relative 
        custodian is eligible to receive relative custody assistance, 
        the local agency shall prepare the relative custody assistance 
        agreement and ensure that it meets the criteria of subdivision 6.
           (d) The local agency shall make monthly payments to the 
        relative as set forth in the relative custody assistance 
        agreement.  On a quarterly basis and on a form to be provided by 
        the commissioner, the local agency shall make claims for 
        reimbursement from the commissioner for relative custody 
        assistance payments made. 
           (e) For a relative custody assistance agreement that is in 
        place for longer than one year, and as long as the agreement 
        remains in effect, the local agency shall send an annual 
        affidavit form to the relative custodian of the eligible child 
        within the month before the anniversary date of the agreement.  
        The local agency shall monitor whether the annual affidavit is 
        returned by the relative custodian within 30 days following the 
        anniversary date of the agreement.  The local agency shall 
        review the affidavit and any other information in its possession 
        to ensure continuing eligibility for relative custody assistance 
        and that the amount of payment made according to the agreement 
        is correct. 
           (f) When the local agency determines that a relative 
        custody assistance agreement should be terminated or modified, 
        it shall provide notice of the proposed termination or 
        modification to the relative custodian at least ten days before 
        the proposed action along with information about the process for 
        appealing the proposed action. 
           Subd. 5.  [RELATIVE CUSTODY ASSISTANCE AGREEMENT.] (a) A 
        relative custody assistance agreement will not be effective, 
        unless it is signed by the local agency and the relative 
        custodian no later than 30 days after the date of the order 
        establishing permanent legal and physical custody with the 
        relative, except that a local agency may enter into a relative 
        custody assistance agreement with a relative custodian more than 
        30 days after the date of the order if it certifies that the 
        delay in entering the agreement was through no fault of the 
        relative custodian.  There must be a separate agreement for each 
        child for whom the relative custodian is receiving relative 
        custody assistance. 
           (b) Regardless of when the relative custody assistance 
        agreement is signed by the local agency and relative custodian, 
        the effective date of the agreement shall be the first day of 
        the month following the date of the order establishing permanent 
        legal and physical custody or the date that the last party signs 
        the agreement, whichever occurs later. 
           (c) If MFIP-S is not the applicable program for a child at 
        the time that a relative custody assistance agreement is entered 
        on behalf of the child, when MFIP-S becomes the applicable 
        program, if the relative custodian had been receiving custody 
        assistance payments calculated based upon a different program, 
        the amount of relative custody assistance payment under 
        subdivision 7 shall be recalculated under the MFIP-S program. 
           (d) The relative custody assistance agreement shall be in a 
        form specified by the commissioner and shall include provisions 
        relating to the following: 
           (1) the responsibilities of all parties to the agreement; 
           (2) the payment terms, including the financial 
        circumstances of the relative custodian, the needs of the child, 
        the amount and calculation of the relative custody assistance 
        payments, and that the amount of the payments shall be 
        reevaluated annually; 
           (3) the effective date of the agreement, which shall also 
        be the anniversary date for the purpose of submitting the annual 
        affidavit under subdivision 8; 
           (4) that failure to submit the affidavit as required by 
        subdivision 8 will be grounds for terminating the agreement; 
           (5) the agreement's expected duration, which shall not 
        extend beyond the child's eighteenth birthday; 
           (6) any specific known circumstances that could cause the 
        agreement or payments to be modified, reduced, or terminated and 
        the relative custodian's appeal rights under subdivision 9; 
           (7) that the relative custodian must notify the local 
        agency within 30 days of any of the following: 
           (i) a change in the child's status; 
           (ii) a change in the relationship between the relative 
        custodian and the child; 
           (iii) a change in composition or level of income of the 
        relative custodian's family; 
           (iv) a change in eligibility or receipt of benefits under 
        AFDC, MFIP-S, or other assistance program; and 
           (v) any other change that could affect eligibility for or 
        amount of relative custody assistance; 
           (8) that failure to provide notice of a change as required 
        by clause (7) will be grounds for terminating the agreement; 
           (9) that the amount of relative custody assistance is 
        subject to the availability of state funds to reimburse the 
        local agency making the payments; 
           (10) that the relative custodian may choose to temporarily 
        stop receiving payments under the agreement at any time by 
        providing 30 days' notice to the local agency and may choose to 
        begin receiving payments again by providing the same notice but 
        any payments the relative custodian chooses not to receive are 
        forfeit; and 
           (11) that the local agency will continue to be responsible 
        for making relative custody assistance payments under the 
        agreement regardless of the relative custodian's place of 
        residence. 
           Subd. 6.  [ELIGIBILITY CRITERIA.] A local agency shall 
        enter into a relative custody assistance agreement under 
        subdivision 5 if it certifies that the following criteria are 
        met: 
           (1) the juvenile court has determined or is expected to 
        determine that the child, under the former or current custody of 
        the local agency, cannot return to the home of the child's 
        parents; 
           (2) the court, upon determining that it is in the child's 
        best interests, has issued or is expected to issue an order 
        transferring permanent legal and physical custody of the child 
        to the relative; and 
           (3) the child either: 
           (i) is a member of a sibling group to be placed together; 
        or 
           (ii) has a physical, mental, emotional, or behavioral 
        disability that will require financial support. 
           When the local agency bases its certification that the 
        criteria in clause (1) or (2) are met upon the expectation that 
        the juvenile court will take a certain action, the relative 
        custody assistance agreement does not become effective until and 
        unless the court acts as expected. 
           Subd. 7.  [AMOUNT OF RELATIVE CUSTODY ASSISTANCE 
        PAYMENTS.] (a) The amount of a monthly relative custody 
        assistance payment shall be determined according to the 
        provisions of this paragraph. 
           (1) The total maximum assistance rate is equal to the base 
        assistance rate plus, if applicable, the supplemental assistance 
        rate. 
           (i) The base assistance rate is equal to the maximum amount 
        that could be received as basic maintenance for a child of the 
        same age under the adoption assistance program. 
           (ii) The local agency shall determine whether the child has 
        physical, mental, emotional, or behavioral disabilities that 
        require care, supervision, or structure beyond that ordinarily 
        provided in a family setting to children of the same age such 
        that the child would be eligible for supplemental maintenance 
        payments under the adoption assistance program if an adoption 
        assistance agreement were entered on the child's behalf.  If the 
        local agency determines that the child has such a disability, 
        the supplemental assistance rate shall be the maximum amount of 
        monthly supplemental maintenance payment that could be received 
        on behalf of a child of the same age, disabilities, and 
        circumstances under the adoption assistance program. 
           (2) The net maximum assistance rate is equal to the total 
        maximum assistance rate from clause (1) less the following 
        offsets: 
           (i) if the child is or will be part of an assistance unit 
        receiving an AFDC, MFIP-S, or other MFIP grant, the portion of 
        the AFDC or MFIP standard relating to the child; 
           (ii) Supplemental Security Income payments received by or 
        on behalf of the child; 
           (iii) veteran's benefits received by or on behalf of the 
        child; and 
           (iv) any other income of the child, including child support 
        payments made on behalf of the child. 
           (3) The relative custody assistance payment to be made to 
        the relative custodian shall be a percentage of the net maximum 
        assistance rate calculated in clause (2) based upon the gross 
        income of the relative custodian's family, including the child 
        for whom the relative has permanent legal and physical custody.  
        In no case shall the amount of the relative custody assistance 
        payment exceed that which the child could qualify for under the 
        adoption assistance program if an adoption assistance agreement 
        were entered on the child's behalf.  The relative custody 
        assistance payment shall be calculated as follows: 
           (i) if the relative custodian's gross family income is less 
        than or equal to 200 percent of federal poverty guidelines, the 
        relative custody assistance payment shall be the full amount of 
        the net maximum assistance rate; 
           (ii) if the relative custodian's gross family income is 
        greater than 200 percent and less than or equal to 225 percent 
        of federal poverty guidelines, the relative custody assistance 
        payment shall be 80 percent of the net maximum assistance rate; 
           (iii) if the relative custodian's gross family income is 
        greater than 225 percent and less than or equal to 250 percent 
        of federal poverty guidelines, the relative custody assistance 
        payment shall be 60 percent of the net maximum assistance rate; 
           (iv) if the relative custodian's gross family income is 
        greater than 250 percent and less than or equal to 275 percent 
        of federal poverty guidelines, the relative custody assistance 
        payment shall be 40 percent of the net maximum assistance rate; 
           (v) if the relative custodian's gross family income is 
        greater than 275 percent and less than or equal to 300 percent 
        of federal poverty guidelines, the relative custody assistance 
        payment shall be 20 percent of the net maximum assistance rate; 
        or 
           (vi) if the relative custodian's gross family income is 
        greater than 300 percent of federal poverty guidelines, no 
        relative custody assistance payment shall be made. 
           (b) This paragraph specifies the provisions pertaining to 
        the relationship between relative custody assistance and AFDC, 
        MFIP-S, or other MFIP programs: 
           (1) the relative custodian of a child for whom the relative 
        is receiving relative custody assistance is expected to seek 
        whatever assistance is available for the child through the AFDC, 
        MFIP-S, or other MFIP programs.  If a relative custodian fails 
        to apply for assistance through AFDC, MFIP-S, or other MFIP 
        program for which the child is eligible, the child's portion of 
        the AFDC or MFIP standard will be calculated as if application 
        had been made and assistance received; 
           (2) the portion of the AFDC or MFIP standard relating to 
        each child for whom relative custody assistance is being 
        received shall be calculated as follows: 
           (i) determine the total AFDC or MFIP standard for the 
        assistance unit; 
           (ii) determine the amount that the AFDC or MFIP standard 
        would have been if the assistance unit had not included the 
        children for whom relative custody assistance is being received; 
           (iii) subtract the amount determined in item (ii) from the 
        amount determined in item (i); and 
           (iv) divide the result in item (iii) by the number of 
        children for whom relative custody assistance is being received 
        that are part of the assistance unit; or 
           (3) if a child for whom relative custody assistance is 
        being received is not eligible for assistance through the AFDC, 
        MFIP-S, or other MFIP programs, the portion of AFDC or MFIP 
        standard relating to that child shall be equal to zero. 
           Subd. 8.  [ANNUAL AFFIDAVIT.] When a relative custody 
        assistance agreement remains in effect for more than one year, 
        the local agency shall require the relative custodian to 
        annually submit an affidavit in a form to be specified by the 
        commissioner.  The affidavit must be submitted to the local 
        agency each year no later than 30 days after the relative 
        custody assistance agreement's anniversary date.  The affidavit 
        shall document the following: 
           (1) that the child remains in the physical custody of the 
        relative custodian; 
           (2) that there is a continuing need for the relative 
        custody assistance payments due to the child's physical, mental, 
        emotional, or behavioral needs; and 
           (3) the current gross income of the relative custodian's 
        family. 
           The relative custody assistance agreement may be modified 
        based on information or documentation presented to the local 
        agency under this requirement and as required by annual 
        adjustments to the federal poverty guidelines. 
           Subd. 9.  [RIGHT OF APPEAL.] A relative custodian who 
        enters into a relative custody assistance agreement with a local 
        agency has the right to appeal to the commissioner according to 
        section 256.045 when the local agency establishes, denies, 
        terminates, or modifies the agreement.  Upon appeal, the 
        commissioner may review only: 
           (1) whether the local agency has met the legal requirements 
        imposed by this chapter for establishing, denying, terminating, 
        or modifying the agreement; 
           (2) whether the amount of the relative custody assistance 
        payment was correctly calculated under the method in subdivision 
        7; 
           (3) whether the local agency paid for correct time periods 
        under the relative custody assistance agreement; 
           (4) whether the child remains in the physical custody of 
        the relative custodian; 
           (5) whether the local agency correctly calculated the 
        amount of the supplemental assistance rate based on a change in 
        the child's physical, mental, emotional, or behavioral needs, 
        the relative custodian's failure to document the continuing need 
        for the supplemental assistance rate after the local agency has 
        requested such documentation; and 
           (6) whether the local agency correctly calculated or 
        terminated the amount of relative custody assistance based on 
        the relative custodian's failure to provide documentation of the 
        gross income of the relative custodian's family after the local 
        agency has requested such documentation. 
           Subd. 10.  [CHILD'S COUNTY OF RESIDENCE.] For the purposes 
        of the unitary residency act under chapter 256G, time spent by a 
        child in the custody of a relative custodian receiving payments 
        under this section is not excluded time.  A child is a resident 
        of the county where the relative custodian is a resident. 
           Subd. 11.  [FINANCIAL CONSIDERATIONS.] (a) Payment of 
        relative custody assistance under a relative custody assistance 
        agreement is subject to the availability of state funds and 
        payments may be reduced or suspended on order of the 
        commissioner if insufficient funds are available. 
           (b) Upon receipt from a local agency of a claim for 
        reimbursement, the commissioner shall reimburse the local agency 
        in an amount equal to 100 percent of the relative custody 
        assistance payments provided to relative custodians.  The local 
        agency may not seek and the commissioner shall not provide 
        reimbursement for the administrative costs associated with 
        performing the duties described in subdivision 4. 
           (c) For the purposes of determining eligibility or payment 
        amounts under the AFDC, MFIP-S, and other MFIP programs, 
        relative custody assistance payments shall be considered 
        excluded income. 
           Sec. 22.  Minnesota Statutes 1996, section 393.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADMINISTRATION OF PUBLIC WELFARE.] The local 
        social services agency, subject to the supervision of the 
        commissioner of human services, shall administer all forms of 
        public welfare, both for children and adults, responsibility for 
        which now or hereafter may be imposed on the commissioner of 
        human services by law, including general assistance, aid to 
        dependent children, county supplementation, if any, or state aid 
        to recipients of supplemental security income for aged, blind 
        and disabled, child welfare services, mental health services, 
        and other public assistance or public welfare services, provided 
        that the local social services agency shall not employ public 
        health nursing or home health service personnel other than 
        homemaker-home help aides, but shall contract for or purchase 
        the necessary services from existing community agencies.  The 
        duties of the local social services agency shall be performed in 
        accordance with the standards and rules which may be promulgated 
        by the commissioner of human services to achieve the purposes 
        intended by law and in order to comply with the requirements of 
        the federal Social Security Act in respect to public assistance 
        and child welfare services, so that the state may qualify for 
        grants-in-aid available under that act.  To avoid administrative 
        penalties under section 256.017, the local social services 
        agency must comply with (1) policies established by state law 
        and (2) instructions from the commissioner relating (i) to 
        public assistance program policies consistent with federal law 
        and regulation and state law and rule and (ii) to local agency 
        program operations.  The commissioner may enforce local social 
        services agency compliance with the instructions, and may delay, 
        withhold, or deny payment of all or part of the state and 
        federal share of benefits and federal administrative 
        reimbursement, according to the provisions under section 
        256.017.  The local social services agency shall supervise wards 
        of the commissioner and, when so designated, act as agent of the 
        commissioner of human services in the placement of the 
        commissioner's wards in adoptive homes or in other foster care 
        facilities.  The local social services agency shall cooperate as 
        needed when the commissioner contracts with a licensed child 
        placement agency for adoption services for a child under the 
        commissioner's guardianship.  The local social services agency 
        may contract with a bank or other financial institution to 
        provide services associated with the processing of public 
        assistance checks and pay a service fee for these services, 
        provided the fee charged does not exceed the fee charged to 
        other customers of the institution for similar services. 
           Sec. 23.  Minnesota Statutes 1996, section 466.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MUNICIPALITY.] For the purposes of 
        sections 466.01 to 466.15, "municipality" means any city, 
        whether organized under home rule charter or otherwise, any 
        county, town, public authority, public corporation, nonprofit 
        firefighting corporation that has associated with it a relief 
        association as defined in section 424A.001, subdivision 4, 
        special district, school district, however organized, county 
        agricultural society organized pursuant to chapter 38, joint 
        powers board or organization created under section 471.59 or 
        other statute, public library, regional public library system, 
        multicounty multitype library system, family services 
        collaborative established under section 121.8355, children's 
        mental health collaboratives established under sections 245.491 
        to 245.496, or a collaborative established by the merger of a 
        children's mental health collaborative and a family services 
        collaborative, other political subdivision, or community action 
        agency. 
           Sec. 24.  Minnesota Statutes 1996, section 471.59, 
        subdivision 11, is amended to read: 
           Subd. 11.  [JOINT POWERS BOARD.] (a) Two or more 
        governmental units, through action of their governing bodies, by 
        adoption of a joint powers agreement that complies with the 
        provisions of subdivisions 1 to 5, may establish a joint board 
        to issue bonds or obligations under any law by which any of the 
        governmental units establishing the joint board may 
        independently issue bonds or obligations and may use the 
        proceeds of the bonds or obligations to carry out the purposes 
        of the law under which the bonds or obligations are issued.  A 
        joint board established under this section may issue obligations 
        and other forms of indebtedness only in accordance with express 
        authority granted by the action of the governing bodies of the 
        governmental units that established the joint board.  Except as 
        provided in paragraph (b), the joint board established under 
        this subdivision must be composed solely of members of the 
        governing bodies of the governmental unit that established the 
        joint board.  A joint board established under this subdivision 
        may not pledge the full faith and credit or taxing power of any 
        of the governmental units that established the joint board.  The 
        obligations or other forms of indebtedness must be obligations 
        of the joint board issued on behalf of the governmental units 
        creating the joint board.  The obligations or other forms of 
        indebtedness must be issued in the same manner and subject to 
        the same conditions and limitations that would apply if the 
        obligations were issued or indebtedness incurred by one of the 
        governmental units that established the joint board, provided 
        that any reference to a governmental unit in the statute, law, 
        or charter provision authorizing the issuance of the bonds or 
        the incurring of the indebtedness is considered a reference to 
        the joint board. 
           (b) Notwithstanding paragraph (a), one school district, one 
        county, and one public health entity, through action of their 
        governing bodies, may establish a joint board to establish and 
        govern a family services collaborative under section 121.8355.  
        The school district, county, and public health entity may 
        include other governmental entities at their discretion.  The 
        membership of a board established under this paragraph, in 
        addition to members of the governing bodies of the participating 
        governmental units, must include the representation required by 
        section 121.8355, subdivision 1, paragraph (a), selected in 
        accordance with section 121.8355, subdivision 1, paragraph (c). 
           (c) Notwithstanding paragraph (a), counties, school 
        districts, and mental health entities, through action of their 
        governing bodies, may establish a joint board to establish and 
        govern a children's mental health collaborative under sections 
        245.491 to 245.496, or a collaborative established by the merger 
        of a children's mental health collaborative and a family 
        services collaborative under section 121.8355.  The county, 
        school district, and mental health entities may include other 
        entities at their discretion.  The membership of a board 
        established under this paragraph, in addition to members of the 
        governing bodies of the participating governmental units, must 
        include the representation provided by section 245.493, 
        subdivision 1. 
           Sec. 25.  Minnesota Statutes 1996, section 626.556, 
        subdivision 10b, is amended to read: 
           Subd. 10b.  [DUTIES OF COMMISSIONER; NEGLECT OR ABUSE IN A 
        FACILITY.] (a) The commissioner shall immediately investigate if 
        the report alleges that: 
           (1) a child who is in the care of a facility as defined in 
        subdivision 2 is neglected, physically abused, or sexually 
        abused by an individual in that facility, or has been so 
        neglected or abused by an individual in that facility within the 
        three years preceding the report; or 
           (2) a child was neglected, physically abused, or sexually 
        abused by an individual in a facility defined in subdivision 2, 
        while in the care of that facility within the three years 
        preceding the report.  
           The commissioner shall arrange for the transmittal to the 
        commissioner of reports received by local agencies and may 
        delegate to a local welfare agency the duty to investigate 
        reports.  In conducting an investigation under this section, the 
        commissioner has the powers and duties specified for local 
        welfare agencies under this section.  The commissioner or local 
        welfare agency may interview any children who are or have been 
        in the care of a facility under investigation and their parents, 
        guardians, or legal custodians. 
           (b) Prior to any interview, the commissioner or local 
        welfare agency shall notify the parent, guardian, or legal 
        custodian of a child who will be interviewed in the manner 
        provided for in subdivision 10d, paragraph (a).  If reasonable 
        efforts to reach the parent, guardian, or legal custodian of a 
        child in an out-of-home placement have failed, the child may be 
        interviewed if there is reason to believe the interview is 
        necessary to protect the child or other children in the 
        facility.  The commissioner or local agency must provide the 
        information required in this subdivision to the parent, 
        guardian, or legal custodian of a child interviewed without 
        parental notification as soon as possible after the interview.  
        When the investigation is completed, any parent, guardian, or 
        legal custodian notified under this subdivision shall receive 
        the written memorandum provided for in subdivision 10d, 
        paragraph (c). 
           (c) In conducting investigations under this subdivision the 
        commissioner or local welfare agency shall obtain access to 
        information consistent with subdivision 10, paragraphs (h), (i), 
        and (j). 
           (d) Except for foster care and family child care, the 
        commissioner has the primary responsibility for the 
        investigations and notifications required under subdivisions 10d 
        and 10f for reports that allege maltreatment related to the care 
        provided by or in facilities licensed by the commissioner.  The 
        commissioner may request assistance from the local social 
        service agency. 
           Sec. 26.  Minnesota Statutes 1996, section 626.556, 
        subdivision 10d, is amended to read: 
           Subd. 10d.  [NOTIFICATION OF NEGLECT OR ABUSE IN A 
        FACILITY.] (a) When a report is received that alleges neglect, 
        physical abuse, or sexual abuse of a child while in the care of 
        a facility required to be licensed pursuant to sections 245A.01 
        to 245A.16 chapter 245A, the commissioner or local welfare 
        agency investigating the report shall provide the following 
        information to the parent, guardian, or legal custodian of a 
        child alleged to have been neglected, physically abused, or 
        sexually abused: the name of the facility; the fact that a 
        report alleging neglect, physical abuse, or sexual abuse of a 
        child in the facility has been received; the nature of the 
        alleged neglect, physical abuse, or sexual abuse; that the 
        agency is conducting an investigation; any protective or 
        corrective measures being taken pending the outcome of the 
        investigation; and that a written memorandum will be provided 
        when the investigation is completed. 
           (b) The commissioner or local welfare agency may also 
        provide the information in paragraph (a) to the parent, 
        guardian, or legal custodian of any other child in the facility 
        if the investigative agency knows or has reason to believe the 
        alleged neglect, physical abuse, or sexual abuse has occurred. 
        In determining whether to exercise this authority, the 
        commissioner or local welfare agency shall consider the 
        seriousness of the alleged neglect, physical abuse, or sexual 
        abuse; the number of children allegedly neglected, physically 
        abused, or sexually abused; the number of alleged perpetrators; 
        and the length of the investigation.  The facility shall be 
        notified whenever this discretion is exercised. 
           (c) When the commissioner or local welfare agency has 
        completed its investigation, every parent, guardian, or legal 
        custodian notified of the investigation by the commissioner or 
        local welfare agency shall be provided with the following 
        information in a written memorandum:  the name of the facility 
        investigated; the nature of the alleged neglect, physical abuse, 
        or sexual abuse; the investigator's name; a summary of the 
        investigation findings; a statement whether maltreatment was 
        found; and the protective or corrective measures that are being 
        or will be taken.  The memorandum shall be written in a manner 
        that protects the identity of the reporter and the child and 
        shall not contain the name, or to the extent possible, reveal 
        the identity of the alleged perpetrator or of those interviewed 
        during the investigation.  The commissioner or local welfare 
        agency shall also provide the written memorandum to the parent, 
        guardian, or legal custodian of each child in the facility if 
        maltreatment is determined to exist. 
           Sec. 27.  Minnesota Statutes 1996, section 626.556, 
        subdivision 10e, is amended to read: 
           Subd. 10e.  [DETERMINATIONS.] Upon the conclusion of every 
        assessment or investigation it conducts, the local welfare 
        agency shall make two determinations:  first, whether 
        maltreatment has occurred; and second, whether child protective 
        services are needed.  When maltreatment is determined in an 
        investigation involving a facility, the investigating agency 
        shall also determine whether the facility or individual was 
        responsible for the maltreatment using the mitigating factors in 
        paragraph (d).  Determinations under this subdivision must be 
        made based on a preponderance of the evidence. 
           (a) For the purposes of this subdivision, "maltreatment" 
        means any of the following acts or omissions committed by a 
        person responsible for the child's care: 
           (1) physical abuse as defined in subdivision 2, paragraph 
        (d); 
           (2) neglect as defined in subdivision 2, paragraph (c); 
           (3) sexual abuse as defined in subdivision 2, paragraph 
        (a); or 
           (4) mental injury as defined in subdivision 2, paragraph 
        (k). 
           (b) For the purposes of this subdivision, a determination 
        that child protective services are needed means that the local 
        welfare agency has documented conditions during the assessment 
        or investigation sufficient to cause a child protection worker, 
        as defined in section 626.559, subdivision 1, to conclude that a 
        child is at significant risk of maltreatment if protective 
        intervention is not provided and that the individuals 
        responsible for the child's care have not taken or are not 
        likely to take actions to protect the child from maltreatment or 
        risk of maltreatment. 
           (c) This subdivision does not mean that maltreatment has 
        occurred solely because the child's parent, guardian, or other 
        person responsible for the child's care in good faith selects 
        and depends upon spiritual means or prayer for treatment or care 
        of disease or remedial care of the child, in lieu of medical 
        care.  However, if lack of medical care may result in serious 
        danger to the child's health, the local welfare agency may 
        ensure that necessary medical services are provided to the child.
           (d) When determining whether the facility or individual is 
        the responsible party for determined maltreatment in a facility, 
        the investigating agency shall consider at least the following 
        mitigating factors: 
           (1) whether the actions of the facility or the individual 
        caregivers were according to, and followed the terms of, an 
        erroneous physician order, prescription, individual care plan, 
        or directive; however, this is not a mitigating factor when the 
        facility or caregiver was responsible for the issuance of the 
        erroneous order, prescription, individual care plan, or 
        directive or knew or should have known of the errors and took no 
        reasonable measures to correct the defect before administering 
        care; 
           (2) comparative responsibility between the facility, other 
        caregivers, and requirements placed upon an employee, including 
        the facility's compliance with related regulatory standards and 
        the adequacy of facility policies and procedures, facility 
        training, an individual's participation in the training, the 
        caregiver's supervision, and facility staffing levels and the 
        scope of the individual employee's authority and discretion; and 
           (3) whether the facility or individual followed 
        professional standards in exercising professional judgment. 
           Sec. 28.  Minnesota Statutes 1996, section 626.556, 
        subdivision 10f, is amended to read: 
           Subd. 10f.  [NOTICE OF DETERMINATIONS.] Within ten working 
        days of the conclusion of an assessment, the local welfare 
        agency shall notify the parent or guardian of the child, the 
        person determined to be maltreating the child, and if 
        applicable, the director of the facility, of the determination 
        and a summary of the specific reasons for the determination.  
        The notice must also include a certification that the 
        information collection procedures under subdivision 10, 
        paragraphs (h), (i), and (j), were followed and a notice of the 
        right of a data subject to obtain access to other private data 
        on the subject collected, created, or maintained under this 
        section.  In addition, the notice shall include the length of 
        time that the records will be kept under subdivision 11c.  When 
        there is no determination of either maltreatment or a need for 
        services, the notice shall also include the alleged 
        perpetrator's right to have the records destroyed.  The 
        investigating agency shall notify the designee of the child who 
        is the subject of the report, and any person or facility 
        determined to have maltreated a child, of their appeal rights 
        under this section. 
           Sec. 29.  Minnesota Statutes 1996, section 626.556, is 
        amended by adding a subdivision to read: 
           Subd. 10i.  [ADMINISTRATIVE RECONSIDERATION OF THE FINAL 
        DETERMINATION OF MALTREATMENT.] (a) An individual or facility 
        that the commissioner or a local social service agency 
        determines has maltreated a child, or the child's designee, 
        regardless of the determination, who contests the investigating 
        agency's final determination regarding maltreatment, may request 
        the investigating agency to reconsider its final determination 
        regarding maltreatment.  The request for reconsideration must be 
        submitted in writing to the investigating agency within 15 
        calendar days after receipt of notice of the final determination 
        regarding maltreatment. 
           (b) If the investigating agency denies the request or fails 
        to act upon the request within 15 calendar days after receiving 
        the request for reconsideration, the person or facility entitled 
        to a fair hearing under section 256.045 may submit to the 
        commissioner of human services a written request for a hearing 
        under that section. 
           (c) If, as a result of the reconsideration, the 
        investigating agency changes the final determination of 
        maltreatment, that agency shall notify the parties specified in 
        subdivisions 10b, 10d, and 10f. 
           Sec. 30.  Minnesota Statutes 1996, section 626.556, 
        subdivision 11c, is amended to read: 
           Subd. 11c.  [WELFARE, COURT SERVICES AGENCY, AND SCHOOL 
        RECORDS MAINTAINED.] Notwithstanding sections 138.163 and 
        138.17, records maintained or records derived from reports of 
        abuse by local welfare agencies, court services agencies, or 
        schools under this section shall be destroyed as provided in 
        paragraphs (a) to (d) by the responsible authority. 
           (a) If upon assessment or investigation there is no 
        determination of maltreatment or the need for child protective 
        services, the records may be maintained for a period of four 
        years.  After the individual alleged to have maltreated a child 
        is notified under subdivision 10f of the determinations at the 
        conclusion of the assessment or investigation, upon that 
        individual's request, records shall be destroyed within 30 
        days or after the appeal rights under subdivision 10i have been 
        concluded, whichever is later. 
           (b) All records relating to reports which, upon assessment 
        or investigation, indicate either maltreatment or a need for 
        child protective services shall be maintained for at least ten 
        years after the date of the final entry in the case record. 
           (c) All records regarding a report of maltreatment, 
        including any notification of intent to interview which was 
        received by a school under subdivision 10, paragraph (d), shall 
        be destroyed by the school when ordered to do so by the agency 
        conducting the assessment or investigation.  The agency shall 
        order the destruction of the notification when other records 
        relating to the report under investigation or assessment are 
        destroyed under this subdivision. 
           (d) Private or confidential data released to a court 
        services agency under subdivision 10h must be destroyed by the 
        court services agency when ordered to do so by the local welfare 
        agency that released the data.  The local welfare agency shall 
        order destruction of the data when other records relating to the 
        assessment or investigation are destroyed under this subdivision.
           Sec. 31.  Minnesota Statutes 1996, section 626.558, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT OF THE TEAM.] A county shall 
        establish a multidisciplinary child protection team that may 
        include, but not be limited to, the director of the local 
        welfare agency or designees, the county attorney or designees, 
        the county sheriff or designees, representatives of health and 
        education, representatives of mental health or other appropriate 
        human service or community-based agencies, and parent groups.  
        As used in this section, a "community-based agency" may include, 
        but is not limited to, schools, social service agencies, family 
        service and mental health collaboratives, early childhood and 
        family education programs, Head Start, or other agencies serving 
        children and families. 
           Sec. 32.  Minnesota Statutes 1996, section 626.558, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES OF TEAM.] A multidisciplinary child 
        protection team may provide public and professional education, 
        develop resources for prevention, intervention, and treatment, 
        and provide case consultation to the local welfare agency to 
        better enable the agency to carry out its child protection 
        functions under section 626.556 and the community social 
        services act. or other interested community-based agencies.  The 
        community-based agencies may request case consultation from the 
        multidisciplinary child protection team regarding a child or 
        family for whom the community-based agency is providing 
        services.  As used in this section, "case consultation" means a 
        case review process in which recommendations are made concerning 
        services to be provided to the identified children and family.  
        Case consultation may be performed by a committee or 
        subcommittee of members representing human services, including 
        mental health and chemical dependency; law enforcement, 
        including probation and parole; the county attorney; health 
        care; education; community-based agencies and other necessary 
        agencies; and persons directly involved in an individual case as 
        designated by other members performing case consultation. 
           Sec. 33.  Minnesota Statutes 1996, section 626.559, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TRAINING 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.  The commissioner must use these funds to 
        ensure decentralization of training. 
           (c) The federal revenue earned under this subdivision is 
        available for these purposes until the funds are expended. 
           Sec. 34.  [EVALUATION REPORT REQUIRED.] 
           The commissioner shall report the results of the evaluation 
        required under section 5 to the chairs of the house of 
        representatives and senate health and human services policy 
        committees by January 15, 1999. 
           Sec. 35.  [UNIFORM CONTRIBUTION SCHEDULE FOR OUT-OF-HOME 
        PLACEMENT; REPORT.] 
           The commissioner of human services shall prepare 
        recommendations and report to the 1998 legislature regarding a 
        uniform relative contribution schedule to reimburse costs 
        associated with out-of-home placement.  The commissioner shall 
        use the child support guidelines in Minnesota Statutes, chapter 
        518, as the basis for the uniform contribution schedule.  The 
        recommendations and report are due December 1, 1997. 
           Sec. 36.  [MALTREATMENT OF MINORS ADVISORY COMMITTEE.] 
           The commissioner of human services, with the cooperation of 
        the commissioners of health and children, families, and learning 
        and the attorney general, shall establish an advisory committee 
        to review the Maltreatment of Minors Act, Minnesota Statutes, 
        section 626.556, to determine whether existing state policy and 
        procedures for protecting children who are at risk of 
        maltreatment in the home, school, or community are effective. 
           The committee shall include consumers, advocacy and 
        provider organizations, county practitioners and administrators, 
        school districts, law enforcement agencies, communities of 
        color, professional associations, labor organizations, office of 
        the ombudsman for mental health and mental retardation, and the 
        commissioners of health, human services, and children, families, 
        and learning. 
           In making recommendations, the advisory committee shall 
        review all services and protections available under existing 
        state and federal laws with the focus on eliminating duplication 
        of effort among various local, state, and federal agencies and 
        minimizing possible conflicts of interest by establishing a 
        statewide process of coordination of responsibilities.  The 
        advisory committee shall submit a report to the legislature by 
        February 15, 1998, that includes a detailed plan with specific 
        law, rule, or administrative procedure changes to implement the 
        recommendations. 
           Sec. 37.  [TRANSFER TO COMMISSIONER OF CHILDREN, FAMILIES, 
        AND LEARNING; REVISOR INSTRUCTION.] 
           Effective July 1, 1997, all duties and funding related to 
        family visitation centers under Minnesota Statutes, section 
        256F.09, are transferred to the commissioner of children, 
        families, and learning.  In the next edition of Minnesota 
        Statutes, the revisor of statutes shall renumber Minnesota 
        Statutes, section 256F.09, in Minnesota Statutes, chapter 119A. 
           Sec. 38.  [REPEALER.] 
           Minnesota Statutes 1996, section 256F.05, subdivisions 5 
        and 7, are repealed. 
                                   ARTICLE 6 
                           CHILD SUPPORT ENFORCEMENT 
           Section 1.  Minnesota Statutes 1996, section 13.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GENERAL.] (a) Unless the data is summary data or 
        a statute specifically provides a different classification, data 
        on individuals collected, maintained, used, or disseminated by 
        the welfare system is private data on individuals, and shall not 
        be disclosed except:  
           (1) pursuant to section 13.05; 
           (2) pursuant to court order; 
           (3) pursuant to a statute specifically authorizing access 
        to the private data; 
           (4) to an agent of the welfare system, including a law 
        enforcement person, attorney, or investigator acting for it in 
        the investigation or prosecution of a criminal or civil 
        proceeding relating to the administration of a program; 
           (5) to personnel of the welfare system who require the data 
        to determine eligibility, amount of assistance, and the need to 
        provide services of additional programs to the individual; 
           (6) to administer federal funds or programs; 
           (7) between personnel of the welfare system working in the 
        same program; 
           (8) the amounts of cash public assistance and relief paid 
        to welfare recipients in this state, including their names, 
        social security numbers, income, addresses, and other data as 
        required, upon request by the department of revenue to 
        administer the property tax refund law, supplemental housing 
        allowance, early refund of refundable tax credits, and the 
        income tax.  "Refundable tax credits" means the dependent care 
        credit under section 290.067, the Minnesota working family 
        credit under section 290.0671, the property tax refund under 
        section 290A.04, and, if the required federal waiver or waivers 
        are granted, the federal earned income tax credit under section 
        32 of the Internal Revenue Code; 
           (9) to the Minnesota department of economic security for 
        the purpose of monitoring the eligibility of the data subject 
        for reemployment insurance, for any employment or training 
        program administered, supervised, or certified by that agency, 
        or for the purpose of administering any rehabilitation program, 
        whether alone or in conjunction with the welfare system, and to 
        verify receipt of energy assistance for the telephone assistance 
        plan; 
           (10) to appropriate parties in connection with an emergency 
        if knowledge of the information is necessary to protect the 
        health or safety of the individual or other individuals or 
        persons; 
           (11) data maintained by residential programs as defined in 
        section 245A.02 may be disclosed to the protection and advocacy 
        system established in this state pursuant to Part C of Public 
        Law Number 98-527 to protect the legal and human rights of 
        persons with mental retardation or other related conditions who 
        live in residential facilities for these persons if the 
        protection and advocacy system receives a complaint by or on 
        behalf of that person and the person does not have a legal 
        guardian or the state or a designee of the state is the legal 
        guardian of the person; 
           (12) to the county medical examiner or the county coroner 
        for identifying or locating relatives or friends of a deceased 
        person; 
           (13) data on a child support obligor who makes payments to 
        the public agency may be disclosed to the higher education 
        services office to the extent necessary to determine eligibility 
        under section 136A.121, subdivision 2, clause (5); 
           (14) participant social security numbers and names 
        collected by the telephone assistance program may be disclosed 
        to the department of revenue to conduct an electronic data match 
        with the property tax refund database to determine eligibility 
        under section 237.70, subdivision 4a; 
           (15) the current address of a recipient of aid to families 
        with dependent children may be disclosed to law enforcement 
        officers who provide the name and social security number of the 
        recipient and satisfactorily demonstrate that:  (i) the 
        recipient is a fugitive felon, including the grounds for this 
        determination; (ii) the location or apprehension of the felon is 
        within the law enforcement officer's official duties; and (iii) 
        the request is made in writing and in the proper exercise of 
        those duties; 
           (16) the current address of a recipient of general 
        assistance, work readiness, or general assistance medical care 
        may be disclosed to probation officers and corrections agents 
        who are supervising the recipient, and to law enforcement 
        officers who are investigating the recipient in connection with 
        a felony level offense; 
           (17) information obtained from food stamp applicant or 
        recipient households may be disclosed to local, state, or 
        federal law enforcement officials, upon their written request, 
        for the purpose of investigating an alleged violation of the 
        food stamp act, in accordance with Code of Federal Regulations, 
        title 7, section 272.1(c); 
           (18) data on a certain information regarding child support 
        obligor obligors who is are in arrears may be disclosed for 
        purposes of publishing the data pursuant made public according 
        to section 518.575; 
           (19) data on child support payments made by a child support 
        obligor, data on the enforcement actions undertaken by the 
        public authority and the status of those actions, and data on 
        the income of the obligor or obligee may be disclosed to the 
        obligee other party; 
           (20) data in the work reporting system may be disclosed 
        under section 256.998, subdivision 7; 
           (21) to the department of children, families, and learning 
        for the purpose of matching department of children, families, 
        and learning student data with public assistance data to 
        determine students eligible for free and reduced price meals, 
        meal supplements, and free milk pursuant to United States Code, 
        title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to 
        produce accurate numbers of students receiving aid to families 
        with dependent children as required by section 124.175; and to 
        allocate federal and state funds that are distributed based on 
        income of the student's family; or 
           (22) the current address and telephone number of program 
        recipients and emergency contacts may be released to the 
        commissioner of health or a local board of health as defined in 
        section 145A.02, subdivision 2, when the commissioner or local 
        board of health has reason to believe that a program recipient 
        is a disease case, carrier, suspect case, or at risk of illness, 
        and the data are necessary to locate the person; or 
           (23) to other state agencies, statewide systems, and 
        political subdivisions of this state, including the attorney 
        general, and agencies of other states, interstate information 
        networks, federal agencies, and other entities as required by 
        federal regulation or law for the administration of the child 
        support enforcement program. 
           (b) Information on persons who have been treated for drug 
        or alcohol abuse may only be disclosed in accordance with the 
        requirements of Code of Federal Regulations, title 42, sections 
        2.1 to 2.67. 
           (c) Data provided to law enforcement agencies under 
        paragraph (a), clause (15), (16), or (17), or paragraph (b), are 
        investigative data and are confidential or protected nonpublic 
        while the investigation is active.  The data are private after 
        the investigation becomes inactive under section 13.82, 
        subdivision 5, paragraph (a) or (b). 
           (d) Mental health data shall be treated as provided in 
        subdivisions 7, 8, and 9, but is not subject to the access 
        provisions of subdivision 10, paragraph (b). 
           Sec. 2.  Minnesota Statutes 1996, section 13.99, is amended 
        by adding a subdivision to read: 
           Subd. 101d.  [CHILD SUPPORT PARTIES.] Certain data 
        regarding the location of parties in connection with child 
        support proceedings are governed by sections 256.87, subdivision 
        8; 257.70; and 518.005, subdivision 5.  Certain data regarding 
        the suspension of licenses of persons owing child support are 
        governed by section 518.551, subdivision 13a, and certain data 
        on newly hired employees maintained by the public authority for 
        support enforcement are governed by section 256.998. 
           Sec. 3.  [13B.06] [CHILD SUPPORT OR MAINTENANCE OBLIGOR 
        DATA MATCHES.] 
           Subdivision 1.  [DEFINITIONS.] The definitions in this 
        subdivision apply to this section. 
           (a) "Account" means a demand deposit account, checking or 
        negotiable withdraw order account, savings account, time deposit 
        account, or money market mutual fund. 
           (b) "Account information" means the type of account, the 
        account number, whether the account is singly or jointly owned, 
        and in the case of jointly owned accounts the name and address 
        of the nonobligor account owner if available. 
           (c) "Financial institution" means any of the following that 
        do business within the state: 
           (1) federal or state commercial banks and federal or state 
        savings banks, including savings and loan associations and 
        cooperative banks; 
           (2) federal and state chartered credit unions; 
           (3) benefit associations; 
           (4) life insurance companies; 
           (5) safe deposit companies; and 
           (6) money market mutual funds. 
           (d) "Obligor" means an individual who 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. 
           (e) "Public authority" means the public authority 
        responsible for child support enforcement. 
           Subd. 2.  [DATA MATCH SYSTEM ESTABLISHED.] The commissioner 
        of human services shall establish a process for the comparison 
        of account information data held by financial institutions with 
        the public authority's database of child support obligors.  The 
        commissioner shall inform the financial industry of the 
        requirements of this section and the means by which financial 
        institutions can comply.  The commissioner may contract for 
        services to carry out this section. 
           Subd. 3.  [DUTY TO PROVIDE DATA.] On written request by a 
        public authority, a financial institution shall provide to the 
        public authority on a quarterly basis the name, address, social 
        security number, tax identification number if known, and all 
        account information for each obligor who maintains an account at 
        the financial institution. 
           Subd. 4.  [METHOD TO PROVIDE DATA.] To comply with the 
        requirements of this section, a financial institution may either:
           (1) provide to the public authority a list containing only 
        the names and other necessary personal identifying information 
        of all account holders for the public authority to compare 
        against its list of child support obligors for the purpose of 
        identifying which obligors maintain an account at the financial 
        institution; the names of the obligors who maintain an account 
        at the institution shall then be transmitted to the financial 
        institution which shall provide the public authority with 
        account information on those obligors; or 
           (2) obtain a list of child support obligors from the public 
        authority and compare that data to the data maintained at the 
        financial institution to identify which of the identified 
        obligors maintains an account at the financial institution. 
           A financial institution shall elect either method in 
        writing upon written request of the public authority, and the 
        election remains in effect unless the public authority agrees in 
        writing to a change. 
           Subd. 5.  [MEANS TO PROVIDE DATA.] A financial institution 
        may provide the required data by submitting electronic media in 
        a compatible format, delivering, mailing, or telefaxing a copy 
        of the data, or by other means authorized by the commissioner of 
        human services that will result in timely reporting. 
           Subd. 6.  [ACCESS TO DATA.] (a) With regard to account 
        information on all account holders provided by a financial 
        institution under subdivision 4, clause (1), the commissioner of 
        human services shall retain the reported information only until 
        the account information is compared against the public 
        authority's obligor database.  Notwithstanding section 138.17, 
        all account information that does not pertain to an obligor 
        listed in the public authority's database must be immediately 
        discarded, and no retention or publication may be made of that 
        data by the public authority.  All account information that does 
        pertain to an obligor listed in the public authority's database 
        must be incorporated into the public authority's database.  
        Access to that data is governed by chapter 13. 
           (b) With regard to data on obligors provided by the public 
        authority to a financial institution under subdivision 4, clause 
        (2), the financial institution shall retain the reported 
        information only until the financial institution's database is 
        compared against the public authority's database.  Data that do 
        not pertain to an account holder at the financial institution 
        must be immediately discarded, and no retention or publication 
        may be made of that data by the financial institution. 
           Subd. 7.  [FEES.] A financial institution may charge and 
        collect a fee from the public authority for providing account 
        information to the public authority.  No financial institution 
        shall charge or collect a fee that exceeds its actual costs of 
        complying with this section.  The commissioner, together with an 
        advisory group consisting of representatives of the financial 
        institutions in the state, shall determine a fee structure that 
        minimizes the cost to the state and reasonably meets the needs 
        of the financial institutions, and shall report to the chairs of 
        the judiciary committees in the house of representatives and the 
        senate by February 1, 1998, a recommended fee structure for 
        inclusion in this section. 
           Subd. 8.  [FAILURE TO RESPOND TO REQUEST FOR 
        INFORMATION.] The public authority shall send by certified mail 
        a written notice of noncompliance to a financial institution 
        that fails to respond to a first written request for information 
        under this section.  The notice of noncompliance must explain 
        the requirements of this section and advise the financial 
        institution of the penalty for noncompliance.  A financial 
        institution that receives a second notice of noncompliance is 
        subject to a civil penalty of $1,000 for its failure to comply.  
        A financial institution that continues to fail to comply with 
        this section is subject to a civil penalty of $5,000 for the 
        third and each subsequent failure to comply.  These penalties 
        may be imposed and collected by the public authority. 
           A financial institution that has been served with a notice 
        of noncompliance and incurs a second or subsequent notice of 
        noncompliance has the right to a contested case hearing under 
        chapter 14.  A financial institution has 20 days from the date 
        of the service of the notice of noncompliance to file a request 
        for a contested case hearing with the commissioner.  The order 
        of the administrative law judge constitutes the final decision 
        in the case. 
           Subd. 9.  [IMMUNITY.] A financial institution that provides 
        or reasonably attempts to provide information to the public 
        authority in compliance with this section is not liable to any 
        person for disclosing the information or for taking any other 
        action in good faith as authorized by this section or chapter 
        552. 
           Subd. 10.  [CIVIL ACTION FOR UNAUTHORIZED DISCLOSURE BY 
        FINANCIAL INSTITUTION.] (a) An account holder may bring a civil 
        action in district court against a financial institution for 
        unauthorized disclosure of data received from the public 
        authority under subdivision 4, clause (2).  A financial 
        institution found to have violated this subdivision shall be 
        liable as provided in paragraph (b) or (c). 
           (b) Any financial institution that willfully and 
        maliciously discloses data received from the public authority 
        under subdivision 4 is liable to that account holder in an 
        amount equal to the sum of: 
           (1) any actual damages sustained by the consumer as a 
        result of the disclosure; and 
           (2) in the case of any successful action to enforce any 
        liability under this section, the costs of the action taken plus 
        reasonable attorney's fees as determined by the court. 
           (c) Any financial institution that negligently discloses 
        data received from the public authority under subdivision 4 is 
        liable to that account holder in an amount equal to any actual 
        damages sustained by the account holder as a result of the 
        disclosure. 
           (d) A financial institution may not be held liable in any 
        action brought under this subdivision if the financial 
        institution shows, by a preponderance of evidence, that the 
        disclosure was not intentional and resulted from a bona fide 
        error notwithstanding the maintenance of procedures reasonably 
        adapted to avoid any error. 
           Sec. 4.  Minnesota Statutes 1996, section 144.223, is 
        amended to read: 
           144.223 [REPORT OF MARRIAGE.] 
           Data relating to certificates of marriage registered shall 
        be reported to the state registrar by the local registrars 
        pursuant to the rules of the commissioner.  The information 
        necessary to compile the report shall be furnished by the 
        applicant prior to the issuance of the marriage license.  The 
        report shall contain the following information: 
           A. Personal information on bride and groom: 
           1. Name; 
           2. Residence; 
           3. Date and place of birth; 
           4. Race; 
           5. If previously married, how terminated; 
           6. Signature of applicant and date signed, and social 
        security number. 
           B. Information concerning the marriage: 
           1. Date of marriage; 
           2. Place of marriage; 
           3. Civil or religious ceremony. 
           Sec. 5.  [256.741] [CHILD SUPPORT AND MAINTENANCE.] 
           Subdivision 1.  [PUBLIC ASSISTANCE.] (a) The term "public 
        assistance" as used in this chapter and chapters 257, 518, and 
        518C, includes any form of assistance provided under AFDC, MFIP, 
        and MFIP-R under chapter 256, MFIP-S under chapter 256J, and 
        work first under chapter 256K; child care assistance provided 
        through the child care fund according to chapter 119B; any form 
        of medical assistance under chapter 256B; MinnesotaCare under 
        chapter 256; and foster care as provided under Title IV-E of the 
        Social Security Act. 
           (b) The term "child support agency" as used in this section 
        refers to the public authority responsible for child support 
        enforcement. 
           (c) The term "public assistance agency" as used in this 
        section refers to a public authority providing public assistance 
        to an individual. 
           Subd. 2.  [ASSIGNMENT OF SUPPORT AND MAINTENANCE 
        RIGHTS.] (a) An individual receiving public assistance in the 
        form of assistance under AFDC, MFIP-S, MFIP-R, MFIP, and work 
        first is considered to have assigned to the state at the time of 
        application all rights to child support and maintenance from any 
        other person the applicant or recipient may have in the 
        individual's own behalf or in the behalf of any other family 
        member for whom application for public assistance is made.  An 
        assistance unit is ineligible for aid to families with dependent 
        children or its successor program unless the caregiver assigns 
        all rights to child support and spousal maintenance benefits 
        according to this section. 
           (1) An assignment made according to this section is 
        effective as to: 
           (i) any current child support and current spousal 
        maintenance; and 
           (ii) any accrued child support and spousal maintenance 
        arrears. 
           (2) An assignment made after September 30, 1997, is 
        effective as to: 
           (i) any current child support and current spousal 
        maintenance; 
           (ii) any accrued child support and spousal maintenance 
        arrears collected before October 1, 2000, or the date the 
        individual terminates assistance, whichever is later; and 
           (iii) any accrued child support and spousal maintenance 
        arrears collected under federal tax intercept. 
           (b) An individual receiving public assistance in the form 
        of medical assistance, including MinnesotaCare, is considered to 
        have assigned to the state at the time of application all rights 
        to medical support from any other person the individual may have 
        in the individual's own behalf or in the behalf of any other 
        family member for whom medical assistance is provided. 
           An assignment made after September 30, 1997, is effective 
        as to any medical support accruing after the date of medical 
        assistance or MinnesotaCare eligibility. 
           (c) An individual receiving public assistance in the form 
        of child care assistance under the child care fund pursuant to 
        chapter 119B is considered to have assigned to the state at the 
        time of application all rights to child care support from any 
        other person the individual may have in the individual's own 
        behalf or in the behalf of any other family member for whom 
        child care assistance is provided. 
           An assignment made according to this paragraph is effective 
        as to: 
           (1) any current child care support and any child care 
        support arrears assigned and accruing after the effective date 
        of this section that are collected before October 1, 2000; and 
           (2) any accrued child care support arrears collected under 
        federal tax intercept. 
           Subd. 3.  [EXISTING ASSIGNMENTS.] Assignments based on the 
        receipt of public assistance in existence prior to the effective 
        date of this section are permanently assigned to the state. 
           Subd. 4.  [EFFECT OF ASSIGNMENT.] Assignments in this 
        section take effect upon a determination that the applicant is 
        eligible for public assistance.  The amount of support assigned 
        under this subdivision may not exceed the total amount of public 
        assistance issued or the total support obligation, whichever is 
        less. 
           Subd. 5.  [COOPERATION WITH CHILD SUPPORT 
        ENFORCEMENT.] After notification from a public assistance agency 
        that an individual has applied for or is receiving any form of 
        public assistance, the child support agency shall determine 
        whether the party is cooperating with the agency in establishing 
        paternity, child support, modification of an existing child 
        support order, or enforcement of an existing child support 
        order.  The public assistance agency shall notify each applicant 
        or recipient in writing of the right to claim a good cause 
        exemption from cooperating with the requirements in this 
        section.  A copy of the notice must be furnished to the 
        applicant or recipient, and the applicant or recipient and a 
        representative from the public authority shall acknowledge 
        receipt of the notice by signing and dating a copy of the 
        notice.  The individual shall cooperate with the child support 
        agency by: 
           (1) providing all known information regarding the alleged 
        father or obligor, including name, address, social security 
        number, telephone number, place of employment or school, and the 
        names and addresses of any relatives; 
           (2) appearing at interviews, hearings and legal 
        proceedings; 
           (3) submitting to genetic tests including genetic testing 
        of the child, under a judicial or administrative order; and 
           (4) providing additional information known by the 
        individual as necessary for cooperating in good faith with the 
        child support agency. 
           The caregiver of a minor child must cooperate with the 
        efforts of the public authority to collect support according to 
        this subdivision.  A caregiver must forward to the public 
        authority all support the caregiver receives during the period 
        the assignment of support required under subdivision 2 is in 
        effect.  Support received by a caregiver and not forwarded to 
        the public authority must be repaid to the child support 
        enforcement unit for any month following the date on which 
        initial eligibility is determined, except as provided under 
        subdivision 8, paragraph (b), clause (4). 
           Subd. 6.  [DETERMINATION.] If the individual cannot provide 
        the information required in subdivision 5, before making a 
        determination that the individual is cooperating, the child 
        support agency shall make a finding that the individual could 
        not reasonably be expected to provide the information.  In 
        making this finding, the child support agency shall consider: 
           (1) the age of the child for whom support is being sought; 
           (2) the circumstances surrounding the conception of the 
        child; 
           (3) the age and mental capacity of the parent or caregiver 
        of the child for whom support is being sought; 
           (4) the time period that has expired since the parent or 
        caregiver of the child for whom support is sought last had 
        contact with the alleged father or obligor, or the person's 
        relatives; and 
           (5) statements from the applicant or recipient or other 
        individuals that show evidence of an inability to provide 
        correct information about the alleged father or obligor because 
        of deception by the alleged father or obligor. 
           Subd. 7.  [NONCOOPERATION.] Unless good cause is found to 
        exist under subdivision 10, upon a determination of 
        noncooperation by the child support agency, the agency shall 
        promptly notify the individual and each public assistance agency 
        providing public assistance to the individual that the 
        individual is not cooperating with the child support agency.  
        Upon notice of noncooperation, the individual shall be 
        sanctioned in the amount determined according to the public 
        assistance agency responsible for enforcing the sanction.  
           Subd. 8.  [REFUSAL TO COOPERATE WITH SUPPORT 
        REQUIREMENTS.] (a) Failure by a caregiver to satisfy any of the 
        requirements of subdivision 5 constitutes refusal to cooperate, 
        and the sanctions under paragraph (b) apply.  The IV-D agency 
        must determine whether a caregiver has refused to cooperate 
        according to subdivision 5. 
           (b) Determination by the IV-D agency that a caregiver has 
        refused to cooperate has the following effects: 
           (1) a caregiver is subject to the applicable sanctions 
        under section 256J.46; 
           (2) a caregiver who is not a parent of a minor child in an 
        assistance unit may choose to remove the child from the 
        assistance unit unless the child is required to be in the 
        assistance unit; 
           (3) a parental caregiver who refuses to cooperate is 
        ineligible for medical assistance; and 
           (4) direct support retained by a caregiver must be counted 
        as unearned income when determining the amount of the assistance 
        payment. 
           Subd. 9.  [GOOD CAUSE EXEMPTION FROM COOPERATING WITH 
        SUPPORT REQUIREMENTS.] The IV-A or IV-D agency must notify the 
        caregiver that the caregiver may claim a good cause exemption 
        from cooperating with the requirements in subdivision 5.  Good 
        cause may be claimed and exemptions determined according to 
        subdivisions 10 to 13. 
           Subd. 10.  [GOOD CAUSE EXEMPTION.] (a) Cooperation with the 
        child support agency under subdivision 5 is not necessary if the 
        individual asserts, and both the child support agency and the 
        public assistance agency find, good cause exists under this 
        subdivision for failing to cooperate.  An individual may request 
        a good cause exemption by filing a written claim with the public 
        assistance agency on a form provided by the commissioner of 
        human services.  Upon notification of a claim for good cause 
        exemption, the child support agency shall cease all child 
        support enforcement efforts until the claim for good cause 
        exemption is reviewed and the validity of the claim is 
        determined.  Designated representatives from public assistance 
        agencies and at least one representative from the child support 
        enforcement agency shall review each claim for a good cause 
        exemption and determine its validity. 
           (b) Good cause exists when an individual documents that 
        pursuit of child support enforcement services could reasonably 
        result in: 
           (1) physical or emotional harm to the child for whom 
        support is sought; 
           (2) physical harm to the parent or caregiver with whom the 
        child is living that would reduce the ability to adequately care 
        for the child; or 
           (3) emotional harm to the parent or caregiver with whom the 
        child is living, of such nature or degree that it would reduce 
        the person's ability to adequately care for the child. 
           Physical and emotional harm under this paragraph must be of 
        a serious nature in order to justify a finding of good cause 
        exemption.  A finding of good cause exemption based on emotional 
        harm may only be based upon a demonstration of emotional 
        impairment that substantially affects the individual's ability 
        to function. 
           (c) Good cause also exists when the designated 
        representatives in this subdivision believe that pursuing child 
        support enforcement would be detrimental to the child for whom 
        support is sought and the individual applicant or recipient 
        documents any of the following: 
           (1) the child for whom child support enforcement is sought 
        was conceived as a result of incest or rape; 
           (2) legal proceedings for the adoption of the child are 
        pending before a court of competent jurisdiction; or 
           (3) the parent or caregiver of the child is currently being 
        assisted by a public or licensed private social service agency 
        to resolve the issues of whether to keep the child or place the 
        child for adoption. 
           The parent or caregiver's right to claim a good cause 
        exemption based solely on this paragraph expires if the 
        assistance lasts more than 90 days. 
           (d) The public authority shall consider the best interests 
        of the child in determining good cause. 
           Subd. 11.  [PROOF OF GOOD CAUSE.] (a) An individual seeking 
        a good cause exemption has 20 days from the date the good cause 
        claim was provided to the public assistance agency to supply 
        evidence supporting the claim.  The public assistance agency may 
        extend the time period in this section if it believes the 
        individual is cooperating and needs additional time to submit 
        the evidence required by this section.  Failure to provide this 
        evidence shall result in the child support agency resuming child 
        support enforcement efforts. 
           (b) Evidence supporting a good cause claim includes, but is 
        not limited to: 
           (1) a birth certificate or medical or law enforcement 
        records indicating that the child was conceived as the result of 
        incest or rape; 
           (2) court documents or other records indicating that legal 
        proceedings for adoption are pending before a court of competent 
        jurisdiction; 
           (3) court, medical, criminal, child protective services, 
        social services, domestic violence advocate services, 
        psychological, or law enforcement records indicating that the 
        alleged father or obligor might inflict physical or emotional 
        harm on the child, parent, or caregiver; 
           (4) medical records or written statements from a licensed 
        medical professional indicating the emotional health history or 
        status of the custodial parent, child, or caregiver, or 
        indicating a diagnosis or prognosis concerning their emotional 
        health; 
           (5) a written statement from a public or licensed private 
        social services agency that the individual is deciding whether 
        to keep the child or place the child for adoption; or 
           (6) sworn statements from individuals other than the 
        applicant or recipient that provide evidence supporting the good 
        cause claim. 
           (c) The child support agency and the public assistance 
        agency shall assist an individual in obtaining the evidence in 
        this section upon request of the individual. 
           Subd. 12.  [DECISION.] A good cause exemption must be 
        granted if the individual's claim and the investigation of the 
        supporting evidence satisfy the investigating agencies that the 
        individual has good cause for refusing to cooperate. 
           Subd. 13.  [DURATION.] (a) A good cause exemption may not 
        continue for more than one year without redetermination of 
        cooperation and good cause pursuant to this section.  The child 
        support agency may redetermine cooperation and the designated 
        representatives in subdivision 10 may redetermine the granting 
        of a good cause exemption before the one year expiration in this 
        subdivision. 
           (b) A good cause exemption must be allowed under subsequent 
        applications and redeterminations without additional evidence 
        when the factors that led to the exemption continue to exist.  A 
        good cause exemption must end when the factors that led to the 
        exemption have changed. 
           Subd. 14.  [TRAINING.] The commissioner shall establish 
        domestic violence and sexual abuse training programs for child 
        support agency employees.  The training programs must be 
        developed in consultation with experts on domestic violence and 
        sexual assault.  To the extent possible, representatives of the 
        child support agency involved in making a determination of 
        cooperation under subdivision 6 or reviewing a claim for good 
        cause exemption under subdivision 9 shall receive training in 
        accordance with this subdivision. 
           Sec. 6.  Minnesota Statutes 1996, section 256.87, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACTIONS AGAINST PARENTS FOR ASSISTANCE 
        FURNISHED.] A parent of a child is liable for the amount 
        of public assistance, as defined in section 256.741, furnished 
        under sections 256.031 to 256.0361, 256.72 to 256.87, or under 
        Title IV-E of the Social Security Act or medical assistance 
        under chapter 256, 256B, or 256D to and for the benefit of the 
        child, including any assistance furnished for the benefit of the 
        caretaker of the child, which the parent has had the ability to 
        pay.  Ability to pay must be determined according to chapter 
        518.  The parent's liability is limited to the two years 
        immediately preceding the commencement of the action, except 
        that where child support has been previously ordered, the state 
        or county agency providing the assistance, as assignee of the 
        obligee, shall be entitled to judgments for child support 
        payments accruing within ten years preceding the date of the 
        commencement of the action up to the full amount of assistance 
        furnished.  The action may be ordered by the state agency or 
        county agency and shall be brought in the name of the county by 
        the county attorney of the county in which the assistance was 
        granted, or by in the name of the state agency against the 
        parent for the recovery of the amount of assistance granted, 
        together with the costs and disbursements of the action. 
           Sec. 7.  Minnesota Statutes 1996, section 256.87, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CONTINUING SUPPORT CONTRIBUTIONS.] In addition 
        to granting the county or state agency a money judgment, the 
        court may, upon a motion or order to show cause, order 
        continuing support contributions by a parent found able to 
        reimburse the county or state agency.  The order shall be 
        effective for the period of time during which the recipient 
        receives public assistance from any county or state agency and 
        thereafter.  The order shall require support according to 
        chapter 518.  An order for continuing contributions is 
        reinstated without further hearing upon notice to the parent by 
        any county or state agency that public assistance, as defined in 
        section 256.741, is again being provided for the child of the 
        parent under sections 256.031 to 256.0361, 256.72 to 256.87, or 
        under Title IV-E of the Social Security Act or medical 
        assistance under chapter 256, 256B, or 256D.  The notice shall 
        be in writing and shall indicate that the parent may request a 
        hearing for modification of the amount of support or maintenance.
           Sec. 8.  Minnesota Statutes 1996, section 256.87, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONTINUING CONTRIBUTIONS TO FORMER RECIPIENT.] 
        The order for continuing support contributions shall remain in 
        effect following the period after public assistance, as defined 
        in section 256.741, granted under sections 256.72 to 256.87 is 
        terminated unless the former recipient files an affidavit with 
        the court requesting termination of the order.  
           Sec. 9.  Minnesota Statutes 1996, section 256.87, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CHILD NOT RECEIVING ASSISTANCE.] A person or 
        entity having physical custody of a dependent child not 
        receiving public assistance under sections 256.031 to 256.0361, 
        or 256.72 to 256.87 as defined in section 256.741 has a cause of 
        action for child support against the child's absent noncustodial 
        parents.  Upon a motion served on the absent noncustodial 
        parent, the court shall order child support payments, including 
        medical support and child care support, from the 
        absent noncustodial parent under chapter 518.  The absent A 
        noncustodial parent's liability may include up to the two years 
        immediately preceding the commencement of the action.  This 
        subdivision applies only if the person or entity has physical 
        custody with the consent of a custodial parent or approval of 
        the court.  
           Sec. 10.  Minnesota Statutes 1996, section 256.87, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [DISCLOSURE PROHIBITED.] Notwithstanding 
        statutory or other authorization for the public authority to 
        release private data on the location of a party to the action, 
        information on the location of one party may not be released to 
        the other party by the public authority if: 
           (1) the public authority has knowledge that a protective 
        order with respect to the other party has been entered; or 
           (2) the public authority has reason to believe that the 
        release of the information may result in physical or emotional 
        harm to the other party. 
           Sec. 11.  Minnesota Statutes 1996, section 256.978, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUEST FOR INFORMATION.] (a) The 
        commissioner of human services public authority responsible for 
        child support in this state or any other state, in order to 
        locate a person to establish paternity, and child support or to 
        modify or enforce child support, or to enforce a child support 
        obligation in arrears, may request information reasonably 
        necessary to the inquiry from the records of all departments, 
        boards, bureaus, or other agencies of this state, which shall, 
        notwithstanding the provisions of section 268.12, subdivision 
        12, or any other law to the contrary, provide the information 
        necessary for this purpose.  Employers, utility companies, 
        insurance companies, financial institutions, and labor 
        associations doing business in this state shall provide 
        information as provided under subdivision 2 upon written or 
        electronic request by an agency responsible for child support 
        enforcement regarding individuals owing or allegedly owing a 
        duty to support within 30 days of the receipt service of the 
        written request made by the public authority.  Information 
        requested and used or transmitted by the commissioner pursuant 
        according to the authority conferred by this section may be made 
        available only to public officials and agencies of this state 
        and its political subdivisions and other states of the union and 
        their political subdivisions who are seeking to enforce the 
        support liability of parents or to locate parents.  The 
        commissioner may not release the information to an agency or 
        political subdivision of another state unless the agency or 
        political subdivision is directed to maintain the data 
        consistent with its classification in this state.  Information 
        obtained under this section may not be released except to the 
        extent necessary for the administration of the child support 
        enforcement program or when otherwise authorized by law. to 
        other agencies, statewide systems, and political subdivisions of 
        this state, and agencies of other states, interstate information 
        networks, federal agencies, and other entities as required by 
        federal regulation or law for the administration of the child 
        support enforcement program.  
           (b) For purposes of this section, "state" includes the 
        District of Columbia, Puerto Rico, the United States Virgin 
        Islands, and any territory or insular possession subject to the 
        jurisdiction of the United States. 
           Sec. 12.  Minnesota Statutes 1996, section 256.978, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ACCESS TO INFORMATION.] (a) A written request 
        for information by the public authority responsible for child 
        support of this state or any other state may be made to: 
           (1) employers when there is reasonable cause to believe 
        that the subject of the inquiry is or was an employee or 
        independent contractor of the employer.  Information to be 
        released by employers is limited to place of residence, 
        employment status, wage or payment information, benefit 
        information, and social security number; 
           (2) utility companies when there is reasonable cause to 
        believe that the subject of the inquiry is or was a retail 
        customer of the utility company.  Customer information to be 
        released by utility companies is limited to place of residence, 
        home telephone, work telephone, source of income, employer and 
        place of employment, and social security number; 
           (3) insurance companies when there is an arrearage of child 
        support and there is reasonable cause to believe that the 
        subject of the inquiry is or was receiving funds either in the 
        form of a lump sum or periodic payments.  Information to be 
        released by insurance companies is limited to place of 
        residence, home telephone, work telephone, employer, social 
        security number, and amounts and type of payments made to the 
        subject of the inquiry; 
           (4) labor organizations when there is reasonable cause to 
        believe that the subject of the inquiry is or was a member of 
        the labor association.  Information to be released by labor 
        associations is limited to place of residence, home telephone, 
        work telephone, social security number, and current and past 
        employment information; and 
           (5) financial institutions when there is an arrearage of 
        child support and there is reasonable cause to believe that the 
        subject of the inquiry has or has had accounts, stocks, loans, 
        certificates of deposits, treasury bills, life insurance 
        policies, or other forms of financial dealings with the 
        institution.  Information to be released by the financial 
        institution is limited to place of residence, home telephone, 
        work telephone, identifying information on the type of financial 
        relationships, social security number, current value of 
        financial relationships, and current indebtedness of the subject 
        with the financial institution. 
           (b) For purposes of this subdivision, utility companies 
        include telephone companies, radio common carriers, and 
        telecommunications carriers as defined in section 237.01, and 
        companies that provide electrical, telephone, natural gas, 
        propane gas, oil, coal, or cable television services to retail 
        customers.  The term financial institution includes banks, 
        savings and loans, credit unions, brokerage firms, mortgage 
        companies, and insurance companies., benefit associations, safe 
        deposit companies, money market mutual funds, or similar 
        entities authorized to do business in the state. 
           Sec. 13.  Minnesota Statutes 1996, section 256.9792, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ARREARAGE COLLECTIONS.] Arrearage 
        collection projects are created to increase the revenue to the 
        state and counties, reduce AFDC public assistance expenditures 
        for former public assistance cases, and increase payments of 
        arrearages to persons who are not receiving public assistance by 
        submitting cases for arrearage collection to collection 
        entities, including but not limited to, the department of 
        revenue and private collection agencies. 
           Sec. 14.  Minnesota Statutes 1996, section 256.9792, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to this section: 
           (b) "Public assistance arrearage case" means a case where 
        current support may be due, no payment, with the exception of 
        tax offset, has been made within the last 90 days, and the 
        arrearages are assigned to the public agency pursuant according 
        to section 256.74, subdivision 5 256.741. 
           (c) "Public authority" means the public authority 
        responsible for child support enforcement. 
           (d) "Nonpublic assistance arrearage case" means a support 
        case where arrearages have accrued that have not been assigned 
        pursuant according to section 256.74, subdivision 5 256.741. 
           Sec. 15.  Minnesota Statutes 1996, section 256.998, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to this section. 
           (b) "Date of hiring" means the earlier of:  (1) the first 
        day for which an employee is owed compensation by an employer; 
        or (2) the first day that an employee reports to work or 
        performs labor or services for an employer. 
           (c) "Earnings" means payment owed by an employer for labor 
        or services rendered by an employee. 
           (d) "Employee" means a person who resides or works in 
        Minnesota and, performs services for compensation, in whatever 
        form, for an employer and satisfies the criteria of an employee 
        under chapter 24 of the Internal Revenue Code.  Employee does 
        not include:  
           (1) persons hired for domestic service in the private home 
        of the employer, as defined in the Federal Tax Code.; or 
           (2) an employee of the federal or state agency performing 
        intelligence or counterintelligence functions, if the head of 
        such agency has determined that reporting according to this law 
        would endanger the safety of the employee or compromise an 
        ongoing investigation or intelligence mission. 
           (e) "Employer" means a person or entity located or doing 
        business in this state that employs one or more employees for 
        payment, and satisfies the criteria of an employer under chapter 
        24 of the Internal Revenue Code.  Employer includes a labor 
        organization as defined in paragraph (g).  Employer also 
        includes the state, political or other governmental subdivisions 
        of the state, and the federal government. 
           (f) "Hiring" means engaging a person to perform services 
        for compensation and includes the reemploying or return to work 
        of any previous employee who was laid off, furloughed, 
        separated, granted a leave without pay, or terminated from 
        employment when a period of 90 days elapses from the date of 
        layoff, furlough, separation, leave, or termination to the date 
        of the person's return to work. 
           (g) "Labor organization" means entities located or doing 
        business in this state that meet the criteria of labor 
        organization under section 2(5) of the National Labor Relations 
        Act.  This includes any entity, that may also be known as a 
        hiring hall, used to carry out requirements described in chapter 
        7 of the National Labor Relations Act. 
           (h) "Payor" means a person or entity located or doing 
        business in Minnesota who pays money to an independent 
        contractor according to an agreement for the performance of 
        services. 
           Sec. 16.  Minnesota Statutes 1996, section 256.998, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SANCTIONS.] If an employer fails to report under 
        this section, the commissioner of human services, by certified 
        mail, shall send the employer a written notice of noncompliance 
        requesting that the employer comply with the reporting 
        requirements of this section.  The notice of noncompliance must 
        explain the reporting procedure under this section and advise 
        the employer of the penalty for noncompliance.  An employer who 
        has received a notice of noncompliance and later incurs a second 
        violation is subject to a civil penalty of $50 $25 for each 
        intentionally unreported employee.  An employer who has received 
        a notice of noncompliance and later incurs a third or subsequent 
        violation is subject to a civil penalty of $500 for each 
        intentionally unreported employee, if noncompliance is the 
        result of a conspiracy between an employer and an employee not 
        to supply the required report or to supply a false or incomplete 
        report.  These penalties may be imposed and collected by the 
        commissioner of human services.  An employer who has been served 
        with a notice of noncompliance and incurs a second or subsequent 
        violation resulting in a civil penalty, has the right to a 
        contested case hearing under chapter 14.  An employer has 20 
        days from the date of service of the notice, to file a request 
        for a contested case hearing with the commissioner.  The order 
        of the administrative law judge constitutes the final decision 
        in the case. 
           Sec. 17.  Minnesota Statutes 1996, section 256.998, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ACCESS TO DATA.] The commissioner of human 
        services shall retain the information reported to the work 
        reporting system for a period of six months.  Data in the work 
        reporting system may be disclosed to the public authority 
        responsible for child support enforcement, federal agencies, and 
        state and local agencies of other states for the purposes of 
        enforcing state and federal laws governing child support, and 
        agencies responsible for the administration of programs under 
        Title IV-A of the Social Security Act, the department of 
        economic security, and the department of labor and industry. 
           Sec. 18.  Minnesota Statutes 1996, section 256.998, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [USE OF WORK REPORTING SYSTEM INFORMATION IN 
        DETERMINING ELIGIBILITY FOR PUBLIC ASSISTANCE PROGRAMS.] The 
        commissioner of human services is authorized to use information 
        from the work reporting system to determine eligibility for 
        applicants and recipients of public assistance programs 
        administered by the department of human services.  Data 
        including names, dates of birth, and social security numbers of 
        people applying for or receiving public assistance benefits will 
        be compared to the work reporting system information to 
        determine if applicants or recipients of public assistance are 
        employed.  County agencies will be notified of discrepancies in 
        information obtained from the work reporting system. 
           Sec. 19.  Minnesota Statutes 1996, section 256.998, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [ACTION ON INFORMATION.] Upon receipt of the 
        discrepant information, county agencies will notify clients of 
        the information and request verification of employment status 
        and earnings.  County agencies must attempt to resolve the 
        discrepancy within 45 days of receipt of the information. 
           Sec. 20.  Minnesota Statutes 1996, section 256.998, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [CLIENT NOTIFICATION.] Persons applying for 
        public assistance programs administered by the department of 
        human services will be notified at the time of application that 
        data including their name, date of birth, and social security 
        number will be shared with the work reporting system to 
        determine possible employment.  All current public assistance 
        recipients will be notified of this provision prior to its 
        implementation. 
           Sec. 21.  Minnesota Statutes 1996, section 257.62, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BLOOD OR GENETIC TESTS REQUIRED.] (a) The 
        court or public authority may, and upon request of a party 
        shall, require the child, mother, or alleged father to submit to 
        blood or genetic tests.  A mother or alleged father requesting 
        the tests shall file with the court an affidavit either alleging 
        or denying paternity and setting forth facts that establish the 
        reasonable possibility that there was, or was not, the requisite 
        sexual contact between the parties. 
           (b) A copy of the test results must be served on the 
        parties as provided in section 543.20 each party by first class 
        mail to the party's last known address.  Any objection to the 
        results of blood or genetic tests must be made in writing no 
        later than 15 days prior to a hearing at which time those test 
        results may be introduced into evidence 30 days after service of 
        the results.  Test results served upon a party must include 
        notice of this right to object.  
           (c) If the alleged father is dead, the court may, and upon 
        request of a party shall, require the decedent's parents or 
        brothers and sisters or both to submit to blood or genetic 
        tests.  However, in a case involving these relatives of an 
        alleged father, who is deceased, the court may refuse to order 
        blood or genetic tests if the court makes an express finding 
        that submitting to the tests presents a danger to the health of 
        one or more of these relatives that outweighs the child's 
        interest in having the tests performed.  Unless the person gives 
        consent to the use, the results of any blood or genetic tests of 
        the decedent's parents, brothers, or sisters may be used only to 
        establish the right of the child to public assistance including 
        but not limited to social security and veterans' benefits.  The 
        tests shall be performed by a qualified expert appointed by the 
        court. 
           Sec. 22.  Minnesota Statutes 1996, section 257.62, 
        subdivision 2, is amended to read: 
           Subd. 2.  The court, upon reasonable request by a party, 
        shall order that independent tests be performed by other 
        qualified experts. Unless otherwise agreed by the parties, a 
        party wanting additional testing must first contest the original 
        tests in subdivision 1, paragraph (b), and must pay in advance 
        for the additional testing.  The additional testing must be 
        performed by another qualified expert. 
           Sec. 23.  Minnesota Statutes 1996, section 257.66, 
        subdivision 3, is amended to read: 
           Subd. 3.  [JUDGMENT; ORDER.] The judgment or order shall 
        contain provisions concerning the duty of support, the custody 
        of the child, the name of the child, the social security number 
        of the mother, father, and child, if known at the time of 
        adjudication, visitation privileges with the child, the 
        furnishing of bond or other security for the payment of the 
        judgment, or any other matter in the best interest of the 
        child.  Custody and visitation and all subsequent motions 
        related to them shall proceed and be determined under section 
        257.541.  The remaining matters and all subsequent motions 
        related to them shall proceed and be determined in accordance 
        with chapter 518.  The judgment or order may direct the 
        appropriate party to pay all or a proportion of the reasonable 
        expenses of the mother's pregnancy and confinement, after 
        consideration of the relevant facts, including the relative 
        financial means of the parents; the earning ability of each 
        parent; and any health insurance policies held by either parent, 
        or by a spouse or parent of the parent, which would provide 
        benefits for the expenses incurred by the mother during her 
        pregnancy and confinement.  Pregnancy and confinement expenses 
        and genetic testing costs, submitted by the public authority, 
        are admissible as evidence without third-party foundation 
        testimony and constitute prima facie evidence of the amounts 
        incurred for those services or for the genetic testing.  
        Remedies available for the collection and enforcement of child 
        support apply to confinement costs and are considered additional 
        child support. 
           Sec. 24.  Minnesota Statutes 1996, section 257.66, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [REQUIRED INFORMATION.] Upon entry of judgment or 
        order, each parent who is a party in a paternity proceeding 
        shall: 
           (1) file with the public authority responsible for child 
        support enforcement the party's social security number, 
        residential and mailing address, telephone number, driver's 
        license number, and name, address, and telephone number of any 
        employer if the party is receiving services from the public 
        authority or begins receiving services from the public 
        authority; 
           (2) file the information in clause (1) with the district 
        court; and 
           (3) notify the court and, if applicable, the public 
        authority responsible for child support enforcement of any 
        change in the information required under this section within ten 
        days of the change. 
           Sec. 25.  Minnesota Statutes 1996, section 257.70, is 
        amended to read: 
           257.70 [HEARINGS AND RECORDS; CONFIDENTIALITY.] 
           (a) Notwithstanding any other law concerning public 
        hearings and records, any hearing or trial held under sections 
        257.51 to 257.74 shall be held in closed court without 
        admittance of any person other than those necessary to the 
        action or proceeding.  All papers and records, other than the 
        final judgment, pertaining to the action or proceeding, whether 
        part of the permanent record of the court or of a file in the 
        state department of human services or elsewhere, are subject to 
        inspection only upon consent of the court and all interested 
        persons, or in exceptional cases only upon an order of the court 
        for good cause shown.  
           (b) In all actions under this chapter in which public 
        assistance is assigned under section 256.741 or the public 
        authority provides services to a party or parties to the action, 
        notwithstanding statutory or other authorization for the public 
        authority to release private data on the location of a party to 
        the action, information on the location of one party may not be 
        released by the public authority to the other party if:  
           (1) the public authority has knowledge that a protective 
        order with respect to the other party has been entered; or 
           (2) the public authority has reason to believe that the 
        release of the information may result in physical or emotional 
        harm to the other party. 
           Sec. 26.  Minnesota Statutes 1996, section 257.75, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REVOCATION OF RECOGNITION.] A recognition may be 
        revoked in a writing signed by the mother or father before a 
        notary public and filed with the state registrar of vital 
        statistics within the earlier of 30 days after the recognition 
        is executed or the date of an administrative or judicial hearing 
        relating to the child in which the revoking party is a party to 
        the related action.  A joinder in a recognition may be revoked 
        in a writing signed by the man who executed the joinder and 
        filed with the state registrar of vital statistics within 30 
        days after the joinder is executed.  Upon receipt of a 
        revocation of the recognition of parentage or joinder in a 
        recognition, the state registrar of vital statistics shall 
        forward a copy of the revocation to the nonrevoking parent, or, 
        in the case of a joinder in a recognition, to the mother and 
        father who executed the recognition.  
           Sec. 27.  Minnesota Statutes 1996, section 257.75, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EFFECT OF RECOGNITION.] Subject to subdivision 2 
        and section 257.55, subdivision 1, paragraph (g) or (h), the 
        recognition has the force and effect of a judgment or order 
        determining the existence of the parent and child relationship 
        under section 257.66.  If the conditions in section 257.55, 
        subdivision 1, paragraph (g) or (h), exist, the recognition 
        creates only a presumption of paternity for purposes of sections 
        257.51 to 257.74.  Once a recognition has been properly executed 
        and filed with the state registrar of vital statistics, if there 
        are no competing presumptions of paternity, a judicial or 
        administrative court may not allow further action to determine 
        parentage regarding the signator of the recognition.  Until an 
        order is entered granting custody to another, the mother has 
        sole custody.  The recognition is: 
           (1) a basis for bringing an action to award custody or 
        visitation rights to either parent, establishing a child support 
        obligation which may include up to the two years immediately 
        preceding the commencement of the action, ordering a 
        contribution by a parent under section 256.87, or ordering a 
        contribution to the reasonable expenses of the mother's 
        pregnancy and confinement, as provided under section 257.66, 
        subdivision 3, or ordering reimbursement for the costs of blood 
        or genetic testing, as provided under section 257.69, 
        subdivision 2; 
           (2) determinative for all other purposes related to the 
        existence of the parent and child relationship; and 
           (3) entitled to full faith and credit in other 
        jurisdictions.  
           Sec. 28.  Minnesota Statutes 1996, section 257.75, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ACTION TO VACATE RECOGNITION.] (a) An action to 
        vacate a recognition of paternity may be brought by the mother, 
        father, husband or former husband who executed a joinder, or the 
        child.  A mother, father, or husband or former husband who 
        executed a joinder must bring the action within one year of the 
        execution of the recognition or within six months after the 
        person bringing the action obtains the results of blood or 
        genetic tests that indicate that the man who executed the 
        recognition is not the father of the child.  A child must bring 
        an action to vacate within six months after the child obtains 
        the result of blood or genetic tests that indicate that the man 
        who executed the recognition is not the father of the child, or 
        within one year of reaching the age of majority, whichever is 
        later.  If the court finds a prima facie basis for vacating the 
        recognition, the court shall order the child, mother, father, 
        and husband or former husband who executed a joinder to submit 
        to blood tests.  If the court issues an order for the taking of 
        blood tests, the court shall require the party seeking to vacate 
        the recognition to make advance payment for the costs of the 
        blood tests.  If the party fails to pay for the costs of the 
        blood tests, the court shall dismiss the action to vacate with 
        prejudice.  The court may also order the party seeking to vacate 
        the recognition to pay the other party's reasonable attorney 
        fees, costs, and disbursements.  If the results of the blood 
        tests establish that the man who executed the recognition is not 
        the father, the court shall vacate the recognition.  If a 
        recognition is vacated, any joinder in the recognition under 
        subdivision 1a is also vacated.  The court shall terminate the 
        obligation of a party to pay ongoing child support based on the 
        recognition.  A modification of child support based on a 
        recognition may be made retroactive with respect to any period 
        during which the moving party has pending a motion to vacate the 
        recognition but only from the date of service of notice of the 
        motion on the responding party. 
           (b) The burden of proof in an action to vacate the 
        recognition is on the moving party.  The moving party must 
        request the vacation on the basis of fraud, duress, or material 
        mistake of fact.  The legal responsibilities in existence at the 
        time of an action to vacate, including child support 
        obligations, may not be suspended during the proceeding, except 
        for good cause shown. 
           Sec. 29.  Minnesota Statutes 1996, section 257.75, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RECOGNITION FORM.] The commissioner of human 
        services shall prepare a form for the recognition of parentage 
        under this section.  In preparing the form, the commissioner 
        shall consult with the individuals specified in subdivision 6.  
        The recognition form must be drafted so that the force and 
        effect of the recognition, the alternatives to executing a 
        recognition, and the benefits and responsibilities of 
        establishing paternity are clear and understandable.  The form 
        must include a notice regarding the finality of a recognition 
        and the revocation procedure under subdivision 2.  The form must 
        include a provision for each parent to verify that the parent 
        has read or viewed the educational materials prepared by the 
        commissioner of human services describing the recognition of 
        paternity.  The individual providing the form to the parents for 
        execution shall provide oral notice of the rights, 
        responsibilities, and alternatives to executing the 
        recognition.  Notice may be provided by audiotape, videotape, or 
        similar means.  Each parent must receive a copy of the 
        recognition. 
           Sec. 30.  Minnesota Statutes 1996, section 257.75, 
        subdivision 7, is amended to read: 
           Subd. 7.  [HOSPITAL AND DEPARTMENT OF HEALTH DISTRIBUTION 
        OF EDUCATIONAL MATERIALS; RECOGNITION FORM.] Hospitals that 
        provide obstetric services and the state registrar of vital 
        statistics shall distribute the educational materials and 
        recognition of parentage forms prepared by the commissioner of 
        human services to new parents and shall assist parents in 
        understanding the recognition of parentage form, including 
        following the provisions for notice under subdivision 5.  On and 
        after January 1, 1994, hospitals may not distribute the 
        declaration of parentage forms. 
           Sec. 31.  Minnesota Statutes 1996, section 299C.46, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AUTHORIZED USE, FEE.] (a) The data 
        communications network shall be used exclusively by:  
           (1) criminal justice agencies in connection with the 
        performance of duties required by law; 
           (2) agencies investigating federal security clearances of 
        individuals for assignment or retention in federal employment 
        with duties related to national security, as required by Public 
        Law Number 99-1691; and 
           (3) other agencies to the extent necessary to provide for 
        protection of the public or property in an emergency or disaster 
        situation; and 
           (4) the public authority responsible for child support 
        enforcement in connection with the performance of its duties.  
           (b) The commissioner of public safety shall establish a 
        monthly network access charge to be paid by each participating 
        criminal justice agency.  The network access charge shall be a 
        standard fee established for each terminal, computer, or other 
        equipment directly addressable by the criminal justice data 
        communications network, as follows:  January 1, 1984 to December 
        31, 1984, $40 connect fee per month; January 1, 1985 and 
        thereafter, $50 connect fee per month.  
           (c) The commissioner of public safety is authorized to 
        arrange for the connection of the data communications network 
        with the criminal justice information system of the federal 
        government, any adjacent state, or Canada. 
           Sec. 32.  Minnesota Statutes 1996, section 508.63, is 
        amended to read: 
           508.63 [REGISTRATION OF INSTRUMENTS CREATING LIENS; 
        JUDGMENTS.] 
           No judgment requiring the payment of money shall be a lien 
        upon registered land, except as herein provided.  Any person 
        claiming such lien shall file with the registrar a certified 
        copy of the judgment, together with a written statement 
        containing a description of each parcel of land in which the 
        judgment debtor has a registered interest and upon which the 
        lien is claimed, and a proper reference to the certificate or 
        certificates of title to such land.  Upon filing such copy and 
        statement, the registrar shall enter a memorial of such judgment 
        upon each certificate designated in such statement, and the 
        judgment shall thereupon be and become a lien upon the judgment 
        debtor's interest in the land described in such certificate or 
        certificates.  At any time after filing the certified copy of 
        such judgment, any person claiming the lien may, by filing a 
        written statement, as herein provided, cause a memorial of such 
        judgment to be entered upon any certificate of title to land in 
        which the judgment debtor has a registered interest and not 
        described in any previous statement and the judgment shall 
        thereupon be and become a lien upon the judgment debtor's 
        interest in such land.  The public authority for child support 
        enforcement may present for filing a notice of judgment lien 
        under section 548.091 with identifying information for a parcel 
        of real property.  Upon receipt of the notice of judgment lien, 
        the registrar shall enter a memorial of it upon each certificate 
        which can reasonably be identified as owned by the judgment 
        debtor on the basis of the information provided.  The judgment 
        shall survive and the lien thereof shall continue for a period 
        of ten years from the date of the judgment and no longer, and 
        the registrar of titles shall not carry forward to a new 
        certificate of title the memorial of the judgment after that 
        period.  In every case where an instrument of any description, 
        or a copy of any writ, order, or decree, is required by law to 
        be filed or recorded in order to create or preserve any lien, 
        writ, or attachment upon unregistered land, such instrument or 
        copy, if intended to affect registered land, shall, in lieu of 
        recording, be filed and registered with the registrar.  In 
        addition to any facts required by law to be stated in such 
        instruments to entitle them to be filed or recorded, they shall 
        also contain a reference to the number of the certificate of 
        title of the land to be affected, and, if the attachment, 
        charge, or lien is not claimed on all the land described in any 
        certificate of title, such instrument shall contain a 
        description sufficient to identify the land. 
           Sec. 33.  Minnesota Statutes 1996, section 508A.63, is 
        amended to read: 
           508A.63 [REGISTRATION OF INSTRUMENTS CREATING LIENS; 
        JUDGMENTS.] 
           No judgment requiring the payment of money shall be a lien 
        upon land registered under sections 508A.01 to 508A.85, except 
        as herein provided.  Any person claiming a lien shall file with 
        the registrar a certified copy of the judgment, together with a 
        written statement containing a description of each parcel of 
        land in which the judgment debtor has a registered interest and 
        upon which the lien is claimed, and a proper reference to the 
        CPT or CPTs to the land.  Upon filing the copy and statement, 
        the registrar shall enter a memorial of the judgment upon each 
        CPT designated in the statement, and the judgment shall then be 
        and become a lien upon the judgment debtor's interest in the 
        land described in CPT or CPTs.  At any time after filing the 
        certified copy of the judgment, any person claiming the lien 
        may, by filing a written statement, as herein provided, cause a 
        memorial of the judgment to be entered upon any CPT to land in 
        which the judgment debtor has a registered interest and not 
        described in any previous statement and the judgment shall then 
        be and become a lien upon the judgment debtor's interest in the 
        land.  The public authority for child support enforcement may 
        present for filing a notice of judgment lien under section 
        548.091 with identifying information for a parcel of real 
        property.  Upon receipt of the notice of judgment lien, the 
        registrar shall enter a memorial of it upon each certificate of 
        possessory title which reasonably can be identified as owned by 
        the judgment debtor on the basis of the information provided.  
        The judgment shall survive and the lien thereof shall continue 
        for a period of ten years from the date of the judgment and no 
        longer; and the registrar shall not carry forward to a new 
        certificate of title the memorial of the judgment after that 
        period.  In every case where an instrument of any description, 
        or a copy of any writ, order, or decree, is required by law to 
        be filed or recorded in order to create or preserve any lien, 
        writ, or attachment upon unregistered land, the instrument or 
        copy, if intended to affect registered land, shall, in lieu of 
        recording, be filed and registered with the registrar.  In 
        addition to any facts required by law to be stated in the 
        instruments to entitle them to be filed or recorded, they shall 
        also contain a reference to the number of the CPT of the land to 
        be affected.  If the attachment, charge, or lien is not claimed 
        on all the land described in any CPT, the instrument shall 
        contain a description sufficient to identify the land. 
           Sec. 34.  Minnesota Statutes 1996, section 517.08, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  Application for a marriage license shall be made 
        upon a form provided for the purpose and shall contain the 
        following information: 
           the full names of the parties, 
           their post office addresses and county and state of 
        residence, 
           their full ages, 
           if either party has previously been married, the party's 
        married name, and the date, place and court in which the 
        marriage was dissolved or annulled or the date and place of 
        death of the former spouse, 
           if either party is a minor, the name and address of the 
        minor's parents or guardian, 
           whether the parties are related to each other, and, if so, 
        their relationship, 
           the name and date of birth of any child of which both 
        parties are parents, born before the making of the application, 
        unless their parental rights and the parent and child 
        relationship with respect to the child have been terminated, 
           address of the bride and groom after the marriage to which 
        the court administrator shall send a certified copy of the 
        marriage certificate, 
           and the full names the parties will have after marriage and 
        the parties' social security numbers.  The social security 
        numbers must be collected for the application but must not 
        appear on the marriage license. 
           Sec. 35.  Minnesota Statutes 1996, section 518.005, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [PROHIBITED DISCLOSURE.] In all proceedings under 
        this chapter in which public assistance is assigned under 
        section 256.741 or the public authority provides services to a 
        party or parties to the proceedings, notwithstanding statutory 
        or other authorization for the public authority to release 
        private data on the location of a party to the action, 
        information on the location of one party may not be released by 
        the public authority to the other party if: 
           (1) the public authority has knowledge that a protective 
        order with respect to the other party has been entered; or 
           (2) the public authority has reason to believe that the 
        release of the information may result in physical or emotional 
        harm to the other party. 
           Sec. 36.  Minnesota Statutes 1996, section 518.10, is 
        amended to read: 
           518.10 [REQUISITES OF PETITION.] 
           The petition for dissolution of marriage or legal 
        separation shall state and allege: 
           (a) The name and, address, and, in circumstances in which 
        child support or spousal maintenance will be addressed, social 
        security number of the petitioner and any prior or other name 
        used by the petitioner; 
           (b) The name and, if known, the address and, in 
        circumstances in which child support or spousal maintenance will 
        be addressed, social security number of the respondent and any 
        prior or other name used by the respondent and known to the 
        petitioner; 
           (c) The place and date of the marriage of the parties; 
           (d) In the case of a petition for dissolution, that either 
        the petitioner or the respondent or both:  
           (1) Has resided in this state for not less than 180 days 
        immediately preceding the commencement of the proceeding, or 
           (2) Has been a member of the armed services and has been 
        stationed in this state for not less than 180 days immediately 
        preceding the commencement of the proceeding, or 
           (3) Has been a domiciliary of this state for not less than 
        180 days immediately preceding the commencement of the 
        proceeding; 
           (e) The name at the time of the petition and any prior or 
        other name, age and date of birth of each living minor or 
        dependent child of the parties born before the marriage or born 
        or adopted during the marriage and a reference to, and the 
        expected date of birth of, a child of the parties conceived 
        during the marriage but not born; 
           (f) Whether or not a separate proceeding for dissolution, 
        legal separation, or custody is pending in a court in this state 
        or elsewhere; 
           (g) In the case of a petition for dissolution, that there 
        has been an irretrievable breakdown of the marriage 
        relationship; 
           (h) In the case of a petition for legal separation, that 
        there is a need for a decree of legal separation; and 
           (i) Any temporary or permanent maintenance, child support, 
        child custody, disposition of property, attorneys' fees, costs 
        and disbursements applied for without setting forth the amounts. 
           The petition shall be verified by the petitioner or 
        petitioners, and its allegations established by competent 
        evidence.  
           Sec. 37.  Minnesota Statutes 1996, section 518.148, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUIRED INFORMATION.] The certificate shall 
        include the following information: 
           (1) the full caption and file number of the case and the 
        title "Certificate of Dissolution"; 
           (2) the names and any prior or other names of the parties 
        to the dissolution; 
           (3) the names of any living minor or dependent children as 
        identified in the judgment and decree; 
           (4) that the marriage of the parties is dissolved; and 
           (5) the date of the judgment and decree; and 
           (6) the social security number of the parties to the 
        dissolution and the social security number of any living minor 
        or dependent children identified in the judgment and decree. 
           Sec. 38.  Minnesota Statutes 1996, section 518.171, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ORDER.] Compliance with this section 
        constitutes compliance with a qualified medical child support 
        order as described in the federal Employee Retirement Income 
        Security Act of 1974 (ERISA) as amended by the federal Omnibus 
        Budget Reconciliation Act of 1993 (OBRA).  
           (a) Every child support order must: 
           (1) expressly assign or reserve the responsibility for 
        maintaining medical insurance for the minor children and the 
        division of uninsured medical and dental costs; and 
           (2) contain the names and, last known addresses, if any and 
        social security number of the custodial parent and noncustodial 
        parent, of the dependents unless the court prohibits the 
        inclusion of an address or social security number and orders the 
        custodial parent to provide the address and social security 
        number to the administrator of the health plan.  The court shall 
        order the party with the better group dependent health and 
        dental insurance coverage or health insurance plan to name the 
        minor child as beneficiary on any health and dental insurance 
        plan that is available to the party on: 
           (i) a group basis; 
           (ii) through an employer or union; or 
           (iii) through a group health plan governed under the ERISA 
        and included within the definitions relating to health plans 
        found in section 62A.011, 62A.048, or 62E.06, subdivision 2.  
        "Health insurance" or "health insurance coverage" as used in 
        this section means coverage that is comparable to or better than 
        a number two qualified plan as defined in section 62E.06, 
        subdivision 2.  "Health insurance" or "health insurance 
        coverage" as used in this section does not include medical 
        assistance provided under chapter 256, 256B, or 256D. 
           (b) If the court finds that dependent health or dental 
        insurance is not available to the obligor or obligee on a group 
        basis or through an employer or union, or that group insurance 
        is not accessible to the obligee, the court may require the 
        obligor (1) to obtain other dependent health or dental 
        insurance, (2) to be liable for reasonable and necessary medical 
        or dental expenses of the child, or (3) to pay no less than $50 
        per month to be applied to the medical and dental expenses of 
        the children or to the cost of health insurance dependent 
        coverage. 
           (c) If the court finds that the available dependent health 
        or dental insurance does not pay all the reasonable and 
        necessary medical or dental expenses of the child, including any 
        existing or anticipated extraordinary medical expenses, and the 
        court finds that the obligor has the financial ability to 
        contribute to the payment of these medical or dental expenses, 
        the court shall require the obligor to be liable for all or a 
        portion of the medical or dental expenses of the child not 
        covered by the required health or dental plan.  Medical and 
        dental expenses include, but are not limited to, necessary 
        orthodontia and eye care, including prescription lenses. 
           (d) Unless otherwise agreed by the parties and approved by 
        the court, if the court finds that the obligee is not receiving 
        public assistance for the child and has the financial ability to 
        contribute to the cost of medical and dental expenses for the 
        child, including the cost of insurance, the court shall order 
        the obligee and obligor to each assume a portion of these 
        expenses based on their proportionate share of their total net 
        income as defined in section 518.54, subdivision 6. 
           (e) Payments ordered under this section are subject to 
        section 518.611.  An obligee who fails to apply payments 
        received to the medical expenses of the dependents may be found 
        in contempt of this order. 
           Sec. 39.  Minnesota Statutes 1996, section 518.171, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EFFECT OF ORDER.] (a) The order is binding on 
        the employer or union and the health and dental insurance plan 
        when service under subdivision 3 has been made.  In the case of 
        an obligor who changes employment and is required to provide 
        health coverage for the child, a new employer that provides 
        health care coverage shall enroll the child in the obligor's 
        health plan upon receipt of an order or notice for health 
        insurance, unless the obligor contests the enrollment.  The 
        obligor may contest the enrollment on the limited grounds that 
        the enrollment is improper due to mistake of fact or that the 
        enrollment meets the requirements of section 518.64, subdivision 
        2.  If the obligor chooses to contest the enrollment, the 
        obligor must do so no later than 15 days after the employer 
        notifies the obligor of the enrollment, by doing all of the 
        following: 
           (1) filing a request for contested hearing according to 
        section 518.5511, subdivision 3a; 
           (2) serving a copy of the request for contested hearing 
        upon the public authority and the obligee; and 
           (3) securing a date for the contested hearing no later than 
        45 days after the notice of enrollment. 
           (b) The enrollment must remain in place during the time 
        period in which the obligor contests the withholding. 
        An employer or union that is included under ERISA may not deny 
        enrollment based on exclusionary clauses described in section 
        62A.048.  Upon receipt of the order, or upon application of the 
        obligor pursuant according to the order or notice, the employer 
        or union and its health and dental insurance plan shall enroll 
        the minor child as a beneficiary in the group insurance plan and 
        withhold any required premium from the obligor's income or 
        wages.  If more than one plan is offered by the employer or 
        union, the child shall be enrolled in the least costly health 
        insurance plan otherwise available to the obligor that is 
        comparable to a number two qualified plan.  If the obligor is 
        not enrolled in a health insurance plan, the employer or union 
        shall also enroll the obligor in the chosen plan if enrollment 
        of the obligor is necessary in order to obtain dependent 
        coverage under the plan.  Enrollment of dependents and the 
        obligor shall be immediate and not dependent upon open 
        enrollment periods.  Enrollment is not subject to the 
        underwriting policies described in section 62A.048.  
           (b) (c) An employer or union that willfully fails to comply 
        with the order is liable for any health or dental expenses 
        incurred by the dependents during the period of time the 
        dependents were eligible to be enrolled in the insurance 
        program, and for any other premium costs incurred because the 
        employer or union willfully failed to comply with the order.  An 
        employer or union that fails to comply with the order is subject 
        to contempt under section 518.615 and is also subject to a fine 
        of $500 to be paid to the obligee or public authority.  Fines 
        paid to the public authority are designated for child support 
        enforcement services. 
           (c) (d) Failure of the obligor to execute any documents 
        necessary to enroll the dependent in the group health and dental 
        insurance plan will not affect the obligation of the employer or 
        union and group health and dental insurance plan to enroll the 
        dependent in a plan.  Information and authorization provided by 
        the public authority responsible for child support enforcement, 
        or by the custodial parent or guardian, is valid for the 
        purposes of meeting enrollment requirements of the health plan.  
        The insurance coverage for a child eligible under subdivision 5 
        shall not be terminated except as authorized in subdivision 5. 
           Sec. 40.  Minnesota Statutes 1996, section 518.54, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [SUPPORT ORDER.] "Support order" means a 
        judgment, decree, or order, whether temporary, final, or subject 
        to modification, issued by a court or administrative agency of 
        competent jurisdiction, for the support and maintenance of a 
        child, including a child who has attained the age of majority 
        under the law of the issuing state, or a child and the parent 
        with whom the child is living, that provides for monetary 
        support, child care, medical support including expenses for 
        confinement and pregnancy, arrearages, or reimbursement, and 
        that may include related costs and fees, interest and penalties, 
        income withholding, and other relief. This definition applies to 
        orders issued under this chapter and chapters 256, 257, and 518C.
           Sec. 41.  Minnesota Statutes 1996, section 518.54, 
        subdivision 6, is amended to read: 
           Subd. 6.  [INCOME.] (a) "Income" means any form of periodic 
        payment to an individual including, but not limited to, wages, 
        salaries, payments to an independent contractor, workers' 
        compensation, reemployment insurance, annuity, military and 
        naval retirement, pension and disability payments.  Benefits 
        received under sections 256.72 to 256.87 and chapter 256D Title 
        IV-A of the Social Security Act are not income under this 
        section. 
           (b) Income also includes nonperiodic distributions of 
        workers' compensation claims, reemployment claims, personal 
        injury recoveries for lost wages or salary, proceeds from a 
        lawsuit for lost wages or salary, severance pay, and bonuses. 
           Sec. 42.  Minnesota Statutes 1996, 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 regarding both 
        current support and arrearages approved by the court, an 
        administrative law judge, or the public authority, the 
        administrative law judge, or 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 regarding both current support and arrearages.  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 regarding both current support and 
        arrearages 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 regarding both current support and arrearages 
        approved by the court, an administrative law judge, or the 
        public authority, the court, an administrative law judge, 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, either a court 
        hearing or a contested administrative proceeding must be held 
        under section 518.5511, subdivision 4.  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 regarding both current support and arrearages 
        approved by the court, an administrative law judge or 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 administrative law judge, on behalf of 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, an administrative law 
        judge, 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, an 
        administrative law judge, or the public authority, the court, an 
        administrative law judge, 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, an administrative law judge, 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. 
           (g) The license of an obligor who fails to remain in 
        compliance with an approved 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.  If the obligor appears at the 
        hearing and the judge determines that the obligor has failed to 
        comply with an approved payment agreement, the judge shall 
        notify the occupational licensing board or agency to suspend the 
        obligor's license under paragraph (c).  If the obligor fails to 
        appear at the hearing, the public authority may notify the 
        occupational or licensing board to suspend the obligor's license 
        under paragraph (c). 
           Sec. 43.  Minnesota Statutes 1996, 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 regarding both current support and arrearages approved 
        by the court, an administrative law judge, 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 regarding both current 
        support and arrearages, which 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 regarding 
        both current support and arrearages 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 regarding both current support and arrearages 
        approved by the court, an administrative law judge, 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 pursuant 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, either a court 
        hearing or a contested administrative proceeding must be held 
        under section 518.5511, subdivision 4.  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.  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 regarding both current support and arrearages approved 
        by the court, an administrative law judge, or 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 the administrative law judge shall order the 
        commissioner of public safety to suspend the obligor's driver's 
        license or operating privileges unless the court or 
        administrative law judge determines that the obligor has 
        executed and is in compliance with a written payment agreement 
        regarding both current support and arrearages approved by the 
        court, an administrative law judge, or the public authority. 
           (e) An obligor whose driver's license or operating 
        privileges are suspended may provide proof to the court or the 
        public authority responsible for child support enforcement that 
        the obligor is in compliance with all written payment agreements 
        regarding both current support and arrearages.  Within 15 days 
        of the receipt of that proof, the court or 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; and 
           (6) the cost of implementation and operation of the 
        requirements of this section. 
           (g) In addition to the criteria established under this 
        section for the suspension of an obligor's driver's license, a 
        court, an administrative law judge, 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 contested administrative 
        proceeding must be held under section 518.5511, subdivision 4.  
        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 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.  If the obligor appears at the 
        hearing and the judge determines that the obligor has failed to 
        comply with an approved payment agreement, the judge shall 
        notify the department of public safety to suspend the obligor's 
        license under paragraph (c).  If the obligor fails to appear at 
        the hearing, the public authority may notify the department of 
        public safety to suspend the obligor's license under paragraph 
        (c). 
           Sec. 44.  Minnesota Statutes 1996, section 518.5512, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PATERNITY.] (a) After service of the notice and 
        proposed order, a nonattorney employee of the public authority 
        may request an administrative law judge or the district court to 
        order the child, mother, or alleged father to submit to blood or 
        genetic tests.  The order is effective when signed by an 
        administrative law judge or the district court.  Failure to 
        comply with the order for blood or genetic tests may result in a 
        default determination of parentage.  
           (b) If parentage is contested at the administrative 
        hearing, the administrative law judge may order temporary child 
        support under section 257.62, subdivision 5, and shall refer the 
        case to the district court. 
           (c) The district court may appoint counsel for an indigent 
        alleged father only after the return of the blood or genetic 
        test results from the testing laboratory. 
           Sec. 45.  Minnesota Statutes 1996, section 518.5512, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [ADMINISTRATIVE AUTHORITY.] (a) In each case in 
        which support rights are assigned under section 256.741, 
        subdivision 2, or where the public authority is providing 
        services under an application for child support services, a 
        nonattorney employee of the public authority may, without 
        requirement of a court order: 
           (1) recognize and enforce orders of child support agencies 
        of other states; 
           (2) compel by subpoena the production of all papers, books, 
        records, documents, or other evidentiary material needed to 
        establish a parentage or child support order or to modify or 
        enforce a child support order; 
           (3) change the payee to the appropriate person, 
        organization, or agency authorized to receive or collect child 
        support or any other person or agency designated as the 
        caretaker of the child by agreement of the legal custodian or by 
        court order; 
           (4) order income withholding of child support under section 
        518.6111; 
           (5) secure assets to satisfy the debt or arrearage in cases 
        in which there is a support debt or arrearage by:  (i) 
        intercepting or seizing periodic or lump sum payments from state 
        or local agencies, including reemployment insurance, workers' 
        compensation payments, judgments, settlements, and lotteries; 
        (ii) attaching and seizing assets of the obligor held in 
        financial institutions or public or private retirement funds; 
        and (iii) imposing liens and, in appropriate cases, forcing the 
        sale of property and the distribution of proceeds; and 
           (6) increase the amount of the monthly support payments to 
        include amounts for debts or arrearages for the purpose of 
        securing overdue support.  
           (b) Subpoenas may be served anywhere within the state and 
        served outside the state in the same manner as prescribed by law 
        for service of process of subpoenas issued by the district court 
        of this state.  When a subpoena under this subdivision is served 
        on a third-party recordkeeper, written notice of the subpoena 
        shall be mailed to the person who is the subject of the 
        subpoenaed material at the person's last known address within 
        three days of the day the subpoena is served.  This notice 
        provision does not apply if there is reasonable cause to believe 
        the giving of the notice may lead to interference with the 
        production of the subpoenaed documents. 
           (c) A person served with a subpoena may make a written 
        objection to the public authority or court before the time 
        specified in the subpoena for compliance.  The public authority 
        or the court shall cancel or modify the subpoena, if 
        appropriate.  The public authority shall pay the reasonable 
        costs of producing the documents, if requested. 
           (d) Subpoenas shall be enforceable in the same manner as 
        subpoenas of the district court, in proceedings initiated by 
        complaint of the public authority in the district court. 
           Sec. 46.  Minnesota Statutes 1996, section 518.5512, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [CONTROLLING ORDER DETERMINATION.] The public 
        authority or a party may request the office of administrative 
        hearings to determine a controlling order according to section 
        518C.207, paragraph (c). 
           Sec. 47.  Minnesota Statutes 1996, section 518.575, is 
        amended to read: 
           518.575 [PUBLICATION OF NAMES OF DELINQUENT CHILD SUPPORT 
        OBLIGORS.] 
           Subdivision 1.  [PUBLICATION OF MAKING NAMES PUBLIC.] Twice 
        each year, At least once each year, the commissioner of human 
        services, in consultation with the attorney general, shall 
        publish a list of the names and last known addresses of each 
        person and other identifying information of no more than 25 
        persons who (1) is a are child support obligor obligors, 
        (2) is are at least $3,000 $10,000 in arrears, and (3) is 
        not in compliance with a written payment agreement regarding 
        both current support and arrearages approved by the court, an 
        administrative law judge, or the public authority.  The 
        commissioner of human services shall publish the name of each 
        obligor in the newspaper or newspapers of widest circulation in 
        the area where the obligor is most likely to be residing.  For 
        each publication, the commissioner shall release the list of all 
        names being published not earlier than the first day on which 
        names appear in any newspaper.  An obligor's name may not be 
        published if the obligor claims in writing, and the commissioner 
        of human services determines, there is good cause for the 
        nonpayment of child support.  Good cause includes the 
        following:  (i) there is a mistake in the obligor's identity or 
        the amount of the obligor's arrears; (ii) arrears are reserved 
        by the court or there is a pending legal action concerning the 
        unpaid child support; or (iii) other circumstances as determined 
        by the commissioner.  The list must be based on the best 
        information available to the state at the time of 
        publication are not in compliance with a written payment 
        agreement regarding both current support and arrearages approved 
        by the court, an administrative law judge, or the public 
        authority, (4) cannot currently be located by the public 
        authority for the purposes of enforcing a support order, and (5) 
        have not made a support payment except tax intercept payments, 
        in the preceding 12 months. 
           Identifying information may include the obligor's name, 
        last known address, amount owed, date of birth, photograph, the 
        number of children for whom support is owed, and any additional 
        information about the obligor that would assist in identifying 
        or locating the obligor.  The commissioner and attorney general 
        may use posters, media presentations, electronic technology, and 
        other means that the commissioner and attorney general determine 
        are appropriate for dissemination of the information, including 
        publication on the Internet.  The commissioner and attorney 
        general may make any or all of the identifying information 
        regarding these persons public.  Information regarding an 
        obligor who meets the criteria in this subdivision will only be 
        made public subsequent to that person's selection by the 
        commissioner and attorney general. 
           Before publishing making public the name of the obligor, 
        the department of human services shall send a notice to the 
        obligor's last known address which states the department's 
        intention to publish the obligor's name and the amount of child 
        support the obligor owes make public information on the 
        obligor.  The notice must also provide an opportunity to have 
        the obligor's name removed from the list by paying the arrearage 
        or by entering into an agreement to pay the arrearage, and or by 
        providing information to the public authority that there is good 
        cause not to make the information public.  The notice must 
        include the final date when the payment or agreement can be 
        accepted. 
           The department of human services shall insert with the 
        notices sent to the obligee, a notice stating the intent to 
        publish the obligor's name, and the criteria used to determine 
        the publication of the obligor's name obtain the written consent 
        of the obligee to make the name of the obligor public. 
           Subd. 2.  [NAMES PUBLISHED IN ERROR.] If the 
        commissioner publishes makes public a name under subdivision 1 
        which is in error, the commissioner must also offer to publish a 
        printed retraction and a public apology acknowledging that the 
        name was published made public in error.  If the person whose 
        name was made public in error elects the public retraction and 
        apology, the retraction and apology must appear in each 
        publication that included the same medium and the same format as 
        the original notice with the name listed in error, and it must 
        appear in the same type size and appear the same number of times 
        as the original notice.  In addition to the right of a public 
        retraction and apology, a person whose name was made public in 
        error has a civil action for damages caused by the error. 
           Sec. 48.  [518.6111] [INCOME WITHHOLDING.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purpose of this 
        section, the following terms have the meanings provided in this 
        subdivision unless otherwise stated. 
           (b) "Payor of funds" means any person or entity that 
        provides funds to an obligor, including an employer as defined 
        under chapter 24 of the Internal Revenue Code, section 3401(d), 
        an independent contractor, payor of worker's compensation 
        benefits or reemployment insurance, or a financial institution 
        as defined in section 13B.06. 
           (c) "Business day" means a day on which state offices are 
        open for regular business. 
           (d) "Arrears" means amounts owed under a support order that 
        are past due. 
           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 518.5512, subdivision 5, 
        paragraph (a), clause (4). 
           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 
        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. 
           Subd. 4.  [COLLECTION SERVICES.] 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.  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. 
           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. 
           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. 
           Subd. 5.  [PAYOR OF FUNDS RESPONSIBILITIES.] (a) An order 
        for or notice of withholding is binding on a payor of funds upon 
        receipt.  Withholding must begin no later than the first pay 
        period that occurs after 14 days following the date of receipt 
        of the order for or notice of withholding.  In the case of a 
        financial institution, preauthorized transfers must occur in 
        accordance with a court-ordered payment schedule. 
           (b) A payor of funds shall withhold from the income payable 
        to the obligor the amount specified in the order or notice of 
        withholding and amounts specified under subdivisions 6 and 9 and 
        shall remit the amounts withheld to the public authority within 
        seven business days of the date the obligor is paid the 
        remainder of the income.  The payor of funds shall include with 
        the remittance the social security number of the obligor, the 
        case type indicator as provided by the public authority and the 
        date the obligor is paid the remainder of the income.  The 
        obligor is considered to have paid the amount withheld as of the 
        date the obligor received the remainder of the income.  A payor 
        of funds may combine all amounts withheld from one pay period 
        into one payment to each public authority, but shall separately 
        identify each obligor making payment. 
           (c) A payor of funds shall not discharge, or refuse to 
        hire, or otherwise discipline an employee as a result of wage or 
        salary withholding authorized by this section.  A payor of funds 
        shall be liable to the obligee for any amounts required to be 
        withheld.  A payor of funds that fails to withhold or transfer 
        funds in accordance with this section is also liable to the 
        obligee for interest on the funds at the rate applicable to 
        judgments under section 549.09, computed from the date the funds 
        were required to be withheld or transferred.  A payor of funds 
        is liable for reasonable attorney fees of the obligee or public 
        authority incurred in enforcing the liability under this 
        paragraph.  A payor of funds that has failed to comply with the 
        requirements of this section is subject to contempt sanctions 
        under section 518.615.  If the payor of funds is an employer or 
        independent contractor and violates this subdivision, a court 
        may award the obligor twice the wages lost as a result of this 
        violation.  If a court finds a payor of funds violated this 
        subdivision, the court shall impose a civil fine of not less 
        than $500. 
           (d) If a single employee is subject to multiple withholding 
        orders or multiple notices of withholding for the support of 
        more than one child, the payor of funds shall comply with all of 
        the orders or notices to the extent that the total amount 
        withheld from the obligor's income does not exceed the limits 
        imposed under the Consumer Credit Protection Act, Chapter 15 of 
        the United States Code section 1637(b), giving priority to 
        amounts designated in each order or notice as current support as 
        follows: 
           (1) if the total of the amounts designated in the orders 
        for or notices of withholding as current support exceeds the 
        amount available for income withholding, the payor of funds 
        shall allocate to each order or notice an amount for current 
        support equal to the amount designated in that order or notice 
        as current support, divided by the total of the amounts 
        designated in the orders or notices as current support, 
        multiplied by the amount of the income available for income 
        withholding; and 
           (2) if the total of the amounts designated in the orders 
        for or notices of withholding as current support does not exceed 
        the amount available for income withholding, the payor of funds 
        shall pay the amounts designated as current support, and shall 
        allocate to each order or notice an amount for past due support, 
        equal to the amount designated in that order or notice as past 
        due support, divided by the total of the amounts designated in 
        the orders or notices as past due support, multiplied by the 
        amount of income remaining available for income withholding 
        after the payment of current support. 
           (e) When an order for or notice of withholding is in effect 
        and the obligor's employment is terminated, the obligor and the 
        payor of funds shall notify the public authority of the 
        termination within ten days of the termination date.  The 
        termination notice shall include the obligor's home address and 
        the name and address of the obligor's new payor of funds, if 
        known. 
           (f) A payor of funds may deduct one dollar from the 
        obligor's remaining salary for each payment made pursuant to an 
        order for or notice of withholding under this section to cover 
        the expenses of withholding.  
           Subd. 6.  [FINANCIAL INSTITUTIONS.] (a) If income 
        withholding is ineffective due to the obligor's method of 
        obtaining income, the court shall order the obligor to identify 
        a child support deposit account owned solely by the obligor, or 
        to establish an account, in a financial institution located in 
        this state for the purpose of depositing court-ordered child 
        support payments.  The court shall order the obligor to execute 
        an agreement with the appropriate public authority for 
        preauthorized transfers from the obligor's child support account 
        payable to an account of the public authority.  The court shall 
        order the obligor to disclose to the court all deposit accounts 
        owned by the obligor in whole or in part in any financial 
        institution.  The court may order the obligor to disclose to the 
        court the opening or closing of any deposit account owned in 
        whole or in part by the obligor within 30 days of the opening or 
        closing.  The court may order the obligor to execute an 
        agreement with the appropriate public authority for 
        preauthorized transfers from any deposit account owned in whole 
        or in part by the obligor to the obligor's child support deposit 
        account if necessary to satisfy court-ordered child support 
        payments.  The court may order a financial institution to 
        disclose to the court the account number and any other 
        information regarding accounts owned in whole or in part by the 
        obligor.  An obligor who fails to comply with this subdivision, 
        fails to deposit funds in at least one deposit account 
        sufficient to pay court-ordered child support, or stops payment 
        or revokes authorization of any preauthorized transfer is 
        subject to contempt of court procedures under chapter 588. 
           (b) A financial institution shall execute preauthorized 
        transfers for the deposit accounts of the obligor in the amount 
        specified in the order and amounts required under this section 
        as directed by the public authority.  A financial institution is 
        liable to the obligee if funds in any of the obligor's deposit 
        accounts identified in the court order equal the amount stated 
        in the preauthorization agreement but are not transferred by the 
        financial institution in accordance with the agreement. 
           Subd. 7.  [SUBSEQUENT INCOME WITHHOLDING.] (a) This 
        subdivision applies to support orders that do not contain 
        provisions for income withholding. 
           (b) For cases in which the public authority is providing 
        child support enforcement services to the parties, the income 
        withholding under this subdivision shall take effect without 
        prior judicial notice to the obligor and without the need for 
        judicial or administrative hearing.  Withholding shall result 
        when: 
           (1) the obligor requests it in writing to the public 
        authority; 
           (2) the obligee or obligor serves on the public authority a 
        copy of the notice of income withholding, a copy of the court's 
        order, an application, and the fee to use the public authority's 
        collection services; or 
           (3) the public authority commences withholding according to 
        section 518.5512, subdivision 5, paragraph (a), clause (4).  
           (c) For cases in which the public authority is not 
        providing child support services to the parties, income 
        withholding under this subdivision shall take effect when an 
        obligee requests it by making a written motion to the court and 
        the court finds that previous support has not been paid on a 
        timely consistent basis or that the obligor has threatened 
        expressly or otherwise to stop or reduce payments; 
           (d) Within two days after the public authority commences 
        withholding under this subdivision, the public authority shall 
        send to the obligor at the obligor's last known address, notice 
        that withholding has commenced.  The notice shall include the 
        information provided to the payor of funds in the notice of 
        withholding. 
           Subd. 8.  [CONTEST.] (a) The obligor may contest 
        withholding under subdivision 7 on the limited grounds that the 
        withholding or the amount withheld is improper due to mistake of 
        fact.  If the obligor chooses to contest the withholding, the 
        obligor must do so no later than 15 days after the employer 
        commences withholding, by doing all of the following: 
           (1) file a request for contested hearing according to 
        section 518.5511, subdivision 4, and include in the request the 
        alleged mistake of fact; 
           (2) serve a copy of the request for contested hearing upon 
        the public authority and the obligee; and 
           (3) secure a date for the contested hearing no later than 
        45 days after receiving notice that withholding has commenced. 
           (b) The income withholding must remain in place while the 
        obligor contests the withholding. 
           (c) If the court finds a mistake in the amount of the 
        arrearage to be withheld, the court shall continue the income 
        withholding, but it shall correct the amount of the arrearage to 
        be withheld. 
           Subd. 9.  [PRIORITY.] (a) An order for or notice of 
        withholding under this section or execution or garnishment upon 
        a judgment for child support arrearage or preadjudicated 
        expenses shall have priority over an attachment, execution, 
        garnishment, or wage assignment and shall not be subject to the 
        statutory limitations on amounts levied against the income of 
        the obligor.  Amounts withheld from an employee's income must 
        not exceed the maximum permitted under the Consumer Credit 
        Protection Act, title 15 of the United States Code, section 
        1673(b). 
           (b) If more than one order for or notice of withholding 
        exists involving the same obligor and child, the public 
        authority shall enforce the most current order or notice.  An 
        order for or notice of withholding that was previously 
        implemented according to this section shall end as of the date 
        of the most current order.  The public authority shall notify 
        the payor of funds to withhold under the most current 
        withholding order or notice. 
           Subd. 10.  [ARREARAGE ORDER.] (a) This section does not 
        prevent the court from ordering the payor of funds to withhold 
        amounts to satisfy the obligor's previous arrearage in support 
        order payments.  This remedy shall not operate to exclude 
        availability of other remedies to enforce judgments.  The 
        employer or payor of funds shall withhold from the obligor's 
        income an additional amount equal to 20 percent of the monthly 
        child support or maintenance obligation until the arrearage is 
        paid.  
           (b) Notwithstanding any law to the contrary, funds from 
        income sources included in section 518.54, subdivision 6, 
        whether periodic or lump sum, are not exempt from attachment or 
        execution upon a judgment for child support arrearage. 
           (c) Absent an order to the contrary, if an arrearage exists 
        at the time a support order would otherwise terminate, income 
        withholding shall continue in effect or may be implemented in an 
        amount equal to the support order plus an additional 20 percent 
        of the monthly child support obligation, until all arrears have 
        been paid in full. 
           Subd. 11.  [LUMP-SUM PAYMENTS.] Before transmittal to the 
        obligor of a lump-sum payment of $500 or more including, but not 
        limited to, severance pay, accumulated sick pay, vacation pay, 
        bonuses, commissions, or other pay or benefits, a payor of funds:
           (1) who has been served with an order for or notice of 
        income withholding under this section shall: 
           (i) notify the public authority of the lump-sum payment 
        that is to be paid to the obligor; 
           (ii) hold the lump-sum payment for 30 days after the date 
        on which the lump-sum payment would otherwise have been paid to 
        the obligor, notwithstanding sections 176.221, 176.225, 176.521, 
        181.08, 181.101, 181.11, 181.13, and 181.145, and Minnesota 
        Rules, part 1415.2000, subpart 10; and 
           (iii) upon order of the court, and after a showing of past 
        willful nonpayment of support, pay any specified amount of the 
        lump-sum payment to the public authority for future support; or 
           (2) shall pay the lessor of the amount of the lump-sum 
        payment or the total amount of the judgment and arrearages upon 
        service by United States mail of a sworn affidavit from the 
        public authority or a court order that includes the following 
        information: 
           (i) that a judgment entered pursuant to section 548.091, 
        subdivision 1a, exists against the obligor, or that other 
        support arrearages exist; 
           (ii) the current balance of the judgment or arrearage; and 
           (iii) that a portion of the judgment or arrearage remains 
        unpaid. 
           The Consumer Credit Protection Act, title 15 of the United 
        States Code, section 1673(b), does not apply to lump-sum 
        payments. 
           Subd. 12.  [INTERSTATE INCOME WITHHOLDING.] (a) Upon 
        receipt of an order for support entered in another state and the 
        specified documentation from an authorized agency, the public 
        authority shall implement income withholding.  A payor of funds 
        in this state shall withhold income under court orders for 
        withholding issued by other states or territories. 
           (b) An employer receiving an income withholding notice from 
        another state shall withhold and distribute the funds as 
        directed in the withholding notice and shall apply the law of 
        the obligor's principal place of employment when determining: 
           (1) the employer's fee for processing an income withholding 
        notice; 
           (2) the maximum amount permitted to be withheld from the 
        obligor's income; and 
           (3) deadlines for implementing and forwarding the child 
        support payment. 
           (c) An obligor may contest withholding under this 
        subdivision pursuant to section 518C.506. 
           Subd. 13.  [ORDER TERMINATING INCOME WITHHOLDING.] (a) An 
        order terminating income withholding must specify the effective 
        date of the order and reference the initial order or decree that 
        establishes the support obligation and shall be entered once the 
        following conditions have been met: 
           (1) the obligor serves written notice of the application 
        for termination of income withholding by mail upon the obligee 
        at the obligee's last known mailing address, and a duplicate 
        copy of the application is served on the public authority; 
           (2) the application for termination of income withholding 
        specifies the event that terminates the support obligation, the 
        effective date of the termination of the support obligation, and 
        the applicable provisions of the order or decree that 
        established the support obligation; and 
           (3) the application includes the complete name of the 
        obligor's payor of funds, the business mailing address, the 
        court action and court file number, and the support and 
        collections file number, if known. 
           (b) After receipt of the application for termination of 
        income withholding, the obligee or the public authority fails 
        within 20 days to request a contested hearing on the issue of 
        whether income withholding of support should continue clearly 
        specifying the basis for the continued support obligation and, 
        ex parte, to stay the service of the order terminating income 
        withholding upon the obligor's payor of funds, pending the 
        outcome of the contest hearing. 
           Subd. 14.  [TERMINATION BY THE PUBLIC AUTHORITY.] If the 
        public authority determines that income withholding is no longer 
        applicable, the public authority shall notify the obligee and 
        the obligor of intent to terminate income withholding. 
           Five days following notification to the obligee and 
        obligor, the public authority shall issue a notice to the payor 
        of funds terminating income withholding, without a requirement 
        for a court order unless the obligee has requested a contested 
        hearing under section 518.5511, subdivision 4. 
           Subd. 15.  [CONTRACT FOR SERVICE.] To carry out the 
        provisions of this section, the public authority responsible for 
        child support enforcement may contract for services, including 
        the use of electronic funds transfer. 
           Subd. 16.  [WAIVER.] (a) If 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 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; or 
           (2) all parties reach an agreement and the agreement is 
        approved 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 court waives income withholding, the obligee or 
        obligor may at any time request income withholding under 
        subdivision 7. 
           Subd. 17.  [NONLIABILITY; PAYOR OF FUNDS.] A payor of funds 
        who complies with an income withholding order or notice of 
        withholding according to this chapter or chapter 518C, that 
        appears regular on its face shall not be subject to civil 
        liability to any individual or agency for taking action in 
        compliance with the order or notice. 
           Subd. 18.  [ELECTRONIC TRANSMISSION.] Orders or notices for 
        withholding under this section may be transmitted for 
        enforcement purposes by electronic means. 
           Sec. 49.  Minnesota Statutes 1996, section 518.68, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS.] The required notices must be 
        substantially as follows: 
                                IMPORTANT NOTICE 
        1.  PAYMENTS TO PUBLIC AGENCY 
           Pursuant According to Minnesota Statutes, section 518.551, 
           subdivision 1, payments ordered for maintenance and support 
           must be paid to the public agency responsible for child 
           support enforcement as long as the person entitled to 
           receive the payments is receiving or has applied for public 
           assistance or has applied for support and maintenance 
           collection services.  MAIL PAYMENTS TO: 
        2.  DEPRIVING ANOTHER OF CUSTODIAL OR PARENTAL RIGHTS -- A 
        FELONY 
           A person may be charged with a felony who conceals a minor 
           child or takes, obtains, retains, or fails to return a 
           minor child from or to the child's parent (or person with 
           custodial or visitation rights), pursuant according to 
           Minnesota Statutes, section 609.26.  A copy of that section 
           is available from any district court clerk. 
        3.  RULES OF SUPPORT, MAINTENANCE, VISITATION 
           (a) Payment of support or spousal maintenance is to be as 
           ordered, and the giving of gifts or making purchases of 
           food, clothing, and the like will not fulfill the 
           obligation. 
           (b) Payment of support must be made as it becomes due, and 
           failure to secure or denial of rights of visitation is NOT 
           an excuse for nonpayment, but the aggrieved party must seek 
           relief through a proper motion filed with the court. 
           (c) Nonpayment of support is not grounds to deny 
           visitation.  The party entitled to receive support may 
           apply for support and collection services, file a contempt 
           motion, or obtain a judgment as provided in Minnesota 
           Statutes, section 548.091.  
           (d) The payment of support or spousal maintenance takes 
           priority over payment of debts and other obligations. 
           (e) A party who accepts additional obligations of support 
           does so with the full knowledge of the party's prior 
           obligation under this proceeding. 
           (f) Child support or maintenance is based on annual income, 
           and it is the responsibility of a person with seasonal 
           employment to budget income so that payments are made 
           throughout the year as ordered. 
           (g) If there is a layoff or a pay reduction, support may be 
           reduced as of the time of the layoff or pay reduction if a 
           motion to reduce the support is served and filed with the 
           court at that time, but any such reduction must be ordered 
           by the court.  The court is not permitted to reduce support 
           retroactively, except as provided in Minnesota Statutes, 
           section 518.64, subdivision 2, paragraph (c).  
        4.  PARENTAL RIGHTS FROM MINNESOTA STATUTES, SECTION 518.17, 
        SUBDIVISION 3 
           Unless otherwise provided by the Court: 
           (a) Each party has the right of access to, and to receive 
           copies of, school, medical, dental, religious training, and 
           other important records and information about the minor 
           children.  Each party has the right of access to 
           information regarding health or dental insurance available 
           to the minor children.  Presentation of a copy of this 
           order to the custodian of a record or other information 
           about the minor children constitutes sufficient 
           authorization for the release of the record or information 
           to the requesting party. 
           (b) Each party shall keep the other informed as to the name 
           and address of the school of attendance of the minor 
           children.  Each party has the right to be informed by 
           school officials about the children's welfare, educational 
           progress and status, and to attend school and parent 
           teacher conferences.  The school is not required to hold a 
           separate conference for each party. 
           (c) In case of an accident or serious illness of a minor 
           child, each party shall notify the other party of the 
           accident or illness, and the name of the health care 
           provider and the place of treatment. 
           (d) Each party has the right of reasonable access and 
           telephone contact with the minor children. 
        5.  WAGE AND INCOME DEDUCTION OF SUPPORT AND MAINTENANCE 
           Child support and/or spousal maintenance may be withheld 
           from income, with or without notice to the person obligated 
           to pay, when the conditions of Minnesota Statutes, sections 
           518.611 and 518.613, have been met.  A copy of those 
           sections is available from any district court clerk. 
        6.  CHANGE OF ADDRESS OR RESIDENCE 
           Unless otherwise ordered, the person responsible to make 
           support or maintenance payments each party shall notify the 
           person entitled to receive the payment other party, the 
           court, and the public authority responsible for collection, 
           if applicable, of a change of address or residence the 
           following information within 60 ten days of the address or 
           residence change any change:  the residential and mailing 
           address, telephone number, driver's license number, social 
           security number, and name, address, and telephone number of 
           the employer. 
        7.  COST OF LIVING INCREASE OF SUPPORT AND MAINTENANCE 
           Child support and/or spousal maintenance may be adjusted 
           every two years based upon a change in the cost of living 
           (using Department of Labor Consumer Price Index .........., 
           unless otherwise specified in this order) when the 
           conditions of Minnesota Statutes, section 518.641, are met. 
           Cost of living increases are compounded.  A copy of 
           Minnesota Statutes, section 518.641, and forms necessary to 
           request or contest a cost of living increase are available 
           from any district court clerk. 
        8.  JUDGMENTS FOR UNPAID SUPPORT 
           If a person fails to make a child support payment, the 
           payment owed becomes a judgment against the person 
           responsible to make the payment by operation of law on or 
           after the date the payment is due, and the person entitled 
           to receive the payment or the public agency may obtain 
           entry and docketing of the judgment WITHOUT NOTICE to the 
           person responsible to make the payment under Minnesota 
           Statutes, section 548.091.  Interest begins to accrue on a 
           payment or installment of child support whenever the unpaid 
           amount due is greater than the current support due, 
           pursuant according to Minnesota Statutes, section 548.091, 
           subdivision 1a.  
        9.  JUDGMENTS FOR UNPAID MAINTENANCE 
           A judgment for unpaid spousal maintenance may be entered 
           when the conditions of Minnesota Statutes, section 548.091, 
           are met.  A copy of that section is available from any 
           district court clerk. 
        10.  ATTORNEY FEES AND COLLECTION COSTS FOR ENFORCEMENT OF CHILD 
        SUPPORT 
           A judgment for attorney fees and other collection costs 
           incurred in enforcing a child support order will be entered 
           against the person responsible to pay support when the 
           conditions of section 518.14, subdivision 2, are met.  A 
           copy of section 518.14 and forms necessary to request or 
           contest these attorney fees and collection costs are 
           available from any district court clerk. 
        11.  VISITATION EXPEDITOR PROCESS 
           On request of either party or on its own motion, the court 
           may appoint a visitation expeditor to resolve visitation 
           disputes under Minnesota Statutes, section 518.1751.  A 
           copy of that section and a description of the expeditor 
           process is available from any district court clerk. 
        12.  VISITATION REMEDIES AND PENALTIES 
           Remedies and penalties for the wrongful denial of 
           visitation rights are available under Minnesota Statutes, 
           section 518.175, subdivision 6.  These include compensatory 
           visitation; civil penalties; bond requirements; contempt; 
           and reversal of custody.  A copy of that subdivision and 
           forms for requesting relief are available from any district 
           court clerk. 
           Sec. 50.  Minnesota Statutes 1996, section 518C.101, is 
        amended to read: 
           518C.101 [DEFINITIONS.] 
           In this chapter: 
           (a) "Child" means an individual, whether over or under the 
        age of majority, who is or is alleged to be owed a duty of 
        support by the individual's parent or who is or is alleged to be 
        the beneficiary of a support order directed to the parent. 
           (b) "Child support order" means a support order for a 
        child, including a child who has attained the age of majority 
        under the law of the issuing state. 
           (c) "Duty of support" means an obligation imposed or 
        imposable by law to provide support for a child, spouse, or 
        former spouse, including an unsatisfied obligation to provide 
        support. 
           (d) "Home state" means the state in which a child lived 
        with a parent or a person acting as parent for at least six 
        consecutive months immediately preceding the time of filing of a 
        petition or comparable pleading for support and, if a child is 
        less than six months old, the state in which the child lived 
        from birth with any of them.  A period of temporary absence of 
        any of them is counted as part of the six-month or other period. 
           (e) "Income" includes earnings or other periodic 
        entitlements to money from any source and any other property 
        subject to withholding for support under the law of this state. 
           (f) "Income-withholding order" means an order or other 
        legal process directed to an obligor's employer or other debtor 
        under section 518.611 or 518.613, to withhold support from the 
        income of the obligor. 
           (g) "Initiating state" means a state in from which a 
        proceeding is forwarded or in which a proceeding is filed for 
        forwarding to a responding state under this chapter or a law or 
        procedure substantially similar to this chapter, or under a law 
        or procedure substantially similar to the uniform reciprocal 
        enforcement of support act, or the revised uniform reciprocal 
        enforcement of support act is filed for forwarding to a 
        responding state. 
           (h) "Initiating tribunal" means the authorized tribunal in 
        an initiating state. 
           (i) "Issuing state" means the state in which a tribunal 
        issues a support order or renders a judgment determining 
        parentage. 
           (j) "Issuing tribunal" means the tribunal that issues a 
        support order or renders a judgment determining parentage. 
           (k) "Law" includes decisional and statutory law and rules 
        and regulations having the force of law. 
           (l) "Obligee" means: 
           (1) an individual to whom a duty of support is or is 
        alleged to be owed or in whose favor a support order has been 
        issued or a judgment determining parentage has been rendered; 
           (2) a state or political subdivision to which the rights 
        under a duty of support or support order have been assigned or 
        which has independent claims based on financial assistance 
        provided to an individual obligee; or 
           (3) an individual seeking a judgment determining parentage 
        of the individual's child. 
           (m) "Obligor" means an individual, or the estate of a 
        decedent: 
           (1) who owes or is alleged to owe a duty of support; 
           (2) who is alleged but has not been adjudicated to be a 
        parent of a child; or 
           (3) who is liable under a support order. 
           (n) "Petition" means a petition or comparable pleading used 
        pursuant to section 518.5511. 
           (o) "Register" means to file a support order or judgment 
        determining parentage in the office of the court administrator. 
           (p) (o) "Registering tribunal" means a tribunal in which a 
        support order is registered. 
           (q) (p) "Responding state" means a state to in which a 
        proceeding is filed or to which a proceeding is forwarded for 
        filing from an initiating state under this chapter or a law or 
        procedure substantially similar to this chapter, or under a law 
        or procedure substantially similar to the uniform reciprocal 
        enforcement of support act, or the revised uniform reciprocal 
        enforcement of support act. 
           (r) (q) "Responding tribunal" means the authorized tribunal 
        in a responding state. 
           (s) (r) "Spousal support order" means a support order for a 
        spouse or former spouse of the obligor. 
           (t) (s) "State" means a state of the United States, the 
        District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, or any territory or insular 
        possession subject to the jurisdiction of the United States.  
        "State" includes: 
           (1) an Indian tribe; and 
           (2) a foreign jurisdiction that has enacted a law or 
        established procedures for issuance and enforcement of support 
        orders that are substantially similar to the procedures under 
        this chapter or the procedures under the uniform reciprocal 
        enforcement of support act or the revised uniform reciprocal 
        enforcement of support act.  
           (u) (t) "Support enforcement agency" means a public 
        official or agency authorized to: 
           (1) seek enforcement of support orders or laws relating to 
        the duty of support; 
           (2) seek establishment or modification of child support; 
           (3) seek determination of parentage; or 
           (4) locate obligors or their assets. 
           (v) (u) "Support order" means a judgment, decree, or order, 
        whether temporary, final, or subject to modification, for the 
        benefit of a child, spouse, or former spouse, which provides for 
        monetary support, health care, arrearages, or reimbursement, and 
        may include related costs and fees, interest, income 
        withholding, attorney's fees, and other relief. 
           (w) (v) "Tribunal" means a court, administrative agency, or 
        quasi-judicial entity authorized to establish, enforce, or 
        modify support orders or to determine parentage. 
           Sec. 51.  Minnesota Statutes 1996, section 518C.205, is 
        amended to read: 
           518C.205 [CONTINUING, EXCLUSIVE JURISDICTION.] 
           (a) A tribunal of this state issuing a support order 
        consistent with the law of this state has continuing, exclusive 
        jurisdiction over a child support order: 
           (1) as long as this state remains the residence of the 
        obligor, the individual obligee, or the child for whose benefit 
        the support order is issued; or 
           (2) until each individual party has all of the parties who 
        are individuals have filed written consent consents with the 
        tribunal of this state for a tribunal of another state to modify 
        the order and assume continuing, exclusive jurisdiction. 
           (b) A tribunal of this state issuing a child support order 
        consistent with the law of this state may not exercise its 
        continuing jurisdiction to modify the order if the order has 
        been modified by a tribunal of another state pursuant to this 
        chapter or a law substantially similar to this chapter. 
           (c) If a child support order of this state is modified by a 
        tribunal of another state pursuant to this chapter or a law 
        substantially similar to this chapter, a tribunal of this state 
        loses its continuing, exclusive jurisdiction with regard to 
        prospective enforcement of the order issued in this state, and 
        may only: 
           (1) enforce the order that was modified as to amounts 
        accruing before the modification; 
           (2) enforce nonmodifiable aspects of that order; and 
           (3) provide other appropriate relief for violations of that 
        order which occurred before the effective date of the 
        modification. 
           (d) A tribunal of this state shall recognize the 
        continuing, exclusive jurisdiction of a tribunal of another 
        state which has issued a child support order pursuant to this 
        chapter or a law substantially similar to this chapter. 
           (e) A temporary support order issued ex parte or pending 
        resolution of a jurisdictional conflict does not create 
        continuing, exclusive jurisdiction in the issuing tribunal. 
           (f) A tribunal of this state issuing a support order 
        consistent with the law of this state has continuing, exclusive 
        jurisdiction over a spousal support order throughout the 
        existence of the support obligation.  A tribunal of this state 
        may not modify a spousal support order issued by a tribunal of 
        another state having continuing, exclusive jurisdiction over 
        that order under the law of that state. 
           Sec. 52.  Minnesota Statutes 1996, section 518C.207, is 
        amended to read: 
           518C.207 [RECOGNITION OF CONTROLLING CHILD SUPPORT ORDERS 
        ORDER.] 
           (a) If a proceeding is brought under this chapter and only 
        one tribunal has issued a child support order, the order of that 
        tribunal is controlling and must be recognized. 
           (b) If a proceeding is brought under this chapter, and one 
        two or more child support orders have been issued in by 
        tribunals of this state or another state with regard to an the 
        same obligor and a child, a tribunal of this state shall apply 
        the following rules in determining which order to recognize for 
        purposes of continuing, exclusive jurisdiction: 
           (1) If only one tribunal has issued a child support order, 
        the order of that tribunal must be recognized. 
           (2) If two or more tribunals have issued child support 
        orders for the same obligor and child, and only one of the 
        tribunals would have continuing, exclusive jurisdiction under 
        this chapter, the order of that tribunal is controlling and must 
        be recognized. 
           (3) (2) If two or more tribunals have issued child support 
        orders for the same obligor and child, and more than one of the 
        tribunals would have continuing, exclusive jurisdiction under 
        this chapter, an order issued by a tribunal in the current home 
        state of the child must be recognized, but if an order has not 
        been issued in the current home state of the child, the order 
        most recently issued is controlling and must be recognized. 
           (4) (3) If two or more tribunals have issued child support 
        orders for the same obligor and child, and none of the tribunals 
        would have continuing, exclusive jurisdiction under this 
        chapter, the tribunal of this state may having jurisdiction over 
        the parties shall issue a child support order, which is 
        controlling and must be recognized. 
           (c) If two or more child support orders have been issued 
        for the same obligor and child and if the obligor or the 
        individual obligee resides in this state, a party may request a 
        tribunal of this state to determine which order controls and 
        must be recognized under paragraph (b).  The request must be 
        accompanied by a certified copy of every support order in effect.
        The requesting party shall give notice of the request to each 
        party whose rights may be affected by the determination. 
           (b) (d) The tribunal that has issued an the order that 
        must be recognized as controlling under paragraph (a) (b) or (c) 
        is the tribunal having that has continuing, exclusive 
        jurisdiction in accordance with section 518C.205. 
           (e) A tribunal of this state which determines by order the 
        identity of the controlling child support order under paragraph 
        (b), clause (1) or (2), or which issues a new controlling child 
        support order under paragraph (b), clause (3), shall include in 
        that order the basis upon which the tribunal made its 
        determination. 
           (f) Within 30 days after issuance of the order determining 
        the identity of the controlling order, the party obtaining that 
        order shall file a certified copy of it with each tribunal that 
        had issued or registered an earlier order of child support.  A 
        party who obtains the order and fails to file a certified copy 
        is subject to appropriate sanctions by a tribunal in which the 
        issue of failure to file arises.  The failure to file does not 
        affect the validity or enforceability of the controlling order. 
           Sec. 53.  Minnesota Statutes 1996, section 518C.304, is 
        amended to read: 
           518C.304 [DUTIES OF INITIATING TRIBUNAL.] 
           (a) Upon the filing of a petition authorized by this 
        chapter, an initiating tribunal of this state shall forward 
        three copies of the petition and its accompanying documents: 
           (1) to the responding tribunal or appropriate support 
        enforcement agency in the responding state; or 
           (2) if the identity of the responding tribunal is unknown, 
        to the state information agency of the responding state with a 
        request that they be forwarded to the appropriate tribunal and 
        that receipt be acknowledged. 
           (b) If a responding state has not enacted this chapter or a 
        law or procedure substantially similar to this chapter, a 
        tribunal of this state may issue a certificate or other 
        documents and make findings required by the law of the 
        responding state.  If the responding state is a foreign 
        jurisdiction, the tribunal may specify the amount of support 
        sought and provide other documents necessary to satisfy the 
        requirements of the responding state. 
           Sec. 54.  Minnesota Statutes 1996, section 518C.305, is 
        amended to read: 
           518C.305 [DUTIES AND POWERS OF RESPONDING TRIBUNAL.] 
           (a) When a responding tribunal of this state receives a 
        petition or comparable pleading from an initiating tribunal or 
        directly pursuant to section 518C.301, paragraph (c), it shall 
        cause the petition or pleading to be filed and notify the 
        petitioner by first class mail where and when it was filed. 
           (b) A responding tribunal of this state, to the extent 
        otherwise authorized by law, may do one or more of the following:
           (1) issue or enforce a support order, modify a child 
        support order, or render a judgment to determine parentage; 
           (2) order an obligor to comply with a support order, 
        specifying the amount and the manner of compliance; 
           (3) order income withholding; 
           (4) determine the amount of any arrearages, and specify a 
        method of payment; 
           (5) enforce orders by civil or criminal contempt, or both; 
           (6) set aside property for satisfaction of the support 
        order; 
           (7) place liens and order execution on the obligor's 
        property; 
           (8) order an obligor to keep the tribunal informed of the 
        obligor's current residential address, telephone number, 
        employer, address of employment, and telephone number at the 
        place of employment; 
           (9) issue a bench warrant for an obligor who has failed 
        after proper notice to appear at a hearing ordered by the 
        tribunal and enter the bench warrant in any local and state 
        computer systems for criminal warrants; 
           (10) order the obligor to seek appropriate employment by 
        specified methods; 
           (11) award reasonable attorney's fees and other fees and 
        costs; and 
           (12) grant any other available remedy. 
           (c) A responding tribunal of this state shall include in a 
        support order issued under this chapter, or in the documents 
        accompanying the order, the calculations on which the support 
        order is based. 
           (d) A responding tribunal of this state may not condition 
        the payment of a support order issued under this chapter upon 
        compliance by a party with provisions for visitation. 
           (e) If a responding tribunal of this state issues an order 
        under this chapter, the tribunal shall send a copy of the order 
        by first class mail to the petitioner and the respondent and to 
        the initiating tribunal, if any. 
           Sec. 55.  Minnesota Statutes 1996, section 518C.310, is 
        amended to read: 
           518C.310 [DUTIES OF STATE INFORMATION AGENCY.] 
           (a) The unit within the department of human services that 
        receives and disseminates incoming interstate actions under 
        title IV-D of the Social Security Act from section 518C.02, 
        subdivision 1a, is the state information agency under this 
        chapter. 
           (b) The state information agency shall: 
           (1) compile and maintain a current list, including 
        addresses, of the tribunals in this state which have 
        jurisdiction under this chapter and any support enforcement 
        agencies in this state and transmit a copy to the state 
        information agency of every other state; 
           (2) maintain a register of tribunals and support 
        enforcement agencies received from other states; 
           (3) forward to the appropriate tribunal in the place in 
        this state in which the individual obligee or the obligor 
        resides, or in which the obligor's property is believed to be 
        located, all documents concerning a proceeding under this 
        chapter received from an initiating tribunal or the state 
        information agency of the initiating state; and 
           (4) obtain information concerning the location of the 
        obligor and the obligor's property within this state not exempt 
        from execution, by such means as postal verification and federal 
        or state locator services, examination of telephone directories, 
        requests for the obligor's address from employers, and 
        examination of governmental records, including, to the extent 
        not prohibited by other law, those relating to real property, 
        vital statistics, law enforcement, taxation, motor vehicles, 
        driver's licenses, and social security; and 
           (5) determine which foreign jurisdictions and Indian tribes 
        have substantially similar procedures for issuance and 
        enforcement of support orders.  The state information agency 
        shall compile and maintain a list, including addresses, of all 
        these foreign jurisdictions and Indian tribes.  The state 
        information agency shall make this list available to all state 
        tribunals and all support enforcement agencies. 
           Sec. 56.  Minnesota Statutes 1996, section 518C.401, is 
        amended to read: 
           518C.401 [PETITION TO ESTABLISH SUPPORT ORDER.] 
           (a) If a support order entitled to recognition under this 
        chapter has not been issued, a responding tribunal of this state 
        may issue a support order if: 
           (1) the individual seeking the order resides in another 
        state; or 
           (2) the support enforcement agency seeking the order is 
        located in another state. 
           (b) The tribunal may issue a temporary child support order 
        if: 
           (1) the respondent has signed a verified statement 
        acknowledging parentage; 
           (2) the respondent has been determined by or pursuant to 
        law to be the parent; or 
           (3) there is other clear and convincing evidence that the 
        respondent is the child's parent. 
           (c) Upon a finding, after notice and opportunity to be 
        heard, that an obligor owes a duty of support, the tribunal 
        shall issue a support order directed to the obligor and may 
        issue other orders pursuant according to section 518C.305. 
           Sec. 57.  Minnesota Statutes 1996, section 518C.501, is 
        amended to read: 
           518C.501 [RECOGNITION EMPLOYER'S RECEIPT OF 
        INCOME-WITHHOLDING ORDER OF ANOTHER STATE.] 
           (a) An income-withholding order issued in another state may 
        be sent by first class mail to the person or entity defined as 
        the obligor's employer under section 518.611 or 518.613 without 
        first filing a petition or comparable pleading or registering 
        the order with a tribunal of this state.  Upon receipt of the 
        order, the employer shall: 
           (1) treat an income-withholding order issued in another 
        state which appears regular on its face as if it had been issued 
        by a tribunal of this state; 
           (2) immediately provide a copy of the order to the obligor; 
        and 
           (3) distribute the funds as directed in the withholding 
        order. 
           (b) An obligor may contest the validity or enforcement of 
        an income-withholding order issued in another state in the same 
        manner as if the order had been issued by a tribunal of this 
        state.  Section 518C.604 applies to the contest.  The obligor 
        shall give notice of the contest to any support enforcement 
        agency providing services to the obligee and to: 
           (1) the person or agency designated to receive payments in 
        the income-withholding order; or 
           (2) if no person or agency is designated, the obligee. 
           Sec. 58.  [518C.5025] [EMPLOYER'S COMPLIANCE WITH 
        INCOME-WITHHOLDING ORDER OF ANOTHER STATE.] 
           (a) Upon receipt of an income-withholding order, the 
        obligor's employer shall immediately provide a copy of the order 
        to the obligor. 
           (b) The employer shall treat an income-withholding order 
        issued in another state which appears regular on its face as if 
        it had been issued by a tribunal of this state. 
           (c) Except as provided by paragraph (d) and section 
        518C.503, the employer shall withhold and distribute the funds 
        as directed in the withholding order by complying with the terms 
        of the order, as applicable, that specify: 
           (1) the duration and the amount of periodic payments of 
        current child support, stated as a sum certain; 
           (2) the person or agency designated to receive payments and 
        the address to which the payments are to be forwarded; 
           (3) medical support, whether in the form of periodic cash 
        payment, stated as a sum certain, or ordering the obligor to 
        provide health insurance coverage for the child under a policy 
        available through the obligor's employment; 
           (4) the amount of periodic payments of fees and costs for a 
        support enforcement agency, the issuing tribunal, and the 
        obligee's attorney, stated as sums certain; and 
           (5) the amount of periodic payments of arrears and interest 
        on arrears, stated as sums certain. 
           (d) The employer shall comply with the law of the state of 
        the obligor's principal place of employment for withholding from 
        income with respect to: 
           (1) the employer's fee for processing an income-withholding 
        order; 
           (2) the maximum amount permitted to be withheld from the 
        obligor's income; and 
           (3) the time periods within which the employer must 
        implement the withholding order and forward the child support 
        payment. 
           Sec. 59.  [518C.503] [COMPLIANCE WITH MULTIPLE 
        INCOME-WITHHOLDING ORDERS.] 
           If the obligor's employer receives multiple orders to 
        withhold support from the earnings of the same obligor, the 
        employer satisfies the terms of the multiple orders if the 
        employer complies with the law of the state of the obligor's 
        principal place of employment to establish the priorities for 
        withholding and allocating income withheld for multiple child 
        support obligees. 
           Sec. 60.  [518C.504] [IMMUNITY FROM CIVIL LIABILITY.] 
           An employer who complies with an income-withholding order 
        issued in another state in accordance with this chapter is not 
        subject to civil liability to any individual or agency with 
        regard to the employer's withholding child support from the 
        obligor's income. 
           Sec. 61.  [518C.505] [PENALTIES FOR NONCOMPLIANCE.] 
           An employer who willfully fails to comply with an 
        income-withholding order issued by another state and received 
        for enforcement is subject to the same penalties that may be 
        imposed for noncompliance with an order issued by a tribunal of 
        this state. 
           Sec. 62.  [518C.506] [CONTEST BY OBLIGOR.] 
           (a) An obligor may contest the validity or enforcement of 
        an income-withholding order issued in another state and received 
        directly by an employer in this state in the same manner as if 
        the order had been issued by a tribunal of this state.  Section 
        518C.604 applies to the contest. 
           (b) The obligor shall give notice of the contest to: 
           (1) a support enforcement agency providing services to the 
        obligee; 
           (2) each employer which has directly received an 
        income-withholding order; and 
           (3) the person or agency designated to receive payments in 
        the income-withholding order or, if no person or agency is 
        designated, to the obligee. 
           Sec. 63.  [518C.508] [ADMINISTRATIVE ENFORCEMENT OF 
        ORDERS.] 
           (a) A party seeking to enforce a support order or an 
        income-withholding order, or both, issued by a tribunal of 
        another state may send the documents required for registering 
        the order to a support enforcement agency of this state. 
           (b) Upon receipt of the documents, the support enforcement 
        agency, without initially seeking to register the order, shall 
        consider and may use any administrative procedure authorized by 
        the laws of this state to enforce a support order or an 
        income-withholding order, or both.  If the obligor does not 
        contest administrative enforcement, the order need not be 
        registered.  If the obligor contests the validity or 
        administrative enforcement of the order, the support enforcement 
        agency shall register the order under this chapter. 
           Sec. 64.  Minnesota Statutes 1996, section 518C.603, is 
        amended to read: 
           518C.603 [EFFECT OF REGISTRATION FOR ENFORCEMENT.] 
           (a) A support order or income-withholding order issued in 
        another state is registered when the order is filed in the 
        registering tribunal of this state. 
           (b) A registered order issued in another state is 
        enforceable in the same manner and is subject to the same 
        procedures as an order issued by a tribunal of this state. 
           (c) Except as otherwise provided in sections 518C.601 to 
        518C.612 this chapter, a tribunal of this state shall recognize 
        and enforce, but may not modify, a registered order if the 
        issuing tribunal had jurisdiction. 
           Sec. 65.  Minnesota Statutes 1996, section 518C.605, is 
        amended to read: 
           518C.605 [NOTICE OF REGISTRATION OF ORDER.] 
           (a) When a support order or income-withholding order issued 
        in another state is registered, the registering tribunal shall 
        notify the nonregistering party.  Notice must be given by 
        certified or registered mail or by any means of personal service 
        authorized by the law of this state.  The notice must be 
        accompanied by a copy of the registered order and the documents 
        and relevant information accompanying the order. 
           (b) The notice must inform the nonregistering party: 
           (1) that a registered order is enforceable as of the date 
        of registration in the same manner as an order issued by a 
        tribunal of this state; 
           (2) that a hearing to contest the validity or enforcement 
        of the registered order must be requested within 20 days after 
        the date of mailing or personal service of the notice; 
           (3) that failure to contest the validity or enforcement of 
        the registered order in a timely manner will result in 
        confirmation of the order and enforcement of the order and the 
        alleged arrearages and precludes further contest of that order 
        with respect to any matter that could have been asserted; and 
           (4) of the amount of any alleged arrearages. 
           (c) Upon registration of an income-withholding order for 
        enforcement, the registering tribunal shall notify the obligor's 
        employer pursuant to section 518.611 or 518.613. 
           Sec. 66.  Minnesota Statutes 1996, section 518C.608, is 
        amended to read: 
           518C.608 [CONFIRMED ORDER.] 
           If a contesting party has received notice of registration 
        under section 518C.605, Confirmation of a registered order, 
        whether by operation of law or after notice and hearing, 
        precludes further contest of the order based upon facts that 
        were known by the contesting party at the time of registration 
        with respect to any matter that could have been asserted at the 
        time of registration with respect to any matter that could have 
        been asserted at the time of registration. 
           Sec. 67.  Minnesota Statutes 1996, section 518C.611, is 
        amended to read: 
           518C.611 [MODIFICATION OF CHILD SUPPORT ORDER OF ANOTHER 
        STATE.] 
           (a) After a child support order issued in another state has 
        been registered in this state, the responding tribunal of this 
        state may modify that order only if, section 518C.613 does not 
        apply and after notice and hearing, it finds that: 
           (1) the following requirements are met: 
           (i) the child, the individual obligee, and the obligor do 
        not reside in the issuing state; 
           (ii) a petitioner who is a nonresident of this state seeks 
        modification; and 
           (iii) the respondent is subject to the personal 
        jurisdiction of the tribunal of this state; or 
           (2) an individual party or the child, or a party who is an 
        individual, is subject to the personal jurisdiction of the 
        tribunal of this state and all of the individual parties who are 
        individuals have filed a written consent consents in the issuing 
        tribunal providing that for a tribunal of this state may to 
        modify the support order and assume continuing, exclusive 
        jurisdiction over the order.  However, if the issuing state is a 
        foreign jurisdiction that has not enacted a law or established 
        procedures substantially similar to the procedures in this 
        chapter, the consent otherwise required of an individual 
        residing in this state is not required for the tribunal to 
        assume jurisdiction to modify the child support order.  
           (b) Modification of a registered child support order is 
        subject to the same requirements, procedures, and defenses that 
        apply to the modification of an order issued by a tribunal of 
        this state and the order may be enforced and satisfied in the 
        same manner. 
           (c) A tribunal of this state may not modify any aspect of a 
        child support order that may not be modified under the law of 
        the issuing state.  If two or more tribunals have issued child 
        support orders for the same obligor and child, the order that 
        controls and must be recognized under section 518C.207 
        establishes the aspects of the support order which are 
        nonmodifiable. 
           (d) On issuance of an order modifying a child support order 
        issued in another state, a tribunal of this state becomes the 
        tribunal of continuing, exclusive jurisdiction. 
           (e) Within 30 days after issuance of a modified child 
        support order, the party obtaining the modification shall file a 
        certified copy of the order with the issuing tribunal which had 
        continuing, exclusive jurisdiction over the earlier order, and 
        in each tribunal in which the party knows that earlier order has 
        been registered. 
           Sec. 68.  Minnesota Statutes 1996, section 518C.612, is 
        amended to read: 
           518C.612 [RECOGNITION OF ORDER MODIFIED IN ANOTHER STATE.] 
           A tribunal of this state shall recognize a modification of 
        its earlier child support order by a tribunal of another state 
        which assumed jurisdiction pursuant according to this chapter or 
        a law substantially similar to this chapter and, upon request, 
        except as otherwise provided in this chapter, shall: 
           (1) enforce the order that was modified only as to amounts 
        accruing before the modification; 
           (2) enforce only nonmodifiable aspects of that order; 
           (3) provide other appropriate relief only for violations of 
        that order which occurred before the effective date of the 
        modification; and 
           (4) recognize the modifying order of the other state, upon 
        registration, for the purpose of enforcement. 
           Sec. 69.  [518C.613] [JURISDICTION TO MODIFY SUPPORT ORDER 
        OF ANOTHER STATE WHEN INDIVIDUAL PARTIES RESIDE IN THIS STATE.] 
           (a) If all of the parties who are individuals reside in 
        this state and the child does not reside in the issuing state, a 
        tribunal of this state has jurisdiction to enforce and to modify 
        the issuing state's child support order in a proceeding to 
        register that order. 
           (b) A tribunal of this state exercising jurisdiction as 
        provided in this section shall apply sections 518C.101 to 
        518C.209 and 518C.601 to 518C.614 to the enforcement or 
        modification proceeding.  Sections 518C.301 to 518C.507 and 
        518C.701 to 518C.802 do not apply and the tribunal shall apply 
        the procedural and substantive law of this state. 
           Sec. 70.  [518C.614] [NOTICE TO ISSUING TRIBUNAL OF 
        MODIFICATION.] 
           Within 30 days after issuance of a modified child support 
        order, the party obtaining the modification shall file a 
        certified copy of the order with the issuing tribunal that had 
        continuing, exclusive jurisdiction over the earlier order, and 
        in each tribunal in which the party knows the earlier order has 
        been registered.  A party who obtains the order and fails to 
        file a certified copy is subject to appropriate sanctions by a 
        tribunal in which the issue of failure to file arises.  The 
        failure to file does not affect the validity or enforceability 
        of the modified order of the new tribunal having continuing, 
        exclusive jurisdiction. 
           Sec. 71.  Minnesota Statutes 1996, section 518C.701, is 
        amended to read: 
           518C.701 [PROCEEDING TO DETERMINE PARENTAGE.] 
           (a) A tribunal of this state may serve as an initiating or 
        responding tribunal in a proceeding brought under this chapter 
        or a law or procedure substantially similar to this chapter, or 
        under a law or procedure substantially similar to the uniform 
        reciprocal enforcement of support act, or the revised uniform 
        reciprocal enforcement of support act to determine that the 
        petitioner is a parent of a particular child or to determine 
        that a respondent is a parent of that child. 
           (b) In a proceeding to determine parentage, a responding 
        tribunal of this state shall apply the parentage act, sections 
        257.51 to 257.74, and the rules of this state on choice of law. 
           Sec. 72.  Minnesota Statutes 1996, section 548.091, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CHILD SUPPORT JUDGMENT BY OPERATION OF LAW.] 
        (a) Any payment or installment of support required by a judgment 
        or decree of dissolution or legal separation, determination of 
        parentage, an order under chapter 518C, an order under section 
        256.87, or an order under section 260.251, that is not paid or 
        withheld from the obligor's income as required under section 
        518.611 or 518.613, or which is ordered as child support by 
        judgment, decree, or order by a court in any other state, is a 
        judgment by operation of law on and after the date it is due and 
        is entitled to full faith and credit in this state and any other 
        state.  Except as otherwise provided by paragraph (b), interest 
        accrues from the date the unpaid amount due is greater than the 
        current support due at the annual rate provided in section 
        549.09, subdivision 1, plus two percent, not to exceed an annual 
        rate of 18 percent.  A payment or installment of support that 
        becomes a judgment by operation of law between the date on which 
        a party served notice of a motion for modification under section 
        518.64, subdivision 2, and the date of the court's order on 
        modification may be modified under that subdivision. 
           (b) Notwithstanding the provisions of section 549.09, upon 
        motion to the court and upon proof by the obligor of 36 
        consecutive months of complete and timely payments of both 
        current support and court-ordered paybacks of a child support 
        debt or arrearage, the court may order interest on the remaining 
        debt or arrearage to stop accruing.  Timely payments are those 
        made in the month in which they are due.  If, after that time, 
        the obligor fails to make complete and timely payments of both 
        current support and court-ordered paybacks of child support debt 
        or arrearage, the public authority or the obligee may move the 
        court for the reinstatement of interest as of the month in which 
        the obligor ceased making complete and timely payments. 
           The court shall provide copies of all orders issued under 
        this section to the public authority.  The commissioner of human 
        services shall prepare and make available to the court and the 
        parties forms to be submitted by the parties in support of a 
        motion under this paragraph. 
           Sec. 73.  Minnesota Statutes 1996, section 548.091, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [DOCKETING OF CHILD SUPPORT JUDGMENT.] On or 
        after the date an unpaid amount becomes a judgment by operation 
        of law under subdivision 1a, the obligee or the public authority 
        may file with the court administrator, either electronically or 
        by other means: 
           (1) a statement identifying, or a copy of, the judgment or 
        decree of dissolution or legal separation, determination of 
        parentage, order under chapter 518C, an order under section 
        256.87, or an order under section 260.251, or judgment, decree, 
        or order for child support by a court in any other state, which 
        provides for installment or periodic payments installments of 
        child support, or a judgment or notice of attorney fees and 
        collection costs under section 518.14, subdivision 2; 
           (2) an affidavit of default.  The affidavit of default must 
        state the full name, occupation, place of residence, and last 
        known post office address of the obligor, the name and post 
        office address of the obligee, the date or dates payment was due 
        and not received and judgment was obtained by operation of law, 
        and the total amount of the judgments to the date of filing, and 
        the amount and frequency of the periodic installments of child 
        support that will continue to become due and payable subsequent 
        to the date of filing; and 
           (3) an affidavit of service of a notice of entry of 
        judgment or notice of intent to docket judgment and to recover 
        attorney fees and collection costs on the obligor, in person or 
        by mail at the obligor's last known post office address.  
        Service is completed upon mailing in the manner designated. 
        Where applicable, a notice of interstate lien in the form 
        promulgated under United States Code, title 42, section 652(a), 
        is sufficient to satisfy the requirements of clauses (1) and (2).
           Sec. 74.  Minnesota Statutes 1996, section 548.091, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [ENTRY, DOCKETING, AND SURVIVAL OF CHILD SUPPORT 
        JUDGMENT.] Upon receipt of the documents filed under subdivision 
        2a, the court administrator shall enter and docket the judgment 
        in the amount of the default specified in the affidavit of 
        default unpaid obligation identified in the affidavit of default 
        and note the amount and frequency of the periodic installments 
        of child support that will continue to become due and payable 
        after the date of docketing.  From the time of docketing, the 
        judgment is a lien upon all the real property in the county 
        owned by the judgment debtor, but it is not a lien on registered 
        land unless the obligee or the public authority causes a notice 
        of judgment lien or certified copy of the judgment to be 
        memorialized on the certificate of title or certificate of 
        possessory title under section 508.63 or 508A.63.  The judgment 
        survives and the lien continues for ten years after the date the 
        judgment was docketed.  Child support judgments may be renewed 
        by service of notice upon the debtor.  Service shall be by 
        certified mail at the last known address of the debtor or in the 
        manner provided for the service of civil process.  Upon the 
        filing of the notice and proof of service the court 
        administrator shall renew the judgment for child support without 
        any additional filing fee. 
           Sec. 75.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [AUTOMATIC INCREASES; SATISFACTION.] After 
        docketing and until satisfied by the obligee, public authority, 
        or the court administrator, the amount of the docketed judgment 
        automatically increases by the total amount of periodic 
        installments of child support that became due and payable 
        subsequent to the date of docketing, plus attorney's fees and 
        collection costs incurred by the public authority, and less any 
        payment made by the obligor to partially satisfy the docketed 
        judgment.  The court administrator shall not satisfy any child 
        support judgment without first obtaining a written judgment 
        payoff statement from the public authority or obligee.  If no 
        such statement can be obtained within two business days, the 
        court administrator shall only satisfy the judgment if the 
        amount paid to the court administrator equals the judgment 
        amount plus interest and costs, and the amount of the periodic 
        installment times the number of payments due since the date of 
        docketing of the judgment.  
           Sec. 76.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [NOTE ON JUDGMENT ROLL.] The court administrator 
        shall note on the judgment roll which judgments are filed 
        pursuant to this section and the amount and frequency of the 
        periodic installment of child support that will continue to 
        become due and payable after the date of docketing.  
           Sec. 77.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [FEES.] The public authority is exempt from 
        payment of fees when a judgment is docketed or a certified copy 
        of a judgment is issued by a court administrator, or a notice of 
        judgment lien or a certified copy of a judgment is presented to 
        a registrar of titles for recording.  If a notice or certified 
        copy is recorded by the public authority under this subdivision, 
        the registrar of titles may collect from a party presenting for 
        recording a satisfaction or release of the notice or certified 
        copy the fees for recording and memorializing both the notice or 
        certified copy and the satisfaction or release. 
           Sec. 78.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [REGISTERED LAND.] If requested by the public 
        authority and upon the public authority's providing a notice of 
        judgment lien or a certified copy of a judgment for child 
        support debt, together with a street address, tax parcel 
        identifying number, or a legal description for a parcel of real 
        property, the county recorder shall search the registered land 
        records in that county and cause the notice of judgment lien or 
        certified copy of the judgment to be memorialized on every 
        certificate of title or certificate of possessory title of 
        registered land in that county that can be reasonably identified 
        as owned by the obligor who is named on a docketed judgment.  
        The fees for memorializing the lien or judgment must be paid in 
        the manner prescribed by subdivision 7.  The county recorders 
        and their employees and agents are not liable for any loss or 
        damages arising from failure to identify a parcel of registered 
        land owned by the obligor who is named on the docketed judgment. 
           Sec. 79.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [PAYOFF STATEMENT.] The public authority shall 
        issue to the obligor, attorneys, lenders, and closers, or their 
        agents, a payoff statement setting forth conclusively the amount 
        necessary to satisfy the lien.  Payoff statements must be issued 
        within three business days after receipt of a request by mail, 
        personal delivery, telefacsimile, or e-mail transmission, and 
        must be delivered to the requester by telefacsimile or e-mail 
        transmission if requested and if appropriate technology is 
        available to the public authority. 
           Sec. 80.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [RELEASE OF LIEN.] Upon payment of the amount 
        due under subdivision 5, the public authority shall execute and 
        deliver a satisfaction of the judgment lien within five business 
        days. 
           Sec. 81.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [SPECIAL PROCEDURES.] The public authority shall 
        negotiate a release of lien on specific property for less than 
        the full amount due where the proceeds of a sale or financing, 
        less reasonable and necessary closing expenses, are not 
        sufficient to satisfy all encumbrances on the liened property.  
        Partial releases do not release the obligor's personal liability 
        for the amount unpaid. 
           Sec. 82.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [CORRECTING ERRORS.] The public authority shall 
        maintain a process to review the identity of the obligor and to 
        issue releases of lien in cases of misidentification.  The 
        public authority shall maintain a process to review the amount 
        of child support determined to be delinquent and to issue 
        amended notices of judgment lien in cases of incorrectly 
        docketed judgments. 
           Sec. 83.  Minnesota Statutes 1996, section 548.091, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [FORMS.] The department of human services, after 
        consultation with registrars of title, shall prescribe the 
        notice of judgment lien.  These forms are not subject to chapter 
        14. 
           Sec. 84.  Minnesota Statutes 1996, section 550.37, 
        subdivision 24, is amended to read: 
           Subd. 24.  [EMPLOYEE BENEFITS.] (a) The debtor's right to 
        receive present or future payments, or payments received by the 
        debtor, under a stock bonus, pension, profit sharing, annuity, 
        individual retirement account, individual retirement annuity, 
        simplified employee pension, or similar plan or contract on 
        account of illness, disability, death, age, or length of service:
           (1) to the extent the plan or contract is described in 
        section 401(a), 403, 408, or 457 of the Internal Revenue Code of 
        1986, as amended, or payments under the plan or contract are or 
        will be rolled over as provided in section 402(a)(5), 403(b)(8), 
        or 408(d)(3) of the Internal Revenue Code of 1986, as amended; 
        or 
           (2) to the extent of the debtor's aggregate interest under 
        all plans and contracts up to a present value of $30,000 and 
        additional amounts under all the plans and contracts to the 
        extent reasonably necessary for the support of the debtor and 
        any spouse or dependent of the debtor.  
           (b) The exemptions in paragraph (a) do not apply when the 
        debt is owed under a support order as defined in section 518.54, 
        subdivision 4a. 
           Sec. 85.  [552.01] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For the purposes of this chapter, 
        the terms defined in this section have the meanings given them. 
           Subd. 2.  [PUBLIC AUTHORITY.] "Public authority" means the 
        public authority responsible for child support enforcement.  
           Subd. 3.  [JUDGMENT DEBTOR.] "Judgment debtor"  means a 
        party against whom the public authority has a judgment for the 
        recovery of money owed pursuant to a support order as defined in 
        section 518.54.  
           Subd. 4.  [THIRD PARTY.] "Third party" means the person or 
        entity upon whom the execution levy is served.  
           Subd. 5.  [CLAIM.] "Claim" means the unpaid balance of the 
        public authority's judgment against the judgment debtor, 
        including all lawful interest and costs incurred. 
           Subd. 6.  [FINANCIAL INSTITUTION.] "Financial institution" 
        means all entities identified in section 13B.06. 
           Sec. 86.  [552.02] [PUBLIC AUTHORITY'S SUMMARY EXECUTION OF 
        SUPPORT JUDGMENT DEBTS; WHEN AUTHORIZED.] 
           The public authority may execute on a money judgment 
        resulting from money owed pursuant to a support order by levying 
        under this chapter on indebtedness owed to the judgment debtor 
        by a third party.  The public authority may execute under this 
        chapter upon service of a notice of support judgment levy for 
        which the seal of the court is not required. 
           Sec. 87.  [552.03] [SCOPE OF GENERAL AND SPECIFIC 
        PROVISIONS.] 
           General provisions relating to the public authority's 
        summary execution as authorized in this chapter are set forth in 
        section 552.04.  Specific provisions relating to summary 
        execution on funds at a financial institution are set forth in 
        section 552.05.  When the public authority levies against funds 
        at a financial institution, the specific provisions of section 
        552.05 must be complied with in addition to the general 
        provisions of section 552.04.  Provisions contained in the 
        statutory forms are incorporated in this chapter and have the 
        same force of law as any other provisions in this chapter.  
           Sec. 88.  [552.04] [GENERAL PROVISIONS.] 
           Subdivision 1.  [RULES OF CIVIL PROCEDURE.] Unless this 
        chapter specifically provides otherwise, the Minnesota Rules of 
        Civil Procedure for the District Courts and section 518.511 
        apply in all proceedings under this chapter.  
           Subd. 2.  [PROPERTY ATTACHABLE BY SERVICE OF LEVY.] Subject 
        to the exemptions provided by subdivision 3 and section 550.37, 
        and any other applicable statute, to the extent the exemptions 
        apply in cases of child support enforcement, the service by the 
        public authority of a notice of support judgment levy under this 
        chapter attaches all nonexempt indebtedness or money due or 
        belonging to the judgment debtor and owing by the third party or 
        in the possession or under the control of the third party at the 
        time of service of the notice of support judgment levy, whether 
        or not the indebtedness or money has become payable.  The third 
        party shall not be compelled to pay or deliver the same before 
        the time specified by any agreement unless the agreement was 
        fraudulently contracted to defeat an execution levy or other 
        collection remedy. 
           Subd. 3.  [PROPERTY NOT ATTACHABLE.] The following property 
        is not subject to attachment by a notice of support judgment 
        levy served under this chapter:  
           (1) any indebtedness or money due to the judgment debtor, 
        unless at the time of the service of the notice of support 
        judgment levy the same is due absolutely or does not depend upon 
        any contingency; 
           (2) any judgment owing by the third party to the judgment 
        debtor, if the third party or the third party's property is 
        liable on an execution levy upon the judgment; 
           (3) any debt owing by the third party to the judgment 
        debtor for which any negotiable instrument has been issued or 
        endorsed by the third party; 
           (4) any indebtedness or money due to the judgment debtor 
        with a cumulative value of less than $10; and 
           (5) any disposable earnings, indebtedness, or money that is 
        exempt under state or federal law to the extent the exemptions 
        apply in cases of child support enforcement.  
           Subd. 4.  [SERVICE OF THIRD PARTY LEVY; NOTICE AND 
        DISCLOSURE FORMS.] When levying upon money owed to the judgment 
        debtor by a third party, the public authority shall serve a copy 
        of the notice of support judgment levy upon the third party 
        either by registered or certified mail, or by personal service.  
        Along with a copy of the notice of support judgment levy, the 
        public authority shall serve upon the third party a notice of 
        support judgment levy and disclosure form that must be 
        substantially in the form set forth below. 
                      OFFICE OF ADMINISTRATIVE HEARINGS
                                     File No. ...........
        ........ (Public authority)
        against                        NOTICE OF SUPPORT JUDGMENT
        ........ (Judgment Debtor)     LEVY AND DISCLOSURE
        and                            (OTHER THAN EARNINGS)
        ........ (Third Party)
           PLEASE TAKE NOTICE that pursuant to Minnesota Statutes, 
        chapters 518 and 522, the undersigned, as representative of the 
        public authority responsible for child support enforcement, 
        makes demand and levies execution upon all money due and owing 
        by you to the judgment debtor for the amount of the judgment 
        specified below.  A copy of the notice of support judgment levy 
        is enclosed.  The unpaid judgment balance is $...... 
           In responding to this levy, you are to complete the 
        attached disclosure form and mail it to the public authority, 
        together with your check payable to the public authority, for 
        the nonexempt amount owed by you to the judgment debtor or for 
        which you are obligated to the judgment debtor, within the time 
        limits in chapter 552. 
                             Public Authority
                              Address
                              (........)
                              Phone number
           
                                  DISCLOSURE
           On the ... day of ......, 19..., the time of service of the 
        execution levy herein, there was due and owing the judgment 
        debtor from the third party the following: 
           (1) Money.  Enter on the line below any amounts due and 
        owing the judgment debtor, except earnings, from the third party.
           ......................... 
           (2) Setoff.  Enter on the line below the amount of any 
        setoff, defense, lien, or claim which the third party claims 
        against the amount set forth on line (1).  State the facts by 
        which the setoff, defense, lien, or claim is claimed.  (Any 
        indebtedness to you incurred by the judgment debtor within ten 
        days prior to the receipt of the first execution levy on a debt 
        may not be claimed as a setoff, defense, lien, or claim against 
        the amount set forth on line (1).) 
           ......................... 
           (3) Exemption.  Enter on the line below any amounts or 
        property claimed by the judgment debtor to be exempt from 
        execution. 
           ......................... 
           (4) Adverse Interest.  Enter on the line below any amounts 
        claimed by other persons by reason of ownership or interest in 
        the judgment debtor's property. 
           ......................... 
           (5) Enter on the line below the total of lines (2), (3), 
        and (4). 
           .........................  
           (6) Enter on the line below the difference obtained (never 
        less than zero when line (5) is subtracted from the amount on 
        line (1)).  
           ......................... 
           (7) Enter on the line below 100 percent of the amount of 
        the public authority 's claim which remains unpaid.  
           ......................... 
           (8) Enter on the line below the lesser of line (6) and line 
        (7).  You are instructed to remit this amount only if it is $10 
        or more.  
           ......................... 
                                 AFFIRMATION
           I, .......... (person signing Affirmation), am the third 
        party or I am authorized by the third party to complete this 
        nonearnings disclosure, and have done so truthfully and to the 
        best of my knowledge. 
        Dated:..........                Signature
                                         ..........
                                         Title
                                         ..........
                                         Telephone Number
           Subd. 5.  [THIRD PARTY DISCLOSURE AND REMITTANCE.] Within 
        15 days after receipt of the notice of support judgment levy, 
        unless governed by section 552.05, the third party shall 
        disclose and remit to the public authority as much of the amount 
        due as the third party's own debt equals to the judgment debtor. 
           Subd. 6.  [ORAL DISCLOSURE.] Before or after the service of 
        a written disclosure by a third party under subdivision 5, upon 
        a showing by affidavit upon information and belief that an oral 
        examination of the third party would provide a complete 
        disclosure of relevant facts, any party to the execution 
        proceedings may obtain an ex parte order requiring the third 
        party, or a representative of the third party designated by name 
        or by title, to appear for oral examination before the court or 
        a referee appointed by the court.  Notice of the examination 
        must be given to all parties. 
           Subd. 7.  [SUPPLEMENTAL COMPLAINT.] If a third party holds 
        property, money, earnings, or other indebtedness by a title that 
        is void as to the judgment debtor's creditors, the property may 
        be levied on although the judgment debtor would be barred from 
        maintaining an action to recover the property, money, earnings, 
        or other indebtedness.  In this and all other cases where the 
        third party denies liability, the public authority may move the 
        court at any time before the third party is discharged, on 
        notice to both the judgment debtor and the third party for an 
        order making the third party a party to supplemental action and 
        granting the public authority leave to file a supplemental 
        complaint against the third party and the judgment debtor.  The 
        supplemental complaint shall set forth the facts upon which the 
        public authority claims to charge the third party.  If probable 
        cause is shown, the motion shall be granted.  The supplemental 
        complaint shall be served upon the third party and the judgment 
        debtor and any other parties.  The parties served shall answer 
        or respond pursuant to the Minnesota Rules of Civil Procedure 
        for the district courts, and if they fail to do so, judgment by 
        default may be entered against them.  
           Subd. 8.  [JUDGMENT AGAINST THIRD PARTY UPON FAILURE TO 
        DISCLOSE OR REMIT.] Judgment may be entered against a third 
        party who has been served with a notice of support judgment levy 
        and fails to disclose or remit the levied funds as required in 
        this chapter.  Upon order to show cause served on the third 
        party and notice of motion supported by affidavit of facts and 
        affidavit of service upon both the judgment debtor and third 
        party, the court may render judgment against the third party for 
        an amount not exceeding 100 percent of the amount claimed in the 
        execution.  Judgment against the third party under this section 
        shall not bar the public authority from further remedies under 
        this chapter as a result of any subsequent defaults by the third 
        party.  The court upon good cause shown may remove the default 
        and permit the third party to disclose or remit on just terms.  
           Subd. 9.  [SATISFACTION.] Upon expiration, the public 
        authority making the execution may file a partial satisfaction 
        by amount or, if applicable, shall file the total satisfaction 
        with the court administrator without charge.  
           Subd. 10.  [THIRD PARTY GOOD FAITH REQUIREMENT.] The third 
        party is not liable to the judgment debtor, public authority, or 
        other person for wrongful retention if the third party retains 
        or remits disposable earnings, indebtedness, or money of the 
        judgment debtor or any other person, pending the third party's 
        disclosure or consistent with the disclosure the third party 
        makes, if the third party has a good faith belief that the 
        property retained or remitted is subject to the execution.  In 
        addition, the third party may, at any time before or after 
        disclosure, proceed under Rule 67 of the Minnesota rules of 
        civil procedure to make deposit into court.  No third party is 
        liable for damages if the third party complies with the 
        provisions of this chapter.  
           Subd. 11.  [BAD FAITH CLAIM.] If, in a proceeding brought 
        under section 552.05, subdivision 9, or a similar proceeding 
        under this chapter to determine a claim of exemption, the claim 
        of exemption is not upheld, and the court finds that it was 
        asserted in bad faith, the public authority shall be awarded 
        actual damages, costs, reasonable attorney's fees resulting from 
        the additional proceedings, and an amount not to exceed $100.  
        If the claim of exemption is upheld, and the court finds that 
        the public authority disregarded the claim of exemption in bad 
        faith, the judgment debtor shall be awarded actual damages, 
        costs, reasonable attorney's fees resulting from the additional 
        proceedings, and an amount not to exceed $100.  The underlying 
        judgment shall be modified to reflect assessment of damages, 
        costs, and attorney's fees.  However, if the party in whose 
        favor a penalty assessment is made is not actually indebted to 
        that party's attorney for fees, the attorney's fee award shall 
        be made directly to the attorney, and if not paid, an 
        appropriate judgment in favor of the attorney shall be entered.  
        Any action by a public authority made in bad faith and in 
        violation of this chapter renders the execution levy void and 
        the public authority liable to the judgment debtor named in the 
        execution levy in the amount of $100, actual damages, and 
        reasonable attorney's fees and costs.  
           Subd. 12.  [DISCHARGE OF A THIRD PARTY.] Subject to 
        subdivisions 6 and 13, the third party, after disclosure, shall 
        be discharged of any further obligation to the public authority 
        when one of the following conditions is met:  
           (a) The third party discloses that the third party is not 
        indebted to the judgment debtor or does not possess any 
        earnings, property, money, or indebtedness belonging to the 
        judgment debtor that is attachable as defined in subdivision 2.  
        The disclosure is conclusive against the public authority and 
        discharges the third party from any further obligation to the 
        public authority other than to retain and remit all nonexempt 
        disposable earnings, property, indebtedness, or money of the 
        judgment debtor which was disclosed.  
           (b) The third party discloses that the third party is 
        indebted to the judgment debtor as indicated on the execution 
        disclosure form.  The disclosure is conclusive against the 
        public authority and discharges the third party from any further 
        obligation to the public authority other than to retain and 
        remit all nonexempt disposable earnings, property, indebtedness, 
        or money of the judgment debtor that was disclosed. 
           (c) The court may, upon motion of an interested person, 
        discharge the third party as to any disposable earnings, money, 
        property, or indebtedness in excess of the amount that may be 
        required to satisfy the public authority's claim.  
           Subd. 13.  [EXCEPTIONS TO DISCHARGE OF A THIRD PARTY.] The 
        third party is not discharged if:  
           (a) Within 20 days of the service of the third party's 
        disclosure, an interested person serves a motion relating to the 
        execution levy. The hearing on the motion must be scheduled to 
        be heard within 30 days of the service of the motion.  
           (b) The public authority moves the court for leave to file 
        a supplemental complaint against the third party, as provided 
        for in subdivision 7, and the court upon proper showing vacates 
        the discharge of the third party.  
           Subd. 14.  [JOINDER AND INTERVENTION BY PERSONS IN 
        INTEREST.] If it appears that a person, who is not a party to 
        the action, has or claims an interest in any of the disposable 
        earnings, other indebtedness, or money, the court shall permit 
        that person to intervene or join in the execution proceeding 
        under this chapter.  If that person does not appear, the court 
        may summon that person to appear or order the claim barred.  The 
        person so appearing or summoned shall be joined as a party and 
        be bound by the judgment.  
           Subd. 15.  [APPEAL.] A party to an execution proceeding 
        aggrieved by an order or final judgment may appeal as allowed by 
        law.  
           Subd. 16.  [PRIORITY OF LEVY.] Notwithstanding section 
        52.12, a levy by the public authority made under this section on 
        an obligor's funds on deposit in a financial institution located 
        in this state has priority over any unexercised right of setoff 
        of the financial institution to apply the levied funds toward 
        the balance of an outstanding loan or loans owed by the obligor 
        to the financial institution.  A claim by the financial 
        institution that it exercised its right to setoff prior to the 
        levy by the public authority must be substantiated by evidence 
        of the date of the setoff and must be verified by the sworn 
        statement of a responsible corporate officer of the financial 
        institution.  For purposes of determining the priority of a levy 
        made under this section, the levy must be treated as if it were 
        an execution made under chapter 550. 
           Sec. 89.  [552.05] [SUMMARY EXECUTION UPON FUNDS AT A 
        FINANCIAL INSTITUTION.] 
           Subdivision 1.  [PROCEDURE.] In addition to the provisions 
        of section 552.04, when levying upon funds at a financial 
        institution, the public authority must comply with this 
        section.  If the notice of support judgment levy is being used 
        by the public authority to levy funds of a judgment debtor who 
        is a natural person and if the funds to be levied are held on 
        deposit at any financial institution, in lieu of service the 
        public authority shall send with the notice of support judgment 
        levy and disclosure required by section 552.04, subdivision 4, 
        one copy of an exemption and right to hearing notice.  The 
        notice must be substantially in the form determined by the 
        commissioner in accordance with section 552.05, subdivision 10.  
        Failure of the public authority to send the notice renders the 
        execution levy void, and the financial institution shall take no 
        action.  Upon receipt of the notice of support judgment levy and 
        exemption and right to hearing notice, the financial institution 
        shall retain as much of the amount due as the financial 
        institution has on deposit owing to the judgment debtor, but not 
        more than 100 percent of the amount remaining due on the 
        judgment until directed by the public authority or the court to 
        release the funds to the public authority or the judgment debtor 
        in accordance with this chapter. 
           Subd. 2.  [DUTIES OF FINANCIAL INSTITUTION.] Within two 
        business days after receipt of the execution levy and exemption 
        and right to hearing notice, the financial institution shall 
        serve upon the judgment debtor the exemption and right to 
        hearing notice.  The financial institution shall serve the 
        notice by first class mail to the last known address of the 
        judgment debtor.  If no claim of exemption or request for 
        hearing is received by the public authority within 14 days after 
        the notice is mailed to the judgment debtor, the public 
        authority shall notify the financial institution within seven 
        days that the funds remain subject to the execution levy and 
        shall be remitted to the public authority.  If a claim of 
        exemption or a request for hearing is received by the public 
        authority within 14 days after the exemption notice is mailed to 
        the judgment debtor, the public authority shall within seven 
        days notify the financial institution either to release the 
        funds to the judgment debtor or that the funds remain subject to 
        the execution levy pending the determination of an 
        administrative law judge at a requested contested case 
        proceeding.  When notified by the public authority to release 
        the funds, the financial institution shall release the funds to 
        the public authority or to the judgment debtor, as directed by 
        the public authority, within two business days. 
           Subd. 3.  [PROCESS TO CLAIM EXEMPTION.] If the judgment 
        debtor elects to claim an exemption, the judgment debtor shall 
        complete the applicable portion of the exemption and right to 
        hearing notice, sign it under penalty of perjury, and deliver 
        one copy to the public authority within 14 days of the date 
        postmarked on the correspondence mailed to the judgment debtor 
        containing the exemption and right to hearing notice.  Failure 
        of the judgment debtor to deliver the executed exemption and 
        right to hearing notice does not constitute a waiver of any 
        claimed right to an exemption.  Upon timely receipt of a claim 
        of exemption, funds not claimed to be exempt by the judgment 
        debtor remain subject to the execution levy.  Within seven days 
        after the date postmarked on the envelope containing the 
        executed exemption and right to hearing notice mailed to the 
        public authority, or the date of personal delivery of the 
        executed exemption and right to hearing notice to the public 
        authority, the public authority shall either notify the 
        financial institution to release the exempt portion of the funds 
        to the judgment debtor or schedule a contested administrative 
        proceeding pursuant to subdivision 5. 
           Subd. 4.  [PROCESS TO REQUEST HEARING.] If the judgment 
        debtor elects to request a hearing on any issue specified in 
        subdivision 6, the judgment debtor shall complete the applicable 
        portion of the exemption and right to hearing notice, sign it 
        under penalty of perjury, and deliver one copy to the public 
        authority within 14 days of the date postmarked on the 
        correspondence mailed to the judgment debtor containing the 
        exemption and right to hearing notice.  Upon timely receipt of a 
        request for hearing, funds not claimed to be exempt by the 
        judgment debtor remain subject to the execution levy.  Within 
        seven days after the date postmarked on the envelope containing 
        the executed request for hearing mailed to the public authority, 
        or the date of personal delivery of the executed request for 
        hearing to the public authority, the public authority shall 
        either notify the financial institution to release the exempt 
        portion of the funds to the judgment debtor or schedule a 
        contested administrative proceeding under section 518.5511 and 
        notify the judgment debtor of the time and place of the 
        scheduled hearing. 
           Subd. 5.  [DUTIES OF PUBLIC AUTHORITY IF HEARING IS 
        REQUESTED.] Within seven days of the receipt of a request for 
        hearing or a claim of exemption to which the public authority 
        does not consent, the public authority shall schedule a 
        contested administrative proceeding under section 518.5511.  The 
        hearing must be scheduled to occur within five business days.  
        The public authority shall send written notice of the hearing 
        date, time, and place to the judgment debtor by first class 
        mail.  The hearing may be conducted by telephone, audiovisual 
        means or other electronic means, at the discretion of the 
        administrative law judge.  If the hearing is to be conducted by 
        telephone, audiovisual means, or other electronic means, the 
        public authority shall provide reasonable assistance to the 
        judgment debtor to facilitate the submission of all necessary 
        documentary evidence to the administrative law judge, including 
        access to the public authority's facsimile transmission machine. 
           Subd. 6.  [ISSUES RELEVANT AT HEARING.] At any hearing 
        requested by the judgment debtor under this chapter, the only 
        issues to be determined are whether: 
           (1) the public authority complied with the process required 
        by this chapter; 
           (2) the amount stated in the notice of support judgment 
        levy is owed by the judgment debtor; 
           (3) the amount stated in the notice of support judgment 
        levy is correct; or 
           (4) any of the funds levied upon are exempt. 
           Subd. 7.  [NOTICE OF ORDER.] Within one business day of 
        receipt of the order of the administrative law judge, the public 
        authority shall send a copy of the order to the judgment debtor 
        at the judgment debtor's last known address and to the financial 
        institution. 
           Subd. 8.  [RELEASE OF FUNDS.] At any time during the 
        procedure specified in this section, the judgment debtor or the 
        public authority may direct the financial institution to release 
        the funds in question to the other party.  Upon receipt of a 
        release, the financial institution shall release the funds as 
        directed. 
           Subd. 9.  [SUBSEQUENT PROCEEDINGS; BAD FAITH CLAIM.] If in 
        subsequent proceedings brought by the judgment debtor or the 
        public authority, the claim of exemption is not upheld, and the 
        office of administrative hearings finds that it was asserted in 
        bad faith, the public authority shall be awarded actual damages, 
        costs, and reasonable attorney fees resulting from the 
        additional proceedings, and an amount not to exceed $100.  The 
        underlying judgment must be modified to reflect assessment of 
        damages, costs, and attorney fees.  However, if the party in 
        whose favor a penalty assessment is made is not actually 
        indebted to the party's attorney for fees, the attorney's fee 
        award shall be made directly to the attorney and if not paid, an 
        appropriate judgment in favor of the attorney shall be entered.  
        Upon motion of any party in interest, on notice, the office of 
        administrative hearings shall determine the validity of any 
        claim of exemption, and may make any order necessary to protect 
        the rights of those interested.  No financial institution is 
        liable for damages for complying with this section.  The 
        financial institution may rely on the date of mailing or 
        delivery of a notice to it in computing any time periods in this 
        section. 
           Subd. 10.  [FORMS.] The commissioner of human services 
        shall develop statutory forms for use as required under this 
        chapter.  In developing these forms, the commissioner shall 
        consult with the attorney general, representatives of financial 
        institutions, and legal services.  The commissioner shall report 
        back to the legislature by February 1, 1998, with recommended 
        forms to be included in this chapter. 
           Sec. 90.  [CHILD SUPPORT ENFORCEMENT PROGRAM; SERVICES 
        DELIVERY STUDY.] 
           The commissioner of human services, in consultation with 
        the commissioner's advisory committee, shall conduct a study of 
        the overall state child support enforcement delivery system and 
        shall recommend to the legislature a program design that will 
        best meet the following goals: 
           (1) comply with all state and federal laws and regulations; 
           (2) deliver child support and paternity services in a 
        timely manner; 
           (3) meet federal performance criteria; 
           (4) provide respectful and efficient service to custodial 
        and noncustodial parents; 
           (5) make efficient use of public money funding the program; 
        and 
           (6) provide a consistent level of services throughout the 
        state. 
           The study may make specific recommendations regarding 
        staffing, training, program administration, customer access to 
        services, use of technology, and other features of a successful 
        child support program.  The commissioner may contract with a 
        private vendor to complete the study.  The commissioner shall 
        provide the study and recommendations to the legislature by July 
        1, 1998. 
           Sec. 91.  [AGENCY CONSULTATION ON SUSPENDING RECREATIONAL 
        LICENSES.] 
           The commissioner shall consult with other state agencies to 
        obtain recommendations for establishing procedures to meet 
        federal requirements to suspend recreational licenses of child 
        support obligors who fail to pay child support.  The procedures 
        must impose the fewest restrictions on recreational licenses 
        consistent with federal law.  No procedure may be implemented 
        until approved by the legislature and enacted into law. 
           Sec. 92.  [INSTRUCTION TO REVISOR.] 
           The revisor shall delete the references to sections 518.611 
        and 518.613 and insert a reference to section 518.6111 wherever 
        they occur in Minnesota Statutes and Minnesota Rules. 
           Sec. 93.  [REPEALER.] 
           (a) Minnesota Statutes 1996, sections 518C.9011; and 
        609.375, subdivisions 3, 4, and 6, are repealed. 
           (b) Minnesota Statutes 1996, section 256.74, subdivisions 5 
        and 7, are repealed March 31, 1998. 
           (c) Minnesota Statutes 1996, sections 256.979, subdivision 
        9; 518.5511, subdivisions 5, 6, 7, 8, and 9; 518.611; 518.613; 
        and 518.645, are repealed effective July 1, 1997.  
           Sec. 94.  [EFFECTIVE DATES.] 
           (a) Section 1 is effective the day following final 
        enactment.  
           (b) Section 3 is effective July 1, 1998. 
           (c) Sections 72 to 83 are effective July 1, 1998. 
           (d) Section 75 applies only to judgments docketed on or 
        after July 1, 1998. 
           (e) Sections 85 to 89 are effective July 1, 1998. 
                                   ARTICLE 7
                      CONTINUING CARE FOR DISABLED PERSONS
           Section 1.  Minnesota Statutes 1996, section 62E.14, is 
        amended by adding a subdivision to read: 
           Subd. 4e.  [WAIVER OF PREEXISTING CONDITIONS; PERSONS 
        COVERED BY PUBLICLY FUNDED HEALTH PROGRAMS.] A person may enroll 
        in the comprehensive plan with a waiver of the preexisting 
        condition limitation in subdivision 3, provided that:  
           (1) the person was formerly enrolled in the medical 
        assistance, general assistance medical care, or MinnesotaCare 
        program; 
           (2) the person is a Minnesota resident; and 
           (3) the person applies within 90 days of termination from 
        medical assistance, general assistance medical care, or 
        MinnesotaCare program. 
           Sec. 2.  Minnesota Statutes 1996, section 245.652, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE.] The regional treatment centers 
        shall provide services designed to end a person's reliance on 
        chemical use or a person's chemical abuse and increase effective 
        and chemical-free functioning.  Clinically effective programs 
        must be provided in accordance with section 246.64.  Services 
        may be offered on the regional center campus or at sites 
        elsewhere in the catchment area served by the regional treatment 
        center. 
           Sec. 3.  Minnesota Statutes 1996, section 245.652, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SERVICES OFFERED.] Services provided must may 
        include, but are not limited to, the following: 
           (1) primary and extended residential care, including 
        residential treatment programs of varied duration intended to 
        deal with a person's chemical dependency or chemical abuse 
        problems; 
           (2) follow-up care to persons discharged from regional 
        treatment center programs or other chemical dependency programs; 
           (3) outpatient treatment programs; and 
           (4) other treatment services, as appropriate and as 
        provided under contract or shared service agreements. 
           Sec. 4.  Minnesota Statutes 1996, section 245A.11, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ADULT FOSTER CARE LICENSE CAPACITY.] An adult 
        foster care license holder may have a maximum license capacity 
        of five if all persons in care are age 60 or over and do not 
        have a serious and persistent mental illness or a developmental 
        disability.  The commissioner may grant variances to this 
        subdivision 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, provided the 
        variance complies with the provisions in section 245A.04, 
        subdivision 9, and approval of the variance is recommended by 
        the county in which the licensed foster care provider is located.
           Sec. 5.  Minnesota Statutes 1996, section 246.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  The commissioner of human services shall act with 
        the advice of the medical policy directional committee on mental 
        health in the appointment and removal of the chief executive 
        officers of the following institutions:  Anoka-Metro Regional 
        Treatment Center, Ah-Gwah-Ching Center, Fergus Falls Regional 
        Treatment Center, St. Peter Regional Treatment Center and 
        Minnesota Security Hospital, Willmar Regional Treatment Center, 
        Faribault Regional Center, Cambridge Regional Human Services 
        Center, Brainerd Regional Human Services Center, and until June 
        30, 1995, Moose Lake Regional Treatment Center, and after June 
        30, 1995, Minnesota Sexual Psychopathic Personality Treatment 
        Center and until June 30, 1998, Faribault Regional Center. 
           Sec. 6.  Minnesota Statutes 1996, section 246.18, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [DISPOSITION OF INTEREST FOR CHEMICAL DEPENDENCY 
        FUNDS.] Beginning July 1, 1991, interest earned on cash balances 
        on deposit with the state treasurer derived from receipts from 
        chemical dependency programs affiliated with state-operated 
        facilities under the commissioner of human services must be 
        deposited in the state treasury and credited to a chemical 
        dependency account under subdivision 2.  Any interest earned is 
        appropriated to the commissioner to operate chemical dependency 
        programs according to subdivision 2. 
           Sec. 7.  Minnesota Statutes 1996, section 252.025, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REGIONAL TREATMENT CENTERS.] State 
        hospitals for persons with mental retardation shall be 
        established and maintained at Faribault until June 30, 1998, 
        Cambridge and Brainerd, and notwithstanding any provision to the 
        contrary they shall be respectively known as the Faribault 
        regional center, the Cambridge regional human services center, 
        and the Brainerd regional human services center.  Each of the 
        foregoing state hospitals shall also be known by the name of 
        regional center at the discretion of the commissioner of human 
        services.  The terms "human services" or "treatment" may be 
        included in the designation. 
           Sec. 8.  Minnesota Statutes 1996, section 252.025, 
        subdivision 4, is amended to read: 
           Subd. 4.  [STATE-PROVIDED SERVICES.] (a) It is the policy 
        of the state to capitalize and recapitalize the regional 
        treatment centers as necessary to prevent depreciation and 
        obsolescence of physical facilities and to ensure they retain 
        the physical capability to provide residential programs.  
        Consistent with that policy and with section 252.50, and within 
        the limits of appropriations made available for this purpose, 
        the commissioner may establish, by June 30, 1991, the following 
        state-operated, community-based programs for the least 
        vulnerable regional treatment center residents:  at Brainerd 
        regional services center, two residential programs and two day 
        programs; at Cambridge regional treatment center, four 
        residential programs and two day programs; at Faribault regional 
        treatment center, ten residential programs and six day programs; 
        at Fergus Falls regional treatment center, two residential 
        programs and one day program; at Moose Lake regional treatment 
        center, four residential programs and two day programs; and at 
        Willmar regional treatment center, two residential programs and 
        one day program. 
           (b) By January 15, 1991, the commissioner shall report to 
        the legislature a plan to provide continued regional treatment 
        center capacity and state-operated, community-based residential 
        and day programs for persons with developmental disabilities at 
        Brainerd, Cambridge, Faribault, Fergus Falls, St. Peter, and 
        Willmar, as follows: 
           (1) by July 1, 1998, continued regional treatment center 
        capacity to serve 350 persons with developmental disabilities as 
        follows:  at Brainerd, 80 persons; at Cambridge, 12 persons; at 
        Faribault, 110 persons; at Fergus Falls, 60 persons; at St. 
        Peter, 35 persons; at Willmar, 25 persons; and up to 16 crisis 
        beds in the Twin Cities metropolitan area; and 
           (2) by July 1, 1999, continued regional treatment center 
        capacity to serve 254 persons with developmental disabilities as 
        follows:  at Brainerd, 57 persons; at Cambridge, 12 persons; at 
        Faribault, 80 persons; at Fergus Falls, 35 persons; at St. 
        Peter, 30 persons; at Willmar, 12 persons, and up to 16 crisis 
        beds in the Twin Cities metropolitan area.  In addition, the 
        plan shall provide for the capacity to provide residential 
        services to 570 persons with developmental disabilities in 95 
        state-operated, community-based residential programs. 
           The commissioner is subject to a mandamus action under 
        chapter 586 for any failure to comply with the provisions of 
        this subdivision. 
           Sec. 9.  Minnesota Statutes 1996, section 252.025, is 
        amended by adding a subdivision 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 and an array of 
        community support services statewide. 
           Sec. 10.  Minnesota Statutes 1996, 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 and who have been 
        determined by a screening team established under section 
        256B.092 to be at risk of institutionalization.  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 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 to the 
        department of human services.  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.  
           (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. 11.  Minnesota Statutes 1996, section 252.32, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMOUNT OF SUPPORT GRANT; USE.] Support grant 
        amounts shall be determined by the commissioner of human 
        services county social service agency.  Each service and item 
        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. 
           The maximum monthly amount shall be $250 per eligible 
        dependent, or $3,000 per eligible dependent per state fiscal 
        year, within the limits of available funds.  During fiscal year 
        1992 and 1993, the maximum monthly grant awarded to families who 
        are eligible for medical assistance shall be $200, except in 
        cases where extreme hardship is demonstrated.  The commissioner 
        county social service agency may consider the dependent's 
        supplemental security income in determining the amount of the 
        support grant.  A variance The county social service agency may 
        be granted by the commissioner to 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.  The commissioner 
        county social service agency may set aside up to five percent of 
        the appropriation its allocation to fund emergency situations. 
           Effective July 1, 1997, 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. 12.  Minnesota Statutes 1996, section 252.32, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [REPORTS AND REIMBURSEMENT ALLOCATIONS.] (a) The 
        commissioner shall specify requirements for quarterly fiscal and 
        annual program reports according to section 256.01, subdivision 
        2, paragraph (17).  Program reports shall include data which 
        will enable the commissioner to evaluate program effectiveness 
        and to audit compliance.  The commissioner shall reimburse 
        county costs on a quarterly basis. 
           (b) Beginning January 1, 1998, the commissioner shall 
        allocate state funds made available under this section to county 
        social service agencies on a calendar year basis.  The 
        commissioner shall allocate to each county first in amounts 
        equal to each county's guaranteed floor as described in clause 
        (1), and second, any remaining funds, after the allocation of 
        funds to the newly participating counties as provided for in 
        clause (3), shall be allocated in proportion to each county's 
        total number of families receiving a grant on July 1 of the most 
        recent calendar year.  
           (1) Each county's guaranteed floor shall be calculated as 
        follows:  
           (i) 95 percent of the county's allocation received in the 
        preceding calendar year.  For the calendar year 1998 allocation, 
        the preceding calendar year shall be considered to be double the 
        six-month allocation as provided in clause (2); 
           (ii) when the amount of funds available for allocation is 
        less than the amount available in the preceding year, each 
        county's previous year allocation shall be reduced in proportion 
        to the reduction in statewide funding, for the purpose of 
        establishing the guaranteed floor.  
           (2) For the period July 1, 1997, to December 31, 1997, the 
        commissioner shall allocate to each county an amount equal to 
        the actual, state approved grants issued to the families for the 
        month of January 1997, multiplied by six.  This six-month 
        allocation shall be combined with the calendar year 1998 
        allocation and be administered as an 18-month allocation.  
           (3) At the commissioner's discretion, funds may be 
        allocated to any nonparticipating county that requests an 
        allocation under this section.  Allocations to newly 
        participating counties are dependent upon the availability of 
        funds, as determined by the actual expenditure amount of the 
        participating counties for the most recently completed calendar 
        year.  
           (4) The commissioner shall regularly review the use of 
        family support fund allocations by county.  The commissioner may 
        reallocate unexpended or unencumbered money at any time to those 
        counties that have a demonstrated need for additional funding.  
           (c) County allocations under this section will be adjusted 
        for transfers that occur according to section 256.476 or when 
        the county of financial responsibility changes according to 
        chapter 256G for eligible recipients. 
           Sec. 13.  Minnesota Statutes 1996, 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; 
           (2) determine the eligibility of all persons proposed for 
        program participation; 
           (3) recommend for approval all approve a plan for items and 
        services to be reimbursed and inform families of 
        the commissioner's 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. 14.  Minnesota Statutes 1996, section 252.32, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMPLIANCE.] If a county board or grantee does 
        not comply with this section and the rules adopted by the 
        commissioner of human services, the commissioner may recover, 
        suspend, or withhold payments. 
           Sec. 15.  Minnesota Statutes 1996, section 254.04, is 
        amended to read: 
           254.04 [TREATMENT OF CHEMICALLY DEPENDENT PERSONS.] 
           The commissioner of human services is hereby authorized to 
        continue the treatment of chemically dependent persons at 
        Ah-Gwah-Ching and Moose Lake area programs as well as at the 
        regional treatment centers located at Anoka, Brainerd, Fergus 
        Falls, Moose Lake, St. Peter, and Willmar as specified in 
        section 245.652.  During the year ending June 30, 1994, the 
        commissioner shall relocate, in the catchment area served by the 
        Moose Lake regional treatment center, two state-operated 
        off-campus programs designed to serve patients who are relocated 
        from the Moose Lake regional treatment center.  One program 
        shall be a 35-bed program for women who are chemically 
        dependent; the other shall be a 25-bed program for men who are 
        chemically dependent.  The facility space housing the Liberalis 
        chemical dependency program (building C-35) and the men's 
        chemical dependency program (4th floor main) may not be vacated 
        until suitable off-campus space for the women's chemical 
        dependency program of 35 beds and the men's chemical dependency 
        program of 25 beds is located and clients and staff are 
        relocated. 
           Sec. 16.  Minnesota Statutes 1996, section 254B.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESERVE ACCOUNT.] The commissioner shall 
        allocate money from the reserve account to counties that, during 
        the current fiscal year, have met or exceeded the base level of 
        expenditures for eligible chemical dependency services from 
        local money.  The commissioner shall establish the base level 
        for fiscal year 1988 as the amount of local money used for 
        eligible services in calendar year 1986.  In later years, the 
        base level must be increased in the same proportion as state 
        appropriations to implement Laws 1986, chapter 394, sections 8 
        to 20, are increased.  The base level must be decreased if the 
        fund balance from which allocations are made under section 
        254B.02, subdivision 1, is decreased in later years.  The local 
        match rate for the reserve account is the same rate as applied 
        to the initial allocation.  Reserve account payments must not be 
        included when calculating the county adjustments made according 
        to subdivision 2.  For counties providing medical assistance or 
        general assistance medical care through managed care plans on 
        January 1, 1996, the base year is fiscal year 1995.  For 
        counties beginning provision of managed care after January 1, 
        1996, the base year is the most recent fiscal year before 
        enrollment in managed care begins.  For counties providing 
        managed care, the base level will be increased or decreased in 
        proportion to changes in the fund balance from which allocations 
        are made under subdivision 2, but will be additionally increased 
        or decreased in proportion to the change in county adjusted 
        population made in subdivision 1, paragraphs (b) and (c). 
           Sec. 17.  Minnesota Statutes 1996, section 254B.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LOCAL AGENCY DUTIES.] (a) Every local 
        agency shall provide chemical dependency services to persons 
        residing within its jurisdiction who meet criteria established 
        by the commissioner for placement in a chemical dependency 
        residential or nonresidential treatment service.  Chemical 
        dependency money must be administered by the local agencies 
        according to law and rules adopted by the commissioner under 
        sections 14.001 to 14.69. 
           (b) In order to contain costs, the county board shall, with 
        the approval of the commissioner of human services, select 
        eligible vendors of chemical dependency services who can provide 
        economical and appropriate treatment.  Unless the local agency 
        is a social services department directly administered by a 
        county or human services board, the local agency shall not be an 
        eligible vendor under section 254B.05.  The commissioner may 
        approve proposals from county boards to provide services in an 
        economical manner or to control utilization, with safeguards to 
        ensure that necessary services are provided.  If a county 
        implements a demonstration or experimental medical services 
        funding plan, the commissioner shall transfer the money as 
        appropriate.  If a county selects a vendor located in another 
        state, the county shall ensure that the vendor is in compliance 
        with the rules governing licensure of programs located in the 
        state. 
           (c) For the biennium ending June 30, 1999, the rate for 
        vendors may not increase more than three percent above the rate 
        approved on January 1, 1997.  
           (c) (d) A culturally specific vendor that provides 
        assessments under a variance under Minnesota Rules, part 
        9530.6610, shall be allowed to provide assessment services to 
        persons not covered by the variance. 
           Sec. 18.  [256B.095] [THREE-YEAR QUALITY ASSURANCE PILOT 
        PROJECT ESTABLISHED.] 
           Effective July 1, 1998, an alternative quality assurance 
        licensing system pilot project 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 pilot project or may continue regulation of these 
        programs under the licensing system operated by the 
        commissioner.  The pilot project expires on June 30, 2001. 
           Sec. 19.  [256B.0951] [QUALITY ASSURANCE COMMISSION.] 
           Subdivision 1.  [MEMBERSHIP.] The region 10 quality 
        assurance commission is established.  The commission consists of 
        at least 13 but not more than 20 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; and at least three but not more 
        than five members representing counties.  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, 2001. 
           Subd. 2.  [AUTHORITY TO HIRE STAFF.] The commission may 
        hire staff to perform the duties assigned in this section.  
           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. 
           Subd. 4.  [COMMISSION'S AUTHORITY TO RECOMMEND VARIANCES OF 
        LICENSING STANDARDS.] The commission may recommend to the 
        commissioners of human services and health variances from the 
        standards governing licensure of programs for persons with 
        developmental disabilities in order to improve the quality of 
        services by implementing an alternative developmental 
        disabilities licensing system if the commission determines that 
        the alternative licensing system does not affect the health or 
        safety of persons being served by the licensed program nor 
        compromise the qualifications of staff to provide services. 
           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 system pilot 
        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 
        referenced in this subdivision. 
           Subd. 6.  [PROGRESS REPORT.] The commission shall submit a 
        progress report to the legislature on pilot project development 
        by January 15, 1998.  The report shall include recommendations 
        on any legislative changes necessary to improve cooperation 
        between the commission and the commissioners of human services 
        and health. 
           Sec. 20.  [256B.0952] [COUNTY DUTIES; QUALITY ASSURANCE 
        TEAMS.] 
           Subdivision 1.  [NOTIFICATION.] By January 15, 1998, each 
        affected county shall notify the commission and the 
        commissioners of human services and health as to whether it 
        chooses to implement on July 1, 1998, the alternative licensing 
        system for the pilot project.  A county that does not implement 
        the alternative licensing system on July 1, 1998, may give 
        notice to the commission and the commissioners by January 15, 
        1999, or January 15, 2000, that it will implement the 
        alternative licensing system on the following July 1.  A county 
        that implements the alternative licensing system commits to 
        participate until June 30, 2001.  
           Subd. 2.  [APPOINTMENT OF REVIEW COUNCIL; DUTIES OF 
        COUNCIL.] A county or group of counties that chooses to 
        participate in the alternative licensing system shall appoint a 
        quality assurance review council comprised of advocates; 
        consumers, families, and their legal representatives; providers; 
        and county staff.  The council shall: 
           (1) review summary reports from quality assurance team 
        reviews and make recommendations to counties regarding program 
        licensure; 
           (2) make recommendations to the commission regarding the 
        alternative licensing system and quality assurance process; and 
           (3) resolve complaints between the quality assurance teams, 
        counties, providers, and consumers, families, and their legal 
        representatives. 
           Subd. 3.  [NOTICE TO COMMISSIONERS.] The county, based on 
        reports from quality assurance managers and recommendations from 
        the quality assurance review council regarding the findings of 
        quality assurance teams, shall notify the commissioners of human 
        services and health regarding whether facilities, programs, or 
        services have met the outcome standards for licensure and are 
        eligible for payment. 
           Subd. 4.  [APPOINTMENT OF QUALITY ASSURANCE MANAGER.] (a) A 
        county or group of counties that chooses to participate in the 
        alternative licensing system shall designate a quality assurance 
        manager and shall establish quality assurance teams in 
        accordance with subdivision 5.  The manager shall recruit, 
        train, and assign duties to the quality assurance team members.  
        In assigning team members to conduct the quality assurance 
        process at a facility, program, or service, the manager shall 
        take into account the size of the service provider, the number 
        of services to be reviewed, the skills necessary for team 
        members to complete the process, and other relevant factors.  
        The manager shall ensure that no team member has a financial, 
        personal, or family relationship with the facility, program, or 
        service being reviewed or with any clients of the facility, 
        program, or service. 
           (b) Quality assurance teams shall report the findings of 
        their quality assurance reviews to the quality assurance manager.
        The quality assurance manager shall provide the report from the 
        quality assurance team to the county and commissioners of human 
        services and health and a summary of the report to the quality 
        assurance review council.  
           Subd. 5.  [QUALITY ASSURANCE TEAMS.] Quality assurance 
        teams shall be comprised of county staff; providers; consumers, 
        families, and their legal representatives; members of advocacy 
        organizations; and other involved community members.  Team 
        members must satisfactorily complete the training program 
        approved by the commission and must demonstrate 
        performance-based competency.  Team members are not considered 
        to be county employees for purposes of workers' compensation, 
        unemployment compensation, or state retirement laws solely on 
        the basis of participation on a quality assurance team.  The 
        county may pay a per diem to team members who do not receive a 
        salary or wages from an employer for time spent on alternative 
        quality assurance process matters.  All team members may be 
        reimbursed for expenses related to their participation in the 
        alternative process. 
           Subd. 6.  [LICENSING FUNCTIONS.] Participating counties 
        shall perform licensing functions and activities as delegated by 
        the commissioner of human services in accordance with section 
        245A.16. 
           Sec. 21.  [256B.0953] [QUALITY ASSURANCE PROCESS.] 
           Subdivision 1.  [PROCESS COMPONENTS.] (a) The quality 
        assurance licensing process consists of an evaluation by a 
        quality assurance team of the facility, program, or service 
        according to outcome-based measurements.  The process must 
        include an evaluation of a random sample of program consumers.  
        The sample must be representative of each service provided.  The 
        sample size must be at least five percent of consumers but not 
        less than three consumers.  
           (b) All consumers must be given the opportunity to be 
        included in the quality assurance process in addition to those 
        chosen for the random sample. 
           Subd. 2.  [LICENSURE PERIODS.] (a) In order to be licensed 
        under the alternative quality assurance process, a facility, 
        program, or service must satisfy the health and safety outcomes 
        approved for the pilot project. 
           (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. 
           Subd. 3.  [APPEALS PROCESS.] A facility, program, or 
        service may contest a licensing decision of the quality 
        assurance team as permitted under chapter 245A. 
           Sec. 22.  [256B.0954] [CERTAIN PERSONS DEFINED AS MANDATED 
        REPORTERS.] 
           Members of the quality assurance commission established 
        under section 256B.0951, members of quality assurance review 
        councils established under section 256B.0952, quality assurance 
        managers appointed under section 256B.0952, and members of 
        quality assurance teams established under section 256B.0952 are 
        mandated reporters as that term is defined in sections 626.556, 
        subdivision 3, and 626.5572, subdivision 16. 
           Sec. 23.  [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 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 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 
        licensing system.  The role of such random inspections shall be 
        to verify that the alternative 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. 
           (d) The commissioner and the commission shall establish an 
        ongoing evaluation process for the alternative licensing system. 
           (e) The commissioner shall contract with an independent 
        entity to conduct a financial review of the alternative 
        licensing system, including an evaluation of possible budgetary 
        savings within the department of human services and the 
        department of health as a result of implementation of the 
        alternative quality assurance licensing system.  This review 
        must be completed by December 15, 2000.  
           (f) The commissioner and the commission shall submit a 
        report to the legislature by January 15, 2001, on the results of 
        the evaluation process of the alternative licensing system, a 
        summary of the results of the independent financial review, and 
        a recommendation on whether the pilot project should be extended 
        beyond June 30, 2001. 
           Sec. 24.  Minnesota Statutes 1996, section 256B.49, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STUDY; WAIVER APPLICATION.] The 
        commissioner shall authorize a study to assess the need for home 
        and community-based waivers for chronically ill children who 
        have been and will continue to be hospitalized without a waiver, 
        and for disabled individuals under the age of 65 who are likely 
        to reside in an acute care or nursing home facility in the 
        absence of a waiver.  If a need for these waivers can be 
        demonstrated, the commissioner shall apply for federal waivers 
        necessary to secure, to the extent allowed by law, federal 
        participation under United States Code, title 42, sections 
        1396-1396p, as amended through December 31, 1982, for the 
        provision of home and community-based services to chronically 
        ill children who, in the absence of such a waiver, would remain 
        in an acute care setting, and to disabled individuals under the 
        age of 65 who, in the absence of a waiver, would reside in an 
        acute care or nursing home setting.  If the need is 
        demonstrated, the commissioner shall request a waiver under 
        United States Code, title 42, sections 1396-1396p, to allow 
        medicaid eligibility for blind or disabled children with 
        ineligible parents where income deemed from the parents would 
        cause the applicant to be ineligible for supplemental security 
        income if the family shared a household and to furnish necessary 
        services in the home or community to disabled individuals under 
        the age of 65 who would be eligible for medicaid if 
        institutionalized in an acute care or nursing home setting. 
        These waivers are requested to furnish necessary services in the 
        home and community setting to children or disabled adults under 
        age 65 who are medicaid eligible when institutionalized in an 
        acute care or nursing home setting.  The commissioner shall 
        assure that the cost of home and community-based care will not 
        be more than the cost of care if the eligible child or disabled 
        adult under age 65 were to remain institutionalized.  The 
        average monthly limit for the cost of home and community-based 
        services to a community alternative care waiver client, 
        determined on a 12-month basis, shall not exceed the statewide 
        average medical assistance adjusted base year operating cost for 
        nursing and accommodation services under sections 256.9685 to 
        256.969 for the diagnostic category to which the waiver client 
        would be assigned except the admission and outlier rates shall 
        be converted to an overall per diem.  The average monthly limit 
        for the cost of services to a traumatic brain injury 
        neurobehavioral hospital waiver client, determined on a 12-month 
        basis, shall not exceed the statewide average medical assistance 
        adjusted base-year operating cost for nursing and accommodation 
        services of neurobehavioral rehabilitation programs in Medicare 
        designated long-term hospitals under sections 256.9685 to 
        256.969.  The following costs must be included in determining 
        the total average monthly costs for a waiver client:  
           (1) cost of all waivered services; and 
           (2) cost of skilled nursing, private duty nursing, home 
        health aide, and personal care services reimbursable by medical 
        assistance.  
           The commissioner of human services shall seek federal 
        waivers as necessary to implement the average monthly limit.  
        The commissioner shall seek to amend the federal waivers 
        obtained under this section to apply criteria to protect against 
        spousal impoverishment as authorized under United States Code, 
        title 42, section 1396r-5, and as implemented in sections 
        256B.0575, 256B.058, and 256B.059, except that the amendment 
        shall seek to add to the personal needs allowance permitted in 
        section 256B.0575, an amount equivalent to the group residential 
        housing rate as set by section 256I.03, subdivision 5. 
           Sec. 25.  Laws 1995, chapter 207, article 8, section 41, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROGRAM DESIGN AND IMPLEMENTATION.] (a) The 
        pilot projects shall be established to design, plan, and improve 
        the mental health service delivery system for adults with 
        serious and persistent mental illness that would: 
           (1) provide an expanded array of services from which 
        clients can choose services appropriate to their needs; 
           (2) be based on purchasing strategies that improve access 
        and coordinate services without cost shifting; 
           (3) incorporate existing state facilities and resources 
        into the community mental health infrastructure through creative 
        partnerships with local vendors; and 
           (4) utilize existing categorical funding streams and 
        reimbursement sources in combined and creative ways, except 
        appropriations to regional treatment centers and all funds that 
        are attributable to the operation of state-operated services are 
        excluded unless appropriated specifically by the legislature for 
        a purpose consistent with this section. 
           (b) All projects funded by January 1, 1997, must complete 
        their the planning phase and be operational by June 30, 1997; 
        all projects funded by January 1, 1998, must be operational by 
        June 30, 1998.  
           Sec. 26.  [NAMES REQUIRED ON GRAVES.] 
           Unless the individual's family indicates otherwise to the 
        appropriate authority, the commissioner of human services with 
        assistance of the communities in which regional treatment 
        centers are located and in consultation with the state council 
        on disability shall replace numbers with the names of 
        individuals whose graves are located at regional treatment 
        centers operated by the commissioner or formerly operated by the 
        commissioner.  The commissioner and the state council on 
        disability shall develop a plan to accomplish this 
        systematically over a five-year period.  The individual names 
        may be placed on a central marker or memorial for a designated 
        cemetery.  
           Sec. 27.  [WAIVER AMENDMENT.] 
           By July 15, 1997, the commissioner of human services shall 
        submit proposed amendments to the Health Care Financing 
        Administration for changes in the home and community-based 
        waiver for persons with mental retardation or a related 
        condition that maximize the number of persons served within the 
        limits of appropriations and divert persons from institutional 
        placement.  The commissioner shall monitor county utilization of 
        allocated resources and, as appropriate, reassign resources not 
        utilized.  Priority consideration for the reassignment of 
        resources shall be given to counties who enter into written 
        agreements with other counties to jointly plan, request 
        resources, and develop services for persons with mental 
        retardation or a related condition who are screened and waiting 
        for waivered services.  In addition to the priorities listed in 
        Minnesota Rules, part 9525.1880, the commissioner shall also 
        give priority consideration to persons whose living situations 
        are unstable due to the age or incapacity of the primary 
        caregiver.  The commissioner shall report to the chairs of the 
        senate health and family security budget division and the house 
        health and human services finance division by March 1, 1998, on 
        the results of the waiver amendment, the authorization and 
        utilization of waivered services for persons with mental 
        retardation or a related condition, including crisis respite 
        services, plans to increase the number of counties working 
        together, additional persons served by the reassignment of 
        resources, and options which would allow an increased number of 
        persons to be served within the existing appropriation. 
           Sec. 28.  [REQUEST FOR WAIVER.] 
           By January 1, 1998, the commissioner of human services or 
        health shall request a waiver from the federal Department of 
        Health and Human Services to permit the use of the alternative 
        quality assurance system to license and certify intermediate 
        care facilities for persons with mental retardation. 
           Sec. 29.  [REPEALER.] 
           Minnesota Statutes 1996, sections 252.32, subdivision 4; 
        and 256B.501, subdivision 5c, are repealed. 
           Sec. 30.  [EFFECTIVE DATE.] 
           Sections 2, 3, 6, 9, 15, and 27 are effective the day 
        following final enactment. 
                                   ARTICLE 8
              DEMONSTRATION PROJECT FOR PERSONS WITH DISABILITIES
           Section 1.  [256B.77] [COORDINATED SERVICE DELIVERY SYSTEM 
        FOR PEOPLE WITH DISABILITIES.] 
           Subdivision 1.  [DEMONSTRATION PROJECT FOR PEOPLE WITH 
        DISABILITIES.] (a) The commissioner of human services, in 
        cooperation with county authorities, shall develop and implement 
        a demonstration project to create a coordinated service delivery 
        system in which the full medical assistance benefit set for 
        disabled persons eligible for medical assistance is provided and 
        funded on a capitated basis.  The demonstration period shall be 
        a minimum of three years. 
           (b) Each demonstration site shall, under county authority, 
        establish a local group to assist the commissioner in planning, 
        designing, implementing, and evaluating the coordinated service 
        delivery system in their area.  This local group shall include 
        county agencies, providers, consumers, family members, 
        advocates, tribal governments, a local representative of labor, 
        and advocacy organizations, and may include health plan 
        companies.  Consumers, families, and consumer representatives 
        must be involved in the planning, implementation, and evaluation 
        processes for the demonstration project. 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
        the following terms have the meanings given: 
           (a) "Acute care" means hospital, physician, and other 
        health and dental services covered in the medical assistance 
        benefit set that are not specified in the intergovernmental 
        contract or service delivery contract as continuing care 
        services. 
           (b) "Additional services" means services developed and 
        provided through the county administrative entity or service 
        delivery organization, which are in addition to the medical 
        assistance benefit set. 
           (c) "Advocate" means an individual who: 
           (1) has been authorized by the enrollee or the enrollee's 
        legal representative to help the enrollee understand information 
        presented and to speak on the enrollee's behalf, based on 
        directions and decisions by the enrollee or the enrollee's legal 
        representative; and 
           (2) represents only the enrollee and the enrollee's legal 
        representative. 
           (d) "Advocacy organization" means an organization whose 
        primary purpose is to advocate for the needs of persons with 
        disabilities. 
           (e) "Alternative services" means services developed and 
        provided through the county administrative entity or service 
        delivery organization that are not part of the medical 
        assistance benefit set. 
           (f) "Commissioner" means the commissioner of human services.
           (g) "Continuing care" means any services, including 
        long-term support services, covered in the medical assistance 
        benefit set that are not specified in the intergovernmental 
        contract or service delivery contract as acute care. 
           (h) "County administrative entity" means the county 
        administrative structure defined and designated by the county 
        authority to implement the demonstration project under the 
        direction of the county authority. 
           (i) "County authority" means the board of county 
        commissioners or a single entity representing multiple boards of 
        county commissioners. 
           (j) "Demonstration period" means the period of time during 
        which county administrative entities or service delivery 
        organizations will provide services to enrollees. 
           (k) "Demonstration site" means the geographic area in which 
        eligible individuals may be included in the demonstration 
        project. 
           (l) "Department" means the department of human services. 
           (m) "Emergency" means a condition that if not immediately 
        treated could cause a person serious physical or mental 
        disability, continuation of severe pain, or death.  Labor and 
        delivery is an emergency if it meets this definition. 
           (n) "Enrollee" means an eligible individual who is enrolled 
        in the demonstration project. 
           (o) "Informed choice" means a voluntary decision made by 
        the enrollee or the enrollee's legal representative, after 
        becoming familiar with the alternatives, and having been 
        provided sufficient relevant written and oral information at an 
        appropriate comprehension level and in a manner consistent with 
        the enrollee's or the enrollee's legal representative's primary 
        mode of communication. 
           (p) "Informed consent" means the written agreement, or an 
        agreement as documented in the record, by a competent enrollee, 
        or an enrollee's legal representative, who: 
           (1) has the capacity to make reasoned decisions based on 
        relevant information; 
           (2) is making decisions voluntarily and without coercion; 
        and 
           (3) has knowledge to make informed choice. 
           (q) "Intergovernmental contract" means the agreement 
        between the commissioner and the county authority. 
           (r) "Legal representative" means an individual who is 
        legally authorized to provide informed consent or make informed 
        choices on a person's behalf.  A legal representative may be one 
        of the following individuals: 
           (1) the parent of a minor who has not been emancipated; 
           (2) a court-appointed guardian or conservator of a person 
        who is 18 years of age or older, in areas where legally 
        authorized to make decisions; 
           (3) a guardian ad litem or special guardian or conservator, 
        in areas where legally authorized to make decisions; 
           (4) legal counsel if so specified by the person; or 
           (5) any other legally authorized individual. 
        The county administrative entity is prohibited from acting as 
        legal representative for any enrollee, as long as the provisions 
        of subdivision 15 are funded. 
           (s) "Life domain areas" include, but are not limited to:  
        home, family, education, employment, social environment, 
        psychological and emotional health, self-care, independence, 
        physical health, need for legal representation and legal needs, 
        financial needs, safety, and cultural identification and 
        spiritual needs. 
           (t) "Medical assistance benefit set" means the services 
        covered under this chapter and accompanying rules which are 
        provided according to the definition of medical necessity in 
        Minnesota Rules, part 9505.0175, subpart 25. 
           (u) "Outcome" means the targeted behavior, action, or 
        status of the enrollee that can be observed and or measured. 
           (v) "Personal support plan" means a document agreed to and 
        signed by the enrollee and the enrollee's legal representative, 
        if any, which describes: 
           (1) the assessed needs and strengths of the enrollee; 
           (2) the outcomes chosen by the enrollee or their legal 
        representative; 
           (3) the amount, type, setting, start date, duration, and 
        frequency of services and supports authorized by the county 
        administrative entity or service delivery organization to 
        achieve the chosen outcomes; 
           (4) a description of needed services and supports that are 
        not the responsibility of the county administrative entity or 
        service delivery organization and plans for addressing those 
        needs; 
           (5) plans for referring to and coordinating between all 
        agencies or individuals providing needed services and supports; 
           (6) the use of regulated treatment; and 
           (7) the transition of a child to the adult service system. 
           (w) "Regulated treatment" means any behaviorally altering 
        medication of any classification or any aversive or deprivation 
        procedure as defined in rules or statutes applicable to eligible 
        individuals. 
           (x) "Service delivery contract" means the agreement between 
        the commissioner or the county authority and the service 
        delivery organization in those areas in which the county 
        authority has provided written approval. 
           (y) "Service delivery organization" means an entity that is 
        licensed as a health maintenance organization under chapter 62D 
        or a community integrated service network under chapter 62N and 
        is under contract with the commissioner or a county authority to 
        participate in the demonstration project.  If authorized in 
        contract by the commissioner or the county authority, a service 
        delivery organization participating in the demonstration project 
        shall have the duties, responsibilities, and obligations defined 
        under subdivisions 8, 9, 18, and 19. 
           (z) "Urgent situation" means circumstances in which care is 
        needed as soon as possible, usually with 24 hours, to protect 
        the health of an enrollee. 
           Subd. 3.  [ASSURANCES TO THE COMMISSIONER OF HEALTH.] A 
        county authority that elects to participate in a demonstration 
        project for people with disabilities under this section is not 
        required to obtain a certificate of authority under chapter 62D 
        or 62N.  A county authority that elects to participate in a 
        demonstration project for people with disabilities under this 
        section must assure the commissioner of health that the 
        requirements of chapters 62D and 62N are met.  All enforcement 
        and rulemaking powers available under chapters 62D and 62N are 
        granted to the commissioner of health with respect to the county 
        authorities that contract with the commissioner to purchase 
        services in a demonstration project for people with disabilities 
        under this section. 
           Subd. 4.  [FEDERAL WAIVERS.] The commissioner, in 
        consultation with county authorities, shall request any 
        authority from the United States Department of Health and Human 
        Services that is necessary to implement the demonstration 
        project under the medical assistance program; and authority to 
        combine Medicaid and Medicare funding for service delivery to 
        eligible individuals who are also eligible for Medicare, only if 
        this authority does not preclude county authority participation 
        under the waiver.  Implementation of these programs may begin 
        without authority to include medicare funding.  The commissioner 
        may authorize county authorities to begin enrollment of eligible 
        individuals upon federal approval but no earlier than July 1, 
        1998. 
           Subd. 5.  [DEMONSTRATION SITES.] The commissioner shall 
        designate up to two demonstration sites with the approval of the 
        county authority.  Demonstration sites may include one county or 
        a multicounty group.  At least one of the sites shall implement 
        a model specifically addressing the needs of eligible 
        individuals with physical disabilities.  By February 1, 1998, 
        the commissioner and the county authorities shall submit to the 
        chairs of the senate committee on health and family security and 
        the house committee on health and human services a phased 
        enrollment plan to ensure an orderly transition which protects 
        the health and safety of enrollees and ensures continuity of 
        services. 
           Subd. 6.  [RESPONSIBILITIES OF THE COUNTY AUTHORITY.] (a) 
        The commissioner may execute an intergovernmental contract with 
        any county authority that demonstrates the ability to arrange 
        for and coordinate services for enrollees covered under this 
        section according to the terms and conditions specified by the 
        commissioner.  With the written consent of the county authority, 
        the commissioner may issue a request for proposals for service 
        delivery organizations to provide portions of the medical 
        assistance benefit set not contracted for by the county 
        authority.  County authorities that do not contract for the full 
        medical assistance benefit set must ensure coordination with the 
        entities responsible for the remainder of the covered services. 
           (b) No less than 90 days before the intergovernmental 
        contract is executed, the county authority shall submit to the 
        commissioner an initial proposal on how it will address the 
        areas listed in this subdivision and subdivisions 1, 7, 8, 9, 
        12, 18, and 19.  The county authority shall submit to the 
        commissioner annual reports describing its progress in 
        addressing these areas. 
           (c) Each county authority shall develop policies to address 
        conflicts of interest, including public guardianship and 
        representative payee issues. 
           (d) Each county authority shall annually evaluate the 
        effectiveness of the service coordination provided according to 
        subdivision 12 and shall take remedial or corrective action if 
        the service coordination does not fulfill the requirements of 
        that subdivision. 
           Subd. 7.  [ELIGIBILITY AND ENROLLMENT.] The commissioner, 
        in consultation with the county authority, shall develop a 
        process for enrolling eligible individuals in the demonstration 
        project.  A county or counties may limit enrollment in the 
        demonstration project to one or more of the disability 
        populations described in subdivision 7a, paragraph (b).  
        Enrollment into county administrative entities and service 
        delivery organizations shall be conducted according to the terms 
        of the federal waiver.  Enrollment of eligible individuals under 
        the demonstration project may be phased in with approval of the 
        commissioner.  The commissioner shall ensure that eligibility 
        for medical assistance and enrollment for the person are 
        determined by individuals outside of the county administrative 
        entity. 
           Subd. 7a.  [ELIGIBLE INDIVIDUALS.] (a) Persons are eligible 
        for the demonstration project as provided in this subdivision. 
           (b) "Eligible individuals" means those persons living in 
        the demonstration site who are eligible for medical assistance 
        and are disabled based on a disability determination under 
        section 256B.055, subdivisions 7 and 12, or who are eligible for 
        medical assistance and have been diagnosed as having: 
           (1) serious and persistent mental illness as defined in 
        section 245.462, subdivision 20; 
           (2) severe emotional disturbance as defined in section 
        245.487, subdivision 6; or 
           (3) mental retardation or a related condition as defined in 
        section 252.27, subdivision 1a. 
        Other individuals may be included at the option of the county 
        authority based on agreement with the commissioner. 
           (c) Eligible individuals residing on a federally recognized 
        Indian reservation may be excluded from participation in the 
        demonstration project at the discretion of the tribal government 
        based on agreement with the commissioner, in consultation with 
        the county authority. 
           (d) Eligible individuals include individuals in excluded 
        time status, as defined in chapter 256G.  Enrollees in excluded 
        time at the time of enrollment shall remain in excluded time 
        status as long as they live in the demonstration site and shall 
        be eligible for 90 days after placement outside the 
        demonstration site if they move to excluded time status in a 
        county within Minnesota other than their county of financial 
        responsibility. 
           (e) A person who is a sexual psychopathic personality as 
        defined in section 253B.02, subdivision 18a, or a sexually 
        dangerous person as defined in section 253B.02, subdivision 18b, 
        is excluded from enrollment in the demonstration project. 
           Subd. 8.  [RESPONSIBILITIES OF THE COUNTY ADMINISTRATIVE 
        ENTITY.] (a) The county administrative entity shall meet the 
        requirements of this subdivision, unless the county authority or 
        the commissioner, with written approval of the county authority, 
        enters into a service delivery contract with a service delivery 
        organization for any or all of the requirements contained in 
        this subdivision. 
           (b) The county administrative entity shall enroll eligible 
        individuals regardless of health or disability status. 
           (c) The county administrative entity shall provide all 
        enrollees timely access to the medical assistance benefit set.  
        Alternative services and additional services are available to 
        enrollees at the option of the county administrative entity and 
        may be provided if specified in the personal support plan.  
        County authorities are not required to seek prior authorization 
        from the department as required by the laws and rules governing 
        medical assistance. 
           (d) The county administrative entity shall cover necessary 
        services as a result of an emergency without prior 
        authorization, even if the services were rendered outside of the 
        provider network. 
           (e) The county administrative entity shall authorize 
        necessary and appropriate services when needed and requested by 
        the enrollee or the enrollee's legal representative in response 
        to an urgent situation.  Enrollees shall have 24-hour access to 
        urgent care services coordinated by experienced disability 
        providers who have information about enrollees' needs and 
        conditions. 
           (f) The county administrative entity shall accept the 
        capitation payment from the commissioner in return for the 
        provision of services for enrollees. 
           (g) The county administrative entity shall maintain 
        internal grievance and complaint procedures, including an 
        expedited informal complaint process in which the county 
        administrative entity must respond to verbal complaints within 
        ten calendar days, and a formal grievance process, in which the 
        county administrative entity must respond to written complaints 
        within 30 calendar days. 
           (h) The county administrative entity shall provide a 
        certificate of coverage, upon enrollment, to each enrollee and 
        the enrollee's legal representative, if any, which describes the 
        benefits covered by the county administrative entity, any 
        limitations on those benefits, and information about providers 
        and the service delivery network.  This information must also be 
        made available to prospective enrollees.  This certificate must 
        be approved by the commissioner. 
           (i) The county administrative entity shall present evidence 
        of an expedited process to approve exceptions to benefits, 
        provider network restrictions, and other plan limitations under 
        appropriate circumstances. 
           (j) The county administrative entity shall provide 
        enrollees or their legal representatives with written notice of 
        their appeal rights under subdivision 16, and of ombudsman and 
        advocacy programs under subdivisions 13 and 14, at the following 
        times:  upon enrollment, upon submission of a written complaint, 
        when a service is reduced, denied, or terminated, or when 
        renewal of authorization for ongoing service is refused. 
           (k) The county administrative entity shall determine 
        immediate needs, including services, support, and assessments, 
        within 30 calendar days of enrollment, or within a shorter time 
        frame if specified in the intergovernmental contract. 
           (l) The county administrative entity shall assess the need 
        for services of new enrollees within 60 calendar days of 
        enrollment, or within a shorter time frame if specified in the 
        intergovernmental contract, and periodically reassess the need 
        for services for all enrollees. 
           (m) The county administrative entity shall ensure the 
        development of a personal support plan for each person within 60 
        calendar days of enrollment, or within a shorter time frame if 
        specified in the intergovernmental contract, unless otherwise 
        agreed to by the enrollee and the enrollee's legal 
        representative, if any.  Until a personal support plan is 
        developed and agreed to by the enrollee, enrollees must have 
        access to the same amount, type, setting, duration, and 
        frequency of covered services that they had at the time of 
        enrollment unless other covered services are needed.  For an 
        enrollee who is not receiving covered services at the time of 
        enrollment and for enrollees whose personal support plan is 
        being revised, access to the medical assistance benefit set must 
        be assured until a personal support plan is developed or 
        revised.  The personal support plan must be based on choices, 
        preferences, and assessed needs and strengths of the enrollee.  
        The service coordinator shall develop the personal support plan, 
        in consultation with the enrollee or the enrollee's legal 
        representative and other individuals requested by the enrollee.  
        The personal support plan must be updated as needed or as 
        requested by the enrollee.  Enrollees may choose not to have a 
        personal support plan. 
           (n) The county administrative entity shall ensure timely 
        authorization, arrangement, and continuity of needed and covered 
        supports and services. 
           (o) The county administrative entity shall offer service 
        coordination that fulfills the responsibilities under 
        subdivision 12 and is appropriate to the enrollee's needs, 
        choices, and preferences, including a choice of service 
        coordinator. 
           (p) The county administrative entity shall contract with 
        schools and other agencies as appropriate to provide otherwise 
        covered medically necessary medical assistance services as 
        described in an enrollee's individual family support plan, as 
        described in section 120.1701, or individual education plan, as 
        described in chapter 120. 
           (q) The county administrative entity shall develop and 
        implement strategies, based on consultation with affected 
        groups, to respect diversity and ensure culturally competent 
        service delivery in a manner that promotes the physical, social, 
        psychological, and spiritual well-being of enrollees and 
        preserves the dignity of individuals, families, and their 
        communities. 
           (r) When an enrollee changes county authorities, county 
        administrative entities shall ensure coordination with the 
        entity that is assuming responsibility for administering the 
        medical assistance benefit set to ensure continuity of supports 
        and services for the enrollee. 
           (s) The county administrative entity shall comply with 
        additional requirements as specified in the intergovernmental 
        contract.  
           (t) To the extent that alternatives are approved under 
        subdivision 17, county administrative entities must provide for 
        the health and safety of enrollees and protect the rights to 
        privacy and to provide informed consent. 
           Subd. 9.  [CONSUMER CHOICE AND SAFEGUARDS.] (a) The 
        commissioner may require all eligible individuals to obtain 
        services covered under this chapter through county authorities.  
        Enrollees shall be given choices among a range of available 
        providers with expertise in serving persons of their age and 
        with their category of disability.  If the county authority is 
        also a provider of services covered under the demonstration 
        project, other than service coordination, the enrollee shall be 
        given the choice of at least one other provider of that 
        service.  The commissioner shall ensure that all enrollees have 
        continued access to medically necessary covered services. 
           (b) The commissioner must ensure that a set of enrollee 
        safeguards in the categories of access, choice, comprehensive 
        benefits, access to specialist care, disclosure of financial 
        incentives to providers, prohibition of exclusive provider 
        contracting and gag clauses, legal representation, guardianship, 
        representative payee, quality, rights and appeals, privacy, data 
        collection, and confidentiality are in place prior to enrollment 
        of eligible individuals. 
           (c) If multiple service delivery organizations are offered 
        for acute or continuing care within a demonstration site, 
        enrollees shall be given a choice of these organizations.  A 
        choice is required if the county authority operates its own 
        health maintenance organization, community integrated service 
        network, or similar plan.  Enrollees shall be given 
        opportunities to change enrollment in these organizations within 
        12 months following initial enrollment into the demonstration 
        project and shall also be offered an annual open enrollment 
        period, during which they are permitted to change their service 
        delivery organization. 
           (d) Enrollees shall have the option to change their primary 
        care provider once per month. 
           (e) The commissioner may waive the choice of provider 
        requirements in paragraph (a) or the choice of service delivery 
        organization requirements in paragraph (c) if the county 
        authority can demonstrate that, despite reasonable efforts, no 
        other provider of the service or service delivery organization 
        can be made available within the cost and quality requirements 
        of the demonstration project. 
           Subd. 10.  [CAPITATION PAYMENT.] (a) The commissioner shall 
        pay a capitation payment to the county authority and, when 
        applicable under subdivision 6, paragraph (a), to the service 
        delivery organization for each medical assistance eligible 
        enrollee.  The commissioner shall develop capitation payment 
        rates for the initial contract period for each demonstration 
        site in consultation with an independent actuary, to ensure that 
        the cost of services under the demonstration project does not 
        exceed the estimated cost for medical assistance services for 
        the covered population under the fee-for-service system for the 
        demonstration period.  For each year of the demonstration 
        project, the capitation payment rate shall be based on 96 
        percent of the projected per person costs that would otherwise 
        have been paid under medical assistance fee-for-service during 
        each of those years.  Rates shall be adjusted within the limits 
        of the available risk adjustment technology, as mandated by 
        section 62Q.03.  In addition, the commissioner shall implement 
        appropriate risk and savings sharing provisions with county 
        administrative entities and, when applicable under subdivision 
        6, paragraph (a), service delivery organizations within the 
        projected budget limits.  Any savings beyond those allowed for 
        the county authority, county administrative entity, or service 
        delivery organization shall be first used to meet the unmet 
        needs of eligible individuals.  Payments to providers 
        participating in the project are exempt from the requirements of 
        sections 256.966 and 256B.03, subdivision 2. 
           (b) The commissioner shall monitor and evaluate annually 
        the effect of the discount on consumers, the county authority, 
        and providers of disability services.  Findings shall be 
        reported and recommendations made, as appropriate, to ensure 
        that the discount effect does not adversely affect the ability 
        of the county administrative entity or providers of services to 
        provide appropriate services to eligible individuals, and does 
        not result in cost shifting of eligible individuals to the 
        county authority. 
           Subd. 11.  [INTEGRATION OF FUNDING SOURCES.] The county 
        authority may integrate other local, state, and federal funding 
        sources with medical assistance funding.  The commissioner's 
        approval is required for integration of state and federal funds 
        but not for local funds.  During the demonstration project 
        period, county authorities must maintain the level of local 
        funds expended during the previous calendar year for populations 
        covered in the demonstration project.  Excluding the state share 
        of Medicaid payments, state appropriations for state-operated 
        services shall not be integrated unless specifically approved by 
        the legislature.  The commissioner may approve integration of 
        other state and federal funding if the intergovernmental 
        contract includes assurances that the people who would have been 
        served by these funds will receive comparable or better 
        services.  The commissioner may withdraw approval for 
        integration of state and federal funds if the county authority 
        does not comply with these assurances.  If the county authority 
        chooses to integrate funding, it must comply with the reporting 
        requirements of the commissioner, as specified in the 
        intergovernmental contract, to account for federal and state 
        Medicaid expenditures and expenditures of local funds.  The 
        commissioner, upon the request and concurrence of a county 
        authority, may transfer state grant funds that would otherwise 
        be made available to the county authority to provide continuing 
        care for enrollees to the medical assistance account and, within 
        the limits of federal authority and available federal funding, 
        the commissioner shall adjust the capitation based on the amount 
        of this transfer. 
           Subd. 12.  [SERVICE COORDINATION.] (a) For purposes of this 
        section, "service coordinator" means an individual selected by 
        the enrollee or the enrollee's legal representative and 
        authorized by the county administrative entity or service 
        delivery organization to work in partnership with the enrollee 
        to develop, coordinate, and in some instances, provide supports 
        and services identified in the personal support plan.  Service 
        coordinators may only provide services and supports if the 
        enrollee is informed of potential conflicts of interest, is 
        given alternatives, and gives informed consent.  Eligible 
        service coordinators are individuals age 18 or older who meet 
        the qualifications as described in paragraph (b).  Enrollees, 
        their legal representatives, or their advocates are eligible to 
        be service coordinators if they have the capabilities to perform 
        the activities and functions outlined in paragraph (b).  
        Providers licensed under chapter 245A to provide residential 
        services, or providers who are providing residential services 
        covered under the group residential housing program may not act 
        as service coordinator for enrollees for whom they provide 
        residential services.  This does not apply to providers of 
        short-term detoxification services.  Each county administrative 
        entity or service delivery organization may develop further 
        criteria for eligible vendors of service coordination during the 
        demonstration period and shall determine whom it contracts with 
        or employs to provide service coordination.  County 
        administrative entities and service delivery organizations may 
        pay enrollees or their advocates or legal representatives for 
        service coordination activities. 
           (b) The service coordinator shall act as a facilitator, 
        working in partnership with the enrollee to ensure that their 
        needs are identified and addressed.  The level of involvement of 
        the service coordinator shall depend on the needs and desires of 
        the enrollee.  The service coordinator shall have the knowledge, 
        skills, and abilities to, and is responsible for: 
           (1) arranging for an initial assessment, and periodic 
        reassessment as necessary, of supports and services based on the 
        enrollee's strengths, needs, choices, and preferences in life 
        domain areas; 
           (2) developing and updating the personal support plan based 
        on relevant ongoing assessment; 
           (3) arranging for and coordinating the provisions of 
        supports and services, including knowledgeable and skilled 
        specialty services and prevention and early intervention 
        services, within the limitations negotiated with the county 
        administrative entity or service delivery organization; 
           (4) assisting the enrollee and the enrollee's legal 
        representative, if any, to maximize informed choice of and 
        control over services and supports and to exercise the 
        enrollee's rights and advocate on behalf of the enrollee; 
           (5) monitoring the progress toward achieving the enrollee's 
        outcomes in order to evaluate and adjust the timeliness and 
        adequacy of the implementation of the personal support plan; 
           (6) facilitating meetings and effectively collaborating 
        with a variety of agencies and persons, including attending 
        individual family service plan and individual education plan 
        meetings when requested by the enrollee or the enrollee's legal 
        representative; 
           (7) soliciting and analyzing relevant information; 
           (8) communicating effectively with the enrollee and with 
        other individuals participating in the enrollee's plan; 
           (8) educating and communicating effectively with the 
        enrollee about good health care practices and risk to the 
        enrollee's health with certain behaviors; 
           (10) having knowledge of basic enrollee protection 
        requirements, including data privacy; 
           (11) informing, educating, and assisting the enrollee in 
        identifying available service providers and accessing needed 
        resources and services beyond the limitations of the medical 
        assistance benefit set covered services; and 
           (12) providing other services as identified in the person 
        support plan.  
           (c) For the demonstration project, the qualifications and 
        standards for service coordination in this section shall replace 
        comparable existing provisions of existing statutes and rules 
        governing case management for eligible individuals. 
           (d) The provisions of this subdivision apply only to the 
        demonstration sites that begin implementation on July 1, 1998. 
           Subd. 13.  [OMBUDSMAN.] Enrollees shall have access to 
        ombudsman services established in section 256B.031, subdivision 
        6, and advocacy services provided by the ombudsman for mental 
        health and mental retardation established in sections 245.91 to 
        245.97.  The managed care ombudsman and the ombudsman for mental 
        health and mental retardation shall coordinate services provided 
        to avoid duplication of services.  For purposes of the 
        demonstration project, the powers and responsibilities of the 
        office of the ombudsman for mental health and mental 
        retardation, as provided in sections 245.91 to 245.97 are 
        expanded to include all eligible individuals, health plan 
        companies, agencies, and providers participating in the 
        demonstration project.  
           Subd. 14.  [EXTERNAL ADVOCACY.] In addition to ombudsman 
        services, enrollees shall have access to advocacy services on a 
        local or regional basis.  The purpose of external advocacy 
        includes providing individual advocacy services for enrollees 
        who have complaints or grievances with the county administrative 
        entity, service delivery organization, or a service provider; 
        assisting enrollees to understand the service delivery system 
        and select providers and, if applicable, a service delivery 
        organization; and understand and exercise their rights as an 
        enrollee.  External advocacy contractors must demonstrate that 
        they have the expertise to advocate on behalf of all categories 
        of eligible individuals and are independent of the commissioner, 
        county authority, county administrative entity, service delivery 
        organization, or any service provider within the demonstration 
        project.  
           These advocacy services shall be provided through the 
        ombudsman for mental health and mental retardation directly, or 
        under contract with private, nonprofit organizations, with 
        funding provided through the demonstration project.  The funding 
        shall be provided annually to the ombudsman's office based on 
        0.1 percent of the projected per person costs that would 
        otherwise have been paid under medical assistance 
        fee-for-service during those years.  Funding for external 
        advocacy shall be provided for each year of the demonstration 
        period.  This funding is in addition to the capitation payment 
        available under subdivision 10. 
           Subd. 15.  [PUBLIC GUARDIANSHIP ALTERNATIVES.] Each county 
        authority with enrollees under public guardianship shall develop 
        a plan to discharge all those public guardianships and establish 
        appropriate private alternatives during the demonstration period.
           The commissioner shall provide county authorities with 
        funding for public guardianship alternatives during the first 
        year of the demonstration project based on a proposal to 
        establish private alternatives for a specific number of 
        enrollees under public guardianship.  Funding in subsequent 
        years shall be based on the county authority's performance in 
        achieving discharges of public guardianship and establishing 
        appropriate alternatives.  The commissioner may establish fiscal 
        incentives to encourage county activity in this area.  For each 
        year of the demonstration period, an appropriation is available 
        to the commissioner based on 0.2 percent of the projected per 
        person costs that would otherwise have been paid under medical 
        assistance fee-for-service for that year.  This funding is in 
        addition to the capitation payment available under subdivision 
        10. 
           Subd. 16.  [APPEALS.] Enrollees have the appeal rights 
        specified in section 256.045.  Enrollees may request the 
        conciliation process as outlined under section 256.045, 
        subdivision 4a.  If an enrollee appeals in writing to the state 
        agency on or before the latter of the effective day of the 
        proposed action or the tenth day after they have received the 
        decision of the county administrative entity or service delivery 
        organization to reduce, suspend, terminate, or deny continued 
        authorization for ongoing services which the enrollee had been 
        receiving, the county administrative entity or service delivery 
        organization must continue to authorize services at a level 
        equal to the level it previously authorized until the state 
        agency renders its decision. 
           Subd. 17.  [APPROVAL OF ALTERNATIVES.] The commissioner may 
        approve alternatives to administrative rules if the commissioner 
        determines that appropriate alternative measures are in place to 
        protect the health, safety, and rights of enrollees and to 
        assure that services are of sufficient quality to produce the 
        outcomes described in the personal support plans.  Prior 
        approved waivers, if needed by the demonstration project, shall 
        be extended.  The commissioner shall not waive the rights or 
        procedural protections under sections 245.825; 245.91 to 245.97; 
        252.41, subdivision 9; 256B.092, subdivision 10; 626.556; and 
        626.557; or procedures for the monitoring of psychotropic 
        medications.  Prohibited practices as defined in statutes and 
        rules governing service delivery to eligible individuals are 
        applicable to services delivered under this demonstration 
        project. 
           Subd. 18.  [REPORTING.] Each county authority and service 
        delivery organization, and their contracted providers, shall 
        submit information as required by the commissioner in the 
        intergovernmental contract or service delivery contract, 
        including information about complaints, appeals, outcomes, 
        costs, including spending on services, service utilization, 
        identified unmet needs, services provided, rates of out-of-home 
        placement of children, institutionalization, commitments, number 
        of public guardianships discharged and alternatives to public 
        guardianship established, the use of emergency services, and 
        enrollee satisfaction.  This information must be made available 
        to enrollees and the public.  A county authority under an 
        intergovernmental contract and a service delivery organization 
        under a service delivery contract to provide services must 
        provide the most current listing of the providers who are 
        participating in the plan.  This listing must be provided to 
        enrollees and be made available to the public.  The 
        commissioner, county authorities, and service delivery 
        organizations shall also made all contracts and subcontracts 
        related to the demonstration project available to the public. 
           Subd. 19.  [QUALITY MANAGEMENT AND EVALUATION.] County 
        authorities and service delivery organizations participating in 
        this demonstration project shall provide information to the 
        department as specified in the intergovernmental contract or 
        service delivery contract for the purpose of project evaluation. 
        This information may include both process and outcome evaluation 
        measures across areas that shall include enrollee satisfaction, 
        service delivery, service coordination, individual outcomes, and 
        costs.  An independent evaluation of each demonstration site 
        shall be conducted prior to expansion of the demonstration 
        project to other sites. 
           Subd. 20.  [LIMITATION ON REIMBURSEMENT.] The county 
        administrative entity or service delivery organization may limit 
        any reimbursement to providers not employed by or under contract 
        with the county administrative entity or service delivery 
        organization to the medical assistance rates paid by the 
        commissioner of human services to providers for services to 
        recipients not participating in the demonstration project. 
           Subd. 21.  [COUNTY SOCIAL SERVICES OBLIGATIONS.] For 
        services that are outside of the medical assistance benefit set 
        for enrollees in excluded time status, the county of financial 
        responsibility must negotiate the provisions and payment of 
        services with the county of service prior to the provision of 
        services. 
           Subd. 22.  [MINNESOTA COMMITMENT ACT SERVICES.] The county 
        administrative entity or service delivery organization is 
        financially responsible for all services for enrollees covered 
        by the medical assistance benefit set and ordered by the court 
        under the Minnesota Commitment Act, chapter 253B.  The county 
        authority shall seek input from the county administrative entity 
        or service delivery organization in giving the court information 
        about services the enrollee needs and least restrictive 
        alternatives.  The court order for services is deemed to comply 
        with the definition of medical necessity in Minnesota Rules, 
        part 9505.0175.  The financial responsibility of the county 
        administrative entity or service delivery organization for 
        regional treatment center services to an enrollee while 
        committed to the regional treatment center is limited to 45 days 
        following commitment.  Voluntary hospitalization for enrollees 
        at regional treatment centers must be covered by the county 
        administrative entity or service delivery organization if deemed 
        medically necessary by the county administrative entity or 
        service delivery organization.  The regional treatment center 
        shall not accept a voluntary admission of an enrollee without 
        the authorization of the county administrative entity or service 
        delivery organization.  An enrollee will maintain enrollee 
        status while receiving treatment under the Minnesota Commitment 
        Act or voluntary services in a regional treatment center.  For 
        enrollees committed to the regional treatment center longer than 
        45 days, the commissioner may adjust the aggregate capitation 
        payments, as specified in the intergovernmental contract or 
        service delivery contract. 
           Subd. 23.  [STAKEHOLDER COMMITTEE.] The commissioner shall 
        appoint a stakeholder committee to review and provide 
        recommendations on specifications for demonstration projects; 
        intergovernmental contracts; service delivery contracts; 
        alternatives to administrative rules proposed under subdivision 
        17; specific recommendations for legislation required for the 
        implementation of this project, including changes to statutes; 
        waivers of choice granted under subdivision 9, paragraph (e); 
        and other demonstration project policies and procedures as 
        requested by the commissioner.  The stakeholder committee shall 
        include representatives from the following stakeholders:  
        consumers and their family members, advocates, advocacy 
        organizations, service providers, state government, counties, 
        and health plan companies.  This stakeholder committee shall be 
        in operation for the demonstration period.  The county 
        authorities shall continue to meet with state government to 
        develop the intergovernmental partnership. 
           Subd. 24.  [REPORT TO THE LEGISLATURE.] (a) By February 15 
        of each year of the demonstration project, the commissioner 
        shall report to the legislature on the progress of the 
        demonstration project, including enrollee outcomes, enrollee 
        satisfaction, fiscal information, other information as described 
        in subdivision 18, recommendations from the stakeholder 
        committee, and descriptions of any rules or other administrative 
        procedures waived. 
           (b) The commissioner, in consultation with the counties and 
        the stakeholder committee, shall study and define the county 
        government function of service coordination and make 
        recommendations to the legislature in the report due February 
        15, 1998. 
           Subd. 25.  [SEVERABILITY.] If any subdivision of this 
        section is not approved by the United States Department of 
        Health and Human Services, the commissioner, with the approval 
        of the county authority, retains the authority to implement the 
        remaining subdivisions. 
           Subd. 26.  [SOUTHERN MINNESOTA HEALTH INITIATIVE PILOT 
        PROJECT.] When the commissioner contracts under subdivisions 1 
        and 6, paragraph (a), with the joint powers board for the 
        southern Minnesota health initiative (SMHI) to participate in 
        the demonstration project for persons with disabilities under 
        subdivision 5, the commissioner shall also require health plans 
        serving counties participating in the southern Minnesota health 
        initiative under this section to contract with the southern 
        Minnesota health initiative joint powers board to provide 
        covered mental health and chemical dependency services for the 
        nonelderly/nondisabled persons who reside in one of the counties 
        and who are required or elect to participate in the prepaid 
        medical assistance and general assistance medical care 
        programs.  Enrollees may obtain covered mental health and 
        chemical dependency services through the SMHI or through other 
        health plan contractors.  Participation of the 
        nonelderly/nondisabled with the SMHI is voluntary.  The 
        commissioner shall identify a monthly per capita payment amount 
        that health plans are required to pay to the SMHI for all 
        nonelderly/nondisabled recipients who choose the SMHI for their 
        mental health and chemical dependency services. 
                                   ARTICLE 9 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 1996, section 16A.124, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [HEALTH CARE PAYMENTS.] (a) The commissioner of 
        human services must pay or deny a valid vendor obligation for 
        health services under the medical assistance, general assistance 
        medical care, or MinnesotaCare program within 30 days after 
        receipt.  A "valid vendor obligation" means a clean claim 
        submitted directly to the commissioner by an eligible health 
        care provider for health services provided to an eligible 
        recipient.  A "clean claim" means an original paper or 
        electronic claim with correct data elements, prepared in 
        accordance with the commissioner's published specifications for 
        claim preparation, that does not require an attachment or text 
        information to pay or deny the claim.  Adjustment claims, claims 
        with attachments and text information, and claims submitted to 
        the commissioner as the secondary or tertiary payer, that have 
        been prepared in accordance with the commissioner's published 
        specifications, must be adjudicated within 90 days after receipt.
           For purposes of this subdivision, paragraphs (b) and (c) 
        apply.  
           (b) The agency is not required to make an interest penalty 
        payment on claims for which payment has been delayed for 
        purposes of reviewing potentially fraudulent or abusive billing 
        practices, if there is an eventual finding by the agency of 
        fraud or abuse. 
           (c) The agency is not required to make an interest penalty 
        payment of less than $2. 
           Sec. 2.  Minnesota Statutes 1996, section 245.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MISSION; EFFICIENCY.] It is part of the 
        department's mission that within the department's resources the 
        commissioner shall endeavor to: 
           (1) prevent the waste or unnecessary spending of public 
        money; 
           (2) use innovative fiscal and human resource practices to 
        manage the state's resources and operate the department as 
        efficiently as possible, including the authority to consolidate 
        different nonentitlement grant programs, having similar 
        functions or serving similar populations, as may be determined 
        by the commissioner, while protecting the original purposes of 
        the programs.  Nonentitlement grant funds consolidated by the 
        commissioner shall be reflected in the department's biennial 
        budget.  With approval of the commissioner, vendors who are 
        eligible for funding from any of the commissioner's granting 
        authority under section 256.01, subdivision 2, paragraph (1), 
        clause (f), may submit a single application for a grant 
        agreement including multiple awards; 
           (3) coordinate the department's activities wherever 
        appropriate with the activities of other governmental agencies; 
           (4) use technology where appropriate to increase agency 
        productivity, improve customer service, increase public access 
        to information about government, and increase public 
        participation in the business of government; 
           (5) utilize constructive and cooperative labor-management 
        practices to the extent otherwise required by chapters 43A and 
        179A; 
           (6) include specific objectives in the performance report 
        required under section 15.91 to increase the efficiency of 
        agency operations, when appropriate; and 
           (7) recommend to the legislature, in the performance report 
        of the department required under section 15.91, appropriate 
        changes in law necessary to carry out the mission of the 
        department. 
           Sec. 3.  Minnesota Statutes 1996, section 245.98, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [STANDARDS.] The commissioner shall create 
        standards for treatment and provider qualifications for the 
        treatment component of the compulsive gambling program. 
           Sec. 4.  [252.294] [CRITERIA FOR DOWNSIZING OF FACILITIES.] 
           The commissioner of human services shall develop a process 
        to evaluate and rank proposals for the voluntary downsizing or 
        closure of intermediate care facilities for persons with mental 
        retardation or related conditions using the following guidelines:
           (1) the extent to which the option matches overall policy 
        direction of the department; 
           (2) the extent to which the option demonstrates respect for 
        individual needs and allows implementation of individual choice; 
           (3) the extent to which the option addresses safety, 
        privacy, and other programmatic issues; 
           (4) the extent to which the option appropriately redesigns 
        the overall community capacity; and 
           (5) the cost of each option. 
           The process shall, to the extent feasible, be modeled on 
        the nursing home moratorium exception process, including 
        procedures for administrative evaluation and approval of 
        projects within the limit of appropriations made available by 
        the legislature. 
           Sec. 5.  Minnesota Statutes 1996, section 256.045, 
        subdivision 10, is amended to read: 
           Subd. 10.  [PAYMENTS PENDING APPEAL.] If the commissioner 
        of human services or district court orders monthly assistance or 
        aid or services paid or provided in any proceeding under this 
        section, it shall be paid or provided pending appeal to the 
        commissioner of human services, district court, court of 
        appeals, or supreme court.  The human services referee may order 
        the local human services agency to reduce or terminate medical 
        assistance or general assistance medical care to a recipient 
        before a final order is issued under this section if:  (1) the 
        human services referee determines at the hearing that the sole 
        issue on appeal is one of a change in state or federal law; and 
        (2) the commissioner or the local agency notifies the recipient 
        before the action.  The state or county agency has a claim for 
        food stamps, cash payments, medical assistance, general 
        assistance medical care, and MinnesotaCare program payments made 
        to or on behalf of a recipient or former recipient while an 
        appeal is pending if the recipient or former recipient is 
        determined ineligible for the food stamps, cash payments, 
        medical assistance, general assistance medical care, or 
        MinnesotaCare as a result of the appeal, except for medical 
        assistance and general assistance medical care made on behalf of 
        a recipient pursuant to a court order.  In enforcing a claim on 
        MinnesotaCare program payments, the state or county agency shall 
        reduce the claim amount by the value of any premium payments 
        made by a recipient or former recipient during the period for 
        which the recipient or former recipient has been determined to 
        be ineligible.  Provision of a health care service by the state 
        agency under medical assistance, general assistance medical 
        care, or MinnesotaCare pending appeal shall not render moot the 
        state agency's position in a court of law. 
           Sec. 6.  Minnesota Statutes 1996, section 256.9742, is 
        amended to read: 
           256.9742 [DUTIES AND POWERS OF THE OFFICE.] 
           Subdivision 1.  [DUTIES.] The ombudsman ombudsman's program 
        shall: 
           (1) gather information and evaluate any act, practice, 
        policy, procedure, or administrative action of a long-term care 
        facility, acute care facility, home care service provider, or 
        government agency that may adversely affect the health, safety, 
        welfare, or rights of any client; 
           (2) mediate or advocate on behalf of clients; 
           (3) monitor the development and implementation of federal, 
        state, or local laws, rules, regulations, and policies affecting 
        the rights and benefits of clients; 
           (4) comment on and recommend to the legislature and public 
        and private agencies regarding laws, rules, regulations, and 
        policies affecting clients; 
           (5) inform public agencies about the problems of clients; 
           (6) provide for training of volunteers and promote the 
        development of citizen participation in the work of the office; 
           (7) conduct public forums to obtain information about and 
        publicize issues affecting clients; 
           (8) provide public education regarding the health, safety, 
        welfare, and rights of clients; and 
           (9) collect and analyze data relating to complaints, 
        conditions, and services. 
           Subd. 1a.  [DESIGNATION; LOCAL OMBUDSMAN REPRESENTATIVES 
        STAFF AND VOLUNTEERS.] (a) In designating an individual to 
        perform duties under this section, the ombudsman must determine 
        that the individual is qualified to perform the duties required 
        by this section. 
           (b) An individual designated as ombudsman staff under this 
        section must successfully complete an orientation training 
        conducted under the direction of the ombudsman or approved by 
        the ombudsman.  Orientation training shall be at least 20 hours 
        and will consist of training in:  investigation, dispute 
        resolution, health care regulation, confidentiality, resident 
        and patients' rights, and health care reimbursement. 
           (c) The ombudsman shall develop and implement a continuing 
        education program for individuals designated as ombudsman staff 
        under this section.  The continuing education program shall be 
        at least 60 hours annually. 
           (d) An individual designated as an ombudsman volunteer 
        under this section must successfully complete an approved 
        orientation training course with a minimum curriculum including 
        federal and state bills of rights for long-term care residents, 
        acute hospital patients and home care clients, the Vulnerable 
        Adults Act, confidentiality, and the role of the ombudsman. 
           (e) The ombudsman shall develop and implement a continuing 
        education program for ombudsman volunteers which will provide a 
        minimum of 12 hours of continuing education per year. 
           (f) The ombudsman may withdraw an individual's designation 
        if the individual fails to perform duties of this section or 
        meet continuing education requirements.  The individual may 
        request a reconsideration of such action by the board on aging 
        whose decision shall be final. 
           Subd. 2.  [IMMUNITY FROM LIABILITY.] The ombudsman or 
        designee including staff and volunteers under this section is 
        immune from civil liability that otherwise might result from the 
        person's actions or omissions if the person's actions are in 
        good faith, are within the scope of the person's 
        responsibilities as an ombudsman or designee, and do not 
        constitute willful or reckless misconduct. 
           Subd. 3.  [POSTING.] Every long-term care facility and 
        acute care facility shall post in a conspicuous place the 
        address and telephone number of the office.  A home care service 
        provider shall provide all recipients, including those in 
        elderly housing with services under chapter 144D, with the 
        address and telephone number of the office.  Counties shall 
        provide clients receiving a consumer support grant or a service 
        allowance with the name, address, and telephone number of the 
        office.  The posting or notice is subject to approval by the 
        ombudsman.  
           Subd. 4.  [ACCESS TO LONG-TERM CARE AND ACUTE CARE 
        FACILITIES AND CLIENTS.] The ombudsman or designee may: 
           (1) enter any long-term care facility without notice at any 
        time; 
           (2) enter any acute care facility without notice during 
        normal business hours; 
           (3) enter any acute care facility without notice at any 
        time to interview a patient or observe services being provided 
        to the patient as part of an investigation of a matter that is 
        within the scope of the ombudsman's authority, but only if the 
        ombudsman's or designee's presence does not intrude upon the 
        privacy of another patient or interfere with routine hospital 
        services provided to any patient in the facility; 
           (4) communicate privately and without restriction with any 
        client in accordance with section 144.651, as long as the 
        ombudsman has the client's consent for such communication; 
           (5) inspect records of a long-term care facility, home care 
        service provider, or acute care facility that pertain to the 
        care of the client according to sections 144.335 and 144.651; 
        and 
           (6) with the consent of a client or client's legal 
        guardian, the ombudsman or designated staff shall have access to 
        review records pertaining to the care of the client according to 
        sections 144.335 and 144.651.  If a client cannot consent and 
        has no legal guardian, access to the records is authorized by 
        this section.  
           A person who denies access to the ombudsman or designee in 
        violation of this subdivision or aids, abets, invites, compels, 
        or coerces another to do so is guilty of a misdemeanor. 
           Subd. 5.  [ACCESS TO STATE RECORDS.] The ombudsman or 
        designee, excluding volunteers, has access to data of a state 
        agency necessary for the discharge of the ombudsman's duties, 
        including records classified confidential or private under 
        chapter 13, or any other law.  The data requested must be 
        related to a specific case and is subject to section 13.03, 
        subdivision 4.  If the data concerns an individual, the 
        ombudsman or designee shall first obtain the individual's 
        consent.  If the individual cannot consent and has no legal 
        guardian, then access to the data is authorized by this section. 
           Each state agency responsible for licensing, regulating, 
        and enforcing state and federal laws and regulations concerning 
        long-term care, home care service providers, and acute care 
        facilities shall forward to the ombudsman on a quarterly basis, 
        copies of all correction orders, penalty assessments, and 
        complaint investigation reports, for all long-term care 
        facilities, acute care facilities, and home care service 
        providers. 
           Subd. 6.  [PROHIBITION AGAINST DISCRIMINATION OR 
        RETALIATION.] (a) No entity shall take discriminatory, 
        disciplinary, or retaliatory action against an employee or 
        volunteer, or a patient, resident, or guardian or family member 
        of a patient, resident, or guardian for filing in good faith a 
        complaint with or providing information to the ombudsman or 
        designee including volunteers.  A person who violates this 
        subdivision or who aids, abets, invites, compels, or coerces 
        another to do so is guilty of a misdemeanor. 
           (b) There shall be a rebuttable presumption that any 
        adverse action, as defined below, within 90 days of report, is 
        discriminatory, disciplinary, or retaliatory.  For the purpose 
        of this clause, the term "adverse action" refers to action taken 
        by the entity involved in a report against the person making the 
        report or the person with respect to whom the report was made 
        because of the report, and includes, but is not limited to: 
           (1) discharge or transfer from a facility; 
           (2) termination of service; 
           (3) restriction or prohibition of access to the facility or 
        its residents; 
           (4) discharge from or termination of employment; 
           (5) demotion or reduction in remuneration for services; and 
           (6) any restriction of rights set forth in section 144.651 
        or 144A.44. 
           Sec. 7.  Minnesota Statutes 1996, section 256.9744, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RELEASE.] Data maintained by the office that 
        does not relate to the identity of a complainant, a client 
        receiving home-care services, or a resident of a long-term 
        facility may be released at the discretion of the ombudsman 
        responsible for maintaining the data.  Data relating to the 
        identity of a complainant, a client receiving home-care 
        services, or a resident of a long-term facility may be released 
        only with the consent of the complainant, the client or resident 
        or by court order. 
           Sec. 8.  [256.9772] [HEALTH CARE CONSUMER ASSISTANCE GRANT 
        PROGRAM.] 
           The board on aging shall award grants to area agencies on 
        aging to develop projects to provide information about health 
        coverage and to provide assistance to individuals in obtaining 
        public and private health care benefits.  Projects must: 
           (1) train and support staff and volunteers to work in 
        partnership to provide one-on-one information and assistance 
        services; 
           (2) provide individual consumers with assistance in 
        understanding the terms of a certificate, contract, or policy of 
        health coverage, including, but not limited to, terms relating 
        to covered services, limitations on services, limitations on 
        access to providers, and enrollee complaint and appeal 
        procedures; 
           (3) assist individuals to understand medical bills and to 
        process health care claims and appeals to obtain health care 
        benefits; 
           (4) coordinate with existing health insurance counseling 
        programs serving Medicare eligible individuals or establish 
        programs to serve all consumers; 
           (5) target those individuals determined to be in greatest 
        social and economic need for counseling services; and 
           (6) operate according to United States Code, title 42, 
        section 1395b-4, if serving Medicare beneficiaries. 
           Sec. 9.  Minnesota Statutes 1996, section 256B.037, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [MULTIPLE DENTAL PLAN AREAS.] After the 
        department has executed contracts with dental plans to provide 
        covered dental care services in a multiple dental plan area, the 
        department shall:  
           (1) inform applicants and recipients, in writing, of 
        available dental plans, when written notice of dental plan 
        selection must be submitted to the department, and when dental 
        plan participation begins; 
           (2) randomly assign to a dental plan recipients who fail to 
        notify the department in writing of their dental plan choice; 
        and 
           (3) notify recipients, in writing, of their assigned dental 
        plan before the effective date of the recipient's dental plan 
        participation.  
           Sec. 10.  Minnesota Statutes 1996, section 256B.0911, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PERSONS REQUIRED TO BE SCREENED; EXEMPTIONS.] 
        All applicants to Medicaid certified nursing facilities must be 
        screened prior to admission, regardless of income, assets, or 
        funding sources, except the following: 
           (1) patients who, having entered acute care facilities from 
        certified nursing facilities, are returning to a certified 
        nursing facility; 
           (2) residents transferred from other certified nursing 
        facilities located within the state of Minnesota; 
           (3) individuals who have a contractual right to have their 
        nursing facility care paid for indefinitely by the veteran's 
        administration; 
           (4) individuals who are enrolled in the Ebenezer/Group 
        Health social health maintenance organization project, or 
        enrolled in a demonstration project under section 256B.69, 
        subdivision 18, at the time of application to a nursing home; or 
           (5) individuals previously screened and currently being 
        served under the alternative care program or under a home and 
        community-based services waiver authorized under section 1915(c) 
        of the Social Security Act; or 
           (6) individuals who are admitted to a certified nursing 
        facility for a short-term stay, which, based upon a physician's 
        certification, is expected to be 14 days or less in duration, 
        and who have been screened and approved for nursing facility 
        admission within the previous six months.  This exemption 
        applies only if the screener determines at the time of the 
        initial screening of the six-month period that it is appropriate 
        to use the nursing facility for short-term stays and that there 
        is an adequate plan of care for return to the home or 
        community-based setting.  If a stay exceeds 14 days, the 
        individual must be referred no later than the first county 
        working day following the 14th resident day for a screening, 
        which must be completed within five working days of the 
        referral.  Payment limitations in subdivision 7 will apply to an 
        individual found at screening to meet the level of care criteria 
        for admission to a certified nursing facility. 
           Regardless of the exemptions in clauses (2) to (4) (6), 
        persons who have a diagnosis or possible diagnosis of mental 
        illness, mental retardation, or a related condition must be 
        screened receive a preadmission screening before admission 
        unless the admission prior to screening is authorized by the 
        local mental health authority or the local developmental 
        disabilities case manager, or unless authorized by the county 
        agency according to Public Law Number 101-508. 
           Before admission to a Medicaid certified nursing home or 
        boarding care home, all persons must be screened and approved 
        for admission through an assessment process.  The nursing 
        facility is authorized to conduct case mix assessments which are 
        not conducted by the county public health nurse under Minnesota 
        Rules, part 9549.0059.  The designated county agency is 
        responsible for distributing the quality assurance and review 
        form for all new applicants to nursing homes. 
           Other persons who are not applicants to nursing facilities 
        must be screened if a request is made for a screening. 
           Sec. 11.  Minnesota Statutes 1996, section 256B.434, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUESTS FOR PROPOSALS.] (a) No later than 
        August 1, 1995, At least twice annually the commissioner shall 
        publish in the State Register a request for proposals to provide 
        nursing facility services according to this section.  The 
        commissioner shall issue two additional requests for proposals 
        prior to July 1, 1997, based upon a timetable established by the 
        commissioner.  The commissioner must respond to all proposals in 
        a timely manner. 
           (b) The commissioner may reject any proposal if, in the 
        judgment of the commissioner, a contract with a particular 
        facility is not in the best interests of the residents of the 
        facility or the state of Minnesota.  The commissioner may accept 
        up to the number of proposals that can be adequately supported 
        with available state resources, as determined by the 
        commissioner, except that the commissioner shall not contract 
        with more than 40 nursing facilities as part of any request for 
        proposals.  The commissioner may accept proposals from a single 
        nursing facility or from a group of facilities through a 
        managing entity.  The commissioner shall seek to ensure that 
        nursing facilities under contract are located in all geographic 
        areas of the state.  The commissioner shall present 
        recommendations to the legislature by February 1, 1996, on the 
        number of nursing facility contracts that may be entered into by 
        the commissioner as a result of a request for proposals. 
           (c) In issuing the request for proposals, the commissioner 
        may develop reasonable requirements which, in the judgment of 
        the commissioner, are necessary to protect residents or ensure 
        that the contractual alternative payment demonstration project 
        furthers the interest of the state of Minnesota.  The request 
        for proposals may include, but need not be limited to, the 
        following: 
           (1) a requirement that a nursing facility make reasonable 
        efforts to maximize Medicare payments on behalf of eligible 
        residents; 
           (2) requirements designed to prevent inappropriate or 
        illegal discrimination against residents enrolled in the medical 
        assistance program as compared to private paying residents; 
           (3) requirements designed to ensure that admissions to a 
        nursing facility are appropriate and that reasonable efforts are 
        made to place residents in home and community-based settings 
        when appropriate; 
           (4) a requirement to agree to participate in a project to 
        develop data collection systems and outcome-based standards for 
        managed care contracting for long-term care services.  Among 
        other requirements specified by the commissioner, each facility 
        entering into a contract may be required to pay an annual fee in 
        an amount determined by the commissioner not to exceed $50 per 
        bed.  Revenue generated from the fees is appropriated to the 
        commissioner and must be used to contract with a qualified 
        consultant or contractor to develop data collection systems and 
        outcome-based contracting standards; 
           (5) a requirement that contractors agree to maintain 
        Medicare cost reports and to submit them to the commissioner 
        upon request or at times specified by the commissioner; 
           (6) a requirement for demonstrated willingness and ability 
        to develop and maintain data collection and retrieval systems to 
        be used in measuring outcomes; and 
           (7) a requirement to provide all information and assurances 
        required by the terms and conditions of the federal waiver or 
        federal approval. 
           (d) In addition to the information and assurances contained 
        in the submitted proposals, the commissioner may consider the 
        following in determining whether to accept or deny a proposal: 
           (1) the facility's history of compliance with federal and 
        state laws and rules;, except that a facility deemed to be in 
        substantial compliance with federal and state laws and rules is 
        eligible to respond to a request for proposal.  A facility's 
        compliance history shall not be the sole determining factor in 
        situations where the facility has been sold and the new owners 
        have submitted a proposal; 
           (2) whether the facility has a record of excessive 
        licensure fines or sanctions or fraudulent cost reports; 
           (3) financial history and solvency; and 
           (4) other factors identified by the commissioner that the 
        commissioner deems relevant to a determination that a contract 
        with a particular facility is not in the best interests of the 
        residents of the facility or the state of Minnesota. 
           (e) If the commissioner rejects the proposal of a nursing 
        facility, the commissioner shall provide written notice to the 
        facility of the reason for the rejection, including the factors 
        and evidence upon which the rejection was based. 
           Sec. 12.  Minnesota Statutes 1996, 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, subdivision 25, 
        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, subdivision 25. 
           (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.  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., 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. 
           (d) The commissioner may shall develop additional 
        incentive-based payments of up to five percent above the 
        standard contract rate for achieving outcomes specified in each 
        contract.  The incentive system may be implemented for contract 
        rate years beginning on or after July 1, 1996.  The specified 
        facility-specific outcomes must be measurable and must be based 
        on criteria to be developed 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. 13.  [256B.693] [STATE-OPERATED SERVICES; MANAGED 
        CARE.] 
           Subdivision 1.  [PROPOSALS FOR MANAGED CARE; ROLE OF STATE 
        OPERATED SERVICES.] Any proposal integrating state-operated 
        services with managed care systems for persons with disabilities 
        shall identify the specific role to be assumed by state-operated 
        services and the funding arrangement in which state-operated 
        services shall effectively operate within the managed care 
        initiative.  The commissioner shall not approve or implement the 
        initiative that consolidates funding appropriated for 
        state-operated services with funding for managed care 
        initiatives for persons with disabilities. 
           Subd. 2.  [STUDY BY THE COMMISSIONER.] To help identify 
        appropriate state-operated services for managed care systems, 
        the commissioner of human services shall study the integration 
        of state-operated services into public managed care systems and 
        make recommendations to the legislature.  The commissioner's 
        study and recommendations shall include, but shall not be 
        limited to, the following: 
           (1) identification of persons with disabilities on waiting 
        lists for services, which could be provided by state-operated 
        services; 
           (2) availability of crisis services to persons with 
        disabilities; 
           (3) unmet service needs, which could be met by 
        state-operated services; and 
           (4) deficiencies in managed care contracts and services, 
        which hinder the placement and maintenance of persons with 
        disabilities in community settings. 
           In conducting this study, the commissioner shall survey 
        counties concerning their interest in and need for services that 
        could be provided by state-operated services.  The commissioner 
        shall also consult with the appropriate exclusive bargaining 
        unit representatives.  The commissioner shall report findings to 
        the legislature by February 1, 1998. 
           Sec. 14.  Minnesota Statutes 1996, section 256E.06, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [COUNTY SOCIAL SERVICE GRANTS FOR FORMER GRH 
        RECIPIENTS.] (a) Notwithstanding subdivisions 1 and 2, and 
        notwithstanding the provision in Laws 1995, chapter 207, article 
        1, section 2, subdivision 3, that authorized the commissioner to 
        transfer funds from the group residential housing account to 
        community social services aids to counties, beginning July 1, 
        1995, money used to provide continuous funding for assistance to 
        persons who are no longer eligible for assistance under the 
        group residential housing program under chapter 256I, as 
        specified in paragraph (b), is added to the community social 
        services aid amount for the county in which the group 
        residential housing setting for which the person is no longer 
        eligible is located.  Notwithstanding the provision in Laws 
        1995, chapter 207, article 1, section 2, subdivision 3, that 
        required the increased community social services act 
        appropriations to be used to proportionately increase each 
        county's aid, this money must not be apportioned to any other 
        county or counties. 
           (b) Former group residential housing recipients for whom 
        money is added to a county's aid amount under paragraph (a) 
        include: 
           (1) persons receiving services in Hennepin county from a 
        provider that on August 1, 1984, was licensed under Minnesota 
        Rules, parts 9525.0520 to 9525.0660, but was funded as a group 
        residence under the general assistance or Minnesota supplemental 
        aid programs; 
           (2) persons residing in a setting with a semi-independent 
        living services license under Minnesota Rules, parts 9525.0900 
        to 9525.1020; and 
           (3) persons residing in family foster care settings who 
        have become ineligible for group residential housing assistance 
        because they receive services through the medical assistance 
        community-based waiver for persons with mental retardation or 
        related conditions under section 256B.0916. 
           Sec. 15.  [256J.03] [TANF RESERVE ACCOUNT.] 
           The Minnesota family investment program-statewide/TANF 
        reserve account is created in the state treasury.  Funds 
        designated by the legislature and earnings available from the 
        federal TANF block grant appropriated to the commissioner but 
        not expended in the biennium beginning July 1, 1997, shall be 
        retained in the reserve account to be expended for the Minnesota 
        family investment program-statewide in fiscal year 2000 and 
        subsequent fiscal years. 
           Sec. 16.  Minnesota Statutes 1996, section 518.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [THE BEST INTERESTS OF THE CHILD.] (a) "The 
        best interests of the child" means all relevant factors to be 
        considered and evaluated by the court including: 
           (1) the wishes of the child's parent or parents as to 
        custody; 
           (2) the reasonable preference of the child, if the court 
        deems the child to be of sufficient age to express preference; 
           (3) the child's primary caretaker; 
           (4) the intimacy of the relationship between each parent 
        and the child; 
           (5) the interaction and interrelationship of the child with 
        a parent or parents, siblings, and any other person who may 
        significantly affect the child's best interests; 
           (6) the child's adjustment to home, school, and community; 
           (7) the length of time the child has lived in a stable, 
        satisfactory environment and the desirability of maintaining 
        continuity; 
           (8) the permanence, as a family unit, of the existing or 
        proposed custodial home; 
           (9) the mental and physical health of all individuals 
        involved; except that a disability, as defined in section 
        363.01, of a proposed custodian or the child shall not be 
        determinative of the custody of the child, unless the proposed 
        custodial arrangement is not in the best interest of the child; 
           (10) the capacity and disposition of the parties to give 
        the child love, affection, and guidance, and to continue 
        educating and raising the child in the child's culture and 
        religion or creed, if any; 
           (11) the child's cultural background; 
           (12) the effect on the child of the actions of an abuser, 
        if related to domestic abuse, as defined in section 518B.01, 
        that has occurred between the parents or between a parent and 
        another individual, whether or not the individual alleged to 
        have committed domestic abuse is or ever was a family or 
        household member of the parent; and 
           (13) except in cases in which a finding of domestic abuse 
        as defined in section 518B.01 has been made, the disposition of 
        each parent to encourage and permit frequent and continuing 
        contact by the other parent with the child. 
           The court may not use one factor to the exclusion of all 
        others.  The primary caretaker factor may not be used as a 
        presumption in determining the best interests of the child.  The 
        court must make detailed findings on each of the factors and 
        explain how the factors led to its conclusions and to the 
        determination of the best interests of the child.  
           (b) The court shall not consider conduct of a proposed 
        custodian that does not affect the custodian's relationship to 
        the child. 
           Sec. 17.  [DOMESTIC VIOLENCE; TRAINING PROGRAMS.] 
           The commissioner of human services shall establish 
        mandatory domestic violence and sexual abuse training programs 
        for county financial workers and child support agency employees 
        who screen and work with applicants and recipients.  In order to 
        provide this training, the commissioner shall establish a 
        request for proposals and contract with experts in domestic 
        violence and sexual abuse issues to do the actual training.  
        Where feasible, the commissioner shall integrate training on 
        domestic violence and sexual abuse issues with retraining of 
        county employees on implementation of the new TANF program, and 
        with the training required under Minnesota Statutes 1996, 
        section 256.741, subdivision 14, in order to contain costs.  To 
        the extent possible, the state or local agency shall not refer 
        applicants or recipients to any employee who has not been 
        trained in dealing with issues related to domestic violence and 
        sexual abuse. 
           Sec. 18.  [VETERANS HOMES IMPROVEMENTS.] 
           (a) The veterans homes board of directors may make and 
        maintain the following improvements to the indicated veterans 
        homes using money donated for those purposes: 
           (1) at the Hastings veterans home, an outdoor bus shelter 
        and smoking area for residents and a pole barn for storage of 
        residents' property; 
           (2) at the Luverne veterans home, a garage, picnic shelter, 
        and three-season porch; and 
           (3) at the Silver Bay veterans home, a garage, maintenance, 
        and storage building, a three-season porch at the east entrance, 
        and landscaping as follows: 
           (i) walking and wheelchair trails; 
           (ii) stationary benches along trails; 
           (iii) flag pole relocation; 
           (iv) a gazebo in the dementia wander area; and 
           (v) two patio areas.  
           (b) Money donated for these improvements must be accounted 
        for according to Minnesota Statutes, section 198.161. 
           Sec. 19.  [TRANSITION FOR THE COMPULSIVE GAMBLING TREATMENT 
        PROGRAM.] 
           The commissioner of human services shall conduct a 
        transition of treatment programs for compulsive gambling from 
        the treatment center model to a model in which reimbursement for 
        treatment of an individual compulsive gambler from an approved 
        provider is on a fee-for-service basis on the following schedule:
           (1) one-third of compulsive gamblers treated through the 
        program must receive services paid for from the individual 
        treatment reimbursement model beginning October 1, 1997; 
           (2) two-thirds of compulsive gamblers treated through the 
        program must receive services paid for from the individual 
        treatment reimbursement model beginning July 1, 1998; and 
           (3) 100 percent of compulsive gamblers treated through the 
        program must receive treatment paid for from the individual 
        treatment reimbursement model beginning July 1, 1999. 
           Sec. 20.  [JOBS-PLUS PILOT PROJECT.] 
           Subdivision 1.  [PROJECT AUTHORIZED.] A three-year 
        jobs-plus pilot project administered by the Manpower 
        Demonstration Research Corporation is authorized in Ramsey 
        county.  The commissioner of human services shall cooperate with 
        the St. Paul public housing authority, Ramsey county, the St. 
        Paul workforce development center, and the Manpower 
        Demonstration Research Corporation to develop and implement the 
        project. 
           Subd. 2.  [PROJECT DESCRIPTION.] (a) Jobs-plus shall offer 
        intensive employment-related services and activities to 
        working-age family residents of the Mt. Airy Homes public 
        housing development.  McDonough Homes and Roosevelt Homes public 
        housing developments shall be used as comparison sites.  The 
        project shall incorporate community support for work, work 
        incentives, and best practices in preparing people for sustained 
        employment and in linking residents with jobs. 
           (b) The Mt. Airy community center shall serve as a hub for 
        delivery of pilot project services, delivery of related 
        services, and promotion of community support for work.  The 
        center shall provide space for economic development and 
        supportive services programming and for activities that best 
        respond to diverse resident needs, including expanded child</