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2003 Minnesota Session Laws

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

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

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

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

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

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

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