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

CHAPTER 147--H.F.No. 1078
An act
relating to state government; making changes to health and human
services programs; changing children and family provisions; amending child
welfare provisions; establishing prekindergarten exploratory projects; modifying
licensing provisions; amending health care programs and policy; modifying
continuing care programs and policy; amending mental and chemical health
provisions; changing Department of Health provisions and policy; establishing
a children's health program; changing public health provisions and policy;
amending MinnesotaCare, medical assistance, and general assistance medical
care; instituting health care reform; modifying health insurance provisions;
establishing family supportive services; providing rate increases for certain
providers and nursing facilities; changing health records information provisions;
making technical changes; providing penalties; establishing task forces; changing
certain fees; requiring reports; making forecast adjustments; appropriating
money for human services and health; appropriating money for various state
boards and councils;amending Minnesota Statutes 2006, sections 13.381,
by adding a subdivision; 13.46, subdivision 2; 16A.724, subdivision 2, by
adding subdivisions; 16B.61, by adding a subdivision; 16D.13, subdivision 3;
43A.23, subdivision 1; 62E.02, subdivision 7; 62H.02; 62J.07, subdivisions
1, 3; 62J.17, subdivisions 2, 4a, 6a, 7; 62J.41, subdivision 1; 62J.495; 62J.52,
subdivisions 1, 2; 62J.60, subdivisions 2, 3; 62J.692, subdivisions 1, 4, 5, 8;
62J.81, subdivision 1; 62J.82; 62L.02, subdivision 11; 62Q.165, subdivisions 1,
2; 62Q.80, subdivisions 3, 4, 13, 14, by adding a subdivision; 69.021, subdivision
11; 103I.101, subdivision 6; 103I.208, subdivisions 1, 2; 103I.235, subdivision
1; 119B.011, by adding a subdivision; 119B.035, subdivision 1; 119B.05,
subdivision 1; 119B.09, subdivision 7, by adding subdivisions; 119B.12;
119B.125, subdivision 2; 119B.13, subdivisions 1, 3a, 7; 119B.21, subdivision
5; 144.123; 144.125; 144.3345; 144.5509; 144.552; 144.553, subdivision 3;
144.565; 144.651, subdivisions 9, 10, 26; 144.698, subdivision 1; 144.699, by
adding a subdivision; 144.9507, by adding a subdivision; 144.9512; 144A.073,
subdivision 4; 144A.351; 144D.03, subdivision 1; 144E.101, subdivision 6;
144E.127; 144E.35, subdivision 1; 145A.17; 145C.05; 145C.07, by adding
a subdivision; 148.235, by adding a subdivision; 148.6445, subdivisions 1,
2; 148B.53, subdivision 3; 148C.11, subdivision 1; 149A.52, subdivision 3;
149A.97, subdivision 7; 151.19, subdivision 2; 151.37, subdivision 2; 152.11, by
adding a subdivision; 157.16, subdivision 1; 169A.70, subdivision 4; 198.075;
245.462, subdivision 20; 245.465, by adding a subdivision; 245.4712, subdivision
1; 245.4874; 245.50, subdivision 5; 245.771, by adding a subdivision; 245.98,
subdivision 2; 245A.035; 245A.10, subdivision 2; 245A.16, subdivisions 1, 3;
245C.02, by adding a subdivision; 245C.04, subdivision 1; 245C.05, subdivisions
1, 4, 5, 7, by adding a subdivision; 245C.08, subdivisions 1, 2; 245C.10, by
adding a subdivision; 245C.11, subdivisions 1, 2; 245C.12; 245C.16, subdivision
1; 245C.17, by adding a subdivision; 245C.21, by adding a subdivision;
245C.23, subdivision 2; 246.54, subdivisions 1, 2; 252.27, subdivision 2a;
252.32, subdivision 3; 253B.185, subdivision 2, by adding a subdivision;
254A.03, subdivision 3; 254A.16, subdivision 2; 254B.02, subdivisions 1, 5;
254B.03, subdivisions 1, 3; 254B.06, subdivision 3; 256.01, subdivisions 2,
2b, 4, by adding subdivisions; 256.015, subdivision 7; 256.017, subdivisions
1, 9; 256.476, subdivisions 1, 2, 3, 4, 5, 10; 256.969, subdivisions 9, 27;
256.974; 256.9741, subdivisions 1, 3; 256.9742, subdivisions 3, 4, 6; 256.9744,
subdivision 1; 256.975, subdivision 7, by adding a subdivision; 256.984,
subdivision 1; 256B.04, subdivision 14, by adding a subdivision; 256B.055,
subdivision 14; 256B.056, subdivision 10, by adding a subdivision; 256B.057,
by adding a subdivision; 256B.0621, subdivision 11; 256B.0622, subdivision 2;
256B.0623, subdivision 5; 256B.0625, subdivisions 3f, 13c, 13d, 18a, 20, 23, 47,
by adding subdivisions; 256B.0631, subdivisions 1, 3; 256B.0644; 256B.0651,
subdivision 7; 256B.0655, subdivisions 1b, 1f, 3, 8, by adding subdivisions;
256B.0911, subdivisions 3a, 3b, 4b, 4c, 6, 7, by adding subdivisions; 256B.0913,
subdivisions 4, 5, 5a, 8, 9, 10, 11, 12, 13, 14; 256B.0915; 256B.0919, subdivision
3; 256B.0943, subdivisions 6, 8, 9, 11, 12; 256B.0945, subdivision 4; 256B.095;
256B.0951, subdivision 1; 256B.199; 256B.27, subdivision 2a; 256B.431,
subdivisions 1, 2e, 3f, 17a, 17e, 41; 256B.434, subdivision 4, by adding
subdivisions; 256B.437, by adding a subdivision; 256B.441, subdivisions 1, 2, 5,
6, 10, 11, 13, 14, 17, 20, 24, 30, 31, 34, 38, by adding subdivisions; 256B.49,
subdivision 11, by adding a subdivision; 256B.5012, by adding a subdivision;
256B.69, subdivisions 4, 5g, 5h, 23; 256B.76; 256B.763; 256D.03, subdivisions
3, 4; 256E.35, subdivision 2; 256I.04, subdivision 3; 256I.05, by adding
subdivisions; 256J.01, by adding a subdivision; 256J.02, subdivisions 1, 4, by
adding a subdivision; 256J.021; 256J.08, subdivision 65; 256J.20, subdivision 3;
256J.21, subdivision 2; 256J.32, subdivision 6; 256J.42, subdivision 1; 256J.46,
by adding a subdivision; 256J.49, subdivision 13; 256J.521, subdivisions 1, 2;
256J.53, subdivision 2; 256J.55, subdivision 1; 256J.626, subdivisions 1, 2, 3, 4,
5, 6, 7; 256J.751, subdivisions 2, 5; 256J.77; 256J.95, subdivision 3; 256K.45,
by adding a subdivision; 256L.01, subdivisions 1, 4; 256L.03, subdivisions
1, 3, 5; 256L.04, subdivisions 1, 7, 12; 256L.05, subdivisions 1, 1b, 2, 3a;
256L.07, subdivisions 1, 6, by adding a subdivision; 256L.09, subdivision 4;
256L.11, subdivision 7; 256L.12, subdivision 9a; 256L.15, subdivisions 1, 2, 4;
256L.17, subdivisions 2, 3, 7; 259.20, subdivision 2; 259.24, subdivision 3;
259.29, subdivision 1; 259.41; 259.53, subdivisions 1, 2; 259.57, subdivisions
1, 2; 259.67, subdivisions 4, 7; 259.75, subdivision 8; 260.012; 260.755,
subdivisions 12, 20; 260.761, subdivision 7; 260.765, subdivision 5; 260.771,
subdivisions 1, 2; 260B.157, subdivision 1; 260C.152, subdivision 5; 260C.163,
subdivision 1; 260C.201, subdivision 11; 260C.209; 260C.212, subdivisions 1, 2,
4, 9; 260C.317, subdivision 3; 260C.331, subdivision 1; 270B.14, subdivision
1; 518A.56, by adding a subdivision; 609.115, subdivisions 8, 9; 626.556,
subdivisions 2, 3, 10, 10a, 10c, 10f, by adding subdivisions; Laws 2000, chapter
340, section 19; Laws 2005, chapter 98, article 3, section 25; Laws 2005, First
Special Session chapter 4, article 9, section 3, subdivision 2; Laws 2006, chapter
282, article 20, section 37; proposing coding for new law in Minnesota Statutes,
chapters 16C; 62J; 62Q; 144; 145; 148; 149A; 151; 152; 156; 245; 245A; 245C;
252; 254A; 256; 256B; 256C; 256D; 256J; 256L; 260; repealing Minnesota
Statutes 2006, sections 62A.301; 62J.052, subdivision 1; 62J.692, subdivision
10; 119B.08, subdivision 4; 144.335; 252.21; 252.22; 252.23; 252.24; 252.25;
252.261; 252.275, subdivision 5; 254A.02, subdivisions 7, 9, 12, 14, 15, 16;
254A.085; 254A.086; 254A.12; 254A.14; 254A.15; 254A.16, subdivision 5;
254A.175; 254A.18; 256.956; 256.9743; 256B.0625, subdivisions 5a, 5b, 5c,
5d, 5e, 5f, 5g, 5h, 5i, 5j, 5k; 256B.0631, subdivision 4; 256B.0913, subdivisions
5b, 5c, 5d, 5e, 5f, 5g, 5h; 256B.441, subdivisions 12, 16, 21, 26, 28, 42, 45;
256J.29; 256J.37, subdivision 3b; 256J.561, subdivision 1; 256J.62, subdivision
9; 256J.626, subdivision 9; 256J.65; 256L.035; 256L.07, subdivision 2a; Laws
1997, chapter 8, section 1; Laws 2004, chapter 288, article 6, section 27; Laws
2006, chapter 249, section 6; Minnesota Rules, parts 4610.2800; 9503.0035,
subpart 2; 9560.0102, subpart 2, item C; 9585.0030.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1
CHILD WELFARE POLICY

    Section 1. Minnesota Statutes 2006, section 256.01, subdivision 2, is amended to read:
    Subd. 2. Specific powers. Subject to the provisions of section 241.021, subdivision
2
, the commissioner of human services shall carry out the specific duties in paragraphs (a)
through (cc):
    (a) Administer and supervise all forms of public assistance provided for by state law
and other welfare activities or services as are vested in the commissioner. Administration
and supervision of human services activities or services includes, but is not limited to,
assuring timely and accurate distribution of benefits, completeness of service, and quality
program management. In addition to administering and supervising human services
activities vested by law in the department, the commissioner shall have the authority to:
    (1) require county agency participation in training and technical assistance programs
to promote compliance with statutes, rules, federal laws, regulations, and policies
governing human services;
    (2) monitor, on an ongoing basis, the performance of county agencies in the
operation and administration of human services, enforce compliance with statutes, rules,
federal laws, regulations, and policies governing welfare services and promote excellence
of administration and program operation;
    (3) develop a quality control program or other monitoring program to review county
performance and accuracy of benefit determinations;
    (4) require county agencies to make an adjustment to the public assistance benefits
issued to any individual consistent with federal law and regulation and state law and rule
and to issue or recover benefits as appropriate;
    (5) delay or deny payment of all or part of the state and federal share of benefits and
administrative reimbursement according to the procedures set forth in section 256.017;
    (6) make contracts with and grants to public and private agencies and organizations,
both profit and nonprofit, and individuals, using appropriated funds; and
    (7) enter into contractual agreements with federally recognized Indian tribes with
a reservation in Minnesota to the extent necessary for the tribe to operate a federally
approved family assistance program or any other program under the supervision of the
commissioner. The commissioner shall consult with the affected county or counties in
the contractual agreement negotiations, if the county or counties wish to be included,
in order to avoid the duplication of county and tribal assistance program services. The
commissioner may establish necessary accounts for the purposes of receiving and
disbursing funds as necessary for the operation of the programs.
    (b) Inform county agencies, on a timely basis, of changes in statute, rule, federal law,
regulation, and policy necessary to county agency administration of the programs.
    (c) Administer and supervise all child welfare activities; promote the enforcement of
laws protecting disabled, dependent, neglected and delinquent children, and children born
to mothers who were not married to the children's fathers at the times of the conception
nor at the births of the children; license and supervise child-caring and child-placing
agencies and institutions; supervise the care of children in boarding and foster homes or
in private institutions; and generally perform all functions relating to the field of child
welfare now vested in the State Board of Control.
    (d) Administer and supervise all noninstitutional service to disabled persons,
including those who are visually impaired, hearing impaired, or physically impaired
or otherwise disabled. The commissioner may provide and contract for the care and
treatment of qualified indigent children in facilities other than those located and available
at state hospitals when it is not feasible to provide the service in state hospitals.
    (e) Assist and actively cooperate with other departments, agencies and institutions,
local, state, and federal, by performing services in conformity with the purposes of Laws
1939, chapter 431.
    (f) Act as the agent of and cooperate with the federal government in matters of
mutual concern relative to and in conformity with the provisions of Laws 1939, chapter
431, including the administration of any federal funds granted to the state to aid in the
performance of any functions of the commissioner as specified in Laws 1939, chapter 431,
and including the promulgation of rules making uniformly available medical care benefits
to all recipients of public assistance, at such times as the federal government increases its
participation in assistance expenditures for medical care to recipients of public assistance,
the cost thereof to be borne in the same proportion as are grants of aid to said recipients.
    (g) Establish and maintain any administrative units reasonably necessary for the
performance of administrative functions common to all divisions of the department.
    (h) Act as designated guardian of both the estate and the person of all the wards of
the state of Minnesota, whether by operation of law or by an order of court, without any
further act or proceeding whatever, except as to persons committed as developmentally
disabled. For children under the guardianship of the commissioner or a tribe in Minnesota
recognized by the Secretary of the Interior whose interests would be best served by
adoptive placement, the commissioner may contract with a licensed child-placing agency
or a Minnesota tribal social services agency to provide adoption services. A contract
with a licensed child-placing agency must be designed to supplement existing county
efforts and may not replace existing county programs or tribal social services, unless the
replacement is agreed to by the county board and the appropriate exclusive bargaining
representative, tribal governing body, or the commissioner has evidence that child
placements of the county continue to be substantially below that of other counties. Funds
encumbered and obligated under an agreement for a specific child shall remain available
until the terms of the agreement are fulfilled or the agreement is terminated.
    (i) Act as coordinating referral and informational center on requests for service for
newly arrived immigrants coming to Minnesota.
    (j) The specific enumeration of powers and duties as hereinabove set forth shall in no
way be construed to be a limitation upon the general transfer of powers herein contained.
    (k) Establish county, regional, or statewide schedules of maximum fees and charges
which may be paid by county agencies for medical, dental, surgical, hospital, nursing and
nursing home care and medicine and medical supplies under all programs of medical
care provided by the state and for congregate living care under the income maintenance
programs.
    (l) Have the authority to conduct and administer experimental projects to test
methods and procedures of administering assistance and services to recipients or potential
recipients of public welfare. To carry out such experimental projects, it is further provided
that the commissioner of human services is authorized to waive the enforcement of
existing specific statutory program requirements, rules, and standards in one or more
counties. The order establishing the waiver shall provide alternative methods and
procedures of administration, shall not be in conflict with the basic purposes, coverage, or
benefits provided by law, and in no event shall the duration of a project exceed four years.
It is further provided that no order establishing an experimental project as authorized by
the provisions of this section shall become effective until the following conditions have
been met:
    (1) the secretary of health and human services of the United States has agreed, for
the same project, to waive state plan requirements relative to statewide uniformity; and
    (2) a comprehensive plan, including estimated project costs, shall be approved by
the Legislative Advisory Commission and filed with the commissioner of administration.
    (m) According to federal requirements, establish procedures to be followed by
local welfare boards in creating citizen advisory committees, including procedures for
selection of committee members.
    (n) Allocate federal fiscal disallowances or sanctions which are based on quality
control error rates for the aid to families with dependent children program formerly
codified in sections 256.72 to 256.87, medical assistance, or food stamp program in the
following manner:
    (1) one-half of the total amount of the disallowance shall be borne by the county
boards responsible for administering the programs. For the medical assistance and the
AFDC program formerly codified in sections 256.72 to 256.87, disallowances shall be
shared by each county board in the same proportion as that county's expenditures for the
sanctioned program are to the total of all counties' expenditures for the AFDC program
formerly codified in sections 256.72 to 256.87, and medical assistance programs. For the
food stamp program, sanctions shall be shared by each county board, with 50 percent of
the sanction being distributed to each county in the same proportion as that county's
administrative costs for food stamps are to the total of all food stamp administrative costs
for all counties, and 50 percent of the sanctions being distributed to each county in the
same proportion as that county's value of food stamp benefits issued are to the total of
all benefits issued for all counties. Each county shall pay its share of the disallowance
to the state of Minnesota. When a county fails to pay the amount due hereunder, the
commissioner may deduct the amount from reimbursement otherwise due the county, or
the attorney general, upon the request of the commissioner, may institute civil action
to recover the amount due; and
    (2) notwithstanding the provisions of clause (1), if the disallowance results from
knowing noncompliance by one or more counties with a specific program instruction, and
that knowing noncompliance is a matter of official county board record, the commissioner
may require payment or recover from the county or counties, in the manner prescribed in
clause (1), an amount equal to the portion of the total disallowance which resulted from the
noncompliance, and may distribute the balance of the disallowance according to clause (1).
    (o) Develop and implement special projects that maximize reimbursements and
result in the recovery of money to the state. For the purpose of recovering state money,
the commissioner may enter into contracts with third parties. Any recoveries that result
from projects or contracts entered into under this paragraph shall be deposited in the
state treasury and credited to a special account until the balance in the account reaches
$1,000,000. When the balance in the account exceeds $1,000,000, the excess shall be
transferred and credited to the general fund. All money in the account is appropriated to
the commissioner for the purposes of this paragraph.
    (p) Have the authority to make direct payments to facilities providing shelter
to women and their children according to section 256D.05, subdivision 3. Upon
the written request of a shelter facility that has been denied payments under section
256D.05, subdivision 3, the commissioner shall review all relevant evidence and make
a determination within 30 days of the request for review regarding issuance of direct
payments to the shelter facility. Failure to act within 30 days shall be considered a
determination not to issue direct payments.
    (q) Have the authority to establish and enforce the following county reporting
requirements:
    (1) the commissioner shall establish fiscal and statistical reporting requirements
necessary to account for the expenditure of funds allocated to counties for human
services programs. When establishing financial and statistical reporting requirements, the
commissioner shall evaluate all reports, in consultation with the counties, to determine if
the reports can be simplified or the number of reports can be reduced;
    (2) the county board shall submit monthly or quarterly reports to the department
as required by the commissioner. Monthly reports are due no later than 15 working days
after the end of the month. Quarterly reports are due no later than 30 calendar days after
the end of the quarter, unless the commissioner determines that the deadline must be
shortened to 20 calendar days to avoid jeopardizing compliance with federal deadlines
or risking a loss of federal funding. Only reports that are complete, legible, and in the
required format shall be accepted by the commissioner;
    (3) if the required reports are not received by the deadlines established in clause (2),
the commissioner may delay payments and withhold funds from the county board until
the next reporting period. When the report is needed to account for the use of federal
funds and the late report results in a reduction in federal funding, the commissioner shall
withhold from the county boards with late reports an amount equal to the reduction in
federal funding until full federal funding is received;
    (4) a county board that submits reports that are late, illegible, incomplete, or not
in the required format for two out of three consecutive reporting periods is considered
noncompliant. When a county board is found to be noncompliant, the commissioner
shall notify the county board of the reason the county board is considered noncompliant
and request that the county board develop a corrective action plan stating how the
county board plans to correct the problem. The corrective action plan must be submitted
to the commissioner within 45 days after the date the county board received notice
of noncompliance;
    (5) the final deadline for fiscal reports or amendments to fiscal reports is one year
after the date the report was originally due. If the commissioner does not receive a report
by the final deadline, the county board forfeits the funding associated with the report for
that reporting period and the county board must repay any funds associated with the
report received for that reporting period;
    (6) the commissioner may not delay payments, withhold funds, or require repayment
under clause (3) or (5) if the county demonstrates that the commissioner failed to
provide appropriate forms, guidelines, and technical assistance to enable the county to
comply with the requirements. If the county board disagrees with an action taken by the
commissioner under clause (3) or (5), the county board may appeal the action according
to sections 14.57 to 14.69; and
    (7) counties subject to withholding of funds under clause (3) or forfeiture or
repayment of funds under clause (5) shall not reduce or withhold benefits or services to
clients to cover costs incurred due to actions taken by the commissioner under clause
(3) or (5).
    (r) Allocate federal fiscal disallowances or sanctions for audit exceptions when
federal fiscal disallowances or sanctions are based on a statewide random sample for
the foster care program under title IV-E of the Social Security Act, United States Code,
title 42, in direct proportion to each county's title IV-E foster care maintenance claim
for that period.
    (s) Be responsible for ensuring the detection, prevention, investigation, and
resolution of fraudulent activities or behavior by applicants, recipients, and other
participants in the human services programs administered by the department.
    (t) Require county agencies to identify overpayments, establish claims, and utilize
all available and cost-beneficial methodologies to collect and recover these overpayments
in the human services programs administered by the department.
    (u) Have the authority to administer a drug rebate program for drugs purchased
pursuant to the prescription drug program established under section 256.955 after the
beneficiary's satisfaction of any deductible established in the program. The commissioner
shall require a rebate agreement from all manufacturers of covered drugs as defined in
section 256B.0625, subdivision 13. Rebate agreements for prescription drugs delivered on
or after July 1, 2002, must include rebates for individuals covered under the prescription
drug program who are under 65 years of age. For each drug, the amount of the rebate shall
be equal to the rebate as defined for purposes of the federal rebate program in United
States Code, title 42, section 1396r-8. The manufacturers must provide full payment
within 30 days of receipt of the state invoice for the rebate within the terms and conditions
used for the federal rebate program established pursuant to section 1927 of title XIX of
the Social Security Act. The manufacturers must provide the commissioner with any
information necessary to verify the rebate determined per drug. The rebate program shall
utilize the terms and conditions used for the federal rebate program established pursuant to
section 1927 of title XIX of the Social Security Act.
    (v) Have the authority to administer the federal drug rebate program for drugs
purchased under the medical assistance program as allowed by section 1927 of title XIX
of the Social Security Act and according to the terms and conditions of section 1927.
Rebates shall be collected for all drugs that have been dispensed or administered in an
outpatient setting and that are from manufacturers who have signed a rebate agreement
with the United States Department of Health and Human Services.
    (w) Have the authority to administer a supplemental drug rebate program for drugs
purchased under the medical assistance program. The commissioner may enter into
supplemental rebate contracts with pharmaceutical manufacturers and may require prior
authorization for drugs that are from manufacturers that have not signed a supplemental
rebate contract. Prior authorization of drugs shall be subject to the provisions of section
256B.0625, subdivision 13.
    (x) Operate the department's communication systems account established in Laws
1993, First Special Session chapter 1, article 1, section 2, subdivision 2, to manage shared
communication costs necessary for the operation of the programs the commissioner
supervises. A communications account may also be established for each regional
treatment center which operates communications systems. Each account must be used
to manage shared communication costs necessary for the operations of the programs the
commissioner supervises. The commissioner may distribute the costs of operating and
maintaining communication systems to participants in a manner that reflects actual usage.
Costs may include acquisition, licensing, insurance, maintenance, repair, staff time and
other costs as determined by the commissioner. Nonprofit organizations and state, county,
and local government agencies involved in the operation of programs the commissioner
supervises may participate in the use of the department's communications technology and
share in the cost of operation. The commissioner may accept on behalf of the state any
gift, bequest, devise or personal property of any kind, or money tendered to the state for
any lawful purpose pertaining to the communication activities of the department. Any
money received for this purpose must be deposited in the department's communication
systems accounts. Money collected by the commissioner for the use of communication
systems must be deposited in the state communication systems account and is appropriated
to the commissioner for purposes of this section.
    (y) Receive any federal matching money that is made available through the medical
assistance program for the consumer satisfaction survey. Any federal money received for
the survey is appropriated to the commissioner for this purpose. The commissioner may
expend the federal money received for the consumer satisfaction survey in either year of
the biennium.
    (z) Designate community information and referral call centers and incorporate
cost reimbursement claims from the designated community information and referral
call centers into the federal cost reimbursement claiming processes of the department
according to federal law, rule, and regulations. Existing information and referral centers
provided by Greater Twin Cities United Way or existing call centers for which Greater
Twin Cities United Way has legal authority to represent, shall be included in these
designations upon review by the commissioner and assurance that these services are
accredited and in compliance with national standards. Any reimbursement is appropriated
to the commissioner and all designated information and referral centers shall receive
payments according to normal department schedules established by the commissioner
upon final approval of allocation methodologies from the United States Department of
Health and Human Services Division of Cost Allocation or other appropriate authorities.
    (aa) Develop recommended standards for foster care homes that address the
components of specialized therapeutic services to be provided by foster care homes with
those services.
    (bb) Authorize the method of payment to or from the department as part of the
human services programs administered by the department. This authorization includes the
receipt or disbursement of funds held by the department in a fiduciary capacity as part of
the human services programs administered by the department.
    (cc) Have the authority to administer a drug rebate program for drugs purchased for
persons eligible for general assistance medical care under section 256D.03, subdivision 3.
For manufacturers that agree to participate in the general assistance medical care rebate
program, the commissioner shall enter into a rebate agreement for covered drugs as
defined in section 256B.0625, subdivisions 13 and 13d. For each drug, the amount of the
rebate shall be equal to the rebate as defined for purposes of the federal rebate program in
United States Code, title 42, section 1396r-8. The manufacturers must provide payment
within the terms and conditions used for the federal rebate program established under
section 1927 of title XIX of the Social Security Act. The rebate program shall utilize
the terms and conditions used for the federal rebate program established under section
1927 of title XIX of the Social Security Act.
    Effective January 1, 2006, drug coverage under general assistance medical care shall
be limited to those prescription drugs that:
    (1) are covered under the medical assistance program as described in section
256B.0625, subdivisions 13 and 13d; and
    (2) are provided by manufacturers that have fully executed general assistance
medical care rebate agreements with the commissioner and comply with such agreements.
Prescription drug coverage under general assistance medical care shall conform to
coverage under the medical assistance program according to section 256B.0625,
subdivisions 13 to 13g
.
    The rebate revenues collected under the drug rebate program are deposited in the
general fund.

    Sec. 2. Minnesota Statutes 2006, section 259.24, subdivision 3, is amended to read:
    Subd. 3. Child. When the child to be adopted is over 14 years of age, the child's
written consent to adoption by a particular person is also shall be necessary. A child
of any age who is under the guardianship of the commissioner and is legally available
for adoption may not refuse or waive the commissioner's agent's exhaustive efforts to
recruit, identify, and place the child in an adoptive home required under section 260C.317,
subdivision 3, paragraph (b), or sign a document relieving county social services agencies
of all recruitment efforts on the child's behalf.

    Sec. 3. Minnesota Statutes 2006, section 259.53, subdivision 1, is amended to read:
    Subdivision 1. Notice to commissioner; referral for postplacement assessment.
    (a) Upon the filing of a petition for adoption of a child who is:
    (1) under the guardianship of the commissioner or a licensed child-placing agency
according to section 260C.201, subdivision 11, or 260C.317;
    (2) placed by the commissioner, commissioner's agent, or licensed child-placing
agency after a consent to adopt according to section 259.24 or under an agreement
conferring authority to place for adoption according to section 259.25; or
    (3) placed by preadoptive custody order for a direct adoptive placement ordered
by the district court under section 259.47,
the court administrator shall immediately transmit a copy of the petition to the
commissioner of human services.
    (b) The court shall immediately refer the petition to the agency specified below for
completion of a postplacement assessment and report as required by subdivision 2.
    (1) If the child to be adopted has been committed to the guardianship of the
commissioner or an agency under section 260C.317 or an agency has been given authority
to place the child under section 259.25, the court shall refer the petition to that agency,
unless another agency is supervising the placement, in which case the court shall refer the
petition to the supervising agency.
    (2) If the child to be adopted has been placed in the petitioner's home by a direct
adoptive placement, the court shall refer the petition to the agency supervising the
placement under section 259.47, subdivision 3, paragraph (a), clause (6).
    (3) If the child is to be adopted by an individual who is related to the child as defined
by section 245A.02, subdivision 13, and in all other instances not described in clause (1)
or (2), the court shall refer the petition to the local social services agency of the county in
which the prospective adoptive parent lives.

    Sec. 4. Minnesota Statutes 2006, section 259.57, subdivision 1, is amended to read:
    Subdivision 1. Findings; orders. Upon the hearing,
    (a) if the court finds that it is in the best interests of the child that the petition
be granted, a decree of adoption shall be made and recorded in the office of the court
administrator, ordering that henceforth the child shall be the child of the petitioner. In the
decree the court may change the name of the child if desired. After the decree is granted
for a child who is:
    (1) under the guardianship of the commissioner or a licensed child-placing agency
according to section 260C.201, subdivision 11, or 260C.317;
    (2) placed by the commissioner, commissioner's agent, or licensed child-placing
agency after a consent to adopt according to section 259.24 or under an agreement
conferring authority to place for adoption according to section 259.25; or
    (3) adopted after a direct adoptive placement ordered by the district court under
section 259.47,
the court administrator shall immediately mail a copy of the recorded decree to the
commissioner of human services;
    (b) if the court is not satisfied that the proposed adoption is in the best interests
of the child, the court shall deny the petition, and shall order the child returned to the
custody of the person or agency legally vested with permanent custody or certify the
case for appropriate action and disposition to the court having jurisdiction to determine
the custody and guardianship of the child.

    Sec. 5. Minnesota Statutes 2006, 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. Adoption services under this subdivision may include adoptive family
recruitment, counseling, and special training when needed.
    (b) An eligible child must have a goal of adoption, which may include an adoption
in accordance with tribal law, and meet one of the following criteria:
    (1) is a ward of the commissioner of human services or a ward of tribal court
pursuant to section 260.755, subdivision 20, who meets one of the criteria in subdivision
4, paragraph (b), clause (1), (2), or (3); or
    (2) is under the guardianship of a Minnesota-licensed child-placing agency who
meets one of the criteria in subdivision 4, paragraph (b), clause (1) or (2).
    (c) 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. Tribal social services 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
Before providing adoption services for which reimbursement will be sought under this
subdivision, a reimbursement agreement, on the designated format, must be entered into
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. The commissioner of human services shall
agree that the reimbursement costs are reasonable and appropriate. The commissioner
may spend up to $16,000 for each purchase of service agreement. Only one agreement per
child is allowed, unless an exception is granted by the commissioner. 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 shall 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. 6. Minnesota Statutes 2006, section 259.75, subdivision 8, is amended to read:
    Subd. 8. Reasons for deferral. Deferral of the listing of a child with the state
adoption exchange shall be only for one or more of the following reasons:
    (a) the child is in an adoptive placement but is not legally adopted;
    (b) the child's foster parents or other individuals are now considering adoption;
    (c) diagnostic study or testing is required to clarify the child's problem and provide
an adequate description; or
    (d) the child is currently in a hospital and continuing need for daily professional care
will not permit placement in a family setting; or.
    (e) the child is 14 years of age or older and will not consent to an adoption plan.
Approval of a request to defer listing for any of the reasons specified in paragraph (b) or
(c) shall be valid for a period not to exceed 90 days, with no subsequent deferrals for
those reasons.

    Sec. 7. Minnesota Statutes 2006, section 260.012, is amended to read:
260.012 DUTY TO ENSURE PLACEMENT PREVENTION AND FAMILY
REUNIFICATION; REASONABLE EFFORTS.
    (a) Once a child alleged to be in need of protection or services is under the court's
jurisdiction, the court shall ensure that reasonable efforts, including culturally appropriate
services, by the social services agency are made to prevent placement or to eliminate the
need for removal and to reunite the child with the child's family at the earliest possible
time, and when a child cannot be reunified with the parent or guardian from whom the
child was removed, the court must ensure that the responsible social services agency
makes reasonable efforts to finalize an alternative permanent plan for the child as provided
in paragraph (e). In determining reasonable efforts to be made with respect to a child and
in making those reasonable efforts, the child's best interests, health, and safety must be of
paramount concern. Reasonable efforts to prevent placement and for rehabilitation and
reunification are always required except upon a determination by the court that a petition
has been filed stating a prima facie case that:
    (1) the parent has subjected a child to egregious harm as defined in section
260C.007, subdivision 14;
    (2) the parental rights of the parent to another child have been terminated
involuntarily;
    (3) the child is an abandoned infant under section 260C.301, subdivision 2,
paragraph (a), clause (2);
    (4) the parent's custodial rights to another child have been involuntarily transferred
to a relative under section 260C.201, subdivision 11, paragraph (e), clause (1), or a similar
law of another jurisdiction; or
    (5) the provision of services or further services for the purpose of reunification is
futile and therefore unreasonable under the circumstances.
    (b) When the court makes one of the prima facie determinations under paragraph (a),
either permanency pleadings under section 260C.201, subdivision 11, or a termination
of parental rights petition under sections 260C.141 and 260C.301 must be filed. A
permanency hearing under section 260C.201, subdivision 11, must be held within 30
days of this determination.
    (c) In the case of an Indian child, in proceedings under sections 260B.178 or
260C.178, 260C.201, and 260C.301 the juvenile court must make findings and conclusions
consistent with the Indian Child Welfare Act of 1978, United States Code, title 25, section
1901 et seq., as to the provision of active efforts. In cases governed by the Indian Child
Welfare Act of 1978, United States Code, title 25, section 1901, the responsible social
services agency must provide active efforts as required under United States Code, title
25, section 1911(d).
    (d) "Reasonable efforts to prevent placement" means:
    (1) the agency has made reasonable efforts to prevent the placement of the child in
foster care; or
    (2) given the particular circumstances of the child and family at the time of the
child's removal, there are no services or efforts available which could allow the child to
safely remain in the home.
    (e) "Reasonable efforts to finalize a permanent plan for the child" means due
diligence by the responsible social services agency to:
    (1) reunify the child with the parent or guardian from whom the child was removed;
    (2) assess a noncustodial parent's ability to provide day-to-day care for the child and,
where appropriate, provide services necessary to enable the noncustodial parent to safely
provide the care, as required by section 260C.212, subdivision 4;
    (3) conduct a relative search as required under section 260C.212, subdivision 5; and
    (4) when the child cannot return to the parent or guardian from whom the child was
removed, to plan for and finalize a safe and legally permanent alternative home for the
child, and considers permanent alternative homes for the child inside or outside of the
state, preferably through adoption or transfer of permanent legal and physical custody of
the child.
    (f) Reasonable efforts are made upon the exercise of due diligence by the responsible
social services agency to use culturally appropriate and available services to meet the
needs of the child and the child's family. Services may include those provided by the
responsible social services agency and other culturally appropriate services available in
the community. At each stage of the proceedings where the court is required to review
the appropriateness of the responsible social services agency's reasonable efforts as
described in paragraphs (a), (d), and (e), the social services agency has the burden of
demonstrating that:
    (1) it has made reasonable efforts to prevent placement of the child in foster care;
    (2) it has made reasonable efforts to eliminate the need for removal of the child from
the child's home and to reunify the child with the child's family at the earliest possible time;
    (3) it has made reasonable efforts to finalize an alternative permanent home for
the child, and considers permanent alternative homes for the child inside or outside of
the state; or
    (4) reasonable efforts to prevent placement and to reunify the child with the parent
or guardian are not required. The agency may meet this burden by stating facts in a sworn
petition filed under section 260C.141, by filing an affidavit summarizing the agency's
reasonable efforts or facts the agency believes demonstrate there is no need for reasonable
efforts to reunify the parent and child, or through testimony or a certified report required
under juvenile court rules.
    (g) Once the court determines that reasonable efforts for reunification are not
required because the court has made one of the prima facie determinations under paragraph
(a), the court may only require reasonable efforts for reunification after a hearing according
to section 260C.163, where the court finds there is not clear and convincing evidence of
the facts upon which the court based its prima facie determination. In this case when there
is clear and convincing evidence that the child is in need of protection or services, the
court may find the child in need of protection or services and order any of the dispositions
available under section 260C.201, subdivision 1. Reunification of a surviving child with a
parent is not required if the parent has been convicted of:
    (1) a violation of, or an attempt or conspiracy to commit a violation of, sections
609.185 to 609.20; 609.222, subdivision 2; or 609.223 in regard to another child of the
parent;
    (2) a violation of section 609.222, subdivision 2; or 609.223, in regard to the
surviving child; or
    (3) a violation of, or an attempt or conspiracy to commit a violation of, United States
Code, title 18, section 1111(a) or 1112(a), in regard to another child of the parent.
    (h) The juvenile court, in proceedings under sections 260B.178 or 260C.178,
260C.201, and 260C.301 shall make findings and conclusions as to the provision of
reasonable efforts. When determining whether reasonable efforts have been made, the
court shall consider whether services to the child and family were:
    (1) relevant to the safety and protection of the child;
    (2) adequate to meet the needs of the child and family;
    (3) culturally appropriate;
    (4) available and accessible;
    (5) consistent and timely; and
    (6) realistic under the circumstances.
    In the alternative, the court may determine that provision of services or further
services for the purpose of rehabilitation is futile and therefore unreasonable under the
circumstances or that reasonable efforts are not required as provided in paragraph (a).
    (i) This section does not prevent out-of-home placement for treatment of a child with
a mental disability when the child's diagnostic assessment or individual treatment plan
indicates that appropriate and necessary treatment cannot be effectively provided outside
of a residential or inpatient treatment program.
    (j) If continuation of reasonable efforts to prevent placement or reunify the child
with the parent or guardian from whom the child was removed is determined by the court
to be inconsistent with the permanent plan for the child or upon the court making one of
the prima facie determinations under paragraph (a), reasonable efforts must be made to
place the child in a timely manner in a safe and permanent home and to complete whatever
steps are necessary to legally finalize the permanent placement of the child.
    (k) Reasonable efforts to place a child for adoption or in another permanent
placement may be made concurrently with reasonable efforts to prevent placement or to
reunify the child with the parent or guardian from whom the child was removed. When
the responsible social services agency decides to concurrently make reasonable efforts for
both reunification and permanent placement away from the parent under paragraph (a), the
agency shall disclose its decision and both plans for concurrent reasonable efforts to all
parties and the court. When the agency discloses its decision to proceed on both plans for
reunification and permanent placement away from the parent, the court's review of the
agency's reasonable efforts shall include the agency's efforts under both plans.

    Sec. 8. Minnesota Statutes 2006, section 260.755, subdivision 12, is amended to read:
    Subd. 12. Indian tribe. "Indian tribe" means an Indian tribe, band, nation, or
other organized group or community of Indians recognized as eligible for the services
provided to Indians by the secretary because of their status as Indians, including any band
Native group under the Alaska Native Claims Settlement Act, United States Code, title 43,
section 1602, and exercising tribal governmental powers.

    Sec. 9. Minnesota Statutes 2006, section 260.755, subdivision 20, is amended to read:
    Subd. 20. Tribal court. "Tribal court" means a court with federally recognized
jurisdiction over child custody proceedings and which is either a court of Indian offenses,
or a court established and operated under the code or custom of an Indian tribe, or the
any other administrative body of a tribe which is vested with authority over child custody
proceedings. Except as provided in section 260.771, subdivision 5, nothing in this chapter
shall be construed as conferring jurisdiction on an Indian tribe.

    Sec. 10. Minnesota Statutes 2006, section 260.761, subdivision 7, is amended to read:
    Subd. 7. Identification of extended family members. Any agency considering
placement of an Indian child shall make reasonable active efforts to identify and locate
extended family members.

    Sec. 11. Minnesota Statutes 2006, section 260.765, subdivision 5, is amended to read:
    Subd. 5. Identification of extended family members. Any agency considering
placement of an Indian child shall make reasonable active efforts to identify and locate
extended family members.

    Sec. 12. Minnesota Statutes 2006, section 260.771, subdivision 1, is amended to read:
    Subdivision 1. Indian tribe jurisdiction. An Indian tribe with a tribal court has
exclusive jurisdiction over a child placement proceeding involving an Indian child who
resides or is domiciled within the reservation of such the tribe at the commencement of
the proceedings, except where jurisdiction is otherwise vested in the state by existing
federal law. When an Indian child is in the legal custody of a person or agency pursuant
to an order of a ward of the tribal court, the Indian tribe retains exclusive jurisdiction,
notwithstanding the residence or domicile of the child.

    Sec. 13. Minnesota Statutes 2006, section 260.771, subdivision 2, is amended to read:
    Subd. 2. Court determination of tribal affiliation of child. In any child placement
proceeding, the court shall establish whether an Indian child is involved and the identity
of the Indian child's tribe. This chapter and the federal Indian Child Welfare Act are
applicable without exception in any child custody proceeding, as defined in the federal act,
involving an Indian child. This chapter applies to child custody proceedings involving
an Indian child whether the child is in the physical or legal custody of an Indian parent,
Indian custodian, Indian extended family member, or other person at the commencement
of the proceedings. A court shall not determine the applicability of this chapter or the
federal Indian Child Welfare Act to a child custody proceeding based upon whether an
Indian child is part of an existing Indian family or based upon the level of contact a child
has with the child's Indian tribe, reservation, society, or off-reservation community.

    Sec. 14. [260.852] PLACEMENT PROCEDURES.
    Subdivision 1. Home study. The state must have procedures for the orderly and
timely interstate placement of children that are implemented in accordance with an
interstate compact and that, within 60 days after the state receives from another state a
request to conduct a study of a home environment for purposes of assessing the safety
and suitability of placing a child in the home, the state shall, directly or by contract,
conduct and complete a home study and return to the other state a report on the results of
the study, which shall address the extent to which placement in the home would meet the
needs of the child; except in the case of a home study begun before October 1, 2008, if the
state fails to comply with conducting and completing the home study within the 60-day
period and this is as a result of circumstances beyond the control of the state, the state has
75 days to comply if the state documents the circumstances involved and certifies that
completing the home study is in the best interests of the child.
    This subdivision does not require the completion within the applicable period of
the parts of the home study involving the education and training of the prospective foster
or adoptive parents.
    Subd. 2. Effect of received report. The state shall treat any report described in
subdivision 1 that is received from another state, an Indian tribe, or a private agency
under contract with another state or Indian tribe as meeting any requirements imposed by
the state for the completion of a home study before placing a child in the home, unless,
within 14 days after receipt of the report, the state determines, based on grounds that
are specific to the content of the report, that making a decision in reliance on the report
would be contrary to the welfare of the child.
    Subd. 3. Resources. The state shall make effective use of cross-jurisdictional
resources, including through contract for the purchase of services, and shall eliminate
legal barriers to facilitate timely adoptive or permanent placements for waiting children.
The state shall not impose any restriction on the use of private agencies for the purpose of
conducting a home study to meet the 60-day requirement.
    Subd. 4. Incentive eligibility. Minnesota is an incentive-eligible state and must:
    (1) have an approved plan as required by the United States Secretary of Health
and Human Services;
    (2) be in compliance with the data requirements of the United States Department of
Health and Human Services; and
    (3) have data that verify that a home study is completed within 30 days.
    Subd. 5. Data requirements. The state shall provide to the United States Secretary
of Health and Human Services a written report, covering the preceding fiscal year, that
specifies:
    (1) the total number of interstate home studies requested by the state with respect
to children in foster care under the responsibility of the state, and with respect to each
study, the identity of the other state involved;
    (2) the total number of timely interstate home studies completed by the state with
respect to children in foster care under the responsibility of other states and, with respect
to each study, the identity of the other state involved; and
    (3) other information the United States Secretary of Health and Human Services
requires in order to determine whether Minnesota is a home study incentive-eligible state.
    Subd. 6. Definitions. (a) The definitions in this subdivision apply to this section.
    (b) "Home study" means an evaluation of a home environment conducted in
accordance with applicable requirements of the state in which the home is located, to
determine whether a proposed placement of a child would meet the individual needs of the
child, including the child's safety; permanency; health; well-being; and mental, emotional,
and physical development.
    (c) "Interstate home study" means a home study conducted by a state at the request
of another state to facilitate an adoptive or foster placement in the state of a child in foster
care under the responsibility of the state.
    (d) "Timely interstate home study" means an interstate home study completed by a
state if the state provides to the state that requested the study, within 30 days after receipt
of the request, a report on the results of the study, except that there is no requirement
for completion within the 30-day period of the parts of the home study involving the
education and training of the prospective foster or adoptive parents.
    Subd. 7. Background study requirements for adoption and foster care. (a)
Background study requirements for an adoption home study must be completed consistent
with section 259.41, subdivisions 1, 2, and 3.
    (b) Background study requirements for a foster care license must be completed
consistent with section 245C.08.
    Subd. 8. Home visits. If a child has been placed in foster care outside the state in
which the home of the parents of the child is located, periodically, but at least every six
months, a caseworker on the staff of the agency of the state in which the home of the
parents of the child is located or the state in which the child has been placed, or a private
agency under contract with either state, must visit the child in the home or institution and
submit a report on each visit to the agency of the state in which the home of the parents of
the child is located.

    Sec. 15. Minnesota Statutes 2006, 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 order 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 order 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.

    Sec. 16. Minnesota Statutes 2006, section 260C.152, subdivision 5, is amended to read:
    Subd. 5. Notice to foster parents and preadoptive parents and relatives. The
foster parents, if any, of a child and any preadoptive parent or relative providing care
for the child must be provided notice of and an opportunity a right to be heard in any
review or hearing to be held with respect to the child. Any other relative may also request,
and must be granted, a notice and the opportunity to be heard under this section. This
subdivision does not require that a foster parent, preadoptive parent, or relative providing
care for the child be made a party to a review or hearing solely on the basis of the notice
and opportunity right to be heard.

    Sec. 17. Minnesota Statutes 2006, section 260C.163, subdivision 1, is amended to read:
    Subdivision 1. General. (a) Except for hearings arising under section 260C.425,
hearings on any matter shall be without a jury and may be conducted in an informal
manner. In all adjudicatory proceedings involving a child alleged to be in need of
protection or services, the court shall admit only evidence that would be admissible in a
civil trial. To be proved at trial, allegations of a petition alleging a child to be in need of
protection or services must be proved by clear and convincing evidence.
    (b) Except for proceedings involving a child alleged to be in need of protection or
services and petitions for the termination of parental rights, hearings may be continued or
adjourned from time to time. In proceedings involving a child alleged to be in need of
protection or services and petitions for the termination of parental rights, hearings may not
be continued or adjourned for more than one week unless the court makes specific findings
that the continuance or adjournment is in the best interests of the child. If a hearing is held
on a petition involving physical or sexual abuse of a child who is alleged to be in need of
protection or services or neglected and in foster care, the court shall file the decision with
the court administrator as soon as possible but no later than 15 days after the matter is
submitted to the court. When a continuance or adjournment is ordered in any proceeding,
the court may make any interim orders as it deems in the best interests of the minor in
accordance with the provisions of sections 260C.001 to 260C.421.
    (c) Except as otherwise provided in this paragraph, the court shall exclude the
general public from hearings under this chapter and shall admit only those persons who, in
the discretion of the court, have a direct interest in the case or in the work of the court.
    (d) Adoption hearings shall be conducted in accordance with the provisions of
laws relating to adoptions.
    (e) In any permanency hearing, including the transition of a child from foster care
to independent living, the court shall ensure that any consult with the child is in an
age-appropriate manner.

    Sec. 18. Minnesota Statutes 2006, section 260C.201, subdivision 11, is amended to
read:
    Subd. 11. Review of court-ordered placements; permanent placement
determination. (a) This subdivision and subdivision 11a do not apply in cases where
the child is in placement due solely to the child's developmental disability or emotional
disturbance, where legal custody has not been transferred to the responsible social services
agency, and where the court finds compelling reasons under section 260C.007, subdivision
8
, to continue the child in foster care past the time periods specified in this subdivision.
Foster care placements of children due solely to their disability are governed by section
260C.141, subdivision 2a. In all other cases where the child is in foster care or in the care
of a noncustodial parent under subdivision 1, the court shall commence proceedings
to determine the permanent status of a child not later than 12 months after the child is
placed in foster care or in the care of a noncustodial parent. At the admit-deny hearing
commencing such proceedings, the court shall determine whether there is a prima facie
basis for finding that the agency made reasonable efforts, or in the case of an Indian
child active efforts, required under section 260.012 and proceed according to the rules of
juvenile court.
    For purposes of this subdivision, the date of the child's placement in foster care is
the earlier of the first court-ordered placement or 60 days after the date on which the
child has been voluntarily placed in foster care by the child's parent or guardian. For
purposes of this subdivision, time spent by a child under the protective supervision of
the responsible social services agency in the home of a noncustodial parent pursuant to
an order under subdivision 1 counts towards the requirement of a permanency hearing
under this subdivision or subdivision 11a. Time spent on a trial home visit does not count
counts towards the requirement of a permanency hearing under this subdivision or and a
permanency review for a child under eight years of age under subdivision 11a.
    For purposes of this subdivision, 12 months is calculated as follows:
    (1) during the pendency of a petition alleging that a child is in need of protection
or services, all time periods when a child is placed in foster care or in the home of a
noncustodial parent are cumulated;
    (2) if a child has been placed in foster care within the previous five years under one
or more previous petitions, the lengths of all prior time periods when the child was placed
in foster care within the previous five years are cumulated. If a child under this clause
has been in foster care for 12 months or more, the court, if it is in the best interests of the
child and for compelling reasons, may extend the total time the child may continue out
of the home under the current petition up to an additional six months before making a
permanency determination.
    (b) Unless the responsible social services agency recommends return of the child
to the custodial parent or parents, not later than 30 days prior to the admit-deny hearing
required under paragraph (a) and the rules of juvenile court, the responsible social services
agency shall file pleadings in juvenile court to establish the basis for the juvenile court to
order permanent placement of the child, including a termination of parental rights petition,
according to paragraph (d). Notice of the hearing and copies of the pleadings must be
provided pursuant to section 260C.152.
    (c) The permanency proceedings shall be conducted in a timely fashion including
that any trial required under section 260C.163 shall be commenced within 60 days of the
admit-deny hearing required under paragraph (a). At the conclusion of the permanency
proceedings, the court shall:
    (1) order the child returned to the care of the parent or guardian from whom the
child was removed; or
    (2) order a permanent placement or termination of parental rights if permanent
placement or termination of parental rights is in the child's best interests. The "best
interests of the child" means all relevant factors to be considered and evaluated. Transfer
of permanent legal and physical custody, termination of parental rights, or guardianship
and legal custody to the commissioner through a consent to adopt are preferred
permanency options for a child who cannot return home.
    (d) If the child is not returned to the home, the court must order one of the following
dispositions:
    (1) permanent legal and physical custody to a relative in the best interests of the
child according to the following conditions:
    (i) an order for transfer of permanent legal and physical custody to a relative shall
only be made after the court has reviewed the suitability of the prospective legal and
physical custodian;
    (ii) in transferring permanent legal and physical custody to a relative, the juvenile
court shall follow the standards applicable under this chapter and chapter 260, and the
procedures set out in the juvenile court rules;
    (iii) an order establishing permanent legal and physical custody under this
subdivision must be filed with the family court;
    (iv) a transfer of legal and physical custody includes responsibility for the protection,
education, care, and control of the child and decision making on behalf of the child;
    (v) the social services agency may bring a petition or motion naming a fit and
willing relative as a proposed permanent legal and physical custodian. The commissioner
of human services shall annually prepare for counties information that must be given to
proposed custodians about their legal rights and obligations as custodians together with
information on financial and medical benefits for which the child is eligible; and
    (vi) the juvenile court may maintain jurisdiction over the responsible social services
agency, the parents or guardian of the child, the child, and the permanent legal and
physical custodian for purposes of ensuring appropriate services are delivered to the child
and permanent legal custodian or for the purpose of ensuring conditions ordered by the
court related to the care and custody of the child are met;
    (2) termination of parental rights when the requirements of sections 260C.301 to
260C.328 are met or according to the following conditions:
    (i) order the social services agency to file a petition for termination of parental
rights in which case all the requirements of sections 260C.301 to 260C.328 remain
applicable; and
    (ii) an adoption completed subsequent to a determination under this subdivision may
include an agreement for communication or contact under section 259.58;
    (3) long-term foster care according to the following conditions:
    (i) the court may order a child into long-term foster care only if it approves the
responsible social service agency's compelling reasons that neither an award of permanent
legal and physical custody to a relative, nor termination of parental rights is in the child's
best interests;
    (ii) further, the court may only order long-term foster care for the child under this
section if it finds the following:
    (A) the child has reached age 12 and the responsible social services agency has made
reasonable efforts to locate and place the child with an adoptive family or with a fit and
willing relative who will agree to a transfer of permanent legal and physical custody of
the child, but such efforts have not proven successful; or
    (B) the child is a sibling of a child described in subitem (A) and the siblings have
a significant positive relationship and are ordered into the same long-term foster care
home; and
    (iii) at least annually, the responsible social services agency reconsiders its provision
of services to the child and the child's placement in long-term foster care to ensure that:
    (A) long-term foster care continues to be the most appropriate legal arrangement
for meeting the child's need for permanency and stability, including whether there is
another permanent placement option under this chapter that would better serve the child's
needs and best interests;
    (B) whenever possible, there is an identified long-term foster care family that is
committed to being the foster family for the child as long as the child is a minor or under
the jurisdiction of the court;
    (C) the child is receiving appropriate services or assistance to maintain or build
connections with the child's family and community;
    (D) the child's physical and mental health needs are being appropriately provided
for; and
    (E) the child's educational needs are being met;
    (4) foster care for a specified period of time according to the following conditions:
    (i) foster care for a specified period of time may be ordered only if:
    (A) the sole basis for an adjudication that the child is in need of protection or
services is the child's behavior;
    (B) the court finds that foster care for a specified period of time is in the best
interests of the child; and
    (C) the court approves the responsible social services agency's compelling reasons
that neither an award of permanent legal and physical custody to a relative, nor termination
of parental rights is in the child's best interests;
    (ii) the order does not specify that the child continue in foster care for any period
exceeding one year; or
    (5) guardianship and legal custody to the commissioner of human services under
the following procedures and conditions:
    (i) there is an identified prospective adoptive home agreed to by the responsible
social services agency having legal custody of the child pursuant to court order under this
section that has agreed to adopt the child and the court accepts the parent's voluntary
consent to adopt under section 259.24, except that such consent executed by a parent under
this item, following proper notice that consent given under this provision is irrevocable
upon acceptance by the court, shall be irrevocable unless fraud is established and an order
issues permitting revocation as stated in item (vii);
    (ii) if the court accepts a consent to adopt in lieu of ordering one of the other
enumerated permanency dispositions, the court must review the matter at least every 90
days. The review will address the reasonable efforts of the agency to achieve a finalized
adoption;
    (iii) a consent to adopt under this clause vests all legal authority regarding the child,
including guardianship and legal custody of the child, with the commissioner of human
services as if the child were a state ward after termination of parental rights;
    (iv) the court must forward a copy of the consent to adopt, together with a certified
copy of the order transferring guardianship and legal custody to the commissioner, to
the commissioner;
    (v) if an adoption is not finalized by the identified prospective adoptive parent within
12 months of the execution of the consent to adopt under this clause, the commissioner of
human services or the commissioner's delegate shall pursue adoptive placement in another
home unless the commissioner certifies that the failure to finalize is not due to either an
action or a failure to act by the prospective adoptive parent;
    (vi) notwithstanding item (v), the commissioner of human services or the
commissioner's designee must pursue adoptive placement in another home as soon as the
commissioner or commissioner's designee determines that finalization of the adoption with
the identified prospective adoptive parent is not possible, that the identified prospective
adoptive parent is not willing to adopt the child, that the identified prospective adoptive
parent is not cooperative in completing the steps necessary to finalize the adoption, or
upon the commissioner's determination to withhold consent to the adoption.
    (vii) unless otherwise required by the Indian Child Welfare Act, United States Code,
title 25, section 1913, a consent to adopt executed under this section, following proper
notice that consent given under this provision is irrevocable upon acceptance by the court,
shall be irrevocable upon acceptance by the court except upon order permitting revocation
issued by the same court after written findings that consent was obtained by fraud.
    (e) In ordering a permanent placement of a child, the court must be governed by the
best interests of the child, including a review of the relationship between the child and
relatives and the child and other important persons with whom the child has resided or
had significant contact. When the court has determined that permanent placement of the
child away from the parent is necessary, the court shall consider permanent alternative
homes that are available both inside and outside the state.
    (f) Once a permanent placement determination has been made and permanent
placement has been established, further court reviews are necessary if:
    (1) the placement is long-term foster care or foster care for a specified period of time;
    (2) the court orders further hearings because it has retained jurisdiction of a transfer
of permanent legal and physical custody matter;
    (3) an adoption has not yet been finalized; or
    (4) there is a disruption of the permanent or long-term placement.
    (g) Court reviews of an order for long-term foster care, whether under this section
or section 260C.317, subdivision 3, paragraph (d), must be conducted at least yearly and
must review the child's out-of-home placement plan and the reasonable efforts of the
agency to finalize the permanent plan for the child including the agency's efforts to:
    (1) ensure that long-term foster care continues to be the most appropriate legal
arrangement for meeting the child's need for permanency and stability or, if not, to identify
and attempt to finalize another permanent placement option under this chapter that would
better serve the child's needs and best interests;
    (2) identify a specific long-term foster home for the child, if one has not already
been identified;
    (3) support continued placement of the child in the identified home, if one has been
identified;
    (4) ensure appropriate services are provided to address the physical health, mental
health, and educational needs of the child during the period of long-term foster care and
also ensure appropriate services or assistance to maintain relationships with appropriate
family members and the child's community; and
    (5) plan for the child's independence upon the child's leaving long-term foster care
living as required under section 260C.212, subdivision 1.
    (h) In the event it is necessary for a child that has been ordered into foster care for a
specified period of time to be in foster care longer than one year after the permanency
hearing held under this section, not later than 12 months after the time the child was
ordered into foster care for a specified period of time, the matter must be returned to
court for a review of the appropriateness of continuing the child in foster care and of the
responsible social services agency's reasonable efforts to finalize a permanent plan for
the child; if it is in the child's best interests to continue the order for foster care for a
specified period of time past a total of 12 months, the court shall set objectives for the
child's continuation in foster care, specify any further amount of time the child may be in
foster care, and review the plan for the safe return of the child to the parent.
    (i) An order permanently placing a child out of the home of the parent or guardian
must include the following detailed findings:
    (1) how the child's best interests are served by the order;
    (2) the nature and extent of the responsible social service agency's reasonable efforts,
or, in the case of an Indian child, active efforts to reunify the child with the parent or
guardian where reasonable efforts are required;
    (3) the parent's or parents' efforts and ability to use services to correct the conditions
which led to the out-of-home placement; and
    (4) that the conditions which led to the out-of-home placement have not been
corrected so that the child can safely return home.
    (j) An order for permanent legal and physical custody of a child may be modified
under sections 518.18 and 518.185. The social services agency is a party to the proceeding
and must receive notice. A parent may only seek modification of an order for long-term
foster care upon motion and a showing by the parent of a substantial change in the parent's
circumstances such that the parent could provide appropriate care for the child and that
removal of the child from the child's permanent placement and the return to the parent's
care would be in the best interest of the child. The responsible social services agency may
ask the court to vacate an order for long-term foster care upon a prima facie showing
that there is a factual basis for the court to order another permanency option under this
chapter and that such an option is in the child's best interests. Upon a hearing where
the court determines that there is a factual basis for vacating the order for long-term
foster care and that another permanent order regarding the placement of the child is in
the child's best interests, the court may vacate the order for long-term foster care and
enter a different order for permanent placement that is in the child's best interests. The
court shall not require further reasonable efforts to reunify the child with the parent or
guardian as a basis for vacating the order for long-term foster care and ordering a different
permanent placement in the child's best interests. The county attorney must file pleadings
and give notice as required under the rules of juvenile court in order to modify an order for
long-term foster care under this paragraph.
    (k) The court shall issue an order required under this section within 15 days of the
close of the proceedings. The court may extend issuing the order an additional 15 days
when necessary in the interests of justice and the best interests of the child.
    (l) This paragraph applies to proceedings required under this subdivision when
the child is on a trial home visit:
    (1) if the child is on a trial home visit 12 months after the child was placed in
foster care or in the care of a noncustodial parent as calculated in this subdivision, the
responsible social services agency may file a report with the court regarding the child's and
parent's progress on the trial home visit and its reasonable efforts to finalize the child's safe
and permanent return to the care of the parent in lieu of filing the pleadings required under
paragraph (b). The court shall make findings regarding reasonableness of the responsible
social services efforts to finalize the child's return home as the permanent order in the best
interests of the child. The court may continue the trial home visit to a total time not to
exceed six months as provided in subdivision 1. If the court finds the responsible social
services agency has not made reasonable efforts to finalize the child's return home as the
permanent order in the best interests of the child, the court may order other or additional
efforts to support the child remaining in the care of the parent; and
    (2) if a trial home visit ordered or continued at proceedings under this subdivision
terminates, the court shall re-commence proceedings under this subdivision to determine
the permanent status of the child not later than 30 days after the child is returned to foster
care.

    Sec. 19. Minnesota Statutes 2006, section 260C.212, subdivision 1, is amended to read:
    Subdivision 1. Out-of-home placement; plan. (a) An out-of-home placement plan
shall be prepared within 30 days after any child is placed in a residential facility by court
order or by the voluntary release of the child by the parent or parents.
    For purposes of this section, a residential facility means any group home, family
foster home or other publicly supported out-of-home residential facility, including any
out-of-home residential facility under contract with the state, county or other political
subdivision, or any agency thereof, to provide those services or foster care as defined in
section 260C.007, subdivision 18.
    (b) An out-of-home placement plan means a written document which is prepared by
the responsible social services agency jointly with the parent or parents or guardian of the
child and in consultation with the child's guardian ad litem, the child's tribe, if the child is
an Indian child, the child's foster parent or representative of the residential facility, and,
where appropriate, the child. For a child in placement due solely or in part to the child's
emotional disturbance, preparation of the out-of-home placement plan shall additionally
include the child's mental health treatment provider. As appropriate, the plan shall be:
    (1) submitted to the court for approval under section 260C.178, subdivision 7;
    (2) ordered by the court, either as presented or modified after hearing, under section
260C.178, subdivision 7, or 260C.201, subdivision 6; and
    (3) signed by the parent or parents or guardian of the child, the child's guardian ad
litem, a representative of the child's tribe, the responsible social services agency, and, if
possible, the child.
    (c) The out-of-home placement plan shall be explained to all persons involved in its
implementation, including the child who has signed the plan, and shall set forth:
    (1) a description of the residential facility including how the out-of-home placement
plan is designed to achieve a safe placement for the child in the least restrictive, most
family-like, setting available which is in close proximity to the home of the parent or
parents or guardian of the child when the case plan goal is reunification, and how the
placement is consistent with the best interests and special needs of the child according to
the factors under subdivision 2, paragraph (b);
    (2) the specific reasons for the placement of the child in a residential facility, and
when reunification is the plan, a description of the problems or conditions in the home of
the parent or parents which necessitated removal of the child from home and the changes
the parent or parents must make in order for the child to safely return home;
    (3) a description of the services offered and provided to prevent removal of the child
from the home and to reunify the family including:
    (i) the specific actions to be taken by the parent or parents of the child to eliminate
or correct the problems or conditions identified in clause (2), and the time period during
which the actions are to be taken; and
    (ii) the reasonable efforts, or in the case of an Indian child, active efforts to be made
to achieve a safe and stable home for the child including social and other supportive
services to be provided or offered to the parent or parents or guardian of the child, the
child, and the residential facility during the period the child is in the residential facility;
    (4) a description of any services or resources that were requested by the child or the
child's parent, guardian, foster parent, or custodian since the date of the child's placement
in the residential facility, and whether those services or resources were provided and if
not, the basis for the denial of the services or resources;
    (5) the visitation plan for the parent or parents or guardian, other relatives as defined
in section 260C.007, subdivision 27, and siblings of the child if the siblings are not placed
together in the residential facility, and whether visitation is consistent with the best interest
of the child, during the period the child is in the residential facility;
    (6) documentation of steps to finalize the adoption or legal guardianship of the child
if the court has issued an order terminating the rights of both parents of the child or of
the only known, living parent of the child, and. At a minimum, the documentation must
include child-specific recruitment efforts such as relative search and the use of state,
regional, and national adoption exchanges to facilitate orderly and timely placements in
and outside of the state. A copy of this documentation shall be provided to the court in the
review required under section 260C.317, subdivision 3, paragraph (b);
    (7) to the extent available and accessible, the health and educational records of the
child including the most recent information available regarding:
    (i) the names and addresses of the child's health and educational providers;
    (ii) the child's grade level performance;
    (iii) the child's school record;
    (iv) assurances that the child's placement in foster care takes into account proximity
to the school in which the child is enrolled at the time of placement;
    (v) a record of the child's immunizations;
    (vi) the child's known medical problems, including any known communicable
diseases, as defined in section 144.4172, subdivision 2;
    (vii) the child's medications; and
    (viii) any other relevant health and education information;
    (8) an independent living plan for a child age 16 or older who is in placement as
a result of a permanency disposition. The plan should include, but not be limited to,
the following objectives:
    (i) educational, vocational, or employment planning;
    (ii) health care planning and medical coverage;
    (iii) transportation including, where appropriate, assisting the child in obtaining a
driver's license;
    (iv) money management;
    (v) planning for housing;
    (vi) social and recreational skills; and
    (vii) establishing and maintaining connections with the child's family and
community; and
    (9) for a child in placement due solely or in part to the child's emotional disturbance,
diagnostic and assessment information, specific services relating to meeting the mental
health care needs of the child, and treatment outcomes.
    (d) The parent or parents or guardian and the child each shall have the right to legal
counsel in the preparation of the case plan and shall be informed of the right at the time
of placement of the child. The child shall also have the right to a guardian ad litem.
If unable to employ counsel from their own resources, the court shall appoint counsel
upon the request of the parent or parents or the child or the child's legal guardian. The
parent or parents may also receive assistance from any person or social services agency
in preparation of the case plan.
    After the plan has been agreed upon by the parties involved or approved or ordered
by the court, the foster parents shall be fully informed of the provisions of the case plan
and shall be provided a copy of the plan.
    Upon discharge from foster care, the parent, adoptive parent, or permanent legal and
physical custodian, as appropriate, and the child, if appropriate, must be provided with
a current copy of the child's health and education record.

    Sec. 20. Minnesota Statutes 2006, section 260C.212, subdivision 4, is amended to read:
    Subd. 4. Responsible social service agency's duties for children in placement. (a)
When a child is in placement, the responsible social services agency shall make diligent
efforts to identify, locate, and, where appropriate, offer services to both parents of the child.
    (1) The responsible social services agency shall assess whether a noncustodial or
nonadjudicated parent is willing and capable of providing for the day-to-day care of the
child temporarily or permanently. An assessment under this clause may include, but
is not limited to, obtaining information under section 260C.209. If after assessment,
the responsible social services agency determines that a noncustodial or nonadjudicated
parent is willing and capable of providing day-to-day care of the child, the responsible
social services agency may seek authority from the custodial parent or the court to have
that parent assume day-to-day care of the child. If a parent is not an adjudicated parent,
the responsible social services agency shall require the nonadjudicated parent to cooperate
with paternity establishment procedures as part of the case plan.
    (2) If, after assessment, the responsible social services agency determines that the
child cannot be in the day-to-day care of either parent, the agency shall:
    (i) prepare an out-of-home placement plan addressing the conditions that each parent
must meet before the child can be in that parent's day-to-day care; and
    (ii) provide a parent who is the subject of a background study under section
260C.209 15 days' notice that it intends to use the study to recommend against putting the
child with that parent, as well as the notice provided in section 260C.209, subdivision 4,
and the court shall afford the parent an opportunity to be heard concerning the study.
    The results of a background study of a noncustodial parent shall not be used by the
agency to determine that the parent is incapable of providing day-to-day care of the child
unless the agency reasonably believes that placement of the child into the home of that
parent would endanger the child's health, safety, or welfare.
    (3) If, after the provision of services following an out-of-home placement plan under
this section, the child cannot return to the care of the parent from whom the child was
removed or who had legal custody at the time the child was placed in foster care, the
agency may petition on behalf of a noncustodial parent to establish legal custody with
that parent under section 260C.201, subdivision 11. If paternity has not already been
established, it may be established in the same proceeding in the manner provided for
under chapter 257.
    (4) The responsible social services agency may be relieved of the requirement to
locate and offer services to both parents by the juvenile court upon a finding of good cause
after the filing of a petition under section 260C.141.
    (b) The responsible social services agency shall give notice to the parent or parents
or guardian of each child in a residential facility, other than a child in placement due
solely to that child's developmental disability or emotional disturbance, of the following
information:
    (1) that residential care of the child may result in termination of parental rights or an
order permanently placing the child out of the custody of the parent, but only after notice
and a hearing as required under chapter 260C and the juvenile court rules;
    (2) time limits on the length of placement and of reunification services, including
the date on which the child is expected to be returned to and safely maintained in the
home of the parent or parents or placed for adoption or otherwise permanently removed
from the care of the parent by court order;
    (3) the nature of the services available to the parent;
    (4) the consequences to the parent and the child if the parent fails or is unable to use
services to correct the circumstances that led to the child's placement;
    (5) the first consideration for placement with relatives;
    (6) the benefit to the child in getting the child out of residential care as soon as
possible, preferably by returning the child home, but if that is not possible, through a
permanent legal placement of the child away from the parent;
    (7) when safe for the child, the benefits to the child and the parent of maintaining
visitation with the child as soon as possible in the course of the case and, in any event,
according to the visitation plan under this section; and
    (8) the financial responsibilities and obligations, if any, of the parent or parents for
the support of the child during the period the child is in the residential facility.
    (c) The responsible social services agency shall inform a parent considering
voluntary placement of a child who is not developmentally disabled or emotionally
disturbed of the following information:
    (1) the parent and the child each has a right to separate legal counsel before signing a
voluntary placement agreement, but not to counsel appointed at public expense;
    (2) the parent is not required to agree to the voluntary placement, and a parent
who enters a voluntary placement agreement may at any time request that the agency
return the child. If the parent so requests, the child must be returned within 24 hours of
the receipt of the request;
    (3) evidence gathered during the time the child is voluntarily placed may be used
at a later time as the basis for a petition alleging that the child is in need of protection
or services or as the basis for a petition seeking termination of parental rights or other
permanent placement of the child away from the parent;
    (4) if the responsible social services agency files a petition alleging that the child is
in need of protection or services or a petition seeking the termination of parental rights
or other permanent placement of the child away from the parent, the parent would have
the right to appointment of separate legal counsel and the child would have a right to the
appointment of counsel and a guardian ad litem as provided by law, and that counsel will
be appointed at public expense if they are unable to afford counsel; and
    (5) the timelines and procedures for review of voluntary placements under
subdivision 3, and the effect the time spent in voluntary placement on the scheduling of a
permanent placement determination hearing under section 260C.201, subdivision 11.
    (d) When an agency accepts a child for placement, the agency shall determine
whether the child has had a physical examination by or under the direction of a licensed
physician within the 12 months immediately preceding the date when the child came into
the agency's care. If there is documentation that the child has had an examination within
the last 12 months, the agency is responsible for seeing that the child has another physical
examination within one year of the documented examination and annually in subsequent
years. If the agency determines that the child has not had a physical examination within
the 12 months immediately preceding placement, the agency shall ensure that the child
has an examination within 30 days of coming into the agency's care and once a year
in subsequent years.
    (e) If a child leaves foster care by reason of having attained the age of majority
under state law, the child must be given at no cost a copy of the child's health and
education report.

    Sec. 21. Minnesota Statutes 2006, section 260C.212, subdivision 9, is amended to read:
    Subd. 9. Review of certain child placements. (a) When a developmentally
disabled child or emotionally disturbed child needs placement in a residential facility for
the sole reason of accessing services or a level of skilled care that cannot be provided in
the parent's home, the child must be placed pursuant to a voluntary placement agreement
between the responsible social services agency and the child's parent. The voluntary
placement agreement must give the responsible social services agency legal responsibility
for the child's physical care, custody, and control, but must not transfer legal custody of
the child to the agency. The voluntary placement agreement must be executed in a form
developed and promulgated by the commissioner of human services. The responsible
social services agency shall report to the commissioner the number of children who are the
subject of a voluntary placement agreement under this subdivision and other information
regarding these children as the commissioner may require.
    (b) If a developmentally disabled child or a child diagnosed as emotionally disturbed
has been placed in a residential facility pursuant to a voluntary release by the child's parent
or parents because of the child's disabling conditions or need for long-term residential
treatment or supervision, the social services agency responsible for the placement shall
report to the court and bring a petition for review of the child's foster care status as
required in section 260C.141, subdivision 2a.
    (b) (c) If a child is in placement due solely to the child's developmental disability or
emotional disturbance, and the court finds compelling reasons not to proceed under section
260C.201, subdivision 11, and custody of the child is not transferred to the responsible
social services agency under section 260C.201, subdivision 1, paragraph (a), clause (2),
and no petition is required by section 260C.201, subdivision 11.
    (c) (d) Whenever a petition for review is brought pursuant to this subdivision, a
guardian ad litem shall be appointed for the child.

    Sec. 22. Minnesota Statutes 2006, section 260C.317, subdivision 3, is amended to read:
    Subd. 3. Order; retention of jurisdiction. (a) A certified copy of the findings and
the order terminating parental rights, and a summary of the court's information concerning
the child shall be furnished by the court to the commissioner or the agency to which
guardianship is transferred. The orders shall be on a document separate from the findings.
The court shall furnish the individual to whom guardianship is transferred a copy of the
order terminating parental rights.
    (b) The court shall retain jurisdiction in a case where adoption is the intended
permanent placement disposition until the child's adoption is finalized, the child is 18 years
of age, or the child is otherwise ordered discharged from the jurisdiction of the court. The
guardian ad litem and counsel for the child shall continue on the case until an adoption
decree is entered. A hearing must be held every 90 days following termination of parental
rights for the court to review progress toward an adoptive placement and the specific
recruitment efforts the agency has taken to find an adoptive family or other placement
living arrangement for the child and to finalize the adoption or other permanency plan.
    (c) The responsible social services agency may make a determination of compelling
reasons for a child to be in long-term foster care when the agency has made exhaustive
efforts to recruit, identify, and place the child in an adoptive home, and the child continues
in foster care for at least 24 months after the court has issued the order terminating
parental rights. A child of any age who is under the guardianship of the commissioner of
the Department of Human Services and is legally available for adoption may not refuse
or waive the commissioner's agent's exhaustive efforts to recruit, identify, and place the
child in an adoptive home required under paragraph (b) or sign a document relieving
county social services agencies of all recruitment efforts on the child's behalf. Upon
approving the agency's determination of compelling reasons, the court may order the
child placed in long-term foster care. At least every 12 months thereafter as long as the
child continues in out-of-home placement, the court shall conduct a permanency review
hearing to determine the future status of the child using the review requirements of section
260C.201, subdivision 11, paragraph (g).
    (d) The court shall retain jurisdiction through the child's minority in a case where
long-term foster care is the permanent disposition whether under paragraph (c) or section
260C.201, subdivision 11.

    Sec. 23. Minnesota Statutes 2006, section 260C.331, subdivision 1, is amended to read:
    Subdivision 1. Care, examination, or treatment. (a) Except where parental rights
are terminated,
    (1) whenever legal custody of a child is transferred by the court to a responsible
social services agency,
    (2) whenever legal custody is transferred to a person other than the responsible social
services agency, but under the supervision of the responsible social services agency, or
    (3) whenever a child is given physical or mental examinations or treatment under
order of the court, and no provision is otherwise made by law for payment for the care,
examination, or treatment of the child, these costs are a charge upon the welfare funds of
the county in which proceedings are held upon certification of the judge of juvenile court.
    (b) The court shall order, and the responsible social services agency shall require,
the parents or custodian of a child, while the child is under the age of 18, to use the
total income and resources attributable to the child for the period of care, examination,
or treatment, except for clothing and personal needs allowance as provided in section
256B.35, to reimburse the county for the cost of care, examination, or treatment. Income
and resources attributable to the child include, but are not limited to, Social Security
benefits, supplemental security income (SSI), veterans benefits, railroad retirement
benefits and child support. When the child is over the age of 18, and continues to receive
care, examination, or treatment, the court shall order, and the responsible social services
agency shall require, reimbursement from the child for the cost of care, examination, or
treatment from the income and resources attributable to the child less the clothing and
personal needs allowance. Income does not include earnings from a child over the age of
18 who is working as part of a plan under section 260C.212, subdivision 1, paragraph (c),
clause (8), to transition from foster care.
    (c) If the income and resources attributable to the child are not enough to reimburse
the county for the full cost of the care, examination, or treatment, the court shall inquire
into the ability of the parents to support the child and, after giving the parents a reasonable
opportunity to be heard, the court shall order, and the responsible social services agency
shall require, the parents to contribute to the cost of care, examination, or treatment of
the child. When determining the amount to be contributed by the parents, the court shall
use a fee schedule based upon ability to pay that is established by the responsible social
services agency and approved by the commissioner of human services. The income of
a stepparent who has not adopted a child shall be excluded in calculating the parental
contribution under this section.
    (d) The court shall order the amount of reimbursement attributable to the parents
or custodian, or attributable to the child, or attributable to both sources, withheld under
chapter 518A from the income of the parents or the custodian of the child. A parent or
custodian who fails to pay without good reason may be proceeded against for contempt, or
the court may inform the county attorney, who shall proceed to collect the unpaid sums,
or both procedures may be used.
    (e) If the court orders a physical or mental examination for a child, the examination
is a medically necessary service for purposes of determining whether the service is
covered by a health insurance policy, health maintenance contract, or other health
coverage plan. Court-ordered treatment shall be subject to policy, contract, or plan
requirements for medical necessity. Nothing in this paragraph changes or eliminates
benefit limits, conditions of coverage, co-payments or deductibles, provider restrictions,
or other requirements in the policy, contract, or plan that relate to coverage of other
medically necessary services.

    Sec. 24. Minnesota Statutes 2006, section 626.556, subdivision 2, is amended to read:
    Subd. 2. Definitions. As used in this section, the following terms have the meanings
given them unless the specific content indicates otherwise:
    (a) "Family assessment" means a comprehensive assessment of child safety, risk
of subsequent child maltreatment, and family strengths and needs that is applied to a
child maltreatment report that does not allege substantial child endangerment. Family
assessment does not include a determination as to whether child maltreatment occurred
but does determine the need for services to address the safety of family members and the
risk of subsequent maltreatment.
    (b) "Investigation" means fact gathering related to the current safety of a child
and the risk of subsequent maltreatment that determines whether child maltreatment
occurred and whether child protective services are needed. An investigation must be used
when reports involve substantial child endangerment, and for reports of maltreatment in
facilities required to be licensed under chapter 245A or 245B; under sections 144.50 to
144.58 and 241.021; in a school as defined in sections 120A.05, subdivisions 9, 11, and
13, and 124D.10; or in a nonlicensed personal care provider association as defined in
sections 256B.04, subdivision 16, and 256B.0625, subdivision 19a.
    (c) "Substantial child endangerment" means a person responsible for a child's care,
and in the case of sexual abuse includes a person who has a significant relationship to the
child as defined in section 609.341, or a person in a position of authority as defined in
section 609.341, who by act or omission commits or attempts to commit an act against a
child under their care that constitutes any of the following:
    (1) egregious harm as defined in section 260C.007, subdivision 14;
    (2) sexual abuse as defined in paragraph (d);
    (3) abandonment under section 260C.301, subdivision 2;
    (4) neglect as defined in paragraph (f), clause (2), that substantially endangers the
child's physical or mental health, including a growth delay, which may be referred to as
failure to thrive, that has been diagnosed by a physician and is due to parental neglect;
    (5) murder in the first, second, or third degree under section 609.185, 609.19, or
609.195;
    (6) manslaughter in the first or second degree under section 609.20 or 609.205;
    (7) assault in the first, second, or third degree under section 609.221, 609.222, or
609.223;
    (8) solicitation, inducement, and promotion of prostitution under section 609.322;
    (9) criminal sexual conduct under sections 609.342 to 609.3451;
    (10) solicitation of children to engage in sexual conduct under section 609.352;
    (11) malicious punishment or neglect or endangerment of a child under section
609.377 or 609.378;
    (12) use of a minor in sexual performance under section 617.246; or
    (13) parental behavior, status, or condition which mandates that the county attorney
file a termination of parental rights petition under section 260C.301, subdivision 3,
paragraph (a).
    (d) "Sexual abuse" means the subjection of a child by a person responsible for the
child's care, by a person who has a significant relationship to the child, as defined in
section 609.341, or by a person in a position of authority, as defined in section 609.341,
subdivision 10, to any act which constitutes a violation of section 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), or 609.3451 (criminal sexual conduct in the fifth degree). Sexual
abuse also includes any act which involves a minor which constitutes a violation of
prostitution offenses under sections 609.321 to 609.324 or 617.246. Sexual abuse includes
threatened sexual abuse.
    (e) "Person responsible for the child's care" means (1) an individual functioning
within the family unit and having responsibilities for the care of the child such as a
parent, guardian, or other person having similar care responsibilities, or (2) an individual
functioning outside the family unit and having responsibilities for the care of the child
such as a teacher, school administrator, other school employees or agents, or other lawful
custodian of a child having either full-time or short-term care responsibilities including,
but not limited to, day care, babysitting whether paid or unpaid, counseling, teaching,
and coaching.
    (f) "Neglect" means:
    (1) failure by a person responsible for a child's care to supply a child with necessary
food, clothing, shelter, health, medical, or other care required for the child's physical or
mental health when reasonably able to do so;
    (2) failure to protect a child from conditions or actions that seriously endanger the
child's physical or mental health when reasonably able to do so, including a growth delay,
which may be referred to as a failure to thrive, that has been diagnosed by a physician and
is due to parental neglect;
    (3) failure to provide for necessary supervision or child care arrangements
appropriate for a child after considering factors as the child's age, mental ability, physical
condition, length of absence, or environment, when the child is unable to care for the
child's own basic needs or safety, or the basic needs or safety of another child in their care;
    (4) failure to ensure that the child is educated as defined in sections 120A.22 and
260C.163, subdivision 11, which does not include a parent's refusal to provide the parent's
child with sympathomimetic medications, consistent with section 125A.091, subdivision 5;
    (5) nothing in this section shall be construed to mean that a child is neglected solely
because the child's parent, guardian, or other person responsible for the child's care in
good faith selects and depends upon spiritual means or prayer for treatment or care of
disease or remedial care of the child in lieu of medical care; except that a parent, guardian,
or caretaker, or a person mandated to report pursuant to subdivision 3, has a duty to report
if a lack of medical care may cause serious danger to the child's health. This section does
not impose upon persons, not otherwise legally responsible for providing a child with
necessary food, clothing, shelter, education, or medical care, a duty to provide that care;
    (6) prenatal exposure to a controlled substance, as defined in section 253B.02,
subdivision 2, used by the mother for a nonmedical purpose, as evidenced by withdrawal
symptoms in the child at birth, results of a toxicology test performed on the mother at
delivery or the child at birth, or medical effects or developmental delays during the child's
first year of life that medically indicate prenatal exposure to a controlled substance;
    (7) "medical neglect" as defined in section 260C.007, subdivision 6, clause (5);
    (8) chronic and severe use of alcohol or a controlled substance by a parent or
person responsible for the care of the child that adversely affects the child's basic needs
and safety; or
    (9) emotional harm from a pattern of behavior which contributes to impaired
emotional functioning of the child which may be demonstrated by a substantial and
observable effect in the child's behavior, emotional response, or cognition that is not
within the normal range for the child's age and stage of development, with due regard to
the child's culture.
    (g) "Physical abuse" means any physical injury, mental injury, or threatened injury,
inflicted by a person responsible for the child's care on a child other than by accidental
means, or any physical or mental injury that cannot reasonably be explained by the child's
history of injuries, or any aversive or deprivation procedures, or regulated interventions,
that have not been authorized under section 121A.67 or 245.825. Abuse does not include
reasonable and moderate physical discipline of a child administered by a parent or legal
guardian which does not result in an injury. Abuse does not include the use of reasonable
force by a teacher, principal, or school employee as allowed by section 121A.582. Actions
which are not reasonable and moderate include, but are not limited to, any of the following
that are done in anger or without regard to the safety of the child:
    (1) throwing, kicking, burning, biting, or cutting a child;
    (2) striking a child with a closed fist;
    (3) shaking a child under age three;
    (4) striking or other actions which result in any nonaccidental injury to a child
under 18 months of age;
    (5) unreasonable interference with a child's breathing;
    (6) threatening a child with a weapon, as defined in section 609.02, subdivision 6;
    (7) striking a child under age one on the face or head;
    (8) purposely giving a child poison, alcohol, or dangerous, harmful, or controlled
substances which were not prescribed for the child by a practitioner, in order to control or
punish the child; or other substances that substantially affect the child's behavior, motor
coordination, or judgment or that results in sickness or internal injury, or subjects the
child to medical procedures that would be unnecessary if the child were not exposed
to the substances;
    (9) unreasonable physical confinement or restraint not permitted under section
609.379, including but not limited to tying, caging, or chaining; or
    (10) in a school facility or school zone, an act by a person responsible for the child's
care that is a violation under section 121A.58.
    (h) "Report" means any report received by the local welfare agency, police
department, county sheriff, or agency responsible for assessing or investigating
maltreatment pursuant to this section.
    (i) "Facility" means:
    (1) a licensed or unlicensed day care facility, residential facility, agency, hospital,
sanitarium, or other facility or institution required to be licensed under sections 144.50 to
144.58, 241.021, or 245A.01 to 245A.16, or chapter 245B;
    (2) a school as defined in sections 120A.05, subdivisions 9, 11, and 13; and
124D.10; or
    (3) a nonlicensed personal care provider organization as defined in sections 256B.04,
subdivision 16, and 256B.0625, subdivision 19a.
    (j) "Operator" means an operator or agency as defined in section 245A.02.
    (k) "Commissioner" means the commissioner of human services.
    (l) "Practice of social services," for the purposes of subdivision 3, includes but is
not limited to employee assistance counseling and the provision of guardian ad litem and
parenting time expeditor services.
    (m) "Mental injury" means an injury to the psychological capacity or emotional
stability of a child as evidenced by an observable or substantial impairment in the child's
ability to function within a normal range of performance and behavior with due regard to
the child's culture.
    (n) "Threatened injury" means a statement, overt act, condition, or status that
represents a substantial risk of physical or sexual abuse or mental injury. Threatened
injury includes, but is not limited to, exposing a child to a person responsible for the
child's care, as defined in paragraph (e), clause (1), who has:
    (1) subjected a child to, or failed to protect a child from, an overt act or condition
that constitutes egregious harm, as defined in section 260C.007, subdivision 14, or a
similar law of another jurisdiction;
    (2) been found to be palpably unfit under section 260C.301, paragraph (b), clause
(4), or a similar law of another jurisdiction;
    (3) committed an act that has resulted in an involuntary termination of parental rights
under section 260C.301, or a similar law of another jurisdiction; or
    (4) committed an act that has resulted in the involuntary transfer of permanent legal
and physical custody of a child to a relative under section 260C.201, subdivision 11,
paragraph (d), clause (1), or a similar law of another jurisdiction.
    (o) Persons who conduct assessments or investigations under this section shall take
into account accepted child-rearing practices of the culture in which a child participates
and accepted teacher discipline practices, which are not injurious to the child's health,
welfare, and safety.

    Sec. 25. Minnesota Statutes 2006, section 626.556, subdivision 3, is amended to read:
    Subd. 3. Persons mandated to report. (a) A person who knows or has reason
to believe a child is being neglected or physically or sexually abused, as defined in
subdivision 2, or has been neglected or physically or sexually abused within the preceding
three years, shall immediately report the information to the local welfare agency, agency
responsible for assessing or investigating the report, police department, or the county
sheriff if the person is:
    (1) a professional or professional's delegate who is engaged in the practice of
the healing arts, social services, hospital administration, psychological or psychiatric
treatment, child care, education, correctional supervision, probation and correctional
services, or law enforcement; or
    (2) employed as a member of the clergy and received the information while
engaged in ministerial duties, provided that a member of the clergy is not required by
this subdivision to report information that is otherwise privileged under section 595.02,
subdivision 1
, paragraph (c).
    The police department or the county sheriff, upon receiving a report, shall
immediately notify the local welfare agency or agency responsible for assessing or
investigating the report, orally and in writing. The local welfare agency, or agency
responsible for assessing or investigating the report, upon receiving a report, shall
immediately notify the local police department or the county sheriff orally and in writing.
The county sheriff and the head of every local welfare agency, agency responsible
for assessing or investigating reports, and police department shall each designate a
person within their agency, department, or office who is responsible for ensuring that
the notification duties of this paragraph and paragraph (b) are carried out. Nothing in
this subdivision shall be construed to require more than one report from any institution,
facility, school, or agency.
    (b) Any person may voluntarily report to the local welfare agency, agency
responsible for assessing or investigating the report, police department, or the county
sheriff if the person knows, has reason to believe, or suspects a child is being or has been
neglected or subjected to physical or sexual abuse. The police department or the county
sheriff, upon receiving a report, shall immediately notify the local welfare agency or
agency responsible for assessing or investigating the report, orally and in writing. The
local welfare agency or agency responsible for assessing or investigating the report, upon
receiving a report, shall immediately notify the local police department or the county
sheriff orally and in writing.
    (c) A person mandated to report physical or sexual child abuse or neglect occurring
within a licensed facility shall report the information to the agency responsible for
licensing the facility under sections 144.50 to 144.58; 241.021; 245A.01 to 245A.16; or
chapter 245B; or a nonlicensed personal care provider organization as defined in sections
256B.04, subdivision 16; and 256B.0625, subdivision 19. A health or corrections agency
receiving a report may request the local welfare agency to provide assistance pursuant
to subdivisions 10, 10a, and 10b. A board or other entity whose licensees perform work
within a school facility, upon receiving a complaint of alleged maltreatment, shall provide
information about the circumstances of the alleged maltreatment to the commissioner of
education. Section 13.03, subdivision 4, applies to data received by the commissioner of
education from a licensing entity.
    (d) Any person mandated to report shall receive a summary of the disposition of
any report made by that reporter, including whether the case has been opened for child
protection or other services, or if a referral has been made to a community organization,
unless release would be detrimental to the best interests of the child. Any person who is
not mandated to report shall, upon request to the local welfare agency, receive a concise
summary of the disposition of any report made by that reporter, unless release would be
detrimental to the best interests of the child.
    (e) For purposes of this subdivision section, "immediately" means as soon as
possible but in no event longer than 24 hours.

    Sec. 26. Minnesota Statutes 2006, section 626.556, is amended by adding a subdivision
to read:
    Subd. 3e. Agency responsibility for assessing or investigating reports of sexual
abuse. The local welfare agency is the agency responsible for investigating allegations
of sexual abuse if the alleged offender is the parent, guardian, sibling, or an individual
functioning within the family unit as a person responsible for the child's care, or a person
with a significant relationship to the child if that person resides in the child's household.

    Sec. 27. Minnesota Statutes 2006, section 626.556, is amended by adding a subdivision
to read:
    Subd. 3f. Law enforcement agency responsibility for investigating
maltreatment. The local law enforcement agency has responsibility for investigating any
report of child maltreatment if a violation of a criminal statute is alleged. Law enforcement
and the responsible agency must coordinate their investigations or assessments as required
under subdivision 10.

    Sec. 28. Minnesota Statutes 2006, section 626.556, subdivision 10, is amended to read:
    Subd. 10. Duties of local welfare agency and local law enforcement agency upon
receipt of a report. (a) Upon receipt of a report, the local welfare agency shall determine
whether to conduct a family assessment or an investigation as appropriate to prevent or
provide a remedy for child maltreatment. The local welfare agency:
    (1) shall conduct an investigation on reports involving substantial child
endangerment;
    (2) shall begin an immediate investigation if, at any time when it is using a family
assessment response, it determines that there is reason to believe that substantial child
endangerment or a serious threat to the child's safety exists;
    (3) may conduct a family assessment for reports that do not allege substantial child
endangerment. In determining that a family assessment is appropriate, the local welfare
agency may consider issues of child safety, parental cooperation, and the need for an
immediate response; and
    (4) may conduct a family assessment on a report that was initially screened and
assigned for an investigation. In determining that a complete investigation is not required,
the local welfare agency must document the reason for terminating the investigation and
notify the local law enforcement agency if the local law enforcement agency is conducting
a joint investigation.
    If the report alleges neglect, physical abuse, or sexual abuse by a parent, guardian,
or individual functioning within the family unit as a person responsible for the child's
care, or sexual abuse by a person with a significant relationship to the child when that
person resides in the child's household or by a sibling, the local welfare agency shall
immediately conduct a family assessment or investigation as identified in clauses (1) to
(4). In conducting a family assessment or investigation, the local welfare agency shall
gather information on the existence of substance abuse and domestic violence and offer
services for purposes of preventing future child maltreatment, safeguarding and enhancing
the welfare of the abused or neglected minor, and supporting and preserving family
life whenever possible. If the report alleges a violation of a criminal statute involving
sexual abuse, physical abuse, or neglect or endangerment, under section 609.378, the
local law enforcement agency and local welfare agency shall coordinate the planning and
execution of their respective investigation and assessment efforts to avoid a duplication of
fact-finding efforts and multiple interviews. Each agency shall prepare a separate report of
the results of its investigation. In cases of alleged child maltreatment resulting in death,
the local agency may rely on the fact-finding efforts of a law enforcement investigation
to make a determination of whether or not maltreatment occurred. When necessary the
local welfare agency shall seek authority to remove the child from the custody of a parent,
guardian, or adult with whom the child is living. In performing any of these duties, the
local welfare agency shall maintain appropriate records.
    If the family assessment or investigation indicates there is a potential for abuse of
alcohol or other drugs by the parent, guardian, or person responsible for the child's care,
the local welfare agency shall conduct a chemical use assessment pursuant to Minnesota
Rules, part 9530.6615. The local welfare agency shall report the determination of the
chemical use assessment, and the recommendations and referrals for alcohol and other
drug treatment services to the state authority on alcohol and drug abuse.
    (b) When a local agency receives a report or otherwise has information indicating
that a child who is a client, as defined in section 245.91, has been the subject of physical
abuse, sexual abuse, or neglect at an agency, facility, or program as defined in section
245.91, it shall, in addition to its other duties under this section, immediately inform the
ombudsman established under sections 245.91 to 245.97. The commissioner of education
shall inform the ombudsman established under sections 245.91 to 245.97 of reports
regarding a child defined as a client in section 245.91 that maltreatment occurred at a
school as defined in sections 120A.05, subdivisions 9, 11, and 13, and 124D.10.
    (c) Authority of the local welfare agency responsible for assessing or investigating
the child abuse or neglect report, the agency responsible for assessing or investigating
the report, and of the local law enforcement agency for investigating the alleged abuse or
neglect includes, but is not limited to, authority to interview, without parental consent,
the alleged victim and any other minors who currently reside with or who have resided
with the alleged offender. The interview may take place at school or at any facility or
other place where the alleged victim or other minors might be found or the child may be
transported to, and the interview conducted at, a place appropriate for the interview of a
child designated by the local welfare agency or law enforcement agency. The interview
may take place outside the presence of the alleged offender or parent, legal custodian,
guardian, or school official. For family assessments, it is the preferred practice to request
a parent or guardian's permission to interview the child prior to conducting the child
interview, unless doing so would compromise the safety assessment. Except as provided in
this paragraph, the parent, legal custodian, or guardian shall be notified by the responsible
local welfare or law enforcement agency no later than the conclusion of the investigation
or assessment that this interview has occurred. Notwithstanding rule 49.02 32 of the
Minnesota Rules of Procedure for Juvenile Courts, the juvenile court may, after hearing on
an ex parte motion by the local welfare agency, order that, where reasonable cause exists,
the agency withhold notification of this interview from the parent, legal custodian, or
guardian. If the interview took place or is to take place on school property, the order shall
specify that school officials may not disclose to the parent, legal custodian, or guardian the
contents of the notification of intent to interview the child on school property, as provided
under this paragraph, and any other related information regarding the interview that may
be a part of the child's school record. A copy of the order shall be sent by the local welfare
or law enforcement agency to the appropriate school official.
    (d) When the local welfare, local law enforcement agency, or the agency responsible
for assessing or investigating a report of maltreatment determines that an interview should
take place on school property, written notification of intent to interview the child on school
property must be received by school officials prior to the interview. The notification
shall include the name of the child to be interviewed, the purpose of the interview, and
a reference to the statutory authority to conduct an interview on school property. For
interviews conducted by the local welfare agency, the notification shall be signed by the
chair of the local social services agency or the chair's designee. The notification shall be
private data on individuals subject to the provisions of this paragraph. School officials
may not disclose to the parent, legal custodian, or guardian the contents of the notification
or any other related information regarding the interview until notified in writing by the
local welfare or law enforcement agency that the investigation or assessment has been
concluded, unless a school employee or agent is alleged to have maltreated the child.
Until that time, the local welfare or law enforcement agency or the agency responsible
for assessing or investigating a report of maltreatment shall be solely responsible for any
disclosures regarding the nature of the assessment or investigation.
    Except where the alleged offender is believed to be a school official or employee,
the time and place, and manner of the interview on school premises shall be within the
discretion of school officials, but the local welfare or law enforcement agency shall have
the exclusive authority to determine who may attend the interview. The conditions as to
time, place, and manner of the interview set by the school officials shall be reasonable and
the interview shall be conducted not more than 24 hours after the receipt of the notification
unless another time is considered necessary by agreement between the school officials and
the local welfare or law enforcement agency. Where the school fails to comply with the
provisions of this paragraph, the juvenile court may order the school to comply. Every
effort must be made to reduce the disruption of the educational program of the child, other
students, or school staff when an interview is conducted on school premises.
    (e) Where the alleged offender or a person responsible for the care of the alleged
victim or other minor prevents access to the victim or other minor by the local welfare
agency, the juvenile court may order the parents, legal custodian, or guardian to produce
the alleged victim or other minor for questioning by the local welfare agency or the local
law enforcement agency outside the presence of the alleged offender or any person
responsible for the child's care at reasonable places and times as specified by court order.
    (f) Before making an order under paragraph (e), the court shall issue an order to
show cause, either upon its own motion or upon a verified petition, specifying the basis for
the requested interviews and fixing the time and place of the hearing. The order to show
cause shall be served personally and shall be heard in the same manner as provided in
other cases in the juvenile court. The court shall consider the need for appointment of a
guardian ad litem to protect the best interests of the child. If appointed, the guardian ad
litem shall be present at the hearing on the order to show cause.
    (g) The commissioner of human services, the ombudsman for mental health and
developmental disabilities, the local welfare agencies responsible for investigating reports,
the commissioner of education, and the local law enforcement agencies have the right to
enter facilities as defined in subdivision 2 and to inspect and copy the facility's records,
including medical records, as part of the investigation. Notwithstanding the provisions of
chapter 13, they also have the right to inform the facility under investigation that they are
conducting an investigation, to disclose to the facility the names of the individuals under
investigation for abusing or neglecting a child, and to provide the facility with a copy of
the report and the investigative findings.
    (h) The local welfare agency responsible for conducting a family assessment or
investigation shall collect available and relevant information to determine child safety,
risk of subsequent child maltreatment, and family strengths and needs and share not public
information with an Indian's tribal social services agency without violating any law of the
state that may otherwise impose duties of confidentiality on the local welfare agency in
order to implement the tribal state agreement. The local welfare agency or the agency
responsible for investigating the report shall collect available and relevant information
to ascertain whether maltreatment occurred and whether protective services are needed.
Information collected includes, when relevant, information with regard to the person
reporting the alleged maltreatment, including the nature of the reporter's relationship to the
child and to the alleged offender, and the basis of the reporter's knowledge for the report;
the child allegedly being maltreated; the alleged offender; the child's caretaker; and other
collateral sources having relevant information related to the alleged maltreatment. The
local welfare agency or the agency responsible for assessing or investigating the report
may make a determination of no maltreatment early in an assessment, and close the case
and retain immunity, if the collected information shows no basis for a full assessment or
investigation.
    Information relevant to the assessment or investigation must be asked for, and
may include:
    (1) the child's sex and age, prior reports of maltreatment, information relating
to developmental functioning, credibility of the child's statement, and whether the
information provided under this clause is consistent with other information collected
during the course of the assessment or investigation;
    (2) the alleged offender's age, a record check for prior reports of maltreatment, and
criminal charges and convictions. The local welfare agency or the agency responsible for
assessing or investigating the report must provide the alleged offender with an opportunity
to make a statement. The alleged offender may submit supporting documentation relevant
to the assessment or investigation;
    (3) collateral source information regarding the alleged maltreatment and care of the
child. Collateral information includes, when relevant: (i) a medical examination of the
child; (ii) prior medical records relating to the alleged maltreatment or the care of the
child maintained by any facility, clinic, or health care professional and an interview with
the treating professionals; and (iii) interviews with the child's caretakers, including the
child's parent, guardian, foster parent, child care provider, teachers, counselors, family
members, relatives, and other persons who may have knowledge regarding the alleged
maltreatment and the care of the child; and
    (4) information on the existence of domestic abuse and violence in the home of
the child, and substance abuse.
    Nothing in this paragraph precludes the local welfare agency, the local law
enforcement agency, or the agency responsible for assessing or investigating the report
from collecting other relevant information necessary to conduct the assessment or
investigation. Notwithstanding section 13.384 or 144.335, the local welfare agency has
access to medical data and records for purposes of clause (3). Notwithstanding the data's
classification in the possession of any other agency, data acquired by the local welfare
agency or the agency responsible for assessing or investigating the report during the course
of the assessment or investigation are private data on individuals and must be maintained
in accordance with subdivision 11. Data of the commissioner of education collected
or maintained during and for the purpose of an investigation of alleged maltreatment
in a school are governed by this section, notwithstanding the data's classification as
educational, licensing, or personnel data under chapter 13.
    In conducting an assessment or investigation involving a school facility as defined
in subdivision 2, paragraph (i), the commissioner of education shall collect investigative
reports and data that are relevant to a report of maltreatment and are from local law
enforcement and the school facility.
    (i) Upon receipt of a report, the local welfare agency shall conduct a face-to-face
contact with the child reported to be maltreated and with the child's primary caregiver
sufficient to complete a safety assessment and ensure the immediate safety of the child.
The face-to-face contact with the child and primary caregiver shall occur immediately
if substantial child endangerment is alleged and within five calendar days for all other
reports. If the alleged offender was not already interviewed as the primary caregiver, the
local welfare agency shall also conduct a face-to-face interview with the alleged offender
in the early stages of the assessment or investigation. At the initial contact, the local child
welfare agency or the agency responsible for assessing or investigating the report must
inform the alleged offender of the complaints or allegations made against the individual in
a manner consistent with laws protecting the rights of the person who made the report.
The interview with the alleged offender may be postponed if it would jeopardize an active
law enforcement investigation.
    (j) When conducting an investigation, the local welfare agency shall use a question
and answer interviewing format with questioning as nondirective as possible to elicit
spontaneous responses. For investigations only, the following interviewing methods and
procedures must be used whenever possible when collecting information:
    (1) audio recordings of all interviews with witnesses and collateral sources; and
    (2) in cases of alleged sexual abuse, audio-video recordings of each interview with
the alleged victim and child witnesses.
    (k) In conducting an assessment or investigation involving a school facility as
defined in subdivision 2, paragraph (i), the commissioner of education shall collect
available and relevant information and use the procedures in paragraphs (i), (k), and
subdivision 3d, except that the requirement for face-to-face observation of the child
and face-to-face interview of the alleged offender is to occur in the initial stages of the
assessment or investigation provided that the commissioner may also base the assessment
or investigation on investigative reports and data received from the school facility and
local law enforcement, to the extent those investigations satisfy the requirements of
paragraphs (i) and (k), and subdivision 3d.

    Sec. 29. Minnesota Statutes 2006, section 626.556, subdivision 10a, is amended to
read:
    Subd. 10a. Abuse outside family unit Law enforcement agency responsibility
for investigation; welfare agency reliance on law enforcement fact-finding; welfare
agency offer of services. (a) If the report alleges neglect, physical abuse, or sexual abuse
by a person who is not a parent, guardian, sibling, person responsible for the child's care
functioning outside within the family unit, or a person who lives in the child's household
and who has a significant relationship to the child, in a setting other than a facility as
defined in subdivision 2, the local welfare agency shall immediately notify the appropriate
law enforcement agency, which shall conduct an investigation of the alleged abuse or
neglect if a violation of a criminal statute is alleged.
    (b) The local agency may rely on the fact-finding efforts of the law enforcement
investigation conducted under this subdivision to make a determination whether or not
threatened harm or other maltreatment has occurred under subdivision 2 if an alleged
offender has minor children or lives with minors.
    (c) The local welfare agency shall offer appropriate social services for the purpose of
safeguarding and enhancing the welfare of the abused or neglected minor.

    Sec. 30. Minnesota Statutes 2006, section 626.556, subdivision 10c, is amended to
read:
    Subd. 10c. Duties of local social service agency upon receipt of a report of
medical neglect. If the report alleges medical neglect as defined in section 260C.007,
subdivision 4 6
, clause (5), the local welfare agency shall, in addition to its other duties
under this section, immediately consult with designated hospital staff and with the parents
of the infant to verify that appropriate nutrition, hydration, and medication are being
provided; and shall immediately secure an independent medical review of the infant's
medical charts and records and, if necessary, seek a court order for an independent medical
examination of the infant. If the review or examination leads to a conclusion of medical
neglect, the agency shall intervene on behalf of the infant by initiating legal proceedings
under section 260C.141 and by filing an expedited motion to prevent the withholding
of medically indicated treatment.

    Sec. 31. Minnesota Statutes 2006, section 626.556, subdivision 10f, is amended to read:
    Subd. 10f. Notice of determinations. Within ten working days of the conclusion
of a family assessment, the local welfare agency shall notify the parent or guardian of
the child of the need for services to address child safety concerns or significant risk of
subsequent child maltreatment. The local welfare agency and the family may also jointly
agree that family support and family preservation services are needed. Within ten working
days of the conclusion of an investigation, the local welfare agency or agency responsible
for assessing or investigating the report shall notify the parent or guardian of the child, the
person determined to be maltreating the child, and if applicable, the director of the facility,
of the determination and a summary of the specific reasons for the determination. The
notice must also include a certification that the information collection procedures under
subdivision 10, paragraphs (h), (i), and (j), were followed and a notice of the right of a
data subject to obtain access to other private data on the subject collected, created, or
maintained under this section. In addition, the notice shall include the length of time that
the records will be kept under subdivision 11c. The investigating agency shall notify the
parent or guardian of the child who is the subject of the report, and any person or facility
determined to have maltreated a child, of their appeal or review rights under this section
or section 256.022. The notice must also state that a finding of maltreatment may result
in denial of a license application or background study disqualification under chapter
245C related to employment or services that are licensed by the Department of Human
Services under chapter 245A, the Department of Health under chapter 144 or 144A, the
Department of Corrections under section 241.021, and from providing services related to
an unlicensed personal care provider organization under chapter 256B.

    Sec. 32. REVISOR'S INSTRUCTION.
    (a) The revisor shall renumber Minnesota Statutes, section 626.556, subdivision 3d,
as Minnesota Statutes, section 626.556, subdivision 3g.
    (b) The revisor shall change references to Minnesota Statutes, section 260.851,
to section 260.853 and references to Minnesota Statutes, section 260.851, article 5, to
section 260.853, article 4, wherever those references appear in Minnesota Statutes and
Minnesota Rules.

ARTICLE 2
CHILDREN AND FAMILY

    Section 1. Minnesota Statutes 2006, section 13.46, subdivision 2, is amended to read:
    Subd. 2. General. (a) Unless the data is summary data or a statute specifically
provides a different classification, data on individuals collected, maintained, used, or
disseminated by the welfare system is private data on individuals, and shall not be
disclosed except:
    (1) according to section 13.05;
    (2) according to court order;
    (3) according to a statute specifically authorizing access to the private data;
    (4) to an agent of the welfare system, including a law enforcement person, attorney,
or investigator acting for it in the investigation or prosecution of a criminal or civil
proceeding relating to the administration of a program;
    (5) to personnel of the welfare system who require the data to verify an individual's
identity; determine eligibility, amount of assistance, and the need to provide services to
an individual or family across programs; evaluate the effectiveness of programs; and
investigate suspected fraud;
    (6) to administer federal funds or programs;
    (7) between personnel of the welfare system working in the same program;
    (8) to the Department of Revenue to administer and evaluate tax refund or tax credit
programs and to identify individuals who may benefit from these programs. The following
information may be disclosed under this paragraph: an individual's and their dependent's
names, dates of birth, Social Security numbers, income, addresses, and other data as
required, upon request by the Department of Revenue. Disclosures by the commissioner
of revenue to the commissioner of human services for the purposes described in this clause
are governed by section 270B.14, subdivision 1. Tax refund or tax credit programs include,
but are not limited to, the dependent care credit under section 290.067, the Minnesota
working family credit under section 290.0671, the property tax refund and rental credit
under section 290A.04, and the Minnesota education credit under section 290.0674;
    (9) between the Department of Human Services, the Department of Education, and
the Department of Employment and Economic Development for the purpose of monitoring
the eligibility of the data subject for unemployment benefits, for any employment or
training program administered, supervised, or certified by that agency, for the purpose of
administering any rehabilitation program or child care assistance program, whether alone
or in conjunction with the welfare system, or to monitor and evaluate the Minnesota
family investment program or the child care assistance program by exchanging data on
recipients and former recipients of food support, cash assistance under chapter 256, 256D,
256J, or 256K, child care assistance under chapter 119B, or medical programs under
chapter 256B, 256D, or 256L;
    (10) to appropriate parties in connection with an emergency if knowledge of
the information is necessary to protect the health or safety of the individual or other
individuals or persons;
    (11) data maintained by residential programs as defined in section 245A.02 may
be disclosed to the protection and advocacy system established in this state according
to Part C of Public Law 98-527 to protect the legal and human rights of persons with
developmental disabilities or other related conditions who live in residential facilities for
these persons if the protection and advocacy system receives a complaint by or on behalf
of that person and the person does not have a legal guardian or the state or a designee of
the state is the legal guardian of the person;
    (12) to the county medical examiner or the county coroner for identifying or locating
relatives or friends of a deceased person;
    (13) data on a child support obligor who makes payments to the public agency
may be disclosed to the Minnesota Office of Higher Education to the extent necessary to
determine eligibility under section 136A.121, subdivision 2, clause (5);
    (14) participant Social Security numbers and names collected by the telephone
assistance program may be disclosed to the Department of Revenue to conduct an
electronic data match with the property tax refund database to determine eligibility under
section 237.70, subdivision 4a;
    (15) the current address of a Minnesota family investment program participant
may be disclosed to law enforcement officers who provide the name of the participant
and notify the agency that:
    (i) the participant:
    (A) is a fugitive felon fleeing to avoid prosecution, or custody or confinement after
conviction, for a crime or attempt to commit a crime that is a felony under the laws of the
jurisdiction from which the individual is fleeing; or
    (B) is violating a condition of probation or parole imposed under state or federal law;
    (ii) the location or apprehension of the felon is within the law enforcement officer's
official duties; and
    (iii) the request is made in writing and in the proper exercise of those duties;
    (16) the current address of a recipient of general assistance or general assistance
medical care may be disclosed to probation officers and corrections agents who are
supervising the recipient and to law enforcement officers who are investigating the
recipient in connection with a felony level offense;
    (17) information obtained from food support applicant or recipient households may
be disclosed to local, state, or federal law enforcement officials, upon their written request,
for the purpose of investigating an alleged violation of the Food Stamp Act, according
to Code of Federal Regulations, title 7, section 272.1(c);
    (18) the address, Social Security number, and, if available, photograph of any
member of a household receiving food support shall be made available, on request, to a
local, state, or federal law enforcement officer if the officer furnishes the agency with the
name of the member and notifies the agency that:
    (i) the member:
    (A) is fleeing to avoid prosecution, or custody or confinement after conviction, for a
crime or attempt to commit a crime that is a felony in the jurisdiction the member is fleeing;
    (B) is violating a condition of probation or parole imposed under state or federal
law; or
    (C) has information that is necessary for the officer to conduct an official duty related
to conduct described in subitem (A) or (B);
    (ii) locating or apprehending the member is within the officer's official duties; and
    (iii) the request is made in writing and in the proper exercise of the officer's official
duty;
    (19) the current address of a recipient of Minnesota family investment program,
general assistance, general assistance medical care, or food support may be disclosed to
law enforcement officers who, in writing, provide the name of the recipient and notify the
agency that the recipient is a person required to register under section 243.166, but is not
residing at the address at which the recipient is registered under section 243.166;
    (20) certain information regarding child support obligors who are in arrears may be
made public according to section 518A.74;
    (21) data on child support payments made by a child support obligor and data on
the distribution of those payments excluding identifying information on obligees may be
disclosed to all obligees to whom the obligor owes support, and data on the enforcement
actions undertaken by the public authority, the status of those actions, and data on the
income of the obligor or obligee may be disclosed to the other party;
    (22) data in the work reporting system may be disclosed under section 256.998,
subdivision 7
;
    (23) to the Department of Education for the purpose of matching Department of
Education student data with public assistance data to determine students eligible for free
and reduced price meals, meal supplements, and free milk according to United States
Code, title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to allocate federal and
state funds that are distributed based on income of the student's family; and to verify
receipt of energy assistance for the telephone assistance plan;
    (24) the current address and telephone number of program recipients and emergency
contacts may be released to the commissioner of health or a local board of health as
defined in section 145A.02, subdivision 2, when the commissioner or local board of health
has reason to believe that a program recipient is a disease case, carrier, suspect case, or at
risk of illness, and the data are necessary to locate the person;
    (25) to other state agencies, statewide systems, and political subdivisions of this
state, including the attorney general, and agencies of other states, interstate information
networks, federal agencies, and other entities as required by federal regulation or law for
the administration of the child support enforcement program;
    (26) to personnel of public assistance programs as defined in section 256.741, for
access to the child support system database for the purpose of administration, including
monitoring and evaluation of those public assistance programs;
    (27) to monitor and evaluate the Minnesota family investment program by
exchanging data between the Departments of Human Services and Education, on
recipients and former recipients of food support, cash assistance under chapter 256, 256D,
256J, or 256K, child care assistance under chapter 119B, or medical programs under
chapter 256B, 256D, or 256L;
    (28) to evaluate child support program performance and to identify and prevent
fraud in the child support program by exchanging data between the Department of Human
Services, Department of Revenue under section 270B.14, subdivision 1, paragraphs (a)
and (b), without regard to the limitation of use in paragraph (c), Department of Health,
Department of Employment and Economic Development, and other state agencies as is
reasonably necessary to perform these functions; or
    (29) counties operating child care assistance programs under chapter 119B may
disseminate data on program participants, applicants, and providers to the commissioner
of education.
    (b) Information on persons who have been treated for drug or alcohol abuse may
only be disclosed according to the requirements of Code of Federal Regulations, title
42, sections 2.1 to 2.67.
    (c) Data provided to law enforcement agencies under paragraph (a), clause (15),
(16), (17), or (18), or paragraph (b), are investigative data and are confidential or protected
nonpublic while the investigation is active. The data are private after the investigation
becomes inactive under section 13.82, subdivision 5, paragraph (a) or (b).
    (d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but is
not subject to the access provisions of subdivision 10, paragraph (b).
    For the purposes of this subdivision, a request will be deemed to be made in writing
if made through a computer interface system.

    Sec. 2. Minnesota Statutes 2006, section 16D.13, subdivision 3, is amended to read:
    Subd. 3. Exclusion. A state agency may not charge interest under this section on
overpayments of assistance benefits under the programs formerly codified in sections
256.031 to 256.0361, 256.72 to 256.87, and under chapters 119B, 256D, and 256I, or the
federal food stamp program. Notwithstanding this prohibition, any debts that have been
reduced to judgment under these programs are subject to the interest charges provided
under section 549.09.

    Sec. 3. Minnesota Statutes 2006, section 119B.011, is amended by adding a subdivision
to read:
    Subd. 13a. Family stabilization services. "Family stabilization services" means the
services under section 256J.575.

    Sec. 4. Minnesota Statutes 2006, section 119B.035, subdivision 1, is amended to read:
    Subdivision 1. Establishment. A family in which a parent provides care for the
family's infant child may receive a subsidy in lieu of assistance if the family is eligible for
or is receiving assistance under the basic sliding fee program. An eligible family must
meet the eligibility factors under section 119B.09, except as provided in subdivision 4,
and the requirements of this section. Subject to federal match and maintenance of effort
requirements for the child care and development fund, and up to available appropriations,
the commissioner shall establish a pool of up to three percent of the annual state
appropriation for the basic sliding fee program to provide assistance under the at-home
infant child care program and for administrative costs associated with the program. At
the end of a fiscal year, the commissioner may carry forward any unspent funds under
this section to the next fiscal year within the same biennium for assistance under the
basic sliding fee program.

    Sec. 5. Minnesota Statutes 2006, section 119B.05, subdivision 1, is amended to read:
    Subdivision 1. Eligible participants. Families eligible for child care assistance
under the MFIP child care program are:
    (1) MFIP participants who are employed or in job search and meet the requirements
of section 119B.10;
    (2) persons who are members of transition year families under section 119B.011,
subdivision 20
, and meet the requirements of section 119B.10;
    (3) families who are participating in employment orientation or job search, or
other employment or training activities that are included in an approved employability
development plan under section 256J.95;
    (4) MFIP families who are participating in work job search, job support,
employment, or training activities as required in their employment plan, or in appeals,
hearings, assessments, or orientations according to chapter 256J;
    (5) MFIP families who are participating in social services activities under chapter
256J as required in their employment plan approved according to chapter 256J;
    (6) families who are participating in services or activities that are included in an
approved family stabilization plan under section 256J.575;
    (7) families who are participating in programs as required in tribal contracts under
section 119B.02, subdivision 2, or 256.01, subdivision 2; and
    (7) (8) families who are participating in the transition year extension under section
119B.011, subdivision 20a.

    Sec. 6. Minnesota Statutes 2006, section 119B.09, subdivision 7, is amended to read:
    Subd. 7. Date of eligibility for assistance. (a) The date of eligibility for child
care assistance under this chapter is the later of the date the application was signed; the
beginning date of employment, education, or training; the date the infant is born for
applicants to the at-home infant care program; or the date a determination has been made
that the applicant is a participant in employment and training services under Minnesota
Rules, part 3400.0080, subpart 2a, or chapter 256J.
    (b) Payment ceases for a family under the at-home infant child care program when a
family has used a total of 12 months of assistance as specified under section 119B.035.
Payment of child care assistance for employed persons on MFIP is effective the date of
employment or the date of MFIP eligibility, whichever is later. Payment of child care
assistance for MFIP or DWP participants in employment and training services is effective
the date of commencement of the services or the date of MFIP or DWP eligibility,
whichever is later. Payment of child care assistance for transition year child care must be
made retroactive to the date of eligibility for transition year child care.

    Sec. 7. Minnesota Statutes 2006, section 119B.09, is amended by adding a subdivision
to read:
    Subd. 11. Payment of other child care expenses. Payment by a source other
than the family, of part or all of a family's child care expenses not payable under this
chapter, does not affect the family's eligibility for child care assistance, and the amount
paid is excluded from the family's income, if the funds are paid directly to the family's
child care provider on behalf of the family. Child care providers who accept third-party
payments must maintain family-specific documentation of payment source, amount, type
of expenses, and time period covered by the payment.

    Sec. 8. Minnesota Statutes 2006, section 119B.09, is amended by adding a subdivision
to read:
    Subd. 12. Sliding fee. Child care services to families must be made available on a
sliding fee basis. The commissioner shall convert eligibility requirements in section
119B.09 and parent fee schedules in 119B.12 to state median income, based on a family
size of three, adjusted for family size, by July 1, 2008. The commissioner shall report
to the 2008 legislature with the necessary statutory changes to codify this conversion
to state median income.

    Sec. 9. Minnesota Statutes 2006, section 119B.12, is amended to read:
119B.12 SLIDING FEE SCALE.
    Subdivision 1. Fee schedule. In setting the sliding fee schedule, the commissioner
shall exclude from the amount of income used to determine eligibility an amount for
federal and state income and Social Security taxes attributable to that income level
according to federal and state standardized tax tables. The commissioner shall base the
parent fee on the ability of the family to pay for child care. The fee schedule must be
designed to use any available tax credits.
    PARENT FEE SCHEDULE. The parent fee schedule is as follows:


Income Range (as a percent of the federal
poverty guidelines)
Co-payment (as a percentage of adjusted
gross income)

0-74.99%
$0/month

75.00-99.99%
$5/month

100.00-104.99%
2.61%

105.00-109.99%
2.61%

110.00-114.99%
2.61%

115.00-119.99%
2.61%

120.00-124.99%
2.91%

125.00-129.99%
2.91%

130.00-134.99%
2.91%

135.00-139.99%
2.91%

140.00-144.99%
3.21%

145.00-149.99%
3.21%

150.00-154.99%
3.21%

155.00-159.99%
3.84%

160.00-164.99%
3.84%

165.00-169.99%
4.46%

170.00-174.99%
4.76%

175.00-179.99%
5.05%

180.00-184.99%
5.65%

185.00-189.99%
5.95%

190.00-194.99%
6.24%

195.00-199.99%
6.84%

200.00-204.99%
7.58%

205.00-209.99%
8.33%

210.00-214.99%
9.20%

215.00-219.99%
10.07%

220.00-224.99%
10.94%

225.00-229.99%
11.55%

230.00-234.99%
12.16%

235.00-239.99%
12.77%

240.00-244.99%
13.38%

245.00-249.99%
14.00%

250%
ineligible
    A family's monthly co-payment fee is the fixed percentage established for the
income range multiplied by the highest possible income within that income range.
    Subd. 2. Parent fee. A family must be assessed a parent fee for each service period.
A family's parent fee must be a fixed percentage of its annual gross income. Parent fees
must apply to families eligible for child care assistance under sections 119B.03 and
119B.05. Income must be as defined in section 119B.011, subdivision 15. The fixed
percent is based on the relationship of the family's annual gross income to 100 percent
of the annual federal poverty guidelines. Parent fees must begin at 75 percent of the
poverty level. The minimum parent fees for families between 75 percent and 100 percent
of poverty level must be $10 $5 per month. Parent fees must provide for graduated
movement to full payment. Payment of part or all of a family's parent fee directly to the
family's child care provider on behalf of the family by a source other than the family shall
not affect the family's eligibility for child care assistance, and the amount paid shall be
excluded from the family's income. Child care providers who accept third-party payments
must maintain family specific documentation of payment source, amount, and time period
covered by the payment.
EFFECTIVE DATE.(a) This section is effective July 1, 2007.
    (b) Effective July 1, 2008, the parent fee scale for families with incomes greater than
or equal to 100 percent of FPG shall be converted to state median income for a family size
of three, adjusted for family size, as directed in section 119B.09, subdivision 12.

    Sec. 10. Minnesota Statutes 2006, section 119B.125, subdivision 2, is amended to read:
    Subd. 2. Persons who cannot be authorized. (a) A person who meets any of the
conditions under paragraphs (b) to (n) must not be authorized as a legal nonlicensed
family child care provider. To determine whether any of the listed conditions exist,
the county must request information about the provider from the Bureau of Criminal
Apprehension, the juvenile courts, and social service agencies. When one of the listed
entities does not maintain information on a statewide basis, the county must contact the
entity in the county where the provider resides and any other county in which the provider
previously resided in the past year. For purposes of this subdivision, a finding that a
delinquency petition is proven in juvenile court must be considered a conviction in state
district court. If a county has determined that a provider is able to be authorized in that
county, and a family in another county later selects that provider, the provider is able to
be authorized in the second county without undergoing a new background investigation
unless one of the following conditions exists:
    (1) two years have passed since the first authorization;
    (2) another person age 13 or older has joined the provider's household since the
last authorization;
    (3) a current household member has turned 13 since the last authorization; or
    (4) there is reason to believe that a household member has a factor that prevents
authorization.
    (b) The person has been convicted of one of the following offenses or has admitted to
committing or a preponderance of the evidence indicates that the person has committed an
act that meets the definition of one of the following offenses: sections 609.185 to 609.195,
murder in the first, second, or third degree; 609.2661 to 609.2663, murder of an unborn
child in the first, second, or third degree; 609.322, solicitation, inducement, promotion
of prostitution, or receiving profit from prostitution; 609.342 to 609.345, criminal sexual
conduct in the first, second, third, or fourth degree; 609.352, solicitation of children to
engage in sexual conduct; 609.365, incest; 609.377, felony malicious punishment of a
child; 617.246, use of minors in sexual performance; 617.247, possession of pictorial
representation of a minor; 609.2242 to 609.2243, felony domestic assault; a felony offense
of spousal abuse; a felony offense of child abuse or neglect; a felony offense of a crime
against children; or an attempt or conspiracy to commit any of these offenses as defined in
Minnesota Statutes; or an offense in any other state or country where the elements are
substantially similar to any of the offenses listed in this paragraph.
    (c) Less than 15 years have passed since the discharge of the sentence imposed for
the offense and the person has received a felony conviction for one of the following
offenses, or the person has admitted to committing or a preponderance of the evidence
indicates that the person has committed an act that meets the definition of a felony
conviction for one of the following offenses: sections 609.20 to 609.205, manslaughter in
the first or second degree; 609.21, criminal vehicular homicide; 609.215, aiding suicide
or aiding attempted suicide; 609.221 to 609.2231, assault in the first, second, third, or
fourth degree; 609.224, repeat offenses of fifth degree assault; 609.228, great bodily
harm caused by distribution of drugs; 609.2325, criminal abuse of a vulnerable adult;
609.2335, financial exploitation of a vulnerable adult; 609.235, use of drugs to injure or
facilitate a crime; 609.24, simple robbery; 617.241, repeat offenses of obscene materials
and performances; 609.245, aggravated robbery; 609.25, kidnapping; 609.255, false
imprisonment; 609.2664 to 609.2665, manslaughter of an unborn child in the first or
second degree; 609.267 to 609.2672, assault of an unborn child in the first, second, or third
degree; 609.268, injury or death of an unborn child in the commission of a crime; 609.27,
coercion; 609.275, attempt to coerce; 609.324, subdivision 1, other prohibited acts, minor
engaged in prostitution; 609.3451, repeat offenses of criminal sexual conduct in the fifth
degree; 609.378, neglect or endangerment of a child; 609.52, theft; 609.521, possession of
shoplifting gear; 609.561 to 609.563, arson in the first, second, or third degree; 609.582,
burglary in the first, second, third, or fourth degree; 609.625, aggravated forgery; 609.63,
forgery; 609.631, check forgery, offering a forged check; 609.635, obtaining signature
by false pretenses; 609.66, dangerous weapon; 609.665, setting a spring gun; 609.67,
unlawfully owning, possessing, or operating a machine gun; 609.687, adulteration; 609.71,
riot; 609.713, terrorist threats; 609.749, harassment, stalking; 260C.301, termination of
parental rights; 152.021 to 152.022 and 152.0262, controlled substance crime in the first
or second degree; 152.023, subdivision 1, clause (3) or (4), or 152.023, subdivision 2,
clause (4), controlled substance crime in third degree; 152.024, subdivision 1, clause
(2), (3), or (4), controlled substance crime in fourth degree; 617.23, repeat offenses of
indecent exposure; an attempt or conspiracy to commit any of these offenses as defined in
Minnesota Statutes; or an offense in any other state or country where the elements are
substantially similar to any of the offenses listed in this paragraph.
    (d) Less than ten years have passed since the discharge of the sentence imposed for
the offense and the person has received a gross misdemeanor conviction for one of the
following offenses or the person has admitted to committing or a preponderance of the
evidence indicates that the person has committed an act that meets the definition of a gross
misdemeanor conviction for one of the following offenses: sections 609.224, fifth degree
assault; 609.2242 to 609.2243, domestic assault; 518B.01, subdivision 14, violation of
an order for protection; 609.3451, fifth degree criminal sexual conduct; 609.746, repeat
offenses of interference with privacy; 617.23, repeat offenses of indecent exposure;
617.241, obscene materials and performances; 617.243, indecent literature, distribution;
617.293, disseminating or displaying harmful material to minors; 609.71, riot; 609.66,
dangerous weapons; 609.749, harassment, stalking; 609.224, subdivision 2, paragraph
(c), fifth degree assault against a vulnerable adult by a caregiver; 609.23, mistreatment
of persons confined; 609.231, mistreatment of residents or patients; 609.2325, criminal
abuse of a vulnerable adult; 609.2335, financial exploitation of a vulnerable adult;
609.233, criminal neglect of a vulnerable adult; 609.234, failure to report maltreatment of
a vulnerable adult; 609.72, subdivision 3, disorderly conduct against a vulnerable adult;
609.265, abduction; 609.378, neglect or endangerment of a child; 609.377, malicious
punishment of a child; 609.324, subdivision 1a, other prohibited acts, minor engaged
in prostitution; 609.33, disorderly house; 609.52, theft; 609.582, burglary in the first,
second, third, or fourth degree; 609.631, check forgery, offering a forged check; 609.275,
attempt to coerce; an attempt or conspiracy to commit any of these offenses as defined in
Minnesota Statutes; or an offense in any other state or country where the elements are
substantially similar to any of the offenses listed in this paragraph.
    (e) Less than seven years have passed since the discharge of the sentence imposed
for the offense and the person has received a misdemeanor conviction for one of the
following offenses or the person has admitted to committing or a preponderance of
the evidence indicates that the person has committed an act that meets the definition
of a misdemeanor conviction for one of the following offenses: sections 609.224, fifth
degree assault; 609.2242, domestic assault; 518B.01, violation of an order for protection;
609.3232, violation of an order for protection; 609.746, interference with privacy; 609.79,
obscene or harassing telephone calls; 609.795, letter, telegram, or package opening,
harassment; 617.23, indecent exposure; 609.2672, assault of an unborn child, third degree;
617.293, dissemination and display of harmful materials to minors; 609.66, dangerous
weapons; 609.665, spring guns; an attempt or conspiracy to commit any of these offenses
as defined in Minnesota Statutes; or an offense in any other state or country where the
elements are substantially similar to any of the offenses listed in this paragraph.
    (f) The person has been identified by the child protection agency in the county where
the provider resides or a county where the provider has resided or by the statewide child
protection database as a person found by a preponderance of evidence under section
626.556 to be responsible for physical or sexual abuse of a child within the last seven years.
    (g) The person has been identified by the adult protection agency in the county
where the provider resides or a county where the provider has resided or by the statewide
adult protection database as the person responsible for abuse or neglect of a vulnerable
adult within the last seven years.
    (h) The person has refused to give written consent for disclosure of criminal history
records.
    (i) The person has been denied a family child care license or has received a fine or a
sanction as a licensed child care provider that has not been reversed on appeal.
    (j) The person has a family child care licensing disqualification that has not been
set aside.
    (k) The person has admitted or a county has found that there is a preponderance of
evidence that fraudulent information was given to the county for child care assistance
application purposes or was used in submitting child care assistance bills for payment.
    (l) The person has been convicted of the crime of theft by wrongfully obtaining
public assistance or has been found guilty of wrongfully obtaining public assistance by a
federal court, state court, or an administrative hearing determination or waiver, through a
disqualification consent agreement, as part of an approved diversion plan under section
401.065, or a court-ordered stay with probationary or other conditions.
    (m) The person has a household member age 13 or older who has access to children
during the hours that care is provided and who meets one of the conditions listed in
paragraphs (b) to (l).
    (n) The person has a household member ages ten to 12 who has access to children
during the hours that care is provided; information or circumstances exist which provide
the county with articulable suspicion that further pertinent information may exist showing
the household member meets one of the conditions listed in paragraphs (b) to (l); and the
household member actually meets one of the conditions listed in paragraphs (b) to (l).

    Sec. 11. Minnesota Statutes 2006, section 119B.13, subdivision 1, is amended to read:
    Subdivision 1. Subsidy restrictions. (a) Beginning July 1, 2006, the maximum rate
paid for child care assistance in any county or multicounty region under the child care
fund shall be the rate for like-care arrangements in the county effective January 1, 2006,
increased by six percent.
    (b) Rate changes shall be implemented for services provided in September 2006
unless a participant eligibility redetermination or a new provider agreement is completed
between July 1, 2006, and August 31, 2006.
    As necessary, appropriate notice of adverse action must be made according to
Minnesota Rules, part 3400.0185, subparts 3 and 4.
    New cases approved on or after July 1, 2006, shall have the maximum rates under
paragraph (a), implemented immediately.
    (c) Not less than once every two years Every year, the commissioner shall survey
rates charged by child care providers in Minnesota to determine the 75th percentile for
like-care arrangements in counties. When the commissioner determines that, using the
commissioner's established protocol, the number of providers responding to the survey is
too small to determine the 75th percentile rate for like-care arrangements in a county or
multicounty region, the commissioner may establish the 75th percentile maximum rate
based on like-care arrangements in a county, region, or category that the commissioner
deems to be similar.
    (d) A rate which includes a special needs rate paid under subdivision 3 or under
a school readiness service agreement paid under section 61 may be in excess of the
maximum rate allowed under this subdivision.
    (e) The department shall monitor the effect of this paragraph on provider rates. The
county shall pay the provider's full charges for every child in care up to the maximum
established. The commissioner shall determine the maximum rate for each type of care on
an hourly, full-day, and weekly basis, including special needs and disability care.
    (f) When the provider charge is greater than the maximum provider rate allowed,
the parent is responsible for payment of the difference in the rates in addition to any
family co-payment fee.

    Sec. 12. Minnesota Statutes 2006, section 119B.13, subdivision 3a, is amended to read:
    Subd. 3a. Provider rate differential for accreditation. A family child care
provider or child care center shall be paid a 15 percent differential above the maximum
rate established in subdivision 1, up to the actual provider rate, if the provider or center
holds a current early childhood development credential or is accredited. For a family
child care provider, early childhood development credential and accreditation includes
an individual who has earned a child development associate degree, a child development
associate credential, a diploma in child development from a Minnesota state technical
college, or a bachelor's or post baccalaureate degree in early childhood education from
an accredited college or university, or who is accredited by the National Association for
Family Child Care or the Competency Based Training and Assessment Program. For a
child care center, accreditation includes accreditation by the National Association for the
Education of Young Children, the Council on Accreditation, the National Early Childhood
Program Accreditation, the National School-Age Care Association, or the National Head
Start Association Program of Excellence. For Montessori programs, accreditation includes
the American Montessori Society, Association of Montessori International-USA, or the
National Center for Montessori Education.

    Sec. 13. Minnesota Statutes 2006, section 119B.13, subdivision 7, is amended to read:
    Subd. 7. Absent days. (a) Child care providers may not be reimbursed for more
than 25 full-day absent days per child, excluding holidays, in a fiscal year, or for more
than ten consecutive full-day absent days, unless the child has a documented medical
condition that causes more frequent absences. Absences due to a documented medical
condition of a parent or sibling who lives in the same residence as the child receiving
child care assistance do not count against the 25-day absent day limit in a fiscal year.
Documentation of medical conditions must be on the forms and submitted according to
the timelines established by the commissioner. A public health nurse or school nurse
may verify the illness in lieu of a medical practitioner. If a provider sends a child home
early due to a medical reason, including, but not limited to, fever or contagious illness,
the child care center director or lead teacher may verify the illness in lieu of a medical
practitioner. If a child attends for part of the time authorized to be in care in a day, but is
absent for part of the time authorized to be in care in that same day, the absent time will be
reimbursed but the time will not count toward the ten consecutive or 25 cumulative absent
day limits. Children in families where at least one parent is under the age of 21, does not
have a high school or general equivalency diploma, and is a student in a school district
or another similar program that provides or arranges for child care, as well as parenting,
social services, career and employment supports, and academic support to achieve high
school graduation, may be exempt from the absent day limits upon request of the program
and approval of the county. If a child attends part of an authorized day, payment to the
provider must be for the full amount of care authorized for that day. Child care providers
may only be reimbursed for absent days if the provider has a written policy for child
absences and charges all other families in care for similar absences.
    (b) Child care providers must be reimbursed for up to ten federal or state holidays
or designated holidays per year when the provider charges all families for these days
and the holiday or designated holiday falls on a day when the child is authorized to be
in attendance. Parents may substitute other cultural or religious holidays for the ten
recognized state and federal holidays. Holidays do not count toward the ten consecutive or
25 cumulative absent day limits.
    (c) A family or child care provider may not be assessed an overpayment for an
absent day payment unless (1) there was an error in the amount of care authorized for the
family, (2) all of the allowed full-day absent payments for the child have been paid, or (3)
the family or provider did not timely report a change as required under law.
    (d) The provider and family must receive notification of the number of absent days
used upon initial provider authorization for a family and when the family has used 15
cumulative absent days. Upon statewide implementation of the Minnesota Electronic
Child Care System, the provider and family authorization for a family and ongoing
notification of the number of absent days used as of the date of the notification.
    (e) A county may pay for more absent days than the statewide absent day policy
established under this subdivision if current market practice in the county justifies payment
for those additional days. County policies for payment of absent days in excess of the
statewide absent day policy and justification for these county policies must be included in
the county's child care fund plan under section 119B.08, subdivision 3.

    Sec. 14. Minnesota Statutes 2006, section 119B.21, subdivision 5, is amended to read:
    Subd. 5. Child care services grants. (a) A child care resource and referral program
designated under section 119B.19, subdivision 1a, may award child care services grants
for:
    (1) creating new licensed child care facilities and expanding existing facilities,
including, but not limited to, supplies, equipment, facility renovation, and remodeling;
    (2) improving licensed child care facility programs;
    (3) staff training and development services including, but not limited to, in-service
training, curriculum development, accreditation, certification, consulting, resource centers,
and program and resource materials, supporting effective teacher-child interactions,
child-focused teaching, and content-driven classroom instruction;
    (4) interim financing;
    (5) capacity building through the purchase of appropriate technology to create,
enhance, and maintain business management systems;
    (6) emergency assistance for child care programs;
    (7) new programs or projects for the creation, expansion, or improvement of
programs that serve ethnic immigrant and refugee communities; and
    (8) targeted recruitment initiatives to expand and build the capacity of the child
care system and to improve the quality of care provided by legal nonlicensed child care
providers.
    (b) A child care resource and referral program designated under section 119B.19,
subdivision 1a
, may award child care services grants to:
    (1) licensed providers;
    (2) providers in the process of being licensed;
    (3) corporations or public agencies that develop or provide child care services;
    (4) school-age care programs; or
    (5) any combination of clauses (1) to (4).
Unlicensed providers are only eligible for grants under paragraph (a), clause (7).
    (c) A recipient of a child care services grant for facility improvements, interim
financing, or staff training and development must provide a 25 percent local match.

    Sec. 15. Minnesota Statutes 2006, section 256.01, subdivision 4, is amended to read:
    Subd. 4. Duties as state agency. (a) The state agency shall:
    (1) supervise the administration of assistance to dependent children under Laws
1937, chapter 438, by the county agencies in an integrated program with other service for
dependent children maintained under the direction of the state agency;
    (2) may subpoena witnesses and administer oaths, make rules, and take such action
as may be necessary, or desirable for carrying out the provisions of Laws 1937, chapter
438. All rules made by the state agency shall be binding on the counties and shall be
complied with by the respective county agencies;
    (3) (2) establish adequate standards for personnel employed by the counties and the
state agency in the administration of Laws 1937, chapter 438, and make the necessary
rules to maintain such standards;
    (4) (3) prescribe the form of and print and supply to the county agencies blanks
for applications, reports, affidavits, and such other forms as it may deem necessary and
advisable;
    (5) (4) cooperate with the federal government and its public welfare agencies
in any reasonable manner as may be necessary to qualify for federal aid for temporary
assistance for needy families and in conformity with title I of Public Law 104-193, the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and successor
amendments, including the making of such reports and such forms and containing such
information as the Federal Social Security Board may from time to time require, and
comply with such provisions as such board may from time to time find necessary to assure
the correctness and verification of such reports;
    (6) may cooperate with other state agencies in establishing reciprocal agreements in
instances where a child receiving Minnesota family investment program assistance moves
or contemplates moving into or out of the state, in order that such child may continue to
receive supervised aid from the state moved from until the child shall have resided for
one year in the state moved to;
    (7) (5) on or before October 1 in each even-numbered year make a biennial report
to the governor concerning the activities of the agency;
    (8) (6) enter into agreements with other departments of the state as necessary to meet
all requirements of the federal government; and
    (9) (7) cooperate with the commissioner of education to enforce the requirements
for program integrity and fraud prevention for investigation for child care assistance
under chapter 119B.
    (b) The state agency may:
    (1) subpoena witnesses and administer oaths, make rules, and take such action as
may be necessary or desirable for carrying out the provisions of Laws 1937, chapter 438.
All rules made by the state agency shall be binding on the counties and shall be complied
with by the respective county agencies;
    (2) cooperate with other state agencies in establishing reciprocal agreements in
instances where a child receiving Minnesota family investment program assistance moves
or contemplates moving into or out of the state, in order that the child may continue
to receive supervised aid from the state moved from until the child has resided for one
year in the state moved to; and
    (3) administer oaths and affirmations, take depositions, certify to official acts, and
issue subpoenas to compel the attendance of individuals and the production of documents
and other personal property necessary in connection with the administration of programs
administered by the Department of Human Services.
    (c) The fees for service of a subpoena in paragraph (b), clause (3), must be paid in
the same manner as prescribed by law for a service of process issued by a district court.
Witnesses must receive the same fees and mileage as in civil actions.
    (d) The subpoena in paragraph (b), clause (3), shall be enforceable through the
district court in the district where the subpoena is issued.

    Sec. 16. Minnesota Statutes 2006, section 256.01, is amended by adding a subdivision
to read:
    Subd. 23. Administrative simplification; county cost study. (a) The commissioner
shall establish and convene the first meeting of an advisory committee to identify ways
to simplify and streamline human services laws and administrative requirements. The
advisory committee shall select its chair from its membership at the first meeting.
    (b) The committee shall consist of three senators appointed by the senate
Subcommittee on Committees of the Committee on Rules and Administration, three
state representatives appointed by the speaker of the house of representatives, and
nine department staff and county representatives appointed by the commissioner. The
appointments required under this paragraph must be completed by September 1, 2007.
    (c) The committee shall discuss methods of reducing inconsistency between
programs and complexity within programs in order to improve administrative efficiency
and reduce the risk of recipient noncompliance. Topics for discussion may include child
support enforcement, adoption services, child care licensing, child care assistance, and
other programs. The state senators and state representatives on the advisory committee,
in consultation with the advisory committee, shall report annually to the chairs of the
legislative committees and divisions with jurisdiction over the Department of Human
Services, beginning January 15, 2008, with recommendations developed by the advisory
group.
    (d) The commissioner, in consultation with the advisory committee, shall study
and report to the legislature by January 15, 2009, on the transfer of any responsibilities
between the department and counties that would result in more efficient and effective
administration of human services programs.
    (e) This section expires on June 30, 2012.

    Sec. 17. Minnesota Statutes 2006, section 256.015, subdivision 7, is amended to read:
    Subd. 7. Cooperation required. Upon the request of the Department of Human
Services, any state agency or third party payer shall cooperate with the department in
furnishing information to help establish a third party liability. Upon the request of the
Department of Human Services or county child support or human service agencies, any
employer or third party payer shall cooperate in furnishing information about group health
insurance plans or medical benefit plans available to its employees. For purposes of
section 176.191, subdivision 4, the Department of Labor and Industry may allow the
Department of Human Services and county agencies direct access and data matching on
information relating to workers' compensation claims in order to determine whether the
claimant has reported the fact of a pending claim and the amount paid to or on behalf of
the claimant to the Department of Human Services. The Department of Human Services
and county agencies shall limit its use of information gained from agencies, third party
payers, and employers to purposes directly connected with the administration of its public
assistance and child support programs. The provision of information by agencies, third
party payers, and employers to the department under this subdivision is not a violation of
any right of confidentiality or data privacy.

    Sec. 18. Minnesota Statutes 2006, section 256.017, subdivision 1, is amended to read:
    Subdivision 1. Authority and purpose. The commissioner shall administer a
compliance system for the Minnesota family investment program, the food stamp or food
support program, emergency assistance, general assistance, medical assistance, general
assistance medical care, emergency general assistance, Minnesota supplemental assistance,
preadmission screening, and alternative care grants, and the child care assistance program
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 sanctions and
fiscal disallowances for noncompliance with federal regulations and state statutes.
    The commissioner shall utilize training, technical assistance, and monitoring
activities, as specified in section 256.01, subdivision 2, to encourage county agency
compliance with written policies and procedures.

    Sec. 19. Minnesota Statutes 2006, section 256.017, subdivision 9, is amended to read:
    Subd. 9. Timing and disposition of penalty and case disallowance funds. Quality
control case penalty and administrative penalty amounts shall be disallowed or withheld
from the next regular reimbursement made to the county agency for state and federal
benefit reimbursements and federal administrative reimbursements for all programs
covered in this section, according to procedures established in statute, but shall not be
imposed sooner than 30 calendar days from the date of written notice of such penalties.
Except for penalties withheld under the child care assistance program, all penalties
must be deposited in the county incentive fund provided in section 256.018. Penalties
withheld under the child care assistance program shall be reallocated to counties using the
allocation formula under section 119B.03, subdivision 5. All penalties must be imposed
according to this provision until a decision is made regarding the status of a written
exception. Penalties must be returned to county agencies when a review of a written
exception results in a decision in their favor.

    Sec. 20. Minnesota Statutes 2006, section 256.984, subdivision 1, is amended to read:
    Subdivision 1. Declaration. Every application for public assistance under this
chapter or chapters 256B, 256D, 256J, and 256L; child care programs under chapter 119B;
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. 21. [256D.0516] EXPIRATION OF FOOD SUPPORT BENEFITS AND
REPORTING REQUIREMENTS.
    Subdivision 1. Expiration of food support benefits. Food support benefits shall
not be stored off line or expunged from a recipient's account unless the benefits have not
been accessed for 12 months after the month they were issued.
    Subd. 2. Food support reporting requirements. The commissioner of human
services shall implement simplified reporting as permitted under the Food Stamp Act of
1977, as amended, and the food stamp regulations in Code of Federal Regulations, title
7, part 273. Food support recipient households required to report periodically shall not
be required to report more often than one time every six months. This provision shall
not apply to households receiving food benefits under the Minnesota family investment
program waiver.
EFFECTIVE DATE.Subdivision 1 is effective February 1, 2008, and subdivision
2 is effective May 1, 2008.

    Sec. 22. Minnesota Statutes 2006, section 256J.01, is amended by adding a subdivision
to read:
    Subd. 6. Legislative approval to move programs or activities. The commissioner
shall not move programs or activities funded with MFIP or TANF maintenance of effort
funds to other funding sources without legislative approval.

    Sec. 23. Minnesota Statutes 2006, section 256J.02, subdivision 1, is amended to read:
    Subdivision 1. Commissioner's authority to administer block grant funds. The
commissioner of human services is authorized to receive, administer, and expend funds
available under the TANF block grant authorized under title I of Public Law 104-193, the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996, and under
Public Law 109-171, the Deficit Reduction Act of 2005.

    Sec. 24. Minnesota Statutes 2006, section 256J.02, subdivision 4, is amended to read:
    Subd. 4. Authority to transfer. Subject to limitations of title I of Public Law
104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996,
as amended, and under Public Law 109-171, the Deficit Reduction Act of 2005, the
legislature may transfer money from the TANF block grant to the child care fund under
chapter 119B, or the Title XX block grant.

    Sec. 25. Minnesota Statutes 2006, section 256J.021, is amended to read:
256J.021 SEPARATE STATE PROGRAM FOR USE OF STATE MONEY.
    (a) Until October 1, 2006, the commissioner of human services must treat 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. Families receiving assistance under this section shall comply with all applicable
requirements in this chapter.
    (b) Beginning October 1, 2006, the commissioner of human services must treat
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. These expenditures shall not count toward the state's maintenance of effort
(MOE) requirements under the federal Temporary Assistance to Needy Families (TANF)
program except if counting certain families would allow the commissioner to avoid a
federal penalty. Families receiving assistance under this section must comply with all
applicable requirements in this chapter.
    (c) Beginning February 1, 2008, the commissioner of human services shall treat
MFIP expenditures made to or on behalf of any minor child who is part of a household
that meets criteria in section 256J.575, subdivision 3, as expenditures under a separately
funded state program under section 256J.575, subdivision 8.

    Sec. 26. Minnesota Statutes 2006, section 256J.08, subdivision 65, is amended to read:
    Subd. 65. Participant. (a) "Participant" means includes any of the following:
    (1) a person who is currently receiving cash assistance or the food portion available
through MFIP. 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.;
    (2) 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;
    (3) the caregiver relative and the minor child whose needs are included in the
assistance payment.;
    (4) a person in an assistance unit who does not receive a cash and food assistance
payment because the case has been suspended from MFIP is a participant.;
    (5) a person who receives cash payments under the diversionary work program
under section 256J.95 is a participant.; and
    (6) a person who receives cash payments under family stabilization services under
section 256J.575.
    (b) "Participant" does not include 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.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 27. Minnesota Statutes 2006, 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 $15,000. 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, the loan value of all additional vehicles and
exclude the combined 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, 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 disabled 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 payments for the current month's 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. 28. Minnesota Statutes 2006, 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 9555.5050
to 9555.6265, 9560.0521, and 9560.0650 to 9560.0655, 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 Workforce
Investment Act of 1998, United States Code, title 20, chapter 73, 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) 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 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) state adoption assistance payments under section 259.67, and up to an equal
amount of county adoption assistance payments;
    (23) state-funded family subsidy program payments made under section 252.32
to help families care for children with developmental disabilities, 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 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 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 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.; and
    (47) cash payments to individuals enrolled for full-time service as a volunteer under
AmeriCorps programs including AmeriCorps VISTA, AmeriCorps State, AmeriCorps
National, and AmeriCorps NCCC.

    Sec. 29. Minnesota Statutes 2006, section 256J.32, subdivision 6, is amended to read:
    Subd. 6. Recertification. The county agency shall recertify eligibility in an annual
face-to-face interview with the participant and verify the following:
    (1) presence of the minor child in the home, if questionable;
    (2) income, unless excluded, including self-employment expenses used as a
deduction or deposits or withdrawals from business accounts;
    (3) assets when the value is within $200 of the asset limit;
    (4) information to establish an exception under section 256J.24, subdivision 9,
if questionable; and
    (5) inconsistent information, if related to eligibility; and
    (6) whether a single caregiver household meets requirements in section 256J.575,
subdivision 3.

    Sec. 30. Minnesota Statutes 2006, section 256J.42, subdivision 1, is amended to read:
    Subdivision 1. Time limit. (a) Except as otherwise provided for in this section, an
assistance unit in which any adult caregiver has received 60 months of cash assistance
funded in whole or in part by the TANF block grant in this or any other state or
United States territory, or from a tribal TANF program, MFIP, the AFDC program
formerly codified in sections 256.72 to 256.87, or the family general assistance program
formerly codified in sections 256D.01 to 256D.23, funded in whole or in part by state
appropriations, is ineligible to receive MFIP. Any cash assistance funded with TANF
dollars in this or any other state or United States territory, or from a tribal TANF program,
or MFIP assistance funded in whole or in part by state appropriations, that was received
by the unit on or after the date TANF was implemented, including any assistance received
in states or United States territories of prior residence, counts toward the 60-month
limitation. Months during which any cash assistance is received by an assistance unit
with a mandatory member who is disqualified for wrongfully obtaining public assistance
under section 256.98, subdivision 8, counts toward the time limit for the disqualified
member. The 60-month limit applies to a minor caregiver except under subdivision 5. The
60-month time period does not need to be consecutive months for this provision to apply.
    (b) The months before July 1998 in which individuals received assistance as part of
the field trials as an MFIP, MFIP-R, or MFIP or MFIP-R comparison group family are
not included in the 60-month time limit.
EFFECTIVE DATE.This section is effective October 1, 2007.

    Sec. 31. Minnesota Statutes 2006, section 256J.46, is amended by adding a subdivision
to read:
    Subd. 3. Restrictions on sanctions. A participant shall not be sanctioned for
failure to meet the agreed upon hours in a participant's employment plan under section
256J.521, subdivision 2, when the participant fails to meet the agreed upon hours of
participation in paid employment because the participant is not eligible for holiday pay
and the participant's place of employment is closed for a holiday.

    Sec. 32. Minnesota Statutes 2006, 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 leads to employment. For purposes of the MFIP program,
this includes activities that meet the definition of work activity under the participation
requirements of TANF. Work activity includes:
    (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 community service, volunteer work,
the community work experience program as specified in section 256J.67, unpaid
apprenticeships or internships, and supported work when a wage subsidy is not provided;.
Unpaid work experience is only an option if the participant has been unable to obtain or
maintain paid employment in the competitive labor market, and no paid work experience
programs are available to the participant. Unless a participant consents to participating
in unpaid work experience, the participant's employment plan may only include unpaid
work experience if including the unpaid work experience in the plan will meet the
following criteria:
    (i) the unpaid work experience will provide the participant specific skills or
experience that cannot be obtained through other work activity options where the
participant resides or is willing to reside; and
    (ii) the skills or experience gained through the unpaid work experience will result
in higher wages for the participant than the participant could earn without the unpaid
work experience;
    (4) job search including job readiness assistance, job clubs, job placement,
job-related counseling, and job retention services;
    (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. 33. Minnesota Statutes 2006, section 256J.521, subdivision 1, is amended to read:
    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 or 3,
as appropriate, and to determine whether the participant qualifies for a family violence
waiver including an employment plan under subdivision 3, and to determine whether the
participant should be referred to family stabilization services under section 256J.575.
    (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, or referral to family stabilization services under
section 256J.575.
    (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.

    Sec. 34. Minnesota Statutes 2006, section 256J.521, subdivision 2, is amended to read:
    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. Notwithstanding this order of
preference for activities, priority must be given for activities related to a family violence
waiver when developing the employment plan. 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.
    (f) Except as provided under paragraph (g), 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.
    (g) When a participant fails to meet the agreed upon hours of participation in paid
employment because the participant is not eligible for holiday pay and the participant's
place of employment is closed for a holiday, the job counselor shall not impose a sanction
or increase the hours of participation in any other activity, including paid employment, to
offset the hours that were missed due to the holiday.
    (f) (h) Employment plans must be reviewed at least every three months to determine
whether activities and hourly requirements should be revised. The job counselor is
encouraged to allow participants who are participating in at least 20 hours of work
activities to also participate in education and training activities in order to meet the federal
hourly participations rates.

    Sec. 35. Minnesota Statutes 2006, section 256J.53, subdivision 2, is amended to read:
    Subd. 2. Approval of postsecondary education or training. (a) In order for a
postsecondary education or training program to be an approved activity in an employment
plan, the participant must be working in unsubsidized employment at least 20 hours per
week. plan must include additional work activities if the education and training activities
do not meet the minimum hours required to meet the federal work participation rate under
Code of Federal Regulations, title 45, sections 261.31 and 261.35.
    (b) Participants seeking approval of a postsecondary education or training plan
must provide documentation that:
    (1) the employment 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 does not apply 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. A participant
whose case is subsequently closed for three months or less for reasons other than
noncompliance with program requirements and who returns to MFIP 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. 36. Minnesota Statutes 2006, section 256J.55, subdivision 1, is amended to read:
    Subdivision 1. Participation requirements. (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 130 hours per month 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 87 hours per month 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. 37. [256J.575] FAMILY STABILIZATION SERVICES.
    Subdivision 1. Purpose. (a) The family stabilization services serve families who are
not making significant progress within the Minnesota family investment program (MFIP)
due to a variety of barriers to employment.
    (b) The goal of the services is to stabilize and improve the lives of families at risk
of long-term welfare dependency or family instability due to employment barriers such
as physical disability, mental disability, age, or providing care for a disabled household
member. These services promote and support families to achieve the greatest possible
degree of self-sufficiency.
    Subd. 2. Definitions. The terms used in this section have the meanings given them
in paragraphs (a) to (d).
    (a) "Case manager" means the county-designated staff person or employment
services counselor.
    (b) "Case management" means the services provided by or through the county
agency or through the employment services agency to participating families, including
assessment, information, referrals, and assistance in the preparation and implementation
of a family stabilization plan under subdivision 5.
    (c) "Family stabilization plan" means a plan developed by a case manager and
the participant, which identifies the participant's most appropriate path to unsubsidized
employment, family stability, and barrier reduction, taking into account the family's
circumstances.
    (d) "Family stabilization services" means programs, activities, and services in this
section that provide participants and their family members with assistance regarding,
but not limited to:
    (1) obtaining and retaining unsubsidized employment;
    (2) family stability;
    (3) economic stability; and
    (4) barrier reduction.
    The goal of the services is to achieve the greatest degree of economic self-sufficiency
and family well-being possible for the family under the circumstances.
    Subd. 3. Eligibility. (a) The following MFIP or diversionary work program (DWP)
participants are eligible for the services under this section:
    (1) a participant who meets the requirements for or has been granted a hardship
extension under section 256J.425, subdivision 2 or 3, except that it is not necessary for
the participant to have reached or be approaching 60 months of eligibility for this section
to apply;
    (2) a participant who is applying for supplemental security income or Social Security
disability insurance; and
    (3) a participant who is a noncitizen who has been in the United States for 12 or
fewer months.
    (b) Families must meet all other eligibility requirements for MFIP established in
this chapter. Families are eligible for financial assistance to the same extent as if they
were participating in MFIP.
    (c) A participant under paragraph (a), clause (3), must be provided with English as a
second language opportunities and skills training for up to 12 months. After 12 months,
the case manager and participant must determine whether the participant should continue
with English as a second language classes or skills training, or both, and continue to
receive family stabilization services.
    Subd. 4. Universal participation. All caregivers must participate in family
stabilization services as defined in subdivision 2.
    Subd. 5. Case management; family stabilization plans; coordinated services.
    (a) The county agency or employment services provider shall provide family stabilization
services to families through a case management model. A case manager shall be assigned
to each participating family within 30 days after the family is determined to be eligible
for family stabilization services. The case manager, with the full involvement of the
participant, shall recommend, and the county agency shall establish and modify as
necessary, a family stabilization plan for each participating family. If a participant is
already assigned to a county case manager or a county-designated case manager in social
services, disability services, or housing services that case manager already assigned may
be the case manager for purposes of these services.
    (b) The family stabilization plan must include:
    (1) each participant's plan for long-term self-sufficiency, including an employment
goal where applicable;
    (2) an assessment of each participant's strengths and barriers, and any special
circumstances of the participant's family that impact, or are likely to impact, the
participant's progress towards the goals in the plan; and
    (3) an identification of the services, supports, education, training, and
accommodations needed to reduce or overcome any barriers to enable the family to
achieve self-sufficiency and to fulfill each caregiver's personal and family responsibilities.
    (c) The case manager and the participant shall meet within 30 days of the family's
referral to the case manager. The initial family stabilization plan must be completed within
30 days of the first meeting with the case manager. The case manager shall establish a
schedule for periodic review of the family stabilization plan that includes personal contact
with the participant at least once per month. In addition, the case manager shall review
and, if necessary, modify the plan under the following circumstances:
    (1) there is a lack of satisfactory progress in achieving the goals of the plan;
    (2) the participant has lost unsubsidized or subsidized employment;
    (3) a family member has failed or is unable to comply with a family stabilization
plan requirement;
    (4) services, supports, or other activities required by the plan are unavailable;
    (5) changes to the plan are needed to promote the well-being of the children; or
    (6) the participant and case manager determine that the plan is no longer appropriate
for any other reason.
    Subd. 6. Cooperation with services requirements. (a) To be eligible, a participant
shall comply with paragraphs (b) to (d).
    (b) Participants shall engage in family stabilization plan services for the appropriate
number of hours per week that the activities are scheduled and available, unless good
cause exists for not doing so, as defined in section 256J.57, subdivision 1. The appropriate
number of hours must be based on the participant's plan.
    (c) The case manager shall review the participant's progress toward the goals in the
family stabilization plan every six months to determine whether conditions have changed,
including whether revisions to the plan are needed.
    (d) A participant's requirement to comply with any or all family stabilization plan
requirements under this subdivision is excused when the case management services,
training and educational services, or family support services identified in the participant's
family stabilization plan are unavailable for reasons beyond the control of the participant,
including when money appropriated is not sufficient to provide the services.
    Subd. 7. Sanctions. (a) The financial assistance grant of a participating family is
reduced according to section 256J.46, if a participating adult fails without good cause to
comply or continue to comply with the family stabilization plan requirements in this
subdivision, unless compliance has been excused under subdivision 6, paragraph (e).
    (b) Given the purpose of the family stabilization services in this section and the
nature of the underlying family circumstances that act as barriers to both employment and
full compliance with program requirements, there must be a review by the county agency
prior to imposing a sanction to determine whether the plan was appropriated to the needs
of the participant and family, and that the participant in all ways had the ability to comply
with the plan, as confirmed by a behavioral health or medical professional.
    (c) Prior to the imposition of a sanction, the county agency or employment services
provider shall review the participant's case to determine if the family stabilization plan
is still appropriate and meet with the participant face-to-face. The participant may bring
an advocate to the face-to-face meeting.
    During the face-to-face meeting, the county agency shall:
    (1) determine whether the continued noncompliance can be explained and mitigated
by providing a needed family stabilization service, as defined in subdivision 2, paragraph
(d);
    (2) 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;
    (3) determine whether activities in the family stabilization plan are appropriate
based on the family's circumstances;
    (4) explain the consequences of continuing noncompliance;
    (5) identify other resources that may be available to the participant to meet the
needs of the family; and
    (6) inform the participant of the right to appeal under section 256J.40.
    If the lack of an identified activity or service can explain the noncompliance, the
county shall work with the participant to provide the identified activity.
    (d) If the participant fails to come to the face-to-face meeting, the case manager or a
designee shall attempt at least one home visit. If a face-to-face meeting is not conducted,
the county agency shall send the participant a written notice that includes the information
under paragraph (c).
    (e) After the requirements of paragraphs (c) and (d) are met and prior to imposition
of a sanction, the county agency shall provide a notice of intent to sanction under section
256J.57, subdivision 2, and, when applicable, a notice of adverse action under section
256J.31.
    (f) Section 256J.57 applies to this section except to the extent that it is modified
by this subdivision.
    Subd. 8. Funding. (a) The commissioner of human services shall treat MFIP
expenditures made to or on behalf of any minor child under this section, who is part of a
household that meets criteria in subdivision 3, as expenditures under a separately funded
state program. These expenditures shall not count toward the state's maintenance of effort
requirements under the federal TANF program.
    (b) A family is no longer part of a separately funded program under this section if
the caregiver no longer meets the criteria for family stabilization services in subdivision 3,
or if it is determined at recertification that a caregiver with a child under the age of six
is working at least 87 hours per month in paid or unpaid employment, or a caregiver
without a child under the age of six is working at least 130 hours per month in paid or
unpaid employment, whichever occurs sooner.
EFFECTIVE DATE.This section is effective February 1, 2008.

    Sec. 38. [256J.621] WORK PARTICIPATION BONUS.
    (a) Upon exiting the diversionary work program (DWP) or upon terminating
MFIP cash assistance with earnings, a participant who is employed may be eligible for
transitional assistance of $75 per month to assist in meeting the family's basic needs as
the participant continues to move toward self-sufficiency.
    (b) To be eligible for a transitional assistance payment, the participant shall not
receive MFIP cash assistance or diversionary work program assistance during the month
and the participant or participants must meet the following work requirements:
    (1) if the participant is a single caregiver and has a child under six years of age, the
participant must be employed at least 87 hours per month;
    (2) if the participant is a single caregiver and does not have a child under six years of
age, the participant must be employed at least 130 hours per month; or
    (3) if the household is a two-parent family, at least one of the parents must be
employed an average of at least 130 hours per month.
    Whenever a participant exits the diversionary work program or is terminated from
MFIP cash assistance and meets the other criteria in this section, transitional assistance is
available for up to 24 consecutive months.
    (c) Expenditures on the program are maintenance of effort state funds for participants
under paragraph (b), clauses (1) and (2). Expenditures for participants under paragraph
(b), clause (3), are nonmaintenance of effort funds. Months in which a participant
receives transitional assistance under this section do not count toward the participant's
MFIP 60-month time limit.
EFFECTIVE DATE.This section is effective February 1, 2009.

    Sec. 39. Minnesota Statutes 2006, section 256J.626, subdivision 1, is amended to read:
    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, including case
management. Tribes may use the funds for any allowable expenditures under subdivision
2, including case management, except those in subdivision 2, paragraph (a), clauses (1)
and (6).

    Sec. 40. Minnesota Statutes 2006, section 256J.626, subdivision 2, is amended to read:
    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 or activities under a family stabilization plan;
    (3) direct and administrative costs of staff to deliver employment services for
MFIP or, the diversionary work program, or family stabilization services; to administer
financial assistance,; and to provide specialized services intended to assist hard-to-employ
participants to transition to work or transition from family stabilization services to MFIP;
    (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, telephone service, 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, the diversionary work program, or family
stabilization services 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; and
    (13) services to help families participating in family stabilization services achieve
the greatest possible degree of self-sufficiency.
    (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 allocation
under this section. The commissioner shall define administrative costs for purposes of
this subdivision.
    (c) The commissioner may waive the cap on administrative costs for a county or tribe
that elects to provide an approved supported employment, unpaid work, or community
work experience program for a major segment of the county's or tribe's MFIP population.
The county or tribe must apply for the waiver on forms provided by the commissioner. In
no case shall total administrative costs exceed the TANF limits.

    Sec. 41. Minnesota Statutes 2006, section 256J.626, subdivision 3, is amended to read:
    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, the diversionary work program, or family
stabilization services, and families at risk of receiving MFIP or diversionary work program.

    Sec. 42. Minnesota Statutes 2006, section 256J.626, subdivision 4, is amended to read:
    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) strategies the county or tribe will pursue under family stabilization services; and
    (5) 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 116L.88.

    Sec. 43. Minnesota Statutes 2006, section 256J.626, subdivision 5, is amended to read:
    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, family stabilization services 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.

    Sec. 44. Minnesota Statutes 2006, section 256J.626, subdivision 6, is amended to read:
    Subd. 6. Base allocation to counties and tribes; definitions. (a) For purposes of
this section, the following terms have the meanings given.
    (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 (6), items (i) through (iv), and earnings
related to calendar year 2002 in the base program listed in clause (6), item (v), and the
amount of spending in fiscal year 2002 in the base program listed in clause (6), item (vi),
issued to or on behalf of persons residing in the county or tribal service delivery area.
    (2) "Adjusted caseload factor" means a factor weighted:
    (i) 47 percent on the MFIP cases in each county at four points in time in the most
recent 12-month period for which data is available multiplied by the county's caseload
difficulty factor; and
    (ii) 53 percent on the count of adults on MFIP in each county and tribe at four points
in time in the most recent 12-month period for which data is available multiplied by the
county or tribe's caseload difficulty factor.
    (3) "Caseload difficulty factor" means a factor determined by the commissioner for
each county and tribe based upon the self-support index described in section 256J.751,
subdivision 2
, clause (7) (6).
    (4) "Initial allocation" means the amount potentially available to each county or tribe
based on the formula in paragraphs (b) through (h) (d).
    (5) "Final allocation" means the amount available to each county or tribe based on
the formula in paragraphs (b) through (h) (d), after adjustment by subdivision 7.
    (6) "Base programs" means the:
    (i) MFIP employment and training services under Minnesota Statutes 2002, section
256J.62, subdivision 1, in effect June 30, 2002;
    (ii) bilingual employment and training services to refugees under Minnesota Statutes
2002, section 256J.62, subdivision 6, in effect June 30, 2002;
    (iii) work literacy language programs under Minnesota Statutes 2002, 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 Minnesota Statutes 2002, section 256J.48,
in effect June 30, 2002.
    (b) The commissioner shall:
    (1) beginning July 1, 2003, determine the initial allocation of funds available under
this section according to clause (2);
    (2) allocate all of the funds available for the period beginning July 1, 2003, and
ending December 31, 2004, to each county or tribe in proportion to the county's or tribe's
share of the statewide 2002 historic spending base;
    (3) determine for calendar year 2005 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;
    (4) determine for calendar year 2006 the initial allocation of funds to be made
available under this section based 90 percent on the proportion of the county or tribe's
share of the statewide 2002 historic spending base and ten percent on the proportion of
the county or tribe's share of the adjusted caseload factor;
    (5) determine for calendar year 2007 the initial allocation of funds to be made
available under this section based 70 percent on the proportion of the county or tribe's
share of the statewide 2002 historic spending base and 30 percent on the proportion of the
county or tribe's share of the adjusted caseload factor; and
    (6) determine for calendar year 2008 and subsequent years the initial allocation of
funds to be made available under this section based 50 percent on the proportion of the
county or tribe's share of the statewide 2002 historic spending base and 50 percent on the
proportion of the county or tribe's share of the adjusted caseload factor.
    (c) With the commencement of a new or expanded tribal TANF program or an
agreement under section 256.01, subdivision 2, paragraph (g), in which some or all of
the responsibilities of particular counties under this section are transferred to a tribe,
the commissioner shall:
    (1) in the case where all responsibilities under this section are transferred to a tribal
program, determine the percentage of the county's current caseload that is transferring to a
tribal program and adjust the affected county's allocation accordingly; and
    (2) in the case where a portion of the responsibilities under this section are
transferred to a tribal program, the commissioner shall consult with the affected county or
counties to determine an appropriate adjustment to the allocation.
    (d) Effective January 1, 2005, counties and tribes will have their final allocations
adjusted based on the performance provisions of subdivision 7.

    Sec. 45. Minnesota Statutes 2006, section 256J.626, subdivision 7, is amended to read:
    Subd. 7. Performance base funds. (a) Beginning calendar year 2005 2008, each
county and tribe will be allocated 95 percent of their initial calendar year allocation.
Counties and tribes will be allocated additional funds based on performance as follows:
    (1) for calendar year 2005, a county or tribe that achieves a 30 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) for calendar year 2006, a county or tribe that achieves a 40 percent rate or a
five percentage point improvement over the previous year's 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
    (3) for calendar year 2007, a county or tribe that achieves a 50 percent rate or a
five percentage point improvement over the previous year's 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
    (4) for calendar year 2008 and yearly thereafter, a county or tribe that achieves a 50
percent MFIP participation rate or a five percentage point improvement over the previous
year's MFIP participation rate under section 256J.751, subdivision 2, clause (8) (7), 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
    (5) (2) for calendar years 2005 and thereafter, a county or tribe that performs above
the top of its annualized range of expected performance on the three-year self-support
index under section 256J.751, subdivision 2, clause (7) (6), will receive an additional
allocation equal to five percent of its initial allocation; or and
    (6) (3) for calendar years 2005 and thereafter, a county or tribe that performs within
its range of expected performance on the annualized three-year self-support index under
section 256J.751, subdivision 2, clause (7) (6), will receive an additional allocation equal
to 2.5 percent of its initial allocation; and
    (4) for calendar years 2008 and thereafter, a county or tribe that does not achieve
a 50 percent MFIP participation rate or a five percentage point improvement over the
previous year's MFIP participation rate under section 256J.751, subdivision 2, clause (7),
as averaged across the four quarterly measurements for the most recent year for which
the measurements are available, will not receive an additional 2.5 percent of its initial
allocation until after negotiating a multiyear improvement plan with the commissioner; or
    (5) for calendar years 2008 and thereafter, a county or tribe that does not perform
within its range of expected performance on the annualized three-year self-support index
under section 256J.751, subdivision 2, clause (6), will not receive an additional allocation
equal to 2.5 percent of its initial allocation until after negotiating a multiyear improvement
plan with the commissioner.
    (b) Performance-based funds for a federally approved tribal TANF program in which
the state and tribe have in place a contract under section 256.01, addressing consolidated
funding, will be allocated as follows:
    (1) for calendar year 2006 and yearly thereafter, a tribe that achieves the participation
rate approved in its federal TANF plan using the average of 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) for calendar years 2006 and thereafter, a tribe that performs above the top of its
annualized range of expected performance on the three-year self-support index under
section 256J.751, subdivision 2, clause (7) (6), will receive an additional allocation equal
to five percent of its initial allocation; or
    (3) for calendar years 2006 and thereafter, a tribe that performs within its range
of expected performance on the annualized three-year self-support index under section
256J.751, subdivision 2, clause (7) (6), will receive an additional allocation equal to 2.5
percent of its initial allocation; or
    (4) for calendar year 2008 and yearly thereafter, a tribe that does not achieve the
participation rate approved in its federal TANF plan using the average of four quarterly
measurements for the most recent year for which the measurements are available, will
not receive an additional allocation equal to 2.5 percent of its initial allocation until after
negotiating a multiyear improvement plan with the commissioner; or
    (5) for calendar year 2008 and yearly thereafter, a tribe that does not perform within
its range of expected performance on the annualized three-year self-support index under
section 256J.751, subdivision 2, clause (6), will not receive an additional allocation equal
to 2.5 percent until after negotiating a multiyear improvement plan with the commissioner.
    (c) Funds remaining unallocated after the performance-based allocations in
paragraph (a) are available to the commissioner for innovation projects under subdivision
5.
    (d)(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).

    Sec. 46. Minnesota Statutes 2006, 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) median placement wage rate;
    (5) caseload by months of TANF assistance;
    (6) percent of MFIP and diversionary work program (DWP) 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 baseline quarter. This measure is called the self-support index. The
commissioner shall report quarterly 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 and DWP case load; and
    (7) the MFIP TANF 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 under Public Law 109-171, the Deficit Reduction Act of 2005.

    Sec. 47. Minnesota Statutes 2006, 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 104-193
of the Personal Responsibility and Work Opportunity Act of 1996, and under Public
Law 109-171, the Deficit Reduction Act of 2005, 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 104-193 of the Personal Responsibility and Work Opportunity Act of 1996, and
Public Law 109-171, the Deficit Reduction Act of 2005, 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 Employment and Economic
Development and Education 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) (6), in an annualized measurement reported in October of each year; or
    (2) performs below 40 percent for the measure in subdivision 2, clause (8) (7), 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. 48. Minnesota Statutes 2006, section 256J.95, subdivision 3, is amended to read:
    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) an 18- or 19-year-old caregiver 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 caregiver who received DWP benefits in the 12 months prior
to the month the family applied for DWP, except as provided in paragraph (c);
    (7) family units with a caregiver who received MFIP within the 12 months prior to
the month the family unit applied for DWP;
    (8) a family unit with a caregiver who received 60 or more months of TANF
assistance; and
    (9) a family unit with a caregiver who is disqualified from DWP or MFIP due to
fraud.; and
    (10) refugees as defined in Code of Federal Regulations, title 45, chapter IV, section
444.43, who arrived in the United States in the 12 months prior to the date of application
for family cash assistance.
    (b) A two-parent family must participate in DWP unless both caregivers 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), (7), (8), or (9).
    (c) Once DWP eligibility is determined, the four months run consecutively. If a
participant leaves the program for any reason and reapplies during the four-month period,
the county must redetermine eligibility for DWP.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 49. Minnesota Statutes 2006, section 256K.45, is amended by adding a
subdivision to read:
    Subd. 6. Funding. Any funds appropriated for this section may be expended on
programs described under subdivisions 3 to 5, technical assistance, and capacity building.
Up to four percent of funds appropriated may be used for the purpose of monitoring and
evaluating runaway and homeless youth programs receiving funding under this section.
Funding shall be directed to meet the greatest need, with a significant share of the funding
focused on homeless youth providers in greater Minnesota.

    Sec. 50. Minnesota Statutes 2006, 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)(i) The child has been a ward of the commissioner, a Minnesota-licensed
child-placing agency, or a tribal social service agency of Minnesota recognized by the
Secretary of the Interior; or (ii) the child will be 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. The placing agency shall not certify a child who remains under the jurisdiction
of the sending agency pursuant to section 260.851, article 5, for state-funded adoption
assistance when Minnesota is the receiving state.
    (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.
    (4) The child is five years of age or older.
    (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. 51. Minnesota Statutes 2006, section 270B.14, subdivision 1, is amended to read:
    Subdivision 1. Disclosure to commissioner of human services. (a) On the request
of the commissioner of human services, the commissioner shall disclose return information
regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to
the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).
    (b) Data that may be disclosed are limited to data relating to the identity,
whereabouts, employment, income, and property of a person owing or alleged to be owing
an obligation of child support.
    (c) The commissioner of human services may request data only for the purposes of
carrying out the child support enforcement program and to assist in the location of parents
who have, or appear to have, deserted their children. Data received may be used only
as set forth in section 256.978.
    (d) The commissioner shall provide the records and information necessary to
administer the supplemental housing allowance to the commissioner of human services.
    (e) At the request of the commissioner of human services, the commissioner of
revenue shall electronically match the Social Security numbers and names of participants
in the telephone assistance plan operated under sections 237.69 to 237.711, with those of
property tax refund filers, and determine whether each participant's household income is
within the eligibility standards for the telephone assistance plan.
    (f) The commissioner may provide records and information collected under sections
295.50 to 295.59 to the commissioner of human services for purposes of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law
102-234. Upon the written agreement by the United States Department of Health and
Human Services to maintain the confidentiality of the data, the commissioner may provide
records and information collected under sections 295.50 to 295.59 to the Centers for
Medicare and Medicaid Services section of the United States Department of Health and
Human Services for purposes of meeting federal reporting requirements.
    (g) The commissioner may provide records and information to the commissioner of
human services as necessary to administer the early refund of refundable tax credits.
    (h) The commissioner may disclose information to the commissioner of human
services necessary to verify income for eligibility and premium payment under the
MinnesotaCare program, under section 256L.05, subdivision 2.
    (i) The commissioner may disclose information to the commissioner of human
services necessary to verify whether applicants or recipients for the Minnesota family
investment program, general assistance, food support, and Minnesota supplemental aid
program, and child care assistance have claimed refundable tax credits under chapter 290
and the property tax refund under chapter 290A, and the amounts of the credits.

    Sec. 52. MFIP PILOT PROGRAM; WORKFORCE U.
    Subdivision 1. Establishment. A pilot program is established in Stearns and
Benton Counties to expand the Workforce U program administered by the Stearns-Benton
Employment and Training Council.
    Subd. 2. Evaluation. The Workforce U pilot program must be evaluated by a
research and evaluation organization with experience evaluating welfare programs. The
evaluation must include information on the total number of persons served, percentage
of participants exiting the program, percentage of former participants reentering the
program, average wages of program participants, and recommendations to the legislature
for possible statewide implementation of the program. The evaluation must be presented
to the legislature by February 15, 2011.
    Subd. 3. Expiration. The Workforce U pilot program expires on June 30, 2011.

    Sec. 53. LEECH LAKE YOUTH TREATMENT CENTER PROPOSAL.
    (a) The commissioner of human services shall provide a planning grant to address
the unmet need for local, effective, culturally relevant alcohol and drug treatment for
American Indian youth, and develop a plan for a family-based youth treatment center in
the Leech Lake area. The planning grant must be provided to a volunteer board consisting
of at least four members appointed by the commissioner, to include at least the following:
    (1) two members of the Leech Lake Tribal Council or their designees;
    (2) one member appointed by the Cass County Social Services administrator; and
    (3) one member appointed by the Cass Lake-Bena Public School superintendent.
    (b) The plan must include:
    (1) an interest, feasibility, and suitability of location study;
    (2) defining scope of programs and services to be offered;
    (3) defining site use limitations and restrictions, including physical and capacity;
    (4) defining facilities required for programs and services offered;
    (5) identifying partners, partnership roles, and partner resources;
    (6) developing proposed operating and maintenance budgets;
    (7) identifying funding sources;
    (8) developing a long-term funding plan; and
    (9) developing a formal steering committee, structure, and bylaws.
    (c) The plan is due to the legislative committees having jurisdiction over chemical
health issues no later than September 2008 in order to provide the 12 months necessary to
complete the plan.

    Sec. 54. MINNESOTA FOOD SUPPORT PROGRAM SIMPLIFIED
APPLICATION.
    The commissioner of human services shall implement a simplified application form
and process for the food support program by January 1, 2008. The commissioner shall
consult with counties and representatives of persons served by the program to develop the
simplified application form and process. The application process shall:
    (1) include a simple, short form that can be completed by individuals with limited
literacy skills;
    (2) include an application form for individuals without dependents;
    (3) include a process that does not require individuals to take time off work for a
face-to-face interview; and
    (4) minimize demands on county staff in assisting applicants.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 55. INSPECTION OF LEGAL UNLICENSED CHILD CARE PROVIDERS.
    The commissioner of human services, in consultation with the commissioner of
health and the counties, shall develop and present recommendations to the legislature in
January 2008 in order for each legally unlicensed child care provider receiving child
care assistance funds to receive a onetime home visit to receive information on health
and safety, and school readiness.

    Sec. 56. COMMISSIONER OF HUMAN SERVICES DUTIES; EARLY
CHILDHOOD AND SCHOOL-AGE PROFESSIONAL DEVELOPMENT
TRAINING.
    Subdivision 1. Development and implementation of an early childhood and
school-age professional development system. (a) The commissioner of human services,
in cooperation with the commissioners of education and health, shall develop and phase-in
the implementation of a professional development system for practitioners serving
children in early childhood and school-age programs. The system shall provide training
options and supports for practitioners to voluntarily choose, as they complete or exceed
existing licensing requirements.
    The system must, at a minimum, include the following features:
    (1) a continuum of training content based on the early childhood and school-age
care practitioner core competencies that translates knowledge into improved practice to
support children's school success;
    (2) training strategies that provide direct feedback about practice to practitioners
through ongoing consultation, mentoring, or coaching with special emphasis on early
literacy and early mathematics;
    (3) an approval process for trainers;
    (4) a professional development registry for early childhood and school-age care
practitioners that will provide tracking and recognition of practitioner training/career
development progress;
    (5) a career lattice that includes a range of professional development and educational
opportunities that provide appropriate coursework and degree pathways;
    (6) development of a plan with public higher education institutions for an articulated
system of education, training, and professional development that includes credit for prior
learning and development of equivalences to two- and four-year degrees;
    (7) incentives and supports for early childhood and school-age care practitioners
to seek additional training and education, including TEACH, other scholarships, and
career guidance; and
    (8) coordinated and accessible delivery of training to early childhood and school-age
care practitioners.
    (b) By January 1, 2008, the commissioner, in consultation with the organizations
named in subdivision 2 shall develop additional opportunities in order to qualify more
licensed family child care providers under section 119B.13, subdivision 3a.
    (c) The commissioner of human services must evaluate the professional development
system and make continuous improvements.
    (d) Beginning July 1, 2007, as appropriations permit, the commissioner shall
phase-in the professional development system.
    Subd. 2. Two-hour early childhood training. By January 15, 2008, the
commissioner of human services, with input from the Minnesota Licensed Family Child
Care Association and the Minnesota Professional Development Council, shall identify
trainings that qualify for the two-hour early childhood development training requirement
for new child care practitioners under Minnesota Statutes, section 245A.14, subdivision
9a, paragraphs (a) and (b). For licensed family child care, the commissioner shall also
seek the input of labor unions that serve licensed family child care providers, if the union
has been recognized by a county to serve licensed family child care providers.

    Sec. 57. [119B.231] SCHOOL READINESS SERVICE AGREEMENTS.
    Subdivision 1. Overview. (a) Effective July 1, 2007, funds must be made available
to allow the commissioner to pay higher rates to up to 50 child care providers who are
deemed by the commissioner to meet the requirements of a school readiness service
agreement (SRSA) provider and perform services that support school readiness for
children and economic stability for parents.
    (b) A provider may be paid a rate above that currently allowed under Minnesota
Statutes, section 119B.13, if:
    (1) the provider has entered into an SRSA with the commissioner;
    (2) a family using that provider receives child care assistance under any provision in
Minnesota Statutes, chapter 119B, except Minnesota Statutes, section 119B.035;
    (3) the family using that provider meets the criteria in this section; and
    (4) funding is available under this section.
    Subd. 2. Provider eligibility. (a) To be considered for an SRSA, a provider shall
apply to the commissioner. To be eligible to apply for an SRSA, a provider shall:
    (1) be eligible for child care assistance payments under Minnesota Statutes, chapter
119B;
    (2) have at least 25 percent of the children enrolled with the provider subsidized
through the child care assistance program;
    (3) provide full-time, full-year child care services; and
    (4) serve at least one child who is subsidized through the child care assistance
program and who is expected to enter kindergarten within the following 30 months.
    (b) The commissioner may waive the 25 percent requirement in paragraph (a), clause
(2), if necessary to achieve geographic distribution of SRSA providers and diversity of
types of care provided by SRSA providers.
    (c) An eligible provider who would like to enter into an SRSA with the commissioner
shall submit an SRSA application. To determine whether to enter into an SRSA with a
provider, the commissioner shall evaluate the following factors:
    (1) the qualifications of the provider and the provider's staff;
    (2) the provider's staff-child ratios;
    (3) the provider's curriculum;
    (4) the provider's current or planned parent education activities;
    (5) the provider's current or planned social service and employment linkages;
    (6) the provider's child development assessment plan;
    (7) the geographic distribution needed for SRSA providers;
    (8) the inclusion of a variety of child care delivery models; and
    (9) other related factors determined by the commissioner.
    Subd. 3. Family and child eligibility. (a) A family eligible to choose an SRSA
provider for their children shall:
    (1) be eligible to receive child care assistance under any provision in Minnesota
Statutes, chapter 119B, except Minnesota Statutes, section 119B.035;
    (2) be in an authorized activity for an average of at least 35 hours per week when
initial eligibility is determined; and
    (3) include a child who has not yet entered kindergarten.
    (b) A family who is determined to be eligible to choose an SRSA provider remains
eligible to be paid at a higher rate through the SRSA provider when the following
conditions exist:
    (1) the child attends child care with the SRSA provider a minimum of 25 hours per
week, on average;
    (2) the family has a child who has not yet entered kindergarten; and
    (3) the family maintains eligibility under Minnesota Statutes, chapter 119B, except
Minnesota Statutes, section 119B.035.
    (c) For the 12 months after initial eligibility has been determined, a decrease in
the family's authorized activities to an average of less than 35 hours per week does not
result in ineligibility for the SRSA rate.
    (d) A family that moves between counties but continues to use the same SRSA
provider shall continue to receive SRSA funding for the increased payments.
    Subd. 4. Requirements of providers. An SRSA must include assessment,
evaluation, and reporting requirements that promote the goals of improved school
readiness and movement toward appropriate child development milestones. A provider
who enters into an SRSA shall comply with the assessment, evaluation, and reporting
requirements in the SRSA.
    Subd. 5. Relationship to current law. (a) The following provisions in Minnesota
Statutes, chapter 119B, must be waived or modified for families receiving services under
this section.
    (b) Notwithstanding Minnesota Statutes, section 119B.13, subdivisions 1 and 1a,
maximum weekly rates under this section are 125 percent of the existing maximum
weekly rate for like-care. Providers eligible for a differential rate under Minnesota
Statutes, section 119B.13, subdivision 3a, remain eligible for the differential above the
rate identified in this section. Only care for children who have not yet entered kindergarten
may be paid at the maximum rate under this section. The provider's charge for service
provided through an SRSA may not exceed the rate that the provider charges a private-pay
family for like-care arrangements.
    (c) A family or child care provider may not be assessed an overpayment for care
provided through an SRSA unless:
    (1) there was an error in the amount of care authorized for the family; or
    (2) the family or provider did not timely report a change as required under the law.
    (d) Care provided through an SRSA is authorized on a weekly basis.
    (e) Funds appropriated under this section to serve families eligible under Minnesota
Statutes, section 119B.03, are not allocated through the basic sliding fee formula under
Minnesota Statutes, section 119B.03. Funds appropriated under this section are used to
offset increased costs when payments are made under SRSA's.
    (f) Notwithstanding Minnesota Statutes, section 119B.09, subdivision 6, the
maximum amount of child care assistance that may be authorized for a child receiving
care through an SRSA in a two-week period is 160 hours per child.
    Subd. 6. Establishment of service agreements. (a) The commissioner shall
approve SRSA's for up to 50 providers that represent diverse parts of the state and a
variety of child care delivery models. Entering into a service agreement does not guarantee
that a provider will receive payment at a higher rate for families receiving child care
assistance. A family eligible under this section shall choose a provider participating in an
SRSA in order for a higher rate to be paid. Payments through SRSA's are also limited by
the availability of SRSA funds.
    (b) Nothing in this section shall be construed to limit parent choice as defined in
Minnesota Statutes, section 119B.09, subdivision 5.
    (c) The commissioner may allow for startup time for some providers if failing to
do so would limit geographic diversity of SRSA providers or a variety of child care
delivery models.

    Sec. 58. [119B.232] FAMILY, FRIEND, AND NEIGHBOR GRANT PROGRAM.
    Subdivision 1. Establishment. A family, friend, and neighbor (FFN) grant program
is established to promote children's early literacy, healthy development, and school
readiness, and to foster community partnerships to promote children's school readiness.
The commissioner shall attempt to ensure that grants are made in all areas of the state. The
commissioner of human services shall make grants available to fund: community-based
organizations, nonprofit organizations, and Indian tribes working with FFN caregivers
under subdivision 2, paragraph (a); and community-based partnerships to implement early
literacy programs under subdivision 2, paragraph (b).
    Subd. 2. Program components. (a)(1) Grants that the commissioner awards under
this section must be used by community-based organizations, nonprofit organizations, and
Indian tribes working with FFN caregivers in local communities, cultural communities,
and Indian tribes to:
    (i) provide training, support, and resources to FFN caregivers in order to improve
and promote children's health, safety, nutrition, and school readiness;
    (ii) connect FFN caregivers and children's families with appropriate community
resources that support the families' health, mental health, economic, and developmental
needs;
    (iii) connect FFN caregivers and children's families to early childhood screening
programs and facilitate referrals where appropriate;
    (iv) provide FFN caregivers and children's families with information about early
learning guidelines from the Departments of Human Services and Education;
    (v) provide FFN caregivers and children's families with information about becoming
a licensed family child care provider; and
    (vi) provide FFN caregivers and children's families with information about early
learning allowances and enrollment opportunities in high quality community-based
child-care and preschool programs.
    (2) Grants that the commissioner awards under this paragraph also may be used for:
    (i) health and safety and early learning kits for FFN caregivers;
    (ii) play-and-learn groups with FFN caregivers;
    (iii) culturally appropriate early childhood training for FFN caregivers;
    (iv) transportation for FFN caregivers and children's families to school readiness and
other early childhood training activities;
    (v) other activities that promote school readiness;
    (vi) data collection and evaluation;
    (vii) staff outreach and outreach activities;
    (viii) translation needs; or
    (ix) administrative costs that equal up to 12 percent of the recipient's grant award.
    (b) Grants that the commissioner awards under this section also must be used to fund
partnerships among Minnesota public and regional library systems, community-based
organizations, nonprofit organizations, and Indian tribes to implement early literacy
programs in low-income communities, including tribal communities, to:
    (1) purchase and equip early childhood read-mobiles that provide FFN caregivers
and children's families with books, training, and early literacy activities;
    (2) provide FFN caregivers and children's families with translations of early
childhood books, training, and early literacy activities in native languages; or
    (3) provide FFN caregivers and children's families with early literacy activities in
local libraries.
    Subd. 3. Grant awards. Interested entities eligible to receive a grant under
this section may apply to the commissioner in the form and manner the commissioner
determines. The commissioner shall awards grants to eligible entities consistent with
the requirements of this section.
    Subd. 4. Evaluation. The commissioner, in consultation with early childhood
care and education experts at the University of Minnesota, must evaluate the impact of
the grants under subdivision 2 on children's school readiness and submit a written report
to the human services and education finance and policy committees of the legislature by
February 15, 2010.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 59. CHILD CARE PROVIDER STUDY.
    If sufficient resources to support the costs are provided by one or more
nongovernmental entities, the commissioner of human services is directed to study the
implications of restricting the use of state subsidies in center-based child care to centers
meeting state quality standards under Minnesota Statutes, section 124D.175, paragraph
(c), and to publish the results no later than January 1, 2010. The study must include:
    (1) the likelihood of there being sufficient child care providers meeting the standards;
    (2) the cost to bring providers up to the standards and how this cost would be funded;
    (3) how the standards and the ratings would be communicated to both parents and
the general public; and
    (4) a determination whether a similar system could be implemented for
non-center-based care.

    Sec. 60. DIRECTION TO COMMISSIONER.
    (a) The commissioner of human services shall offer a request for proposals to
identify a research and evaluation firm with experience working with:
    (1) homeless youth providers;
    (2) data; and
    (3) the topics of housing, homelessness, and a continuum of care for youth.
    (b) The research and evaluation firm identified under paragraph (a) shall monitor and
evaluate the programs receiving funding under Minnesota Statutes, section 256K.45.

    Sec. 61. NOT ASSESSING TANF PENALTIES AGAINST COUNTIES.
    From October 2006 through October 2007, if the state does not meet the federal
work participation requirements, and the state is penalized by a reduction in the TANF
grant, the state shall not assess penalties against the counties.

    Sec. 62. PREKINDERGARTEN EXPLORATORY PROJECTS.
    Subdivision 1. Early childhood allowance. The commissioners of human services
and education shall establish three prekindergarten exploratory projects to be conducted in
partnership with the Minnesota Early Learning Foundation to promote children's school
readiness. The exploratory projects shall be designed and evaluated by the Minnesota
Early Learning Foundation.
    Subd. 2. Family eligibility. Parents or legal guardians with incomes less than or
equal to 185 percent of the federal poverty guidelines are eligible to receive allowances to
pay for their children's education in a quality early education program, in an amount not
to exceed $4,000 per child per year. The allowance must be used during the 12 months
following receipt of the allowance by the claimant for a child who is age 3 or 4 on August
31, to pay for services designed to promote school readiness in a quality early education
setting. A quality program is one that meets the standards in subdivision 3.
    Subd. 3. Quality standards. (a) A quality early care and education setting is any
service or program that receives a quality rating from the Department of Human Services
under the Minnesota Early Learning Foundation quality rating system administered by
the Department of Human Services and agrees to accept a prekindergarten education
allowance to pay for services. For fiscal years 2008 and 2009 only, a provider may satisfy
the quality rating system requirements and be deemed eligible to participate in this
program if the provider has received a provisional quality rating system approval from
either the Department of Human Services or the Department of Education.
    (b) For the purposes of receiving a provisional quality rating, a child care program or
provider must be approved by the commissioner of human services and a school readiness
program or a Head Start program must be approved by the commissioner of education.
Programs and providers must apply for approval in the form and manner prescribed by the
commissioners. To receive approval, the commissioners must determine that applicants:
    (1) use research-based curricula that are aligned with the education standards under
Minnesota Statutes, section 120B.021, instruction, and child assessment instruments
approved by the Department of Education and the Department of Human Services, in
consultation with the Minnesota Early Learning Foundation;
    (2) provide a program of sufficient intensity and duration to improve the school
readiness of participating children;
    (3) provide opportunities for parent involvement; and
    (4) meet other research-based criteria determined necessary by the commissioners.
    (c) For 2008 and 2009, notwithstanding paragraph (b), Head Start programs
meeting Head Start performance standards and accredited child care centers are granted
a provisional quality rating for the purposes of receiving a prekindergarten education
allowance under this statute.
    (d) A provider deemed eligible to receive a prekindergarten education allowance
under paragraphs (a) to (c) may use the allowance to enhance services above the current
quality levels, increase the duration of services provided, or expand the number of children
to whom services are provided.
    (e) For fiscal years 2008 and 2009 only, when no quality program is available, a
recipient may direct the prekindergarten education allowance to a provider or program for
school readiness quality improvements that will make the provider or program eligible
for a quality rating according to the quality rating system. Allowable expenditures that
will increase the capacity of the provider or program to help children be ready for school
include purchase of curricula and assessment tools, training on the use of curriculum and
assessment tools, purchase of materials to improve the learning environment, or other
expenditures approved by the commissioner of human services for child care providers
and the commissioner of education for school readiness programs.
    Subd. 4. Eligibility; applications. Eligible families must have incomes less than or
equal to 185 percent of the federal poverty guidelines. Allowances paid to families under
this program may not be counted as earned income for the purposes of medical assistance,
MinnesotaCare, MFIP, child care assistance, or Head Start programs.
    Subd. 5. Expenditures. This program shall operate during fiscal years 2008 and
2009.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 63. REPEALER.
(a) Minnesota Statutes 2006, sections 119B.08, subdivision 4; 256J.29; and
256J.626, subdivision 9, are repealed.
(b) Minnesota Statutes 2006, section 256J.37, subdivision 3b, is repealed effective
February 1, 2008.
(c) Laws 1997, chapter 8, section 1, is repealed.
(d) Minnesota Rules, part 9560.0102, subpart 2, item C, is repealed.

    Sec. 64. EFFECTIVE DATE.
    Section 27 (Minnesota Statutes, section 256J.20, subdivision 3) is effective January
1, 2008. Section 13 (Minnesota Statutes, section 119B.13, subdivision 7) is effective
January 1, 2009.

ARTICLE 3
LICENSING

    Section 1. Minnesota Statutes 2006, section 245A.035, is amended to read:
245A.035 RELATIVE FOSTER CARE; UNLICENSED EMERGENCY
LICENSE RELATIVE PLACEMENT.
    Subdivision 1. Grant of Emergency license placement. Notwithstanding section
245A.03, subdivision 2a, or 245C.13, subdivision 2, a county agency may place a child
for foster care with a relative who is not licensed to provide foster care, provided the
requirements of subdivision 2 this section are met. As used in this section, the term
"relative" has the meaning given it under section 260C.007, subdivision 27.
    Subd. 2. Cooperation with emergency licensing placement process. (a) A county
agency that places a child with a relative who is not licensed to provide foster care must
begin the process of securing an emergency license for the relative as soon as possible
and must conduct the initial inspection required by subdivision 3, clause (1), whenever
possible, prior to placing the child in the relative's home, but no later than three working
days after placing the child in the home. A child placed in the home of a relative who is
not licensed to provide foster care must be removed from that home if the relative fails
to cooperate with the county agency in securing an emergency foster care license. The
commissioner may issue an emergency foster care license to a relative with whom the
county agency wishes to place or has placed a child for foster care, or to a relative with
whom a child has been placed by court order.
    (b) If a child is to be placed in the home of a relative not licensed to provide foster
care, either the placing agency or the county agency in the county in which the relative
lives shall conduct the emergency licensing placement process as required in this section.
    Subd. 3. Requirements for emergency license placement. Before an emergency
license placement may be issued made, the following requirements must be met:
    (1) the county agency must conduct an initial inspection of the premises where
the foster care placement is to be provided made 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 county
agency must provide the relative being considered for an emergency license shall receive
placement 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 placement shall provide the information
required by section 245C.05; and
    (4) if the county determines, prior to the issuance of an emergency license
placement, that anyone requiring a background study may be prior to licensure of the
home is disqualified under section 245C.14 and chapter 245C, and the disqualification
is one which the commissioner cannot set aside, an emergency license shall placement
must not be issued made.
    Subd. 4. Applicant study. When the county agency has received the information
required by section 245C.05, the county agency shall begin an applicant study according to
the procedures in chapter 245C. The commissioner may issue an emergency license upon
recommendation of the county agency once the initial inspection has been successfully
completed and the information necessary to begin the applicant background study has been
provided. If the county agency does not recommend that the emergency license be granted,
the agency shall notify the relative in writing that the agency is recommending denial to the
commissioner; shall remove any child who has been placed in the home prior to licensure;
and shall inform the relative in writing of the procedure to request review pursuant to
subdivision 6. An emergency license shall be effective until a child foster care license is
granted or denied, but shall in no case remain in effect more than 120 days from the date
of placement submit the information to the commissioner according to section 245C.05.
    Subd. 5. Child foster care license application. (a) The relatives with whom the
emergency license holder placement has been made shall complete the child foster care
license application and necessary paperwork within ten days of the placement. The county
agency shall assist the emergency license holder applicant to complete the application.
The granting of a child foster care license to a relative shall be under the procedures in this
chapter and according to the standards set forth by foster care rule in Minnesota Rules,
chapter 2960. In licensing a relative, the commissioner shall consider the importance of
maintaining the child's relationship with relatives as an additional significant factor in
determining whether to a background study disqualification should be set aside a licensing
disqualifier under section 245C.22, or to grant a variance of licensing requirements should
be granted under sections 245C.21 to 245C.27 section 245C.30.
    (b) When the county or private child-placing agency is processing an application
for child foster care licensure of a relative as defined in section 260B.007, subdivision
12
, or 260C.007, subdivision 27, the county agency or child-placing agency must explain
the licensing process to the prospective licensee, including the background study process
and the procedure for reconsideration of an initial disqualification for licensure. The
county or private child-placing agency must also provide the prospective relative licensee
with information regarding appropriate options for legal representation in the pertinent
geographic area. If a relative is initially disqualified under section 245C.14, the county
or child-placing agency commissioner must provide written notice of the reasons for the
disqualification and the right to request a reconsideration by the commissioner as required
under section 245C.17.
    (c) The commissioner shall maintain licensing data so that activities related to
applications and licensing actions for relative foster care providers may be distinguished
from other child foster care settings.
    Subd. 6. Denial of emergency license. If the commissioner denies an application
for an emergency foster care license under this section, that denial must be in writing and
must include reasons for the denial. Denial of an emergency license is not subject to
appeal under chapter 14. The relative may request a review of the denial by submitting
to the commissioner a written statement of the reasons an emergency license should be
granted. The commissioner shall evaluate the request for review and determine whether
to grant the emergency license. The commissioner's review shall be based on a review
of the records submitted by the county agency and the relative. Within 15 working
days of the receipt of the request for review, the commissioner shall notify the relative
requesting review in written form whether the emergency license will be granted. The
commissioner's review shall be based on a review of the records submitted by the county
agency and the relative. A child shall not be placed or remain placed in the relative's home
while the request for review is pending. Denial of an emergency license shall not preclude
an individual from reapplying for an emergency license or from applying for a child foster
care license. The decision of the commissioner is the final administrative agency action.

    Sec. 2. Minnesota Statutes 2006, section 245A.10, subdivision 2, is amended to read:
    Subd. 2. County fees for background studies and licensing inspections. (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 license fee to an applicant or license holder to recover the actual cost of
licensing inspections, but in any case not to exceed $150 annually $50 for a one-year
license or $100 for a two-year license.
    (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.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 3. Minnesota Statutes 2006, section 245A.16, subdivision 1, is amended to read:
    Subdivision 1. Delegation of authority to agencies. (a) County agencies and
private agencies that have been designated or licensed by the commissioner to perform
licensing functions and activities under section 245A.04 and background studies for
adult foster care, family adult day services, and family child care, under chapter 245C,;
to recommend denial of applicants under section 245A.05,; to issue correction orders,
to issue variances, and recommend a conditional license under section 245A.06, or to
recommend suspending or revoking a license or issuing a fine under section 245A.07,
shall comply with rules and directives of the commissioner governing those functions and
with this section. The following variances are excluded from the delegation of variance
authority and may be issued only by the commissioner:
    (1) dual licensure of family child care and child foster care, dual licensure of child
and adult foster care, and adult foster care and family child care;
    (2) adult foster care maximum capacity;
    (3) adult foster care minimum age requirement;
    (4) child foster care maximum age requirement;
    (5) variances regarding disqualified individuals except that county agencies may
issue variances under section 245C.30 regarding disqualified individuals when the county
is responsible for conducting a consolidated reconsideration according to sections 245C.25
and 245C.27, subdivision 2, clauses (a) and (b), of a county maltreatment determination
and a disqualification based on serious or recurring maltreatment; and
    (6) the required presence of a caregiver in the adult foster care residence during
normal sleeping hours.
    (b) County agencies must report:
    (1) information about disqualification reconsiderations under sections 245C.25 and
245C.27, subdivision 2, clauses paragraphs (a) and (b), and variances granted under
paragraph (a), clause (5), to the commissioner at least monthly in a format prescribed by
the commissioner; and.
    (2) for relative child foster care applicants and license holders, the number of
relatives, as defined in section 260C.007, subdivision 27, and household members of
relatives who are disqualified under section 245C.14; the disqualifying characteristics
under section 245C.15; the number of these individuals who requested reconsideration
under section 245C.21; the number of set-asides under section 245C.22; and variances
under section 245C.30 issued. This information shall be reported to the commissioner
annually by January 15 of each year in a format prescribed by the commissioner.
    (c) For family day care programs, the commissioner may authorize licensing reviews
every two years after a licensee has had at least one annual review.
    (d) For family adult day services programs, the commissioner may authorize
licensing reviews every two years after a licensee has had at least one annual review.
    (e) A license issued under this section may be issued for up to two years.

    Sec. 4. Minnesota Statutes 2006, section 245A.16, subdivision 3, is amended to read:
    Subd. 3. Recommendations to the commissioner. The county or private agency
shall not make recommendations to the commissioner regarding licensure without
first conducting an inspection, and for adult foster care, family adult day services, and
family child care, a background study of the applicant, and evaluation pursuant to under
chapter 245C. The county or private agency must forward its recommendation to the
commissioner regarding the appropriate licensing action within 20 working days of
receipt of a completed application.

    Sec. 5. Minnesota Statutes 2006, section 245C.02, is amended by adding a subdivision
to read:
    Subd. 14a. Private agency. "Private agency" has the meaning given in section
245A.02, subdivision 12.

    Sec. 6. Minnesota Statutes 2006, section 245C.04, subdivision 1, is amended to read:
    Subdivision 1. Licensed programs. (a) The commissioner shall conduct a
background study of an individual required to be studied under section 245C.03,
subdivision 1
, at least upon application for initial license for all license types.
    (b) The commissioner shall conduct a background study of an individual required
to be studied under section 245C.03, subdivision 1, at reapplication for a license for
family child care, child foster care, and adult foster care, family adult day services, and
family child care.
    (c) The commissioner is not required to conduct a study of an individual at the time
of reapplication for a license if the individual's background study was completed by the
commissioner of human services for an adult foster care license holder that is also:
    (1) registered under chapter 144D; or
    (2) licensed to provide home and community-based services to people with
disabilities at the foster care location and the license holder does not reside in the foster
care residence; and
    (3) the following conditions are met:
    (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 last study of the individual was conducted on or after October 1, 1995.
    (d) From July 1, 2007, to June 30, 2009, the commissioner of human services shall
conduct a study of an individual required to be studied under section 245C.03, at the
time of reapplication for a child foster care license. The county or private agency shall
collect and forward to the commissioner the information required under section 245C.05,
subdivisions 1, paragraphs (a) and (b), and 5, paragraphs (a) and (b). The background
study conducted by the commissioner of human services under this paragraph must
include a review of the information required under section 245C.08, subdivisions 1,
paragraph (a), clauses (1) to (5), 3, and 4.
    (e) The commissioner of human services shall conduct a background study of an
individual specified under section 245C.03, subdivision 1, paragraph (a), clauses (2)
to (6), who is newly affiliated with a child foster care license holder. The county or
private agency shall collect and forward to the commissioner the information required
under section 245C.05, subdivisions 1 and 5. The background study conducted by the
commissioner of human services under this paragraph must include a review of the
information required under section 245C.08, subdivisions 1, 3, and 4.
    (f) Applicants for licensure, license holders, and other entities as provided in this
chapter must submit completed background study forms to the commissioner before
individuals specified in section 245C.03, subdivision 1, begin positions allowing direct
contact in any licensed program.
    (e) (g) For 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.

    Sec. 7. Minnesota Statutes 2006, section 245C.05, subdivision 1, is amended to read:
    Subdivision 1. Individual studied. (a) The individual who is the subject of the
background study must provide the applicant, license holder, or other entity under section
245C.04 with sufficient information to ensure an accurate study, including:
    (1) the individual's first, middle, and last name and all other names by which the
individual has been known;
    (2) home address, city, and state of residence;
    (3) zip code;
    (4) sex;
    (5) date of birth; and
    (6) Minnesota driver's license number or state identification number.
    (b) Every subject of a background study conducted or initiated by counties or private
agencies under this chapter must also provide the home address, city, county, and state of
residence for the past five years.
    (c) Every subject of a background study related to private agency adoptions or
related to child foster care licensed through a private agency, who is 18 years of age
or older, shall also provide the commissioner a signed consent for the release of any
information received from national crime information databases to the private agency that
initiated the background study.
    (d) The subject of a background study shall provide fingerprints as required in
subdivision 5, paragraph (c).

    Sec. 8. Minnesota Statutes 2006, section 245C.05, is amended by adding a subdivision
to read:
    Subd. 2a. County or private agency. For background studies related to child foster
care, county and private agencies must collect the information under subdivision 1 and
forward it to the commissioner.

    Sec. 9. Minnesota Statutes 2006, section 245C.05, subdivision 4, is amended to read:
    Subd. 4. Electronic transmission. 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.; and
    (3) background study results to county and private agencies for background studies
conducted by the commissioner for child foster care.

    Sec. 10. Minnesota Statutes 2006, section 245C.05, subdivision 5, is amended to read:
    Subd. 5. Fingerprints. (a) Except as provided in paragraph (c), for any background
study completed under this chapter, when the commissioner has reasonable cause to
believe that further pertinent information may exist on the subject of the background
study, the subject shall provide the commissioner with a set of classifiable fingerprints
obtained from an authorized law enforcement agency.
    (b) For purposes of requiring fingerprints, the commissioner has reasonable cause
when, but not limited to, the:
    (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) 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.
    (c) Except as specified under section 245C.04, subdivision 1, paragraph (d), for
background studies conducted by the commissioner for child foster care or adoptions,
the subject of the background study, who is 18 years of age or older, shall provide the
commissioner with a set of classifiable fingerprints obtained from an authorized agency.

    Sec. 11. Minnesota Statutes 2006, section 245C.05, subdivision 7, is amended to read:
    Subd. 7. Probation officer and corrections agent. (a) A probation officer or
corrections agent shall notify the commissioner of an individual's conviction if the
individual is:
    (1) 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 any type of home care agency or provider of personal care
assistance services; and
    (2) convicted of a crime constituting a disqualification under section 245C.14.
    (b) For the purpose of this subdivision, "conviction" has the meaning given it
in section 609.02, subdivision 5.
    (c) The commissioner, in consultation with the commissioner of corrections, shall
develop forms and information necessary to implement this subdivision and shall provide
the forms and information to the commissioner of corrections for distribution to local
probation officers and corrections agents.
    (d) 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.
    (e) 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
subdivision.
    (f) Upon receipt of disqualifying information, the commissioner shall provide the
notice required under section 245C.17, 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.
    (g) This subdivision does not apply to family child care and child foster care
programs.

    Sec. 12. Minnesota Statutes 2006, section 245C.08, subdivision 1, is amended to read:
    Subdivision 1. Background studies conducted by commissioner of human
services. (a) For a background study conducted by the commissioner, the commissioner
shall review:
    (1) 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);
    (2) the commissioner's records relating to the maltreatment of minors in licensed
programs, and from county agency findings of maltreatment of minors as indicated
through the social service information system;
    (3) information from juvenile courts as required in subdivision 4 for individuals
listed in section 245C.03, subdivision 1, clauses (2), (5), and (6); and
    (4) information from the Bureau of Criminal Apprehension.;
    (5) except as provided in clause (6), information from the national crime information
system when the commissioner has reasonable cause as defined under section 245C.05,
subdivision 5; and
    (6) for a background study related to a child foster care application for licensure or
adoptions, the commissioner shall also review:
    (i) information from the child abuse and neglect registry for any state in which the
background study subject has resided for the past five years; and
    (ii) information from national crime information databases, when the background
study object is 18 years of age or older.
    (b) Notwithstanding expungement by a court, the commissioner may consider
information obtained under paragraph (a), clauses (3) and (4), unless the commissioner
received notice of the petition for expungement and the court order for expungement is
directed specifically to the commissioner.

    Sec. 13. Minnesota Statutes 2006, section 245C.08, subdivision 2, is amended to read:
    Subd. 2. Background studies conducted by a county or private agency. (a)
For a background study conducted by a county or private agency for child foster care,
adult foster care, family adult day services, and family child care homes services, the
commissioner shall review:
    (1) information from the county agency's record of substantiated maltreatment
of adults and the maltreatment of minors;
    (2) information from juvenile courts as required in subdivision 4 for individuals
listed in section 245C.03, subdivision 1, clauses (2), (5), and (6);
    (3) information from the Bureau of Criminal Apprehension; and
    (4) arrest and investigative records maintained by the Bureau of Criminal
Apprehension, county attorneys, county sheriffs, courts, county agencies, local police, the
National Criminal Records Repository, and criminal records from other states.
    (b) If the individual has resided in the county for less than five years, the study shall
include the records specified under paragraph (a) for the previous county or counties of
residence for the past five years.
    (c) Notwithstanding expungement by a court, the county or private agency may
consider information obtained under paragraph (a), clauses (3) and (4), unless the
commissioner received notice of the petition for expungement and the court order for
expungement is directed specifically to the commissioner.

    Sec. 14. Minnesota Statutes 2006, section 245C.10, is amended by adding a
subdivision to read:
    Subd. 4. Temporary personnel agencies, educational programs, and professional
services agencies. The commissioner shall recover the cost of the background studies
initiated by temporary personnel agencies, educational programs, and professional
services agencies that initiate background studies under section 245C.03, subdivision 4,
through a fee of no more than $20 per study charged to the agency. The fees collected
under this subdivision are appropriated to the commissioner for the purpose of conducting
background studies.

    Sec. 15. Minnesota Statutes 2006, section 245C.11, subdivision 1, is amended to read:
    Subdivision 1. Adult foster care; criminal conviction data. For individuals who
are required to have background studies under section 245C.03, subdivisions 1 and 2, and
who have been continuously affiliated with a an adult foster care provider that is licensed
in more than one county, criminal conviction data may be shared among those counties in
which the adult 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 chapter.

    Sec. 16. Minnesota Statutes 2006, section 245C.11, subdivision 2, is amended to read:
    Subd. 2. Jointly licensed programs. A county agency may accept a background
study completed by the commissioner under this chapter 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 adult 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.

    Sec. 17. Minnesota Statutes 2006, section 245C.12, is amended to read:
245C.12 BACKGROUND STUDY; TRIBAL ORGANIZATIONS.
    (a) 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.
    (b) Tribal organizations may contract with the commissioner to obtain background
study data on individuals under tribal jurisdiction related to adoptions according to
section 245C.34. Tribal organizations may also contract with the commissioner to obtain
background study data on individuals under tribal jurisdiction related to child foster care
according to section 245C.34.

    Sec. 18. Minnesota Statutes 2006, section 245C.16, subdivision 1, is amended to read:
    Subdivision 1. Determining immediate risk of harm. (a) If the commissioner
determines that the individual studied has a disqualifying characteristic, the commissioner
shall review the information immediately available and make a determination as to the
subject's immediate risk of harm to persons served by the program where the individual
studied will have direct contact.
    (b) The commissioner shall consider all relevant information available, including the
following factors in determining the immediate risk of harm:
    (1) the recency of the disqualifying characteristic;
    (2) the recency of discharge from probation for the crimes;
    (3) the number of disqualifying characteristics;
    (4) the intrusiveness or violence of the disqualifying characteristic;
    (5) the vulnerability of the victim involved in the disqualifying characteristic;
    (6) the similarity of the victim to the persons served by the program where the
individual studied will have direct contact; and
    (7) whether the individual has a disqualification from a previous background study
that has not been set aside.
    (c) This section does not apply when the subject of a background study is regulated
by a health-related licensing board as defined in chapter 214, and the subject is determined
to be responsible for substantiated maltreatment under section 626.556 or 626.557.
    (d) This section does not apply to a background study related to an initial application
for a child foster care license.
    (e) If the commissioner has reason to believe, based on arrest information or an
active maltreatment investigation, that an individual poses an imminent risk of harm to
persons receiving services, the commissioner may order that the person be continuously
supervised or immediately removed pending the conclusion of the maltreatment
investigation or criminal proceedings.

    Sec. 19. Minnesota Statutes 2006, section 245C.17, is amended by adding a
subdivision to read:
    Subd. 5. Notice to county or private agency. For studies on individuals related to a
license to provide child foster care, the commissioner shall also provide a notice of the
background study results to the county or private agency that initiated the background
study.

    Sec. 20. Minnesota Statutes 2006, section 245C.21, is amended by adding a
subdivision to read:
    Subd. 1a. Submission of reconsideration request to county or private agency.
    (a) For disqualifications related to studies conducted by county agencies, and for
disqualifications related to studies conducted by the commissioner for child foster care,
the individual shall submit the request for reconsideration to the county or private agency
that initiated the background study.
    (b) A reconsideration request shall be submitted within 30 days of the individual's
receipt of the disqualification notice or the time frames specified in subdivision 2,
whichever time frame is shorter.
    (c) The county or private agency shall forward the individual's request for
reconsideration and provide the commissioner with a recommendation whether to set aside
the individual's disqualification.

    Sec. 21. Minnesota Statutes 2006, section 245C.23, subdivision 2, is amended to read:
    Subd. 2. Commissioner's notice of disqualification that is not set aside. (a) The
commissioner shall notify the license holder of the disqualification and order the license
holder to immediately remove the individual from any position allowing direct contact
with persons receiving services from the license holder if:
    (1) the individual studied does not submit a timely request for reconsideration
under section 245C.21;
    (2) the individual submits a timely request for reconsideration, but the commissioner
does not set aside the disqualification for that license holder under section 245C.22;
    (3) an individual who has a right to request a hearing under sections 245C.27 and
256.045, or 245C.28 and chapter 14 for a disqualification that has not been set aside, does
not request a hearing within the specified time; or
    (4) an individual submitted a timely request for a hearing under sections 245C.27
and 256.045, or 245C.28 and chapter 14, but the commissioner does not set aside the
disqualification under section 245A.08, subdivision 5, or 256.045.
    (b) If the commissioner does not set aside the disqualification under section 245C.22,
and the license holder was previously ordered under section 245C.17 to immediately
remove the disqualified individual from direct contact with persons receiving services or
to ensure that the individual is under continuous, direct supervision when providing direct
contact services, the order remains in effect pending the outcome of a hearing under
sections 245C.27 and 256.045, or 245C.28 and chapter 14.
    (c) For background studies related to child foster care, the commissioner shall
also notify the county or private agency that initiated the study of the results of the
reconsideration.

    Sec. 22. [245C.33] ADOPTION BACKGROUND STUDY REQUIREMENTS.
    Subdivision 1. Background studies conducted by commissioner. Before
placement of a child for purposes of adoption, the commissioner shall conduct a
background study on individuals listed in section 259.41, subdivision 3, for county
agencies and private agencies licensed to place children for adoption.
    Subd. 2. Information and data provided to county or private agency. The subject
of the background study shall provide the information specified in section 245C.05.
    Subd. 3. Information and data provided to commissioner. The county or private
agency shall forward the data collected under subdivision 2 to the commissioner.
    Subd. 4. Information commissioner reviews. (a) The commissioner shall review
the following information regarding the background study subject:
    (1) the information under section 245C.08, subdivisions 1, 3, and 4;
    (2) information from the child abuse and neglect registry for any state in which the
subject has resided for the past five years; and
    (3) information from national crime information databases, when required under
section 245C.08.
    (b) The commissioner shall provide any information collected under this subdivision
to the county or private agency that initiated the background study. The commissioner
shall indicate if the information collected shows that the subject of the background study
has a conviction listed in United States Code, title 42, section 671(a)(20)(A).

    Sec. 23. [245C.34] ADOPTION AND CHILD FOSTER CARE BACKGROUND
STUDIES; TRIBAL ORGANIZATIONS.
    Subdivision 1. Background studies may be conducted by commissioner. (a)
Tribal organizations may contract with the commissioner under section 245C.12 to obtain
background study data on individuals under tribal jurisdiction related to adoptions.
    (b) Tribal organizations may contract with the commissioner under section 245C.12
to obtain background study data on individuals under tribal jurisdiction related to child
foster care.
    (c) Background studies initiated by tribal organizations under paragraphs (a) and (b)
must be conducted as provided in subdivisions 2 and 3.
    Subd. 2. Information and data provided to tribal organization. The background
study subject must provide the information specified in section 245C.05.
    Subd. 3. Information and data provided to commissioner. The tribal organization
shall forward the data collected under subdivision 2 to the commissioner.
    Subd. 4. Information commissioner reviews. (a) The commissioner shall review
the following information regarding the background study subject:
    (1) the information under section 245C.08, subdivisions 1, 3, and 4;
    (2) information from the child abuse and neglect registry for any state in which the
subject has resided for the past five years; and
    (3) information from national crime information databases, when required under
section 245C.08.
    (b) The commissioner shall provide any information collected under this subdivision
to the tribal organization that initiated the background study. The commissioner shall
indicate if the information collected shows that the subject of the background study has a
conviction listed in United States Code, title 42, section 671(a)(20)(A).

    Sec. 24. Minnesota Statutes 2006, section 259.20, subdivision 2, is amended to read:
    Subd. 2. Other applicable law. (a) Portions of chapters 245A, 245C, 257, 260, and
317A may also affect the adoption of a particular child.
    (b) Provisions of the Indian Child Welfare Act, United States Code, title 25, chapter
21, sections 1901-1923, may also apply in the adoption of an Indian child, and may
preempt specific provisions of this chapter.
    (c) Consistent with section 245C.33 and Public Law 109-248, a completed
background study is required before the approval of any foster or adoptive placement in
a related or an unrelated home.

    Sec. 25. Minnesota Statutes 2006, section 259.29, subdivision 1, is amended to read:
    Subdivision 1. Best interests of the child. (a) The policy of the state of Minnesota
is to ensure that the best interests of the child are met by requiring individualized
determination of the needs of the child and of how the adoptive placement will serve the
needs of the child.
    (b) Among the factors the agency shall consider in determining the needs of the child
are those specified under section 260C.193, subdivision 3, paragraph (b).
    (c) Except for emergency placements provided for in section 245A.035, a completed
background study is required under section 245C.33 before the approval of an adoptive
placement in a home.

    Sec. 26. Minnesota Statutes 2006, section 259.41, is amended to read:
259.41 ADOPTION STUDY.
    Subdivision 1. Study required before placement; certain relatives excepted. (a)
An approved adoption study; completed background study, as required under section
245C.33; and written report must be completed before the child is placed in a prospective
adoptive home under this chapter, except as allowed by section 259.47, subdivision 6.
In an agency placement, the report must be filed with the court at the time the adoption
petition is filed. In a direct adoptive placement, the report must be filed with the court in
support of a motion for temporary preadoptive custody under section 259.47, subdivision
3
, or, if the study and report are complete, in support of an emergency order under section
259.47, subdivision 6. The study and report shall be completed by a licensed child-placing
agency and must be thorough and comprehensive. The study and report shall be paid for
by the prospective adoptive parent, except as otherwise required under section 259.67
or 259.73.
    (b) A placement for adoption with an individual who is related to the child, as
defined by section 245A.02, subdivision 13, is not subject to this section except as required
by section sections 245C.33 and 259.53, subdivision 2, paragraph (c).
    (c) In the case of a licensed foster parent seeking to adopt a child who is in the foster
parent's care, any portions of the foster care licensing process that duplicate requirements
of the home study may be submitted in satisfaction of the relevant requirements of this
section.
    Subd. 2. Form of study. (a) The adoption study must include at least one in-home
visit with the prospective adoptive parent. At a minimum, the study must include
document the following information about the prospective adoptive parent:
    (1) a background check study as required by subdivision 3 and section 245C.33,
and including:
    (i) an evaluation assessment of the data and information provided by section
245C.33, subdivision 4, to determine if the prospective adoptive parent and any other
person over the age of 13 living in the home has a felony conviction consistent with
subdivision 3 and section 471(a)(2) of the Social Security Act; and
    (ii) an assessment of the effect of a any conviction or finding of substantiated
maltreatment on the ability to capacity of the prospective adoptive parent to safely care
for and parent a child;
    (2) a medical and social history and assessment of current health;
    (3) an assessment of potential parenting skills;
    (4) an assessment of ability to provide adequate financial support for a child; and
    (5) an assessment of the level of knowledge and awareness of adoption issues
including, where appropriate, matters relating to interracial, cross-cultural, and special
needs adoptions.
    (b) The adoption study is the basis for completion of a written report. The report
must be in a format specified by the commissioner and must contain recommendations
regarding the suitability of the subject of the study to be an adoptive parent.
    Subd. 3. Background check; affidavit of history study. (a) At the time an adoption
study is commenced, each prospective adoptive parent must:
    (1) authorize access by the agency to any private data needed to complete the study;
    (2) provide all addresses at which the prospective adoptive parent and anyone in the
household over the age of 13 has resided in the previous five years; and
    (3) disclose any names used previously other than the name used at the time of
the study.
    (b) When the requirements of paragraph (a) have been met, the agency shall
immediately begin initiate a background check, study under section 245C.33 to be
completed by the commissioner on each person over the age of 13 living in the home,
consisting, at a minimum, of the following:. As required under section 245C.33 and Public
Law 109-248, a completed background study is required before the approval of any foster
or adoptive placement in a related or an unrelated home. The required background study
must be completed as part of the home study.
    (1) a check of criminal conviction data with the Bureau of Criminal Apprehension
and local law enforcement authorities;
    (2) a check for data on substantiated maltreatment of a child or vulnerable adult
and domestic violence data with local law enforcement and social services agencies and
district courts; and
    (3) for those persons under the age of 25, a check of juvenile court records.
    Notwithstanding the provisions of section 260B.171 or 260C.171, the Bureau of
Criminal Apprehension, local law enforcement and social services agencies, district courts,
and juvenile courts shall release the requested information to the agency completing
the adoption study.
    (c) When paragraph (b) requires checking the data or records of local law
enforcement and social services agencies and district and juvenile courts, the agency
shall check with the law enforcement and social services agencies and courts whose
jurisdictions cover the addresses under paragraph (a), clause (2). In the event that the
agency is unable to complete any of the record checks required by paragraph (b), the
agency shall document the fact and the agency's efforts to obtain the information.
    (d) For a study completed under this section, when the agency has reasonable
cause to believe that further information may exist on the prospective adoptive parent or
household member over the age of 13 that may relate to the health, safety, or welfare of
the child, the prospective adoptive parent or household member over the age of 13 shall
provide the agency with a set of classifiable fingerprints obtained from an authorized law
enforcement agency and the agency may obtain criminal history data from the National
Criminal Records Repository by submitting fingerprints to the Bureau of Criminal
Apprehension. The agency has reasonable cause when, but not limited to, the:
    (1) information from the Bureau of Criminal Apprehension indicates that the
prospective adoptive parent or household member over the age of 13 is a multistate
offender;
    (2) information from the Bureau of Criminal Apprehension indicates that multistate
offender status is undetermined;
    (3) the agency has received a report from the prospective adoptive parent or
household member over the age of 13 or a third party indicating that the prospective
adoptive parent or household member over the age of 13 has a criminal history in a
jurisdiction other than Minnesota; or
    (4) the prospective adoptive parent or household member over the age of 13 is or has
been a resident of a state other than Minnesota in the prior five years.
    (e) At any time prior to completion of the background check required under
paragraph (b), a prospective adoptive parent may submit to the agency conducting the
study a sworn affidavit stating whether they or any person residing in the household have
been convicted of a crime. The affidavit shall also state whether the adoptive parent or any
other person residing in the household is the subject of an open investigation of, or have
been the subject of a substantiated allegation of, child or vulnerable-adult maltreatment
within the past ten years. A complete description of the crime, open investigation, or
substantiated abuse, and a complete description of any sentence, treatment, or disposition
must be included. The affidavit must contain an acknowledgment that if, at any time
before the adoption is final, a court receives evidence leading to a conclusion that a
prospective adoptive parent knowingly gave false information in the affidavit, it shall be
determined that the adoption of the child by the prospective adoptive parent is not in the
best interests of the child.
    (f) For the purposes of subdivision 1 and section 259.47, subdivisions 3 and 6, an
adoption study is complete for placement, even though the background checks required by
paragraph (b) have not been completed, if each prospective adoptive parent has completed
the affidavit allowed by paragraph (e) and the other requirements of this section have been
met. The background checks required by paragraph (b) must be completed before an
adoption petition is filed. If an adoption study has been submitted to the court under section
259.47, subdivision 3 or 6, before the background checks required by paragraph (b) were
complete, an updated adoption study report which includes the results of the background
check must be filed with the adoption petition. In the event that an agency is unable to
complete any of the records checks required by paragraph (b), the agency shall submit with
the petition to adopt an affidavit documenting the agency's efforts to complete the checks.
    (c) A home study under paragraph (b) used to consider placement of any child
on whose behalf Title IV-E adoption assistance payments are to be made must not be
approved if a background study reveals a felony conviction at any time for:
    (1) child abuse or neglect;
    (2) spousal abuse;
    (3) a crime against children, including child pornography; or
    (4) a crime involving violence, including rape, sexual assault, or homicide, but not
including other physical assault or battery.
    (d) A home study under paragraph (b) used to consider placement of any child
on whose behalf Title IV-E adoption assistance payments are to be made must not be
approved if a background study reveals a felony conviction within the past five years for:
    (1) physical assault or battery; or
    (2) a drug-related offense.
    Subd. 4. Updates to adoption study; period of validity. An agency may update
an adoption study and report as needed, regardless of when the original study and report
or most recent update was completed. An update must be in a format specified by the
commissioner and must verify the continuing accuracy of the elements of the original
report and document any changes to elements of the original report. An update to a study
and report not originally completed under this section must ensure that the study and
report, as updated, meet the requirements of this section. An adoption study is valid if the
report has been completed or updated within the previous 12 months.

    Sec. 27. Minnesota Statutes 2006, section 259.53, subdivision 2, is amended to read:
    Subd. 2. Adoption agencies; postplacement assessment and report. (a) The
agency to which the petition has been referred under subdivision 1 shall conduct a
postplacement assessment and file a report with the court within 90 days of receipt
of a copy of the adoption petition. The agency shall send a copy of the report to the
commissioner at the time it files the report with the court. The assessment and report
must evaluate the environment and antecedents of the child to be adopted, the home of
the petitioners, whether placement with the petitioners meets the needs of the child as
described in section 259.57, subdivision 2. The report must include a recommendation to
the court as to whether the petition should or should not be granted.
    In making evaluations and recommendations, the postplacement assessment and
report must, at a minimum, address the following:
    (1) the level of adaptation by the prospective adoptive parents to parenting the child;
    (2) the health and well-being of the child in the prospective adoptive parents' home;
    (3) the level of incorporation by the child into the prospective adoptive parents'
home, extended family, and community; and
    (4) the level of inclusion of the child's previous history into the prospective adoptive
home, such as cultural or ethnic practices, or contact with former foster parents or
biological relatives.
    (b) A postplacement adoption report is valid for 12 months following its date
of completion.
    (c) If the petitioner is an individual who is related to the child, as defined by section
245A.02, subdivision 13, the agency, as part of its postplacement assessment and report
under paragraph (a), shall conduct a background check meeting the requirements of
section 259.41, subdivision 3, paragraph (b). The prospective adoptive parent shall
cooperate in the completion of the background check by supplying the information and
authorizations described in section 259.41, subdivision 3, paragraph (a).
    (d) (c) If the report recommends that the court not grant the petition to adopt the
child, the provisions of this paragraph apply. Unless the assessment and report were
completed by the local social services agency, the agency completing the report, at the
time it files the report with the court under paragraph (a), must provide a copy of the report
to the local social services agency in the county where the prospective adoptive parent
lives. The agency or local social services agency may recommend that the court dismiss
the petition. If the local social services agency determines that continued placement in the
home endangers the child's physical or emotional health, the agency shall seek a court
order to remove the child from the home.
    (e) (d) If, through no fault of the petitioner, the agency to whom the petition was
referred under subdivision 1, paragraph (b), fails to complete the assessment and file the
report within 90 days of the date it received a copy of the adoption petition, the court may
hear the petition upon giving the agency and the local social services agency, if different,
five days' notice by mail of the time and place of the hearing.

    Sec. 28. Minnesota Statutes 2006, section 259.57, subdivision 2, is amended to read:
    Subd. 2. Protection of child's best interests. (a) The policy of the state of
Minnesota is to ensure that the best interests of children are met by requiring an
individualized determination of the needs of the child and how the adoptive placement
will serve the needs of the child.
    (b) Among the factors the court shall consider in determining the needs of the child
are those specified under section 260C.193, subdivision 3, paragraph (b). Consistent with
section 245C.33 and Public Law 109-248, a complete background study is required before
the approval of an adoptive placement in a home.
    (c) In reviewing adoptive placement and in determining appropriate adoption,
the court shall consider placement, consistent with the child's best interests and in the
following order, with (1) a relative or relatives of the child, or (2) an important friend with
whom the child has resided or had significant contact. Placement of a child cannot be
delayed or denied based on race, color, or national origin of the adoptive parent or the
child. Whenever possible, siblings should be placed together unless it is determined
not to be in the best interests of a sibling.
    (d) If the child's birth parent or parents explicitly request that relatives and important
friends not be considered, the court shall honor that request consistent with the best
interests of the child.
    If the child's birth parent or parents express a preference for placing the child in an
adoptive home of the same or a similar religious background to that of the birth parent
or parents, the court shall place the child with a family that also meets the birth parent's
religious preference. Only if no family is available as described in clause (a) or (b)
may the court give preference to a family described in clause (c) that meets the parent's
religious preference.
    (e) This subdivision does not affect the Indian Child Welfare Act, United States
Code, title 25, sections 1901 to 1923, and the Minnesota Indian Family Preservation
Act, sections 260.751 to 260.835.

    Sec. 29. Minnesota Statutes 2006, section 260C.209, is amended to read:
260C.209 BACKGROUND CHECKS.
    Subdivision 1. Subjects. The responsible social services agency must conduct
initiate a background check study to be completed by the commissioner under this section
of chapter 245C on the following individuals:
    (1) a noncustodial parent or nonadjudicated parent who is being assessed for
purposes of providing day-to-day care of a child temporarily or permanently under section
260C.212, subdivision 4, and any member of the parent's household who is over the age of
13 when there is a reasonable cause to believe that the parent or household member over
age 13 has a criminal history or a history of maltreatment of a child or vulnerable adult
which would endanger the child's health, safety, or welfare;
    (2) an individual whose suitability for relative placement under section 260C.212,
subdivision 5
, is being determined and any member of the relative's household who is
over the age of 13 when:
    (i) the relative must be licensed for foster care; or
    (ii) the agency must conduct a background study is required under section 259.53,
subdivision 2
; or
    (iii) the agency or the commissioner has reasonable cause to believe the relative
or household member over the age of 13 has a criminal history which would not make
transfer of permanent legal and physical custody to the relative under section 260C.201,
subdivision 11
, in the child's best interest; and
    (3) a parent, following an out-of-home placement, when the responsible social
services agency has reasonable cause to believe that the parent has been convicted of a
crime directly related to the parent's capacity to maintain the child's health, safety, or
welfare or the parent is the subject of an open investigation of, or has been the subject
of a substantiated allegation of, child or vulnerable-adult maltreatment within the past
ten years.
"Reasonable cause" means that the agency has received information or a report from the
subject or a third person that creates an articulable suspicion that the individual has a
history that may pose a risk to the health, safety, or welfare of the child. The information
or report must be specific to the potential subject of the background check and shall not
be based on the race, religion, ethnic background, age, class, or lifestyle of the potential
subject.
    Subd. 2. General procedures. (a) When conducting initiating a background check
under subdivision 1, the agency may shall require the individual being assessed to provide
sufficient information to ensure an accurate assessment under this section, including:
    (1) the individual's first, middle, and last name and all other names by which the
individual has been known;
    (2) home address, zip code, city, county, and state of residence for the past ten five
years;
    (3) sex;
    (4) date of birth; and
    (5) driver's license number or state identification number.
    (b) When notified by the commissioner or the responsible social services agency that
it is conducting an assessment under this section, the Bureau of Criminal Apprehension,
commissioners of health and human services, law enforcement, and county agencies must
provide the commissioner or the responsible social services agency or county attorney
with the following information on the individual being assessed: criminal history data,
reports about the maltreatment of adults substantiated under section 626.557, and reports
of maltreatment of minors substantiated under section 626.556.
    Subd. 3. Multistate information. (a) For any assessment every background study
completed under this section, if the responsible social services agency has reasonable
cause to believe that the individual is a multistate offender, the individual must the subject
of the background study shall provide the responsible social services agency or the
county attorney with a set of classifiable fingerprints obtained from an authorized law
enforcement agency. The responsible social services agency or county attorney may shall
provide the fingerprints to the commissioner, and the commissioner shall obtain criminal
history data from the National Criminal Records Repository by submitting the fingerprints
to the Bureau of Criminal Apprehension.
    (b) For purposes of this subdivision, the responsible social services agency has
reasonable cause when, but not limited to:
    (1) information from the Bureau of Criminal Apprehension indicates that the
individual is a multistate offender;
    (2) information from the Bureau of Criminal Apprehension indicates that multistate
offender status is undetermined;
    (3) the social services agency has received a report from the individual or a third
party indicating that the individual has a criminal history in a jurisdiction other than
Minnesota; or
    (4) the individual is or has been a resident of a state other than Minnesota at any
time during the prior ten years.
    Subd. 4. Notice upon receipt. The responsible social services agency commissioner
must provide the subject of the background study with the results of the study as required
under this section within 15 business days of receipt or at least 15 days prior to the hearing
at which the results will be presented, whichever comes first. The subject may provide
written information to the agency that the results are incorrect and may provide additional
or clarifying information to the agency and to the court through a party to the proceeding.
This provision does not apply to any background study conducted under chapters 245A
and chapter 245C.

    Sec. 30. Minnesota Statutes 2006, section 260C.212, subdivision 2, is amended to read:
    Subd. 2. Placement decisions based on best interest of the child. (a) The policy
of the state of Minnesota is to ensure that the child's best interests are met by requiring an
individualized determination of the needs of the child and of how the selected placement
will serve the needs of the child being placed. The authorized child-placing agency shall
place a child, released by court order or by voluntary release by the parent or parents, in
a family foster home selected by considering placement with relatives and important
friends in the following order:
    (1) with an individual who is related to the child by blood, marriage, or adoption; or
    (2) with an individual who is an important friend with whom the child has resided or
had significant contact.
    (b) Among the factors the agency shall consider in determining the needs of the
child are the following:
    (1) the child's current functioning and behaviors;
    (2) the medical, educational, and developmental needs of the child;
    (3) the child's history and past experience;
    (4) the child's religious and cultural needs;
    (5) the child's connection with a community, school, and church;
    (6) the child's interests and talents;
    (7) the child's relationship to current caretakers, parents, siblings, and relatives; and
    (8) the reasonable preference of the child, if the court, or the child-placing agency
in the case of a voluntary placement, deems the child to be of sufficient age to express
preferences.
    (c) Placement of a child cannot be delayed or denied based on race, color, or national
origin of the foster parent or the child.
    (d) Siblings should be placed together for foster care and adoption at the earliest
possible time unless it is determined not to be in the best interests of a sibling or unless it
is not possible after appropriate efforts by the responsible social services agency.
    (e) Except for emergency placement as provided for in section 245A.035, a
completed background study is required under section 245C.08 before the approval of a
foster placement in a related or unrelated home.

    Sec. 31. LICENSING MORATORIUM.
    A program operated by a nonpublic school for children 33 months or older is
exempt from the human services licensing requirements in Minnesota Statutes, chapter
245A, until July 1, 2009. Nothing in this section prohibits an already licensed nonpublic
school program from continuing its licensure or a nonpublic school program from seeking
licensure.
EFFECTIVE DATE.This moratorium is effective the day following final
enactment.

    Sec. 32. ANNUAL LICENSE REVIEW.
    The commissioner of human services shall work with counties to determine the cost
and propose an ongoing funding allocation from the general fund to cover the cost to
counties to implement an annual license review for licensed family child care providers.
The commissioner shall solicit input from counties to determine the outcome. The
commissioner shall report to the house and senate committees having jurisdiction over
early childhood programs by January 15, 2008, as to the costs and the funding allocation
recommended for future use.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 4
HEALTH CARE POLICY

    Section 1. Minnesota Statutes 2006, section 16A.724, subdivision 2, is amended to
read:
    Subd. 2. Transfers. (a) Notwithstanding section 295.581, to the extent available
resources in the health care access fund exceed expenditures in that fund, effective with
for the biennium beginning July 1, 2007, the commissioner of finance shall transfer the
excess funds from the health care access fund to the general fund on June 30 of each year,
provided that the amount transferred in any fiscal biennium shall not exceed $96,000,000.
The purpose of this transfer is to meet the rate increase required under Laws 2003, First
Special Session chapter 14, article 13C, section 2, subdivision 6.
    (b) For fiscal years 2006 to 2009, MinnesotaCare shall be a forecasted program, and,
if necessary, the commissioner shall reduce these transfers from the health care access
fund to the general fund to meet annual MinnesotaCare expenditures or, if necessary,
transfer sufficient funds from the general fund to the health care access fund to meet
annual MinnesotaCare expenditures.

    Sec. 2. [254A.171] INTERVENTION AND ADVOCACY PROGRAM.
    Within the limit of money available, the commissioner shall fund voluntary outreach
programs targeted at women who deliver children affected by prenatal alcohol or drug use.
The programs shall help women obtain treatment, stay in recovery, and plan any future
pregnancies. An advocate shall be assigned to each woman in the program to provide
guidance and advice with respect to treatment programs, child safety and parenting,
housing, family planning, and any other personal issues that are barriers to remaining free
of chemical dependency.

    Sec. 3. Minnesota Statutes 2006, section 256B.055, subdivision 14, is amended to read:
    Subd. 14. Persons detained by law. (a) Medical assistance may be paid for an
inmate of a correctional facility who is conditionally released as authorized under section
241.26, 244.065, or 631.425, if the individual does not require the security of a public
detention facility and is housed in a halfway house or community correction center, or
under house arrest and monitored by electronic surveillance in a residence approved
by the commissioner of corrections, and if the individual meets the other eligibility
requirements of this chapter.
    (b) An individual who is enrolled in medical assistance, and who is charged with a
crime and incarcerated for less than 12 months shall be suspended from eligibility at the
time of incarceration until the individual is released. Upon release, medical assistance
eligibility is reinstated without reapplication using a reinstatement process and form, if the
individual is otherwise eligible.
    (c) An individual, regardless of age, who is considered an inmate of a public
institution as defined in Code of Federal Regulations, title 42, section 435.1009, is not
eligible for medical assistance.

    Sec. 4. Minnesota Statutes 2006, section 256B.056, is amended by adding a
subdivision to read:
    Subd. 1d. Treatment of certain monetary gifts. The commissioner shall disregard
as income any portion of a monetary gift received by an applicant or enrollee that is
designated to purchase a prosthetic device not covered by insurance, other third-party
payers, or medical assistance.

    Sec. 5. Minnesota Statutes 2006, section 256B.0625, subdivision 13c, is amended to
read:
    Subd. 13c. Formulary committee. The commissioner, after receiving
recommendations from professional medical associations and professional pharmacy
associations, and consumer groups shall designate a Formulary Committee to carry
out duties as described in subdivisions 13 to 13g. The Formulary Committee shall be
comprised of four licensed physicians actively engaged in the practice of medicine in
Minnesota one of whom must be actively engaged in the treatment of persons with mental
illness; at least three licensed pharmacists actively engaged in the practice of pharmacy
in Minnesota; and one consumer representative; the remainder to be made up of health
care professionals who are licensed in their field and have recognized knowledge in the
clinically appropriate prescribing, dispensing, and monitoring of covered outpatient drugs.
Members of the Formulary Committee shall not be employed by the Department of
Human Services, but the committee shall be staffed by an employee of the department
who shall serve as an ex officio, nonvoting member of the board committee. The
department's medical director shall also serve as an ex officio, nonvoting member for the
committee. Committee members shall serve three-year terms and may be reappointed
by the commissioner. The Formulary Committee shall meet at least quarterly. The
commissioner may require more frequent Formulary Committee meetings as needed. An
honorarium of $100 per meeting and reimbursement for mileage shall be paid to each
committee member in attendance.

    Sec. 6. Minnesota Statutes 2006, section 256B.0625, subdivision 13d, is amended to
read:
    Subd. 13d. Drug formulary. (a) The commissioner shall establish a drug
formulary. Its establishment and publication shall not be subject to the requirements of the
Administrative Procedure Act, but the Formulary Committee shall review and comment
on the formulary contents.
    (b) The formulary shall not include:
    (1) drugs or products for which there is no federal funding;
    (2) over-the-counter drugs, except as provided in subdivision 13;
    (3) drugs used for weight loss, except that medically necessary lipase inhibitors may
be covered for a recipient with type II diabetes;
    (4) drugs when used for the treatment of impotence or erectile dysfunction;
    (5) drugs for which medical value has not been established; and
    (6) drugs from manufacturers who have not signed a rebate agreement with the
Department of Health and Human Services pursuant to section 1927 of title XIX of the
Social Security Act.
    (c) If a single-source drug used by at least two percent of the fee-for-service
medical assistance recipients is removed from the formulary due to the failure of the
manufacturer to sign a rebate agreement with the Department of Health and Human
Services, the commissioner shall notify prescribing practitioners within 30 days of
receiving notification from the Centers for Medicare and Medicaid Services (CMS) that a
rebate agreement was not signed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2006, section 256B.0625, is amended by adding a
subdivision to read:
    Subd. 49. Community health worker. (a) Medical assistance covers the care
coordination and patient education services provided by a community health worker if
the community health worker has:
    (1) received a certificate from the Minnesota State Colleges and Universities System
approved community health worker curriculum; or
    (2) at least five years of supervised experience with an enrolled physician, registered
nurse, or advanced practice registered nurse.
Community health workers eligible for payment under clause (2) must complete the
certification program by January 1, 2010, to continue to be eligible for payment.
    (b) Community health workers must work under the supervision of a medical
assistance enrolled physician, registered nurse, or advanced practice registered nurse.

    Sec. 8. Minnesota Statutes 2006, section 256L.03, subdivision 5, is amended to read:
    Subd. 5. Co-payments and coinsurance. (a) Except as provided in paragraphs (b)
and (c), the MinnesotaCare benefit plan shall include the following co-payments and
coinsurance requirements for all enrollees:
    (1) ten percent of the paid charges for inpatient hospital services for adult enrollees,
subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and
$3,000 per family;
    (2) $3 per prescription for adult enrollees;
    (3) $25 for eyeglasses for adult enrollees;
    (4) $3 per nonpreventive visit. For purposes of this subdivision, a "visit" means an
episode of service which is required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse,
audiologist, optician, or optometrist; and
    (5) $6 for nonemergency visits to a hospital-based emergency room.
    (b) Paragraph (a), clause (1), does not apply to parents and relative caretakers of
children under the age of 21 in households with family income equal to or less than 175
percent of the federal poverty guidelines. Paragraph (a), clause (1), does not apply to
parents and relative caretakers of children under the age of 21 in households with family
income greater than 175 percent of the federal poverty guidelines for inpatient hospital
admissions occurring on or after January 1, 2001.
    (c) Paragraph (a), clauses (1) to (4), do does not apply to pregnant women and
children under the age of 21.
    (d) Adult enrollees with family gross income that exceeds 175 percent of the
federal poverty guidelines and who are not pregnant shall be financially responsible for
the coinsurance amount, if applicable, and amounts which exceed the $10,000 inpatient
hospital benefit limit.
    (e) When a MinnesotaCare enrollee becomes a member of a prepaid health plan,
or changes from one prepaid health plan to another during a calendar year, any charges
submitted towards the $10,000 annual inpatient benefit limit, and any out-of-pocket
expenses incurred by the enrollee for inpatient services, that were submitted or incurred
prior to enrollment, or prior to the change in health plans, shall be disregarded.

    Sec. 9. Minnesota Statutes 2006, section 256L.04, subdivision 12, is amended to read:
    Subd. 12. Persons in detention. Beginning January 1, 1999, an applicant residing
in a correctional or detention facility is not eligible for MinnesotaCare. An enrollee
residing in a correctional or detention facility is not eligible at renewal of eligibility under
section 256L.05, subdivision 3b 3a.

    Sec. 10. Minnesota Statutes 2006, section 256L.17, subdivision 3, is amended to read:
    Subd. 3. Documentation. (a) The commissioner of human services shall require
individuals and families, at the time of application or renewal, to indicate on a checkoff
form developed by the commissioner whether they satisfy the MinnesotaCare asset
requirement. This form must include the following or similar language: "To be eligible for
MinnesotaCare, individuals and families must not own net assets in excess of $30,000
for a household of two or more persons or $15,000 for a household of one person, not
including a homestead, household goods and personal effects, assets owned by children,
vehicles used for employment, court-ordered settlements up to $10,000, individual
retirement accounts, and capital and operating assets of a trade or business up to $200,000.
Do you and your household own net assets in excess of these limits?"
    (b) The commissioner may require individuals and families to provide any
information the commissioner determines necessary to verify compliance with the asset
requirement, if the commissioner determines that there is reason to believe that an
individual or family has assets that exceed the program limit.

ARTICLE 5
HEALTH CARE

    Section 1. Minnesota Statutes 2006, section 16A.724, subdivision 2, is amended to
read:
    Subd. 2. Transfers. (a) Notwithstanding section 295.581, to the extent available
resources in the health care access fund exceed expenditures in that fund, effective with
for the biennium beginning July 1, 2007, the commissioner of finance shall transfer the
excess funds from the health care access fund to the general fund on June 30 of each year,
provided that the amount transferred in any fiscal biennium shall not exceed $96,000,000.
The purpose of this transfer is to meet the rate increase required under Laws 2003, First
Special Session chapter 14, article 13C, section 2, subdivision 6.
    (b) For fiscal years 2006 to 2009 2011, MinnesotaCare shall be a forecasted
program, and, if necessary, the commissioner shall reduce these transfers from the health
care access fund to the general fund to meet annual MinnesotaCare expenditures or, if
necessary, transfer sufficient funds from the general fund to the health care access fund to
meet annual MinnesotaCare expenditures.

    Sec. 2. [256.962] MINNESOTA HEALTH CARE PROGRAMS OUTREACH.
    Subdivision 1. Public awareness and education. The commissioner, in consultation
with community organizations, health plans, and other public entities experienced in
outreach to the uninsured, shall design and implement a statewide campaign to raise public
awareness on the availability of health coverage through medical assistance, general
assistance medical care, and MinnesotaCare and to educate the public on the importance of
obtaining and maintaining health care coverage. The campaign shall include multimedia
messages directed to the general population.
    Subd. 2. Outreach grants. (a) The commissioner shall award grants to public and
private organizations, regional collaboratives, and regional health care outreach centers
for outreach activities, including, but not limited to:
    (1) providing information, applications, and assistance in obtaining coverage
through Minnesota public health care programs;
    (2) collaborating with public and private entities such as hospitals, providers, health
plans, legal aid offices, pharmacies, insurance agencies, and faith-based organizations to
develop outreach activities and partnerships to ensure the distribution of information
and applications and provide assistance in obtaining coverage through Minnesota health
care programs; and
    (3) providing or collaborating with public and private entities to provide multilingual
and culturally specific information and assistance to applicants in areas of high
uninsurance in the state or populations with high rates of uninsurance.
    (b) The commissioner shall ensure that all outreach materials are available in
languages other than English.
    (c) The commissioner shall establish an outreach trainer program to provide
training to designated individuals from the community and public and private entities on
application assistance in order for these individuals to provide training to others in the
community on an as-needed basis.
    Subd. 3. Application and assistance. (a) The Minnesota health care programs
application must be made available at provider offices, local human services agencies,
school districts, public and private elementary schools in which 25 percent or more of
the students receive free or reduced price lunches, community health offices, Women,
Infants and Children (WIC) program sites, Head Start program sites, public housing
councils, child care centers, early childhood education and preschool program sites, legal
aid offices, and libraries. The commissioner shall ensure that applications are available
in languages other than English.
    (b) Local human service agencies, hospitals, and health care community clinics
receiving state funds must provide direct assistance in completing the application
form, including the free use of a copy machine and a drop box for applications. These
locations must ensure that the drop box is checked at least weekly and any applications
are submitted to the commissioner. The commissioner shall provide these entities with
an identification number to stamp on each application to identify the entity that provided
assistance. Other locations where applications are required to be available shall either
provide direct assistance in completing the application form or provide information on
where an applicant can receive application assistance.
    (c) Counties must offer applications and application assistance when providing
child support collection services.
    (d) Local public health agencies and counties that provide immunization clinics must
offer applications and application assistance during these clinics.
    (e) The commissioner shall coordinate with the commissioner of health to ensure
that maternal and child health outreach efforts include information on Minnesota health
care programs and application assistance, when needed.
    Subd. 4. Statewide toll-free telephone number. The commissioner shall provide
funds for a statewide toll-free telephone number to provide information on public and
private health coverage options and sources of free and low-cost health care. The
statewide telephone number must provide the option of obtaining this information in
languages other than English.
    Subd. 5. Incentive program. Beginning January 1, 2008, the commissioner
shall establish an incentive program for organizations that directly identify and assist
potential enrollees in filling out and submitting an application. For each applicant who is
successfully enrolled in MinnesotaCare, medical assistance, or general assistance medical
care, the commissioner, within the available appropriation, shall pay the organization
a $20 application assistance bonus. The organization may provide an applicant a gift
certificate or other incentive upon enrollment.
    Subd. 6. School districts. (a) At the beginning of each school year, a school district
shall provide information to each student on the availability of health care coverage
through the Minnesota health care programs.
    (b) For each child who is determined to be eligible for a free or reduced priced lunch,
the district shall provide the child's family with an application for the Minnesota health
care programs and information on how to obtain application assistance.
    (c) A district shall also ensure that applications and information on application
assistance are available at early childhood education sites and public schools located
within the district's jurisdiction.
    (d) Each district shall designate an enrollment specialist to provide application
assistance and follow-up services with families who are eligible for the reduced or free
lunch program or who have indicated an interest in receiving information or an application
for the Minnesota health care program.
    (e) Each school district shall provide on their Web site a link to information on how
to obtain an application and application assistance.
    Subd. 7. Renewal notice. (a) Beginning December 1, 2007, the commissioner shall
mail a renewal notice to enrollees notifying the enrollees that the enrollees eligibility must
be renewed. A notice shall be sent at least 90 days prior to the renewal date and at least
60 days prior to the renewal date.
    (b) For enrollees who are receiving services through managed care plans, the
managed care plan must provide a follow-up renewal call at least 60 days prior to the
enrollees' renewal dates.
    (c) The commissioner shall include the end of coverage dates on the monthly rosters
of enrollees provided to managed care organizations.

    Sec. 3. [256.963] PRIMARY CARE ACCESS INITIATIVE.
    Subdivision 1. Establishment. (a) The commissioner shall award a grant to
implement in Hennepin and Ramsey Counties a Web-based primary care access pilot
project designed as a collaboration between private and public sectors to connect, where
appropriate, a patient with a primary care medical home, and schedule patients into
available community-based appointments as an alternative to nonemergency use of the
hospital emergency room. The grantee must establish a program that diverts patients
presenting at an emergency room for nonemergency care to more appropriate outpatient
settings. The program must refer the patient to an appropriate health care professional
based on the patient's health care needs and situation. The program must provide the
patient with a scheduled appointment that is timely, with an appropriate provider who is
conveniently located. If the patient is uninsured and potentially eligible for a Minnesota
health care program, the program must connect the patient to a primary care provider,
community clinic, or agency that can assist the patient with the application process. The
program must also ensure that discharged patients are connected with a community-based
primary care provider and assist in scheduling any necessary follow-up visits before
the patient is discharged.
    (b) The program must not require a provider to pay a fee for accepting charity care
patients or patients enrolled in a Minnesota public health care program.
    Subd. 2. Evaluation. (a) The grantee must report to the commissioner on a quarterly
basis the following information:
    (1) the total number of appointments available for scheduling by specialty;
    (2) the average length of time between scheduling and actual appointment;
    (3) the total number of patients referred and whether the patient was insured or
uninsured; and
    (4) the total number of appointments resulting in visits completed and number of
patients continuing services with the referring clinic.
    (b) The commissioner, in consultation with the Minnesota Hospital Association,
shall conduct an evaluation of the emergency room diversion pilot project and submit the
results to the legislature by January 15, 2009. The evaluation shall compare the number of
nonemergency visits and repeat visits to hospital emergency rooms for the period before
the commencement of the project and one year after the commencement, and an estimate
of the costs saved from any documented reductions.

    Sec. 4. Minnesota Statutes 2006, section 256.969, subdivision 9, is amended to read:
    Subd. 9. Disproportionate numbers of low-income patients served. (a) For
admissions occurring on or after October 1, 1992, through December 31, 1992, the
medical assistance disproportionate population adjustment shall comply with federal law
and shall be paid to a hospital, excluding regional treatment centers and facilities of the
federal Indian Health Service, with a medical assistance inpatient utilization rate in excess
of the arithmetic mean. The adjustment must be determined as follows:
    (1) for a hospital with a medical assistance inpatient utilization rate above the
arithmetic mean for all hospitals excluding regional treatment centers and facilities of the
federal Indian Health Service but less than or equal to one standard deviation above the
mean, the adjustment must be determined by multiplying the total of the operating and
property payment rates by the difference between the hospital's actual medical assistance
inpatient utilization rate and the arithmetic mean for all hospitals excluding regional
treatment centers and facilities of the federal Indian Health Service; and
    (2) for a hospital with a medical assistance inpatient utilization rate above one
standard deviation above the mean, the adjustment must be determined by multiplying
the adjustment that would be determined under clause (1) for that hospital by 1.1. If
federal matching funds are not available for all adjustments under this subdivision, the
commissioner shall reduce payments on a pro rata basis so that all adjustments qualify for
federal match. The commissioner may establish a separate disproportionate population
operating payment rate adjustment under the general assistance medical care program.
For purposes of this subdivision medical assistance does not include general assistance
medical care. The commissioner shall report annually on the number of hospitals likely to
receive the adjustment authorized by this paragraph. The commissioner shall specifically
report on the adjustments received by public hospitals and public hospital corporations
located in cities of the first class.
    (b) For admissions occurring on or after July 1, 1993, the medical assistance
disproportionate population adjustment shall comply with federal law and shall be paid to
a hospital, excluding regional treatment centers and facilities of the federal Indian Health
Service, with a medical assistance inpatient utilization rate in excess of the arithmetic
mean. The adjustment must be determined as follows:
    (1) for a hospital with a medical assistance inpatient utilization rate above the
arithmetic mean for all hospitals excluding regional treatment centers and facilities of the
federal Indian Health Service but less than or equal to one standard deviation above the
mean, the adjustment must be determined by multiplying the total of the operating and
property payment rates by the difference between the hospital's actual medical assistance
inpatient utilization rate and the arithmetic mean for all hospitals excluding regional
treatment centers and facilities of the federal Indian Health Service;
    (2) for a hospital with a medical assistance inpatient utilization rate above one
standard deviation above the mean, the adjustment must be determined by multiplying
the adjustment that would be determined under clause (1) for that hospital by 1.1. The
commissioner may establish a separate disproportionate population operating payment
rate adjustment under the general assistance medical care program. For purposes of this
subdivision, medical assistance does not include general assistance medical care. The
commissioner shall report annually on the number of hospitals likely to receive the
adjustment authorized by this paragraph. The commissioner shall specifically report on
the adjustments received by public hospitals and public hospital corporations located
in cities of the first class;
    (3) for a hospital that had medical assistance fee-for-service payment volume during
calendar year 1991 in excess of 13 percent of total medical assistance fee-for-service
payment volume, a medical assistance disproportionate population adjustment shall be
paid in addition to any other disproportionate payment due under this subdivision as
follows: $1,515,000 due on the 15th of each month after noon, beginning July 15, 1995.
For a hospital that had medical assistance fee-for-service payment volume during calendar
year 1991 in excess of eight percent of total medical assistance fee-for-service payment
volume and was the primary hospital affiliated with the University of Minnesota, a
medical assistance disproportionate population adjustment shall be paid in addition to any
other disproportionate payment due under this subdivision as follows: $505,000 due on
the 15th of each month after noon, beginning July 15, 1995; and
    (4) effective August 1, 2005, the payments in paragraph (b), clause (3), shall be
reduced to zero.
    (c) The commissioner shall adjust rates paid to a health maintenance organization
under contract with the commissioner to reflect rate increases provided in paragraph (b),
clauses (1) and (2), on a nondiscounted hospital-specific basis but shall not adjust those
rates to reflect payments provided in clause (3).
    (d) If federal matching funds are not available for all adjustments under paragraph
(b), the commissioner shall reduce payments under paragraph (b), clauses (1) and (2), on a
pro rata basis so that all adjustments under paragraph (b) qualify for federal match.
    (e) For purposes of this subdivision, medical assistance does not include general
assistance medical care.
    (f) For hospital services occurring on or after July 1, 2005, to June 30, 2007, :
    (1) general assistance medical care expenditures for fee-for-service inpatient
and outpatient hospital payments made by the department and by prepaid health
plans participating in general assistance medical care shall be considered Medicaid
disproportionate share hospital payments, except as limited below:
    (1) (i) only the portion of Minnesota's disproportionate share hospital allotment
under section 1923(f) of the Social Security Act that is not spent on the disproportionate
population adjustments in paragraph (b), clauses (1) and (2), may be used for general
assistance medical care expenditures;
    (2) (ii) only those general assistance medical care expenditures made to hospitals that
qualify for disproportionate share payments under section 1923 of the Social Security Act
and the Medicaid state plan may be considered disproportionate share hospital payments;
    (3) (iii) only those general assistance medical care expenditures made to an
individual hospital that would not cause the hospital to exceed its individual hospital limits
under section 1923 of the Social Security Act may be considered; and
    (4) (iv) general assistance medical care expenditures may be considered only to the
extent of Minnesota's aggregate allotment under section 1923 of the Social Security Act.
All hospitals and prepaid health plans participating in general assistance medical care
must provide any necessary expenditure, cost, and revenue information required by the
commissioner as necessary for purposes of obtaining federal Medicaid matching funds for
general assistance medical care expenditures; and
    (2) certified public expenditures made by Hennepin County Medical Center shall
be considered Medicaid disproportionate share hospital payments. Hennepin County
and Hennepin County Medical Center shall report by June 15, 2007, on payments made
beginning July 1, 2005, or another date specified by the commissioner, that may qualify
for reimbursement under federal law. Based on these reports, the commissioner shall
apply for federal matching funds.
    (g) Upon federal approval of the related state plan amendment, paragraph (f) is
effective retroactively from July 1, 2005, or the earliest effective date approved by the
Centers for Medicare and Medicaid Services.
EFFECTIVE DATE.This section is effective retroactively from July 1, 2005.

    Sec. 5. Minnesota Statutes 2006, section 256.969, subdivision 27, is amended to read:
    Subd. 27. Quarterly payment adjustment. (a) In addition to any other payment
under this section, the commissioner shall make the following payments effective July
1, 2007:
    (1) for a hospital located in Minnesota and not eligible for payments under
subdivision 20, with a medical assistance inpatient utilization rate greater than 17.8
percent of total patient days as of the base year in effect on July 1, 2005, a payment equal
to 13 percent of the total of the operating and property payment rates;
    (2) for a hospital located in Minnesota in a specified urban area outside of the
seven-county metropolitan area and not eligible for payments under subdivision 20, with
a medical assistance inpatient utilization rate less than or equal to 17.8 percent of total
patient days as of the base year in effect on July 1, 2005, a payment equal to ten percent
of the total of the operating and property payment rates. For purposes of this clause, the
following cities are specified urban areas: Detroit Lakes, Rochester, Willmar, Alexandria,
Austin, Cambridge, Brainerd, Hibbing, Mankato, Duluth, St. Cloud, Grand Rapids,
Wyoming, Fergus Falls, Albert Lea, Winona, Virginia, Thief River Falls, and Wadena; and
    (3) for a hospital located in Minnesota but not located in a specified urban area
under clause (2), with a medical assistance inpatient utilization rate less than or equal to
17.8 percent of total patient days as of the base year in effect on July 1, 2005, a payment
equal to four percent of the total of the operating and property payment rates. A hospital
located in Woodbury and not in existence during the base year shall be reimbursed under
this clause.; and
    (4) in addition to any payments under clauses (1) to (3), for a hospital located in
Minnesota and not eligible for payments under subdivision 20 with a medical assistance
inpatient utilization rate of 17.9 percent of total patient days as of the base year in effect
on July 1, 2005, a payment equal to eight percent of the total of the operating and property
payment rates, and for a hospital located in Minnesota and not eligible for payments
under subdivision 20 with a medical assistance inpatient utilization rate of 59.6 percent
of total patient days as of the base year in effect on July 1, 2005, a payment equal to
nine percent of the total of the operating and property payment rates. After making any
ratable adjustments required under paragraph (b), the commissioner shall proportionately
reduce payments under clauses (2) and (3) by an amount needed to make payments under
this clause.
    (b) The state share of payments under paragraph (a) shall be equal to federal
reimbursements to the commissioner to reimburse nonstate expenditures reported under
section 256B.199. The commissioner shall ratably reduce or increase payments under this
subdivision in order to ensure that these payments equal the amount of reimbursement
received by the commissioner under section 256B.199, except that payments shall be
ratably reduced by an amount equivalent to the state share of a four percent reduction in
MinnesotaCare and medical assistance payments for inpatient hospital services. Effective
July 1, 2009, the ratable reduction shall be equivalent to the state share of a three percent
reduction in these payments.
    (c) The payments under paragraph (a) shall be paid quarterly based on each hospital's
operating and property payments from the second previous quarter, beginning on July
15, 2007, or upon federal approval of federal reimbursements under section 256B.199,
whichever occurs later.
    (d) The commissioner shall not adjust rates paid to a prepaid health plan under
contract with the commissioner to reflect payments provided in paragraph (a).
    (e) The commissioner shall maximize the use of available federal money for
disproportionate share hospital payments and shall maximize payments to qualifying
hospitals. In order to accomplish these purposes, the commissioner may, in consultation
with the nonstate entities identified in section 256B.199, adjust, on a pro rata basis
if feasible, the amounts reported by nonstate entities under section 256B.199 when
application for reimbursement is made to the federal government, and otherwise adjust
the provisions of this subdivision. The commissioner shall utilize a settlement process
based on finalized data to maximize revenue under section 256B.199 and payments
under this section.
    (f) By January 15 of each year, beginning January 15, 2006, the commissioner
shall report to the chairs of the house and senate finance committees and divisions with
jurisdiction over funding for the Department of Human Services the following estimates
for the current and upcoming federal and state fiscal years:
    (1) the difference between the Medicare upper payment limit and actual or
anticipated medical assistance payments for hospital services;
    (2) the amount of federal disproportionate share hospital funding available to
Minnesota and the amount expected to be claimed by the state; and
    (3) the methodology used to calculate the results reported for clauses (1) and (2).
    (g) For purposes of this subdivision, medical assistance does not include general
assistance medical care.
    (h) This section sunsets on June 30, 2009. The commissioner shall report to
the legislature by December 15, 2008, with recommendations for maximizing federal
disproportionate share hospital payments after June 30, 2009.

    Sec. 6. Minnesota Statutes 2006, section 256B.04, subdivision 14, is amended to read:
    Subd. 14. Competitive bidding. (a) When determined to be effective, economical,
and feasible, the commissioner may utilize volume purchase through competitive bidding
and negotiation under the provisions of chapter 16C, to provide items under the medical
assistance program including but not limited to the following:
    (1) eyeglasses;
    (2) oxygen. The commissioner shall provide for oxygen needed in an emergency
situation on a short-term basis, until the vendor can obtain the necessary supply from
the contract dealer;
    (3) hearing aids and supplies; and
    (4) durable medical equipment, including but not limited to:
    (i) hospital beds;
    (ii) commodes;
    (iii) glide-about chairs;
    (iv) patient lift apparatus;
    (v) wheelchairs and accessories;
    (vi) oxygen administration equipment;
    (vii) respiratory therapy equipment;
    (viii) electronic diagnostic, therapeutic and life support systems;
    (5) special nonemergency medical transportation services level of need
determinations, disbursement of public transportation passes and tokens, and volunteer
and recipient mileage and parking reimbursements; and
    (6) drugs.
    (b) Rate changes under this chapter and chapters 256D and 256L do not affect
contract payments under this subdivision unless specifically identified.
    (c) The commissioner may not utilize volume purchase through competitive bidding
and negotiation for special transportation services under the provisions of chapter 16C.

    Sec. 7. Minnesota Statutes 2006, section 256B.04, is amended by adding a subdivision
to read:
    Subd. 14a. Level of need determination. Nonemergency medical transportation
level of need determinations must be performed by a physician, a registered nurse working
under direct supervision of a physician, a physician's assistant, a nurse practitioner, a
licensed practical nurse, or a discharge planner. Nonemergency medical transportation
level of need determinations must not be performed more than semiannually on any
individual, unless the individual's circumstances have sufficiently changed so as to require
a new level of need determination. Individuals residing in licensed nursing facilities are
exempt from a level of need determination and are eligible for special transportation
services until the individual no longer resides in a licensed nursing facility. If a person
authorized by this subdivision to perform a level of need determination determines that an
individual requires stretcher transportation, the individual is presumed to maintain that
level of need until otherwise determined by a person authorized to perform a level of need
determination, or for six months, whichever is sooner.

    Sec. 8. Minnesota Statutes 2006, section 256B.056, subdivision 10, is amended to read:
    Subd. 10. Eligibility verification. (a) The commissioner shall require women who
are applying for the continuation of medical assistance coverage following the end of the
60-day postpartum period to update their income and asset information and to submit
any required income or asset verification.
    (b) The commissioner shall determine the eligibility of private-sector health care
coverage for infants less than one year of age eligible under section 256B.055, subdivision
10
, or 256B.057, subdivision 1, paragraph (d), and shall pay for private-sector coverage
if this is determined to be cost-effective.
    (c) The commissioner shall modify the application for Minnesota health care
programs to require more detailed information related to verification of assets and income,
and shall verify assets and income for all applicants, and for all recipients upon renewal.
    (d) The commissioner shall require Minnesota health care program recipients to
report new or an increase in earned income within ten days of the change, and to verify new
or an increase in earned income that affects eligibility within ten days of notification by
the agency that the new or increased earned income affects eligibility. Recipients who fail
to verify new or an increase in earned income that affects eligibility shall be disenrolled.

    Sec. 9. Minnesota Statutes 2006, section 256B.0625, subdivision 3f, is amended to
read:
    Subd. 3f. Circumcision for newborns. Newborn Circumcision is not covered,
unless the procedure is medically necessary or required because of a well-established
religious practice.

    Sec. 10. Minnesota Statutes 2006, section 256B.0631, subdivision 1, is amended to
read:
    Subdivision 1. Co-payments. (a) Except as provided in subdivision 2, the medical
assistance benefit plan shall include the following co-payments for all recipients, effective
for services provided on or after October 1, 2003, and before January 1, 2009:
    (1) $3 per nonpreventive visit. For purposes of this subdivision, a visit means an
episode of service which is required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse,
audiologist, optician, or optometrist;
    (2) $3 for eyeglasses;
    (3) $6 for nonemergency visits to a hospital-based emergency room; and
    (4) $3 per brand-name drug prescription and $1 per generic drug prescription,
subject to a $12 per month maximum for prescription drug co-payments. No co-payments
shall apply to antipsychotic drugs when used for the treatment of mental illness.
    (b) Except as provided in subdivision 2, the medical assistance benefit plan shall
include the following co-payments for all recipients, effective for services provided on
or after January 1, 2009:
    (1) $6 for nonemergency visits to a hospital-based emergency room; and
    (2) $3 per brand-name drug prescription and $1 per generic drug prescription,
subject to a $7 per month maximum for prescription drug co-payments. No co-payments
shall apply to antipsychotic drugs when used for the treatment of mental illness.
    (c) Recipients of medical assistance are responsible for all co-payments in this
subdivision.

    Sec. 11. Minnesota Statutes 2006, section 256B.0631, subdivision 3, is amended to
read:
    Subd. 3. Collection. (a) The medical assistance reimbursement to the provider shall
be reduced by the amount of the co-payment, except that reimbursement for prescription
drugs shall not be reduced once a recipient has reached the $12 per month maximum or
the $7 per month maximum effective January 1, 2009, for prescription drug co-payments.
    (b) The provider collects the co-payment from the recipient. Providers may not
deny services to recipients who are unable to pay the co-payment, except as provided in
subdivision 4.
    (c) Medical assistance reimbursement to fee-for-service providers and payments to
managed care plans shall not be increased as a result of the removal of the co-payments
effective January 1, 2009.

    Sec. 12. Minnesota Statutes 2006, section 256B.0644, is amended to read:
256B.0644 REIMBURSEMENT UNDER OTHER STATE HEALTH CARE
PROGRAMS.
    (a) A vendor of medical care, as defined in section 256B.02, subdivision 7, and a
health maintenance organization, as defined in chapter 62D, must participate as a provider
or contractor in the medical assistance program, general assistance medical care program,
and MinnesotaCare as a condition of participating as a provider in health insurance plans
and programs or contractor for state employees established under section 43A.18, the
public employees insurance program under section 43A.316, for health insurance plans
offered to local statutory or home rule charter city, county, and school district employees,
the workers' compensation system under section 176.135, and insurance plans provided
through the Minnesota Comprehensive Health Association under sections 62E.01 to
62E.19. The limitations on insurance plans offered to local government employees shall
not be applicable in geographic areas where provider participation is limited by managed
care contracts with the Department of Human Services.
    (b) For providers other than health maintenance organizations, participation in the
medical assistance program means that:
     (1) the provider accepts new medical assistance, general assistance medical care,
and MinnesotaCare patients or;
    (2) for providers other than dental service providers, at least 20 percent of the
provider's patients are covered by medical assistance, general assistance medical care, and
MinnesotaCare as their primary source of coverage, or; or
    (3) for dental service providers, at least ten percent of the provider's patients are
covered by medical assistance, general assistance medical care, and MinnesotaCare as
their primary source of coverage, or the provider accepts new medical assistance and
MinnesotaCare patients who are children with special health care needs. For purposes
of this section, "children with special health care needs" means children up to age 18
who: (i) require health and related services beyond that required by children generally;
and (ii) have or are at risk for a chronic physical, developmental, behavioral, or emotional
condition, including: bleeding and coagulation disorders; immunodeficiency disorders;
cancer; endocrinopathy; developmental disabilities; epilepsy, cerebral palsy, and other
neurological diseases; visual impairment or deafness; Down syndrome and other genetic
disorders; autism; fetal alcohol syndrome; and other conditions designated by the
commissioner after consultation with representatives of pediatric dental providers and
consumers.
    (c) Patients seen on a volunteer basis by the provider at a location other than the
provider's usual place of practice may be considered in meeting this the participation
requirement in this section. The commissioner shall establish participation requirements
for health maintenance organizations. The commissioner shall provide lists of
participating medical assistance providers on a quarterly basis to the commissioner of
employee relations, the commissioner of labor and industry, and the commissioner of
commerce. Each of the commissioners shall develop and implement procedures to exclude
as participating providers in the program or programs under their jurisdiction those
providers who do not participate in the medical assistance program. The commissioner
of employee relations shall implement this section through contracts with participating
health and dental carriers.

    Sec. 13. Minnesota Statutes 2006, section 256B.199, is amended to read:
256B.199 PAYMENTS REPORTED BY GOVERNMENTAL ENTITIES.
    (a) Effective July 1, 2007, the commissioner shall apply for federal matching funds
for the expenditures in paragraphs (b) and (c).
    (b) The commissioner shall apply for federal matching funds for certified public
expenditures as follows:
     (1) Hennepin County, Hennepin County Medical Center, Ramsey County, Regions
Hospital, the University of Minnesota, and Fairview-University Medical Center shall
report quarterly to the commissioner beginning June 1, 2007, payments made during the
second previous quarter that may qualify for reimbursement under federal law.;
    (b) (2) based on these reports, the commissioner shall apply for federal matching
funds. These funds are appropriated to the commissioner for the payments under section
256.969, subdivision 27.; and
    (c) (3) by May 1 of each year, beginning May 1, 2007, the commissioner shall inform
the nonstate entities listed in paragraph (a) of the amount of federal disproportionate share
hospital payment money expected to be available in the current federal fiscal year.
    (c) The commissioner shall apply for federal matching funds for general assistance
medical care expenditures as follows:
    (1) for hospital services occurring on or after July 1, 2007, general assistance medical
care expenditures for fee-for-service inpatient and outpatient hospital payments made by
the department shall be used to apply for federal matching funds, except as limited below:
    (i) only those general assistance medical care expenditures made to an individual
hospital that would not cause the hospital to exceed its individual hospital limits under
section 1923 of the Social Security Act may be considered; and
    (ii) general assistance medical care expenditures may be considered only to the extent
of Minnesota's aggregate allotment under section 1923 of the Social Security Act; and
    (2) all hospitals must provide any necessary expenditure, cost, and revenue
information required by the commissioner as necessary for purposes of obtaining federal
Medicaid matching funds for general assistance medical care expenditures.
    (d) This section sunsets on June 30, 2009. The commissioner shall report to
the legislature by December 15, 2008, with recommendations for maximizing federal
disproportionate share hospital payments after June 30, 2009.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2006, 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, shall 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 For dental
services rendered on or after July 1, 2007, the commissioner shall increase reimbursement
by 30 percent above the reimbursement rate that would otherwise be paid to the critical
access dental provider. The commissioner shall pay the health plan companies in amounts
sufficient 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.
    The commissioner shall annually establish a reimbursement schedule for critical
access dental providers and provider-specific limits on total reimbursement received
under the reimbursement schedule, and shall notify each critical access dental provider
of the schedule and limit.
    (d) 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.
    (e) Effective for services rendered on or after January 1, 2007, the commissioner
shall make payments for physician and professional services based on the Medicare
relative value units (RVU's). This change shall be budget neutral and the cost of
implementing RVU's will be incorporated in the established conversion factor.

    Sec. 15. [256B.764] REIMBURSEMENT FOR FAMILY PLANNING SERVICES.
    Effective for services rendered on or after July 1, 2007, payment rates for family
planning services shall be increased by 25 percent over the rates in effect June 30, 2007,
when these services are provided by a community clinic as defined in section 145.9268,
subdivision 1.

    Sec. 16. Minnesota Statutes 2006, section 256D.03, subdivision 3, is amended to read:
    Subd. 3. General assistance medical care; eligibility. (a) General assistance
medical care may be paid for any person who is not eligible for medical assistance under
chapter 256B, including eligibility for medical assistance based on a spenddown of excess
income according to section 256B.056, subdivision 5, or MinnesotaCare as defined in
paragraph (b), except as provided in paragraph (c), and:
    (1) who is receiving assistance under section 256D.05, except for families with
children who are eligible under Minnesota family investment program (MFIP), or who is
having a payment made on the person's behalf under sections 256I.01 to 256I.06; or
    (2) who is a resident of Minnesota; and
    (i) who has gross countable income not in excess of 75 percent of the federal poverty
guidelines for the family size, using a six-month budget period and whose equity in assets
is not in excess of $1,000 per assistance unit. General assistance medical care is not
available for applicants or enrollees who are otherwise eligible for medical assistance but
fail to verify their assets. Enrollees who become eligible for medical assistance shall be
terminated and transferred to medical assistance. Exempt assets, the reduction of excess
assets, and the waiver of excess assets must conform to the medical assistance program in
section 256B.056, subdivision 3, with the following exception: the maximum amount of
undistributed funds in a trust that could be distributed to or on behalf of the beneficiary by
the trustee, assuming the full exercise of the trustee's discretion under the terms of the
trust, must be applied toward the asset maximum;
    (ii) who has gross countable income above 75 percent of the federal poverty
guidelines but not in excess of 175 percent of the federal poverty guidelines for the
family size, using a six-month budget period, whose equity in assets is not in excess
of the limits in section 256B.056, subdivision 3c, and who applies during an inpatient
hospitalization; or
    (iii) the commissioner shall adjust the income standards under this section each July
1 by the annual update of the federal poverty guidelines following publication by the
United States Department of Health and Human Services.
    (b) Effective for applications and renewals processed on or after September 1, 2006,
general assistance medical care may not be paid for applicants or recipients who are adults
with dependent children under 21 whose gross family income is equal to or less than 275
percent of the federal poverty guidelines who are not described in paragraph (e).
    (c) Effective for applications and renewals processed on or after September 1, 2006,
general assistance medical care may be paid for applicants and recipients who meet all
eligibility requirements of paragraph (a), clause (2), item (i), for a temporary period
beginning the date of application. Immediately following approval of general assistance
medical care, enrollees shall be enrolled in MinnesotaCare under section 256L.04,
subdivision 7
, with covered services as provided in section 256L.03 for the rest of the
six-month general assistance medical care eligibility period, until their six-month renewal.
    (d) To be eligible for general assistance medical care following enrollment in
MinnesotaCare as required by paragraph (c), an individual must complete a new
application.
    (e) Applicants and recipients eligible under paragraph (a), clause (1); who have
applied for and are awaiting a determination of blindness or disability by the state medical
review team or a determination of eligibility for Supplemental Security Income or Social
Security Disability Insurance by the Social Security Administration; who fail to meet the
requirements of section 256L.09, subdivision 2; who are homeless as defined by United
States Code, title 42, section 11301, et seq.; who are classified as end-stage renal disease
beneficiaries in the Medicare program; who are enrolled in private health care coverage as
defined in section 256B.02, subdivision 9; who are eligible under paragraph (j); or who
receive treatment funded pursuant to section 254B.02 are exempt from the MinnesotaCare
enrollment requirements of this subdivision.
    (f) For applications received on or after October 1, 2003, eligibility may begin no
earlier than the date of application. For individuals eligible under paragraph (a), clause
(2), item (i), a redetermination of eligibility must occur every 12 months. Individuals are
eligible under paragraph (a), clause (2), item (ii), only during inpatient hospitalization but
may reapply if there is a subsequent period of inpatient hospitalization.
    (g) Beginning September 1, 2006, Minnesota health care program applications and
renewals completed by recipients and applicants who are persons described in paragraph
(c) and submitted to the county agency shall be determined for MinnesotaCare eligibility
by the county agency. If all other eligibility requirements of this subdivision are met,
eligibility for general assistance medical care shall be available in any month during which
MinnesotaCare enrollment is pending. Upon notification of eligibility for MinnesotaCare,
notice of termination for eligibility for general assistance medical care shall be sent to
an applicant or recipient. If all other eligibility requirements of this subdivision are
met, eligibility for general assistance medical care shall be available until enrollment in
MinnesotaCare subject to the provisions of paragraphs (c), (e), and (f).
    (h) The date of an initial Minnesota health care program application necessary to
begin a determination of eligibility shall be the date the applicant has provided a name,
address, and Social Security number, signed and dated, to the county agency or the
Department of Human Services. If the applicant is unable to provide a name, address,
Social Security number, and signature when health care is delivered due to a medical
condition or disability, a health care provider may act on an applicant's behalf to establish
the date of an initial Minnesota health care program application by providing the county
agency or Department of Human Services with provider identification and a temporary
unique identifier for the applicant. The applicant must complete the remainder of the
application and provide necessary verification before eligibility can be determined. The
county agency must assist the applicant in obtaining verification if necessary.
    (i) County agencies are authorized to use all automated databases containing
information regarding recipients' or applicants' income in order to determine eligibility for
general assistance medical care or MinnesotaCare. Such use shall be considered sufficient
in order to determine eligibility and premium payments by the county agency.
    (j) General assistance medical care is not available for a person in a correctional
facility unless the person is detained by law for less than one year in a county correctional
or detention facility as a person accused or convicted of a crime, or admitted as an
inpatient to a hospital on a criminal hold order, and the person is a recipient of general
assistance medical care at the time the person is detained by law or admitted on a criminal
hold order and as long as the person continues to meet other eligibility requirements
of this subdivision.
    (k) General assistance medical care is not available for applicants or recipients who
do not cooperate with the county agency to meet the requirements of medical assistance.
    (l) In determining the amount of assets of an individual eligible under paragraph
(a), clause (2), item (i), there shall be included any asset or interest in an asset, including
an asset excluded under paragraph (a), that was given away, sold, or disposed of for
less than fair market value within the 60 months preceding application for general
assistance medical care or during the period of eligibility. Any transfer described in this
paragraph shall be presumed to have been for the purpose of establishing eligibility for
general assistance medical care, unless the individual furnishes convincing evidence to
establish that the transaction was exclusively for another purpose. For purposes of this
paragraph, the value of the asset or interest shall be the fair market value at the time it
was given away, sold, or disposed of, less the amount of compensation received. For any
uncompensated transfer, the number of months of ineligibility, including partial months,
shall be calculated by dividing the uncompensated transfer amount by the average monthly
per person payment made by the medical assistance program to skilled nursing facilities
for the previous calendar year. The individual shall remain ineligible until this fixed period
has expired. The period of ineligibility may exceed 30 months, and a reapplication for
benefits after 30 months from the date of the transfer shall not result in eligibility unless
and until the period of ineligibility has expired. The period of ineligibility begins in the
month the transfer was reported to the county agency, or if the transfer was not reported,
the month in which the county agency discovered the transfer, whichever comes first. For
applicants, the period of ineligibility begins on the date of the first approved application.
    (m) When determining eligibility for any state benefits under this subdivision,
the income and resources of all noncitizens shall be deemed to include their sponsor's
income and resources as defined in the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, title IV, Public Law 104-193, sections 421 and 422, and
subsequently set out in federal rules.
    (n) Undocumented noncitizens and nonimmigrants are ineligible for general
assistance medical care. For purposes of this subdivision, a nonimmigrant is an individual
in one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and
an undocumented noncitizen is an individual who resides in the United States without the
approval or acquiescence of the Immigration and Naturalization Service.
    (o) Notwithstanding any other provision of law, a noncitizen who is ineligible for
medical assistance due to the deeming of a sponsor's income and resources, is ineligible
for general assistance medical care.
    (p) Effective July 1, 2003, general assistance medical care emergency services end.
EFFECTIVE DATE.This section is effective July 1, 2007.

    Sec. 17. Minnesota Statutes 2006, section 256D.03, subdivision 4, is amended to read:
    Subd. 4. General assistance medical care; services. (a)(i) For a person who is
eligible under subdivision 3, paragraph (a), clause (2), item (i), general assistance medical
care covers, except as provided in paragraph (c):
    (1) inpatient hospital services;
    (2) outpatient hospital services;
    (3) services provided by Medicare certified rehabilitation agencies;
    (4) prescription drugs and other products recommended through the process
established in section 256B.0625, subdivision 13;
    (5) equipment necessary to administer insulin and diagnostic supplies and equipment
for diabetics to monitor blood sugar level;
    (6) eyeglasses and eye examinations provided by a physician or optometrist;
    (7) hearing aids;
    (8) prosthetic devices;
    (9) laboratory and X-ray services;
    (10) physician's services;
    (11) medical transportation except special transportation;
    (12) chiropractic services as covered under the medical assistance program;
    (13) podiatric services;
    (14) dental services as covered under the medical assistance program;
    (15) outpatient services provided by a mental health center or clinic that is under
contract with the county board and is established under section 245.62;
    (16) day treatment services for mental illness provided under contract with the
county board;
    (17) prescribed medications for persons who have been diagnosed as mentally ill as
necessary to prevent more restrictive institutionalization;
    (18) psychological services, medical supplies and equipment, and Medicare
premiums, coinsurance and deductible payments;
    (19) medical equipment not specifically listed in this paragraph when the use of
the equipment will prevent the need for costlier services that are reimbursable under
this subdivision;
    (20) services performed by a certified pediatric nurse practitioner, a certified family
nurse practitioner, a certified adult nurse practitioner, a certified obstetric/gynecological
nurse practitioner, a certified neonatal nurse practitioner, or a certified geriatric nurse
practitioner in independent practice, if (1) the service is otherwise covered under this
chapter as a physician service, (2) the service provided on an inpatient basis is not included
as part of the cost for inpatient services included in the operating payment rate, and (3) the
service is within the scope of practice of the nurse practitioner's license as a registered
nurse, as defined in section 148.171;
    (21) services of a certified public health nurse or a registered nurse practicing in
a public health nursing clinic that is a department of, or that operates under the direct
authority of, a unit of government, if the service is within the scope of practice of the
public health nurse's license as a registered nurse, as defined in section 148.171;
    (22) telemedicine consultations, to the extent they are covered under section
256B.0625, subdivision 3b; and
    (23) mental health telemedicine and psychiatric consultation as covered under
section 256B.0625, subdivisions 46 and 48.;
    (24) care coordination and patient education services provided by a community
health worker according to section 256B.0625, subdivision 49; and
    (25) regardless of the number of employees that an enrolled health care provider
may have, sign language interpreter services when provided by an enrolled health care
provider during the course of providing a direct, person-to-person covered health care
service to an enrolled recipient who has a hearing loss and uses interpreting services.
    (ii) Effective October 1, 2003, for a person who is eligible under subdivision 3,
paragraph (a), clause (2), item (ii), general assistance medical care coverage is limited
to inpatient hospital services, including physician services provided during the inpatient
hospital stay. A $1,000 deductible is required for each inpatient hospitalization.
    (b) Effective August 1, 2005, sex reassignment surgery is not covered under this
subdivision.
    (c) In order to contain costs, the commissioner of human services shall select
vendors of medical care who can provide the most economical care consistent with high
medical standards and shall where possible contract with organizations on a prepaid
capitation basis to provide these services. The commissioner shall consider proposals by
counties and vendors for prepaid health plans, competitive bidding programs, block grants,
or other vendor payment mechanisms designed to provide services in an economical
manner or to control utilization, with safeguards to ensure that necessary services are
provided. Before implementing prepaid programs in counties with a county operated or
affiliated public teaching hospital or a hospital or clinic operated by the University of
Minnesota, the commissioner shall consider the risks the prepaid program creates for the
hospital and allow the county or hospital the opportunity to participate in the program in a
manner that reflects the risk of adverse selection and the nature of the patients served by
the hospital, provided the terms of participation in the program are competitive with the
terms of other participants considering the nature of the population served. Payment for
services provided pursuant to this subdivision shall be as provided to medical assistance
vendors of these services under sections 256B.02, subdivision 8, and 256B.0625. For
payments made during fiscal year 1990 and later years, the commissioner shall consult
with an independent actuary in establishing prepayment rates, but shall retain final control
over the rate methodology.
    (d) Effective January 1, 2008, drug coverage under general assistance medical care
is limited to prescription drugs that:
    (i) are covered under the medical assistance program as described in section
256B.0625, subdivisions 13 and 13d; and
    (ii) are provided by manufacturers that have fully executed general assistance
medical care rebate agreements with the commissioner and comply with the agreements.
Prescription drug coverage under general assistance medical care must conform to
coverage under the medical assistance program according to section 256B.0625,
subdivisions 13 to 13g.
    (d) (e) Recipients eligible under subdivision 3, paragraph (a), shall pay the following
co-payments for services provided on or after October 1, 2003, and before January 1, 2009:
    (1) $25 for eyeglasses;
    (2) $25 for nonemergency visits to a hospital-based emergency room;
    (3) $3 per brand-name drug prescription and $1 per generic drug prescription,
subject to a $12 per month maximum for prescription drug co-payments. No co-payments
shall apply to antipsychotic drugs when used for the treatment of mental illness; and
    (4) 50 percent coinsurance on restorative dental services.
    (e) (f) Recipients eligible under subdivision 3, paragraph (a), shall include the
following co-payments for services provided on or after January 1, 2009:
    (1) $25 for nonemergency visits to a hospital-based emergency room; and
    (2) $3 per brand-name drug prescription and $1 per generic drug prescription,
subject to a $7 per month maximum for prescription drug co-payments. No co-payments
shall apply to antipsychotic drugs when used for the treatment of mental illness.
    (g) Co-payments shall be limited to one per day per provider for nonpreventive visits,
eyeglasses, and nonemergency visits to a hospital-based emergency room. Recipients of
general assistance medical care are responsible for all co-payments in this subdivision.
The general assistance medical care reimbursement to the provider shall be reduced by the
amount of the co-payment, except that reimbursement for prescription drugs shall not be
reduced once a recipient has reached the $12 per month maximum for prescription drug
co-payments. The provider collects the co-payment from the recipient. Providers may
not deny services to recipients who are unable to pay the co-payment, except as provided
in paragraph (f). This paragraph expires January 1, 2009.
    (f) If it is the routine business practice of a provider to refuse service to an individual
with uncollected debt, the provider may include uncollected co-payments under this
section. A provider must give advance notice to a recipient with uncollected debt before
services can be denied.
    (h) Effective January 1, 2009, co-payments shall be limited to one per day per
provider for nonemergency visits to a hospital-based emergency room. Recipients of
general assistance medical care are responsible for all co-payments in this subdivision.
The general assistance medical care reimbursement to the provider shall be reduced by the
amount of the co-payment, except that reimbursement for prescription drugs shall not be
reduced once a recipient has reached the $7 per month maximum for prescription drug
co-payments. The provider collects the co-payment from the recipient. Providers may not
deny services to recipients who are unable to pay the co-payment.
    (i) General assistance medical care reimbursement to fee-for-service providers
and payments to managed care plans shall not be increased as a result of the removal of
the co-payments effective January 1, 2009.
    (g) (j) Any county may, from its own resources, provide medical payments for
which state payments are not made.
    (h) (k) Chemical dependency services that are reimbursed under chapter 254B must
not be reimbursed under general assistance medical care.
    (i) (l) The maximum payment for new vendors enrolled in the general assistance
medical care program after the base year shall be determined from the average usual and
customary charge of the same vendor type enrolled in the base year.
    (j) (m) The conditions of payment for services under this subdivision are the same
as the conditions specified in rules adopted under chapter 256B governing the medical
assistance program, unless otherwise provided by statute or rule.
    (k) (n) Inpatient and outpatient payments shall be reduced by five percent, effective
July 1, 2003. This reduction is in addition to the five percent reduction effective July 1,
2003, and incorporated by reference in paragraph (i) (l).
    (l) (o) Payments for all other health services except inpatient, outpatient, and
pharmacy services shall be reduced by five percent, effective July 1, 2003.
    (m) (p) Payments to managed care plans shall be reduced by five percent for services
provided on or after October 1, 2003.
    (n) (q) A hospital receiving a reduced payment as a result of this section may apply
the unpaid balance toward satisfaction of the hospital's bad debts.
    (o) (r) Fee-for-service payments for nonpreventive visits shall be reduced by $3
for services provided on or after January 1, 2006. For purposes of this subdivision, a
visit means an episode of service which is required because of a recipient's symptoms,
diagnosis, or established illness, and which is delivered in an ambulatory setting by
a physician or physician ancillary, chiropractor, podiatrist, advance practice nurse,
audiologist, optician, or optometrist.
    (p) (s) Payments to managed care plans shall not be increased as a result of the
removal of the $3 nonpreventive visit co-payment effective January 1, 2006.
EFFECTIVE DATE.This section is effective July 1, 2007, unless another effective
date is explicit.

    Sec. 18. Minnesota Statutes 2006, section 256L.01, subdivision 1, is amended to read:
    Subdivision 1. Scope. For purposes of sections 256L.01 to 256L.18 this chapter,
the following terms shall have the meanings given them.

    Sec. 19. Minnesota Statutes 2006, section 256L.01, subdivision 4, is amended to read:
    Subd. 4. Gross individual or gross family income. (a) "Gross individual or gross
family income" for nonfarm self-employed means income calculated for the six-month
12-month period of eligibility using the net profit or loss reported on the applicant's
federal income tax form for the previous year and using the medical assistance families
with children methodology for determining allowable and nonallowable self-employment
expenses and countable income.
    (b) "Gross individual or gross family income" for farm self-employed means income
calculated for the six-month 12-month period of eligibility using as the baseline the
adjusted gross income reported on the applicant's federal income tax form for the previous
year and adding back in reported depreciation amounts that apply to the business in which
the family is currently engaged.
    (c) "Gross individual or gross family income" means the total income for all family
members, calculated for the six-month 12-month period of eligibility.
EFFECTIVE DATE.This section is effective July 1, 2007, or upon federal
approval, whichever is later.

    Sec. 20. Minnesota Statutes 2006, section 256L.03, subdivision 1, is amended to read:
    Subdivision 1. Covered health services. For individuals under section 256L.04,
subdivision 7
, with income no greater than 75 percent of the federal poverty guidelines
or for families with children under section 256L.04, subdivision 1, all subdivisions of
this section apply. "Covered health services" means the health services reimbursed
under chapter 256B, with the exception of inpatient hospital services, special education
services, private duty nursing services, adult dental care services other than services
covered under section 256B.0625, subdivision 9, orthodontic services, nonemergency
medical transportation services, personal care assistant and case management services,
nursing home or intermediate care facilities services, inpatient mental health services,
and chemical dependency services. Outpatient mental health services covered under the
MinnesotaCare program are limited to diagnostic assessments, psychological testing,
explanation of findings, mental health telemedicine, psychiatric consultation, medication
management by a physician, day treatment, partial hospitalization, and individual, family,
and group psychotherapy.
    No public funds shall be used for coverage of abortion under MinnesotaCare
except where the life of the female would be endangered or substantial and irreversible
impairment of a major bodily function would result if the fetus were carried to term; or
where the pregnancy is the result of rape or incest.
    Covered health services shall be expanded as provided in this section.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 21. Minnesota Statutes 2006, section 256L.03, subdivision 3, is amended to read:
    Subd. 3. Inpatient hospital services. (a) Covered health services shall include
inpatient hospital services, including inpatient hospital mental health services and inpatient
hospital and residential chemical dependency treatment, subject to those limitations
necessary to coordinate the provision of these services with eligibility under the medical
assistance spenddown. Prior to July 1, 1997, the inpatient hospital benefit for adult
enrollees is subject to an annual benefit limit of $10,000. The inpatient hospital benefit for
adult enrollees who qualify under section 256L.04, subdivision 7, or who qualify under
section 256L.04, subdivisions 1 and 2, with family gross income that exceeds 175 200
percent of the federal poverty guidelines or 215 percent of the federal poverty guidelines
on or after July 1, 2009, and who are not pregnant, is subject to an annual limit of $10,000.
    (b) Admissions for inpatient hospital services paid for under section 256L.11,
subdivision 3
, must be certified as medically necessary in accordance with Minnesota
Rules, parts 9505.0500 to 9505.0540, except as provided in clauses (1) and (2):
    (1) all admissions must be certified, except those authorized under rules established
under section 254A.03, subdivision 3, or approved under Medicare; and
    (2) payment under section 256L.11, subdivision 3, shall be reduced by five percent
for admissions for which certification is requested more than 30 days after the day of
admission. The hospital may not seek payment from the enrollee for the amount of the
payment reduction under this clause.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 22. Minnesota Statutes 2006, section 256L.03, subdivision 5, is amended to read:
    Subd. 5. Co-payments and coinsurance. (a) Except as provided in paragraphs (b)
and (c), the MinnesotaCare benefit plan shall include the following co-payments and
coinsurance requirements for all enrollees:
    (1) ten percent of the paid charges for inpatient hospital services for adult enrollees,
subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and
$3,000 per family;
    (2) $3 per prescription for adult enrollees;
    (3) $25 for eyeglasses for adult enrollees;
    (4) $3 per nonpreventive visit. For purposes of this subdivision, a "visit" means an
episode of service which is required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse,
audiologist, optician, or optometrist; and
    (5) $6 for nonemergency visits to a hospital-based emergency room.
    (b) Paragraph (a), clause (1), does not apply to parents and relative caretakers of
children under the age of 21 in households with family income equal to or less than 175
percent of the federal poverty guidelines. Paragraph (a), clause (1), does not apply to
parents and relative caretakers of children under the age of 21 in households with family
income greater than 175 percent of the federal poverty guidelines for inpatient hospital
admissions occurring on or after January 1, 2001.
    (c) Paragraph (a), clauses (1) to (4), do does not apply to pregnant women and
children under the age of 21.
    (d) Adult enrollees with family gross income that exceeds 175 200 percent of the
federal poverty guidelines or 215 percent of the federal poverty guidelines on or after July
1, 2009, and who are not pregnant shall be financially responsible for the coinsurance
amount, if applicable, and amounts which exceed the $10,000 inpatient hospital benefit
limit.
    (e) When a MinnesotaCare enrollee becomes a member of a prepaid health plan,
or changes from one prepaid health plan to another during a calendar year, any charges
submitted towards the $10,000 annual inpatient benefit limit, and any out-of-pocket
expenses incurred by the enrollee for inpatient services, that were submitted or incurred
prior to enrollment, or prior to the change in health plans, shall be disregarded.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 23. Minnesota Statutes 2006, section 256L.04, subdivision 7, is amended to read:
    Subd. 7. Single adults and households with no children. The definition of eligible
persons includes all individuals and households with no children who have gross family
incomes that are equal to or less than 175 200 percent of the federal poverty guidelines.
Effective July 1, 2009, the definition of eligible persons includes all individuals and
households with no children who have gross family incomes that are equal to or less than
215 percent of the federal poverty guidelines.
EFFECTIVE DATE.This section is effective January 1, 2008.

    Sec. 24. Minnesota Statutes 2006, section 256L.05, subdivision 1, is amended to read:
    Subdivision 1. Application and information availability. Applications and other
information application assistance must be made available to at provider offices, local
human services agencies, school districts, public and private elementary schools in which
25 percent or more of the students receive free or reduced price lunches, community health
offices, and Women, Infants and Children (WIC) program sites, Head Start program sites,
public housing councils, crisis nurseries, child care centers, early childhood education
and preschool program sites, legal aid offices, and libraries. These sites may accept
applications and forward the forms to the commissioner or local county human services
agencies that choose to participate as an enrollment site. Otherwise, applicants may apply
directly to the commissioner or to participating local county human services agencies.
Beginning January 1, 2000, MinnesotaCare enrollment sites will be expanded to include
local county human services agencies which choose to participate.

    Sec. 25. Minnesota Statutes 2006, section 256L.05, subdivision 1b, is amended to read:
    Subd. 1b. MinnesotaCare enrollment by county agencies. Beginning September
1, 2006, county agencies shall enroll single adults and households with no children
formerly enrolled in general assistance medical care in MinnesotaCare according to
section 256D.03, subdivision 3. County agencies shall perform all duties necessary
to administer the MinnesotaCare program ongoing for these enrollees, including the
redetermination of MinnesotaCare eligibility at six-month renewal.

    Sec. 26. Minnesota Statutes 2006, section 256L.05, subdivision 2, is amended to read:
    Subd. 2. Commissioner's duties. (a) The commissioner or county agency shall
use electronic verification as the primary method of income verification. If there is a
discrepancy between reported income and electronically verified income, an individual
may be required to submit additional verification. In addition, the commissioner shall
perform random audits to verify reported income and eligibility. The commissioner
may execute data sharing arrangements with the Department of Revenue and any other
governmental agency in order to perform income verification related to eligibility and
premium payment under the MinnesotaCare program.
    (b) In determining eligibility for MinnesotaCare, the commissioner shall require
applicants and enrollees seeking renewal of eligibility to verify both earned and unearned
income. The commissioner shall also require applicants and enrollees to submit the names
of their employers and a contact name with a telephone number for each employer for
purposes of verifying whether the applicant or enrollee, and any dependents, are eligible
for employer-subsidized coverage. Data collected is nonpublic data as defined in section
13.02, subdivision 9.

    Sec. 27. Minnesota Statutes 2006, section 256L.05, subdivision 3a, is amended to read:
    Subd. 3a. Renewal of eligibility. (a) Beginning January 1, 1999 July 1, 2007, an
enrollee's eligibility must be renewed every 12 months. The 12-month period begins in
the month after the month the application is approved.
    (b) Beginning October 1, 2004, an enrollee's eligibility must be renewed every
six months. The first six-month period of eligibility begins the month the application is
received by the commissioner. The effective date of coverage within the first six-month
period of eligibility is as provided in subdivision 3. Each new period of eligibility must
take into account any changes in circumstances that impact eligibility and premium
amount. An enrollee must provide all the information needed to redetermine eligibility by
the first day of the month that ends the eligibility period. The premium for the new period
of eligibility must be received as provided in section 256L.06 in order for eligibility to
continue.
    (c) For single adults and households with no children formerly enrolled in general
assistance medical care and enrolled in MinnesotaCare according to section 256D.03,
subdivision 3
, the first six-month period of eligibility begins the month the enrollee
submitted the application or renewal for general assistance medical care.
EFFECTIVE DATE.This section is effective July 1, 2007, or upon federal
approval, whichever is later.

    Sec. 28. Minnesota Statutes 2006, section 256L.07, subdivision 1, is amended to read:
    Subdivision 1. General requirements. (a) Children enrolled in the original
children's health plan as of September 30, 1992, children who enrolled in the
MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross incomes that are equal to or
less than 150 percent of the federal poverty guidelines are eligible without meeting
the requirements of subdivision 2 and the four-month requirement in subdivision 3, as
long as they maintain continuous coverage in the MinnesotaCare program or medical
assistance. Children who apply for MinnesotaCare on or after the implementation date
of the employer-subsidized health coverage program as described in Laws 1998, chapter
407, article 5, section 45, who have family gross incomes that are equal to or less than 150
percent of the federal poverty guidelines, must meet the requirements of subdivision 2 to
be eligible for MinnesotaCare.
    (b) Families enrolled in MinnesotaCare under section 256L.04, subdivision 1, whose
income increases above 275 percent of the federal poverty guidelines, are no longer
eligible for the program and shall be disenrolled by the commissioner. Beginning January
1, 2008, individuals enrolled in MinnesotaCare under section 256L.04, subdivision 7,
whose income increases above 175 200 percent of the federal poverty guidelines or 215
percent of the federal poverty guidelines on or after July 1, 2009, are no longer eligible for
the program and shall be disenrolled by the commissioner. For persons disenrolled under
this subdivision, MinnesotaCare coverage terminates the last day of the calendar month
following the month in which the commissioner determines that the income of a family or
individual exceeds program income limits.
    (c) (b) Notwithstanding paragraph (b) (a), children may remain enrolled in
MinnesotaCare if ten percent of their gross individual or gross family income as defined
in section 256L.01, subdivision 4, is less than the annual premium for a six-month
policy with a $500 deductible available through the Minnesota Comprehensive Health
Association. Children who are no longer eligible for MinnesotaCare under this clause shall
be given a 12-month notice period from the date that ineligibility is determined before
disenrollment. The premium for children remaining eligible under this clause shall be the
maximum premium determined under section 256L.15, subdivision 2, paragraph (b).
    (d) (c) Notwithstanding paragraphs (b) (a) and (c) (b), parents are not eligible for
MinnesotaCare if gross household income exceeds $25,000 for the six-month $50,000
for the twelve-month period of eligibility.
EFFECTIVE DATE.This section is effective July 1, 2007, or upon federal
approval, whichever is later.

    Sec. 29. Minnesota Statutes 2006, section 256L.07, subdivision 6, is amended to read:
    Subd. 6. Exception for certain adults. Single adults and households with
no children formerly enrolled in general assistance medical care and enrolled in
MinnesotaCare according to section 256D.03, subdivision 3, are eligible without meeting
the requirements of this section until six-month renewal.

    Sec. 30. Minnesota Statutes 2006, section 256L.09, subdivision 4, is amended to read:
    Subd. 4. Eligibility as Minnesota resident. (a) For purposes of this section, a
permanent Minnesota resident is a person who has demonstrated, through persuasive and
objective evidence, that the person is domiciled in the state and intends to live in the
state permanently.
    (b) To be eligible as a permanent resident, an applicant must demonstrate the
requisite intent to live in the state permanently by:
    (1) showing that the applicant maintains a residence at a verified address other than a
place of public accommodation, through the use of evidence of residence described in
section 256D.02, subdivision 12a, paragraph (b), clause (1) (2);
    (2) demonstrating that the applicant has been continuously domiciled in the state for
no less than 180 days immediately before the application; and
    (3) signing an affidavit declaring that (A) the applicant currently resides in the state
and intends to reside in the state permanently; and (B) the applicant did not come to the
state for the primary purpose of obtaining medical coverage or treatment.
    (c) A person who is temporarily absent from the state does not lose eligibility for
MinnesotaCare. "Temporarily absent from the state" means the person is out of the state
for a temporary purpose and intends to return when the purpose of the absence has been
accomplished. A person is not temporarily absent from the state if another state has
determined that the person is a resident for any purpose. If temporarily absent from the
state, the person must follow the requirements of the health plan in which the person is
enrolled to receive services.

    Sec. 31. Minnesota Statutes 2006, section 256L.11, subdivision 7, is amended to read:
    Subd. 7. Critical access dental providers. Effective for dental services provided
to MinnesotaCare enrollees on or after January 1, 2007, the commissioner shall increase
payment rates to dentists and dental clinics deemed by the commissioner to be critical
access providers under section 256B.76, paragraph (c), by 50 percent above the payment
rate that would otherwise be paid to the provider. The commissioner shall adjust the rates
paid on or after January 1, 2007, to pay the prepaid health plans under contract with the
commissioner amounts sufficient to reflect this rate increase. The prepaid health plan must
pass this rate increase to providers who have been identified by the commissioner as
critical access dental providers under section 256B.76, paragraph (c).

    Sec. 32. Minnesota Statutes 2006, section 256L.15, subdivision 1, is amended to read:
    Subdivision 1. Premium determination. (a) Families with children and individuals
shall pay a premium determined according to subdivision 2.
    (b) Pregnant women and children under age two are exempt from the provisions
of section 256L.06, subdivision 3, paragraph (b), clause (3), requiring disenrollment
for failure to pay premiums. For pregnant women, this exemption continues until the
first day of the month following the 60th day postpartum. Women who remain enrolled
during pregnancy or the postpartum period, despite nonpayment of premiums, shall be
disenrolled on the first of the month following the 60th day postpartum for the penalty
period that otherwise applies under section 256L.06, unless they begin paying premiums.
    (c) Members of the military and their families who meet the eligibility criteria
for MinnesotaCare upon eligibility approval made within 24 months following the end
of the member's tour of active duty shall have their premiums paid by the commissioner.
The effective date of coverage for an individual or family who meets the criteria of this
paragraph shall be the first day of the month following the month in which eligibility is
approved. This exemption applies for 12 months. This paragraph expires June 30, 2010.
EFFECTIVE DATE.This section is effective July 1, 2007, or upon federal
approval, whichever is later. The commissioner of human services shall notify the Office
of the Revisor of Statutes when federal approval is obtained.

    Sec. 33. Minnesota Statutes 2006, section 256L.15, subdivision 2, is amended to read:
    Subd. 2. Sliding fee scale; monthly gross individual or family income. (a) The
commissioner shall establish a sliding fee scale to determine the percentage of monthly
gross individual or family income that households at different income levels must pay
to obtain coverage through the MinnesotaCare program. The sliding fee scale must be
based on the enrollee's monthly gross individual or family income. The sliding fee scale
must contain separate tables based on enrollment of one, two, or three or more persons.
The sliding fee scale begins with a premium of 1.5 percent of monthly gross individual or
family income for individuals or families with incomes below the limits for the medical
assistance program for families and children in effect on January 1, 1999, and proceeds
through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent.
These percentages are matched to evenly spaced income steps ranging from the medical
assistance income limit for families and children in effect on January 1, 1999, to 275
percent of the federal poverty guidelines for the applicable family size, up to a family size
of five. The sliding fee scale for a family of five must be used for families of more than
five. Effective October 1, 2003, the commissioner shall increase each percentage by 0.5
percentage points for enrollees with income greater than 100 percent but not exceeding
200 percent of the federal poverty guidelines and shall increase each percentage by 1.0
percentage points for families and children with incomes greater than 200 percent of
the federal poverty guidelines. The sliding fee scale and percentages are not subject to
the provisions of chapter 14. If a family or individual reports increased income after
enrollment, premiums shall be adjusted at the time the change in income is reported.
    (b) Children in Families whose gross income is above 275 percent of the federal
poverty guidelines shall pay the maximum premium. The maximum premium is defined
as a base charge for one, two, or three or more enrollees so that if all MinnesotaCare
cases paid the maximum premium, the total revenue would equal the total cost of
MinnesotaCare medical coverage and administration. In this calculation, administrative
costs shall be assumed to equal ten percent of the total. The costs of medical coverage
for pregnant women and children under age two and the enrollees in these groups shall
be excluded from the total. The maximum premium for two enrollees shall be twice the
maximum premium for one, and the maximum premium for three or more enrollees shall
be three times the maximum premium for one.
    (c) After calculating the percentage of premium each enrollee shall pay under
paragraph (a), eight percent shall be added to the premium.
EFFECTIVE DATE.This section is effective July 1, 2007, or upon federal
approval, whichever is later.

    Sec. 34. Minnesota Statutes 2006, section 256L.15, subdivision 4, is amended to read:
    Subd. 4. Exception for transitioned adults. County agencies shall pay premiums
for single adults and households with no children formerly enrolled in general assistance
medical care and enrolled in MinnesotaCare according to section 256D.03, subdivision 3,
until six-month renewal. The county agency has the option of continuing to pay premiums
for these enrollees past the first six-month renewal period.
EFFECTIVE DATE.This section is effective July 1, 2007.

    Sec. 35. Minnesota Statutes 2006, section 256L.17, subdivision 2, is amended to read:
    Subd. 2. Limit on total assets. (a) Effective July 1, 2002, or upon federal approval,
whichever is later, in order to be eligible for the MinnesotaCare program, a household of
two or more persons must not own more than $20,000 in total net assets, and a household
of one person must not own more than $10,000 in total net assets.
    (b) For purposes of this subdivision, assets are determined according to section
256B.056, subdivision 3c, except that workers' compensation settlements received due to
a work-related injury shall not be considered.
    (c) State-funded MinnesotaCare is not available for applicants or enrollees who are
otherwise eligible for medical assistance but fail to verify assets. Enrollees who become
eligible for federally funded medical assistance shall be terminated from state-funded
MinnesotaCare and transferred to medical assistance.
EFFECTIVE DATE.This section is effective July 1, 2007, or upon federal
approval, whichever is later.

    Sec. 36. Minnesota Statutes 2006, section 256L.17, subdivision 7, is amended to read:
    Subd. 7. Exception for certain adults. Single adults and households with
no children formerly enrolled in general assistance medical care and enrolled in
MinnesotaCare according to section 256D.03, subdivision 3, are exempt from the
requirements of this section until six-month renewal.

    Sec. 37. HENNEPIN COUNTY PILOT PROJECT.
    The commissioner of human services shall support a pilot project in Hennepin
County to demonstrate the effectiveness of alternative strategies to redetermine eligibility
for certain recipient populations in the medical assistance program. The target populations
for the demonstration are persons who are eligible based upon disability or age, who have
chronic medical conditions, and who are expected to experience minimal change in income
or assets from month to month. The commissioner and the county shall analyze the issues
and strategies employed and the outcomes to determine reasonable efforts to streamline
eligibility statewide. The duration of the pilot project shall be no more than two years.
The commissioner shall apply for any federal waivers needed to implement this section.

    Sec. 38. PHARMACY REPORT ON DRA IMPACT.
    Subdivision 1. Fiscal impact of deficit reduction act. The commissioner of
human services shall report to the legislature by January 15, 2008, on the fiscal impact of
Deficit Reduction Act reforms on the Minnesota Medicaid pharmacy program, including
but not limited to:
    (1) overall cost reductions to the Minnesota Medicaid pharmacy program as a result
of the Deficit Reduction Act of 2005;
    (2) the impact of reforms on the federal upper limit on pharmacy reimbursement,
and the amount that the dispensing fee for multiple-source generic drugs would have to
be adjusted to offset any reductions resulting from federal upper limits implemented as a
result of the Deficit Reduction Act of 2005;
    (3) the change in federal rebates received from pharmaceutical manufacturers
as a result of Deficit Reduction Act reforms, and strategies that could be employed in
administering the Medicaid drug formulary to compensate for lost manufacturer rebates;
    (4) a comparison of published federal upper limits and state maximum allowable
cost (MAC) prices prior to and following implementation of the Deficit Reduction Act
federal upper limit reforms;
    (5) the number of participating pharmacies in the program as of January 1, 2007,
July 1, 2007, and November 1, 2007; and
    (6) the Minnesota Medicaid fee-for-service pharmacy program rate of generic
dispensing before and after state implementation of Deficit Reduction Act of 2005 generic
reimbursement reform.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 39. CHIROPRACTIC COVERAGE.
    The commissioner of human services, through the Health Services Policy
Committee established under Minnesota Statutes, section 256B.0625, subdivision 3c, and
using existing funding, shall study whether medical assistance coverage for chiropractic
services should be expanded to include initial and progress exams, and shall report
recommendations to the legislature by January 15, 2008.

    Sec. 40. IMPLEMENTATION.
    The commissioner of human services shall implement the amendments to Minnesota
Statutes, sections 256.969, subdivision 9; 256.969, subdivision 27; and 256B.199, on the
earliest date for which the Centers for Medicare and Medicaid Services grants approval.
The commissioner may alter the reporting date for Hennepin County and Hennepin
County Medical Center in Minnesota Statutes, section 256.969, subdivision 9, paragraph
(f), clause (2), to reflect the approved effective date.

    Sec. 41. REPEALER.
(a) Minnesota Statutes 2006, sections 256B.0625, subdivisions 5a, 5b, 5c, 5d, 5e, 5f,
5g, 5h, 5i, 5j, and 5k; and 256L.07, subdivision 2a, are repealed effective July 1, 2007.
(b) Minnesota Statutes 2006, sections 256.956, is repealed effective September
1, 2007.
(c) Minnesota Statutes 2006, section 256L.035, is repealed effective January 1, 2008.
(d) Minnesota Statutes 2006, section 256B.0631, subdivision 4, is repealed effective
January 1, 2009.

ARTICLE 6
CONTINUING CARE POLICY

    Section 1. Minnesota Statutes 2006, section 144A.351, is amended to read:
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 August 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. 2. Minnesota Statutes 2006, 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. Services and 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 and
as adjusted by any legislatively authorized cost of living adjustment. The county social
service agency may consider the dependent's supplemental security income in determining
the amount of the support grant.
    Any adjustments to their monthly grant amount must be based on the needs of the
family and funding availability.

    Sec. 3. Minnesota Statutes 2006, 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 available to individuals or families as an effective alternative
to 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.

    Sec. 4. Minnesota Statutes 2006, section 256.476, subdivision 2, is amended to read:
    Subd. 2. Definitions. For purposes of this section, the following terms have the
meanings given them:
    (a) "County board" means the county board of commissioners for the county of
financial responsibility as defined in section 256G.02, subdivision 4, or its designated
representative. When a human services board has been established under sections 402.01
to 402.10, it shall be considered the county board for the purposes of this section.
    (b) "Family" means the person's birth parents, adoptive parents or stepparents,
siblings or stepsiblings, children or stepchildren, grandparents, grandchildren, niece,
nephew, aunt, uncle, or spouse. For the purposes of this section, a family member is
at least 18 years of age.
    (c) "Functional limitations" means the long-term inability to perform an activity or
task in one or more areas of major life activity, including self-care, understanding and use
of language, learning, mobility, self-direction, and capacity for independent living. For the
purpose of this section, the inability to perform an activity or task results from a mental,
emotional, psychological, sensory, or physical disability, condition, or illness.
    (d) "Informed choice" means a voluntary decision made by the person or,
the person's legal representative, or other authorized representative after becoming
familiarized with the alternatives to:
    (1) select a preferred alternative from a number of feasible alternatives;
    (2) select an alternative which may be developed in the future; and
    (3) refuse any or all alternatives.
    (e) "Local agency" means the local agency authorized by the county board or,
for counties not participating in the consumer grant program by July 1, 2002, the
commissioner, to carry out the provisions of this section.
    (f) "Person" or "persons" means a person or persons meeting the eligibility criteria in
subdivision 3.
    (g) "Authorized representative" means an individual designated by the person or
their legal representative to act on their behalf. This individual may be a family member,
guardian, representative payee, or other individual designated by the person or their legal
representative, if any, to assist in purchasing and arranging for supports. For the purposes
of this section, an authorized representative is at least 18 years of age.
    (h) "Screening" means the screening of a person's service needs under sections
256B.0911 and 256B.092.
    (i) "Supports" means services, care, aids, environmental modifications, or assistance
purchased by the person or the person's family, the person's legal representative, or other
authorized representative. Examples of supports include respite care, assistance with daily
living, and assistive technology. For the purpose of this section, notwithstanding the
provisions of section 144A.43, supports purchased under the consumer support program
are not considered home care services.
    (j) "Program of origination" means the program the individual transferred from
when approved for the consumer support grant program.

    Sec. 5. Minnesota Statutes 2006, 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 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) 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. 6. Minnesota Statutes 2006, 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, a person's legal representative,
or other authorized representative 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, a person's legal representative,
or other authorized representative to delay or prevent out-of-home placement of the
person; and
    (4) it must be consistent with the needs identified in the service 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, a person's
legal representative, or other authorized representative. 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, a person's legal representative, or other authorized
representative shall be provided sufficient information to ensure an informed choice
of alternatives by the person, the person's legal representative, or other authorized
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. 7. Minnesota Statutes 2006, 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 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. 8. Minnesota Statutes 2006, section 256.476, subdivision 10, is amended to read:
    Subd. 10. Consumer responsibilities. Persons receiving grants under this section
shall:
    (1) spend the grant money in a manner consistent with their agreement with the
local agency;
    (2) notify the local agency of any necessary changes in the grant or the items on
which it is spent;
    (3) notify the local agency of any decision made by the person, the a person's legal
representative, or the person's family or other authorized representative that would change
their eligibility for consumer support grants;
    (4) arrange and pay for supports; and
    (5) inform the local agency of areas where they have experienced difficulty securing
or maintaining supports.

    Sec. 9. Minnesota Statutes 2006, section 256.974, is amended to read:
256.974 OFFICE OF OMBUDSMAN FOR OLDER MINNESOTANS
LONG-TERM CARE; LOCAL PROGRAMS.
    The ombudsman for older Minnesotans long-term care serves in the classified service
under section 256.01, subdivision 7, in an office within the Minnesota Board on Aging that
incorporates the long-term care ombudsman program required by the Older Americans
Act, Public Law 100-75 as amended, United States Code, title 42, section 3027(a)(12)
(9) and 3058g (a), and established within the Minnesota Board on Aging. The Minnesota
Board on Aging may make grants to and designate local programs for the provision of
ombudsman services to clients in county or multicounty areas. The local program may not
be an agency engaged in the provision of nursing home care, hospital care, or home care
services either directly or by contract, or have the responsibility for planning, coordinating,
funding, or administering nursing home care, hospital care, or home care services.

    Sec. 10. Minnesota Statutes 2006, section 256.9741, subdivision 1, is amended to read:
    Subdivision 1. Long-term care facility. "Long-term care facility" means a nursing
home licensed under sections 144A.02 to 144A.10 or; a boarding care home licensed
under sections 144.50 to 144.56; or a licensed or registered residential setting that provides
or arranges for the provision of home care services.

    Sec. 11. Minnesota Statutes 2006, section 256.9741, subdivision 3, is amended to read:
    Subd. 3. Client. "Client" means an individual who requests, or on whose behalf a
request is made for, ombudsman services and is (a) a resident of a long-term care facility
or (b) a Medicare beneficiary who requests assistance relating to access, discharge, or
denial of inpatient or outpatient services, or (c) an individual reserving, receiving, or
requesting a home care service.

    Sec. 12. Minnesota Statutes 2006, section 256.9742, subdivision 3, is amended to read:
    Subd. 3. Posting. Every long-term care facility and acute care facility shall post in a
conspicuous place the address and telephone number of the office. A home care service
provider shall provide all recipients, including those in elderly housing with services
under chapter 144D, with the address and telephone number of the office. Counties shall
provide clients receiving a consumer support grant or a service allowance long-term care
consultation services under section 256B.0911 or home and community-based services
through a state or federally funded program with the name, address, and telephone number
of the office. The posting or notice is subject to approval by the ombudsman.

    Sec. 13. Minnesota Statutes 2006, section 256.9742, subdivision 4, is amended to read:
    Subd. 4. Access to long-term care and acute care facilities and clients. The
ombudsman or designee may:
    (1) enter any long-term care facility without notice at any time;
    (2) enter any acute care facility without notice during normal business hours;
    (3) enter any acute care facility without notice at any time to interview a patient or
observe services being provided to the patient as part of an investigation of a matter that is
within the scope of the ombudsman's authority, but only if the ombudsman's or designee's
presence does not intrude upon the privacy of another patient or interfere with routine
hospital services provided to any patient in the facility;
    (4) communicate privately and without restriction with any client in accordance
with section 144.651, as long as the ombudsman has the client's consent for such
communication;
    (5) inspect records of a long-term care facility, home care service provider, or acute
care facility that pertain to the care of the client according to sections section 144.335 and
144.651; and
    (6) with the consent of a client or client's legal guardian, the ombudsman or
designated staff shall have access to review records pertaining to the care of the client
according to sections section 144.335 and 144.651. If a client cannot consent and has no
legal guardian, access to the records is authorized by this section.
    A person who denies access to the ombudsman or designee in violation of this
subdivision or aids, abets, invites, compels, or coerces another to do so is guilty of a
misdemeanor.

    Sec. 14. Minnesota Statutes 2006, section 256.9742, subdivision 6, is amended to read:
    Subd. 6. Prohibition against discrimination or retaliation. (a) No entity shall take
discriminatory, disciplinary, or retaliatory action against an employee or volunteer, or a
patient, resident, or guardian or family member of a patient, resident, or guardian for filing
in good faith a complaint with or providing information to the ombudsman or designee
including volunteers. A person who violates this subdivision or who aids, abets, invites,
compels, or coerces another to do so is guilty of a misdemeanor.
    (b) There shall be a rebuttable presumption that any adverse action, as defined below,
within 90 days of report, is discriminatory, disciplinary, or retaliatory. For the purpose
of this clause, the term "adverse action" refers to action taken by the entity involved in a
report against the person making the report or the person with respect to whom the report
was made because of the report, and includes, but is not limited to:
    (1) discharge or transfer from a facility;
    (2) termination of service;
    (3) restriction or prohibition of access to the facility or its residents;
    (4) discharge from or termination of employment;
    (5) demotion or reduction in remuneration for services; and
    (6) any restriction of rights set forth in section 144.651 or, 144A.44, or 144A.751.

    Sec. 15. Minnesota Statutes 2006, section 256.9744, subdivision 1, is amended to read:
    Subdivision 1. Classification. Except as provided in this section, data maintained
by the office under sections 256.974 to 256.9744 are private data on individuals or
nonpublic data as defined in section 13.02, subdivision 9 or 12, and must be maintained
in accordance with the requirements of Public Law 100-75 the Older Americans Act, as
amended, United States Code, title 42, section 3027(a)(12)(D) 3058g(d).

    Sec. 16. Minnesota Statutes 2006, section 256.975, is amended by adding a subdivision
to read:
    Subd. 2a. Electronic meetings. (a) Notwithstanding section 13D.01, the Minnesota
Board on Aging may conduct a meeting of its members by telephone or other electronic
means so long as the following conditions are met:
    (1) all members of the board participating in the meeting, wherever their physical
location, can hear one another and can hear all discussion and testimony;
    (2) members of the public present at the regular meeting location of the board can
hear all discussion and testimony and all votes of members of the board;
    (3) at least one member of the board is physically present at the regular meeting
location; and
    (4) all votes are conducted by roll call, so that each member's vote on each issue
can be identified and recorded.
    (b) Each member of the board participating in a meeting by telephone or other
electronic means is considered present at the meeting for purposes of determining a
quorum and participating in all proceedings.
    (c) If telephone or other electronic means is used to conduct a meeting, the board,
to the extent practical, shall allow a person to monitor the meeting electronically from
a remote location. The board may require the person making a connection to pay for
documented marginal costs that the board incurs as a result of the additional connection.
    (d) If telephone or other electronic means is used to conduct a regular, special, or
emergency meeting, the board shall provide notice of the regular meeting location, of the
fact that some members may participate by telephone or other electronic means, and of
the provisions of paragraph (c). The timing and method of providing notice is governed
by section 13D.04.

    Sec. 17. Minnesota Statutes 2006, section 256B.0621, subdivision 11, is amended to
read:
    Subd. 11. Data use agreement; Notice of relocation assistance. The commissioner
shall execute a data use agreement with the Centers for Medicare and Medicaid Services
to obtain the long-term care minimum data set data to assist residents of nursing facilities
who have establish a process with the Centers for Independent Living that allows a person
residing in a Minnesota nursing facility to receive needed information, consultation, and
assistance from one of the centers about the available community support options that may
enable the person to relocate to the community, if the person: (1) is under the age of 65,
(2) has indicated a desire to live in the community. The commissioner shall in turn enter
into agreements with the Centers for Independent Living to provide information about
assistance for persons who want to move to the community. The commissioner shall work
with the Centers for Independent Living on both the content of the information to be
provided and privacy protections for the individual residents, and (3) has signed a release
of information authorized by the person or the person's appointed legal representative.
The process established under this subdivision shall be coordinated with the long-term
care consultation service activities established in section 256B.0911.

    Sec. 18. Minnesota Statutes 2006, 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. Notwithstanding
Minnesota Rules, part 9505.0323, subpart 15, effective July 1, 2004, medical assistance
covers day treatment services for children as specified under section 256B.0943.

    Sec. 19. Minnesota Statutes 2006, section 256B.0655, subdivision 1f, is amended to
read:
    Subd. 1f. Personal care assistant. (a) "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 E paragraph (b);
    (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;
    (6) maintains daily written records detailing:
    (i) the actual services provided to the recipient; and
    (ii) the amount of time spent providing the services; and
    (7) is subject to criminal background checks and procedures specified in chapter
245C.
    (b) Personal care assistant training must include successful completion of one or
more training requirements in:
    (1) a nursing assistant training program or its equivalent for which competency as a
nursing assistant is determined according to a test administered by the Minnesota State
Board of Technical Colleges;
    (2) a homemaker home health aide preservice training program using a curriculum
recommended by the Department of Health;
    (3) an accredited educational program for registered nurses or licensed practical
nurses;
    (4) a training program that provides the assistant with skills required to perform
personal care assistant services specified in subdivision 2; or
    (5) a determination by the personal care provider that the assistant has, through
training or experience, the skills required to perform the personal care services specified in
subdivision 2.

    Sec. 20. Minnesota Statutes 2006, section 256B.0655, is amended by adding a
subdivision to read:
    Subd. 11. Personal care provider responsibilities. The personal care provider
shall:
    (1) employ or contract with services staff to provide personal care services and to
train services staff as necessary;
    (2) supervise the personal care services as provided in subdivision 2, paragraph (f);
    (3) employ a personal care assistant that a qualified recipient brings to the personal
care provider as the recipient's choice of assistant and who meets the employment
qualifications of the provider, except that a personal care provider who must comply with
the requirements of a governmental personnel administration system is exempt from
this clause;
    (4) bill the medical assistance program for a personal care service by the personal
care assistant and a visit by the qualified professional supervising the personal care
assistant;
    (5) establish a grievance mechanism to resolve consumer complaints about personal
care services, including the personal care provider's decision whether to employ the
qualified recipient's choice of a personal care assistant;
    (6) keep records as required in Minnesota Rules, parts 9505.2160 to 9505.2195;
    (7) perform functions and provide services specified in the personal care provider's
contract;
    (8) comply with applicable rules and statutes; and
    (9) perform other functions as necessary to carry out the responsibilities in clauses
(1) to (8).

    Sec. 21. Minnesota Statutes 2006, section 256B.0655, is amended by adding a
subdivision to read:
    Subd. 12. Personal care provider; employment prohibition. A personal care
provider shall not employ a person to provide personal care service for a qualified
recipient if the person:
    (1) refuses to provide full disclosure of criminal history records as specified in
subdivision 1g, clause (1);
    (2) has been convicted of a crime that directly relates to the occupation of providing
personal care services to a qualified recipient;
    (3) has jeopardized the health or welfare of a vulnerable adult through physical
abuse, sexual abuse, or neglect as defined in section 626.557; or
    (4) is misusing or is dependent on mood-altering chemicals, including alcohol, to
the extent that the personal care provider knows or has reason to believe that the use of
chemicals has a negative effect on the person's ability to provide personal care services
or the use of chemicals is apparent during the hours the person is providing personal
care services.

    Sec. 22. Minnesota Statutes 2006, section 256B.0655, is amended by adding a
subdivision to read:
    Subd. 13. Supervision of personal care services. A personal care service to a
qualified recipient as described in subdivision 4 shall be under the supervision of a
qualified professional who shall have the following duties:
    (1) ensure that the personal care assistant is capable of providing the required
personal care services through direct observation of the assistant's work or through
consultation with the qualified recipient;
    (2) ensure that the personal care assistant is knowledgeable about the plan of
personal care services before the personal care assistant performs personal care services;
    (3) ensure that the personal care assistant is knowledgeable about essential
observations of the recipient's health, and about any conditions that should be immediately
brought to the attention of either the qualified professional or the attending physician;
    (4) evaluate the personal care services of a recipient through direct observation of
the personal care assistant's work or through consultation with the qualified recipient.
Evaluation shall be made:
    (i) within 14 days after the placement of a personal care assistant with the qualified
recipient;
    (ii) at least once every 30 days during the first 90 days after the qualified recipient
first receives personal care services according to the plan of personal care service; and
    (iii) at least once every 120 days following the period of evaluations in item (ii). The
qualified professional shall record in writing the results of the evaluation and actions taken
to correct any deficiencies in the work of the personal care assistant;
    (5) review, together with the recipient, and revise, as necessary, the plan of
personal care services at least once every 120 days after a plan of personal care services
is developed;
    (6) ensure that the personal care assistant and recipient are knowledgeable about a
change in the plan of personal care services;
    (7) ensure that records are kept, showing the services provided to the recipient
by the personal care assistant as described in subdivision 2, paragraph (f), and the time
spent providing the services;
    (8) determine that a qualified recipient is still capable of directing the recipient's
own care or has a responsible party; and
    (9) determine with a physician that a recipient is a qualified recipient.

    Sec. 23. Minnesota Statutes 2006, section 256B.0911, subdivision 3b, is amended to
read:
    Subd. 3b. Transition assistance. (a) A long-term care consultation team shall
provide assistance to persons residing in a nursing facility, hospital, regional treatment
center, or intermediate care facility for persons with developmental disabilities who
request or are referred for assistance. Transition assistance must include assessment,
community support plan development, referrals to Minnesota health care programs,
and referrals to programs that provide assistance with housing. Transition assistance
must also include information about the Centers for Independent Living and about other
organizations that can provide assistance with relocation efforts, and information about
contacting these organizations to obtain their assistance and support.
    (b) The county shall develop transition processes with institutional social workers
and discharge planners to ensure that:
    (1) persons admitted to facilities receive information about transition assistance
that is available;
    (2) the assessment is completed for persons within ten working days of the date of
request or recommendation for assessment; and
    (3) there is a plan for transition and follow-up for the individual's return to the
community. The plan must require notification of other local agencies when a person
who may require assistance is screened by one county for admission to a facility located
in another county.
    (c) If a person who is eligible for a Minnesota health care program is admitted to a
nursing facility, the nursing facility must include a consultation team member or the case
manager in the discharge planning process.

    Sec. 24. Minnesota Statutes 2006, section 256B.0911, subdivision 4b, is amended to
read:
    Subd. 4b. Exemptions and emergency admissions. (a) Exemptions from the
federal screening requirements outlined in subdivision 4a, paragraphs (b) and (c), are
limited to:
    (1) a person who, having entered an acute care facility from a certified nursing
facility, is returning to a certified nursing facility;
    (2) a person transferring from one certified nursing facility in Minnesota to another
certified nursing facility in Minnesota; and
    (3) a person, 21 years of age or older, who satisfies the following criteria, as specified
in Code of Federal Regulations, title 42, section 483.106(b)(2):
    (i) the person is admitted to a nursing facility directly from a hospital after receiving
acute inpatient care at the hospital;
    (ii) the person requires nursing facility services for the same condition for which
care was provided in the hospital; and
    (iii) the attending physician has certified before the nursing facility admission that
the person is likely to receive less than 30 days of nursing facility services.
    (b) Persons who are exempt from preadmission screening for purposes of level of
care determination include:
    (1) persons described in paragraph (a);
    (2) an individual who has a contractual right to have nursing facility care paid for
indefinitely by the veterans' administration;
    (3) an individual enrolled in a demonstration project under section 256B.69,
subdivision 8
, at the time of application to a nursing facility; and
    (4) an individual currently being served under the alternative care program or under
a home and community-based services waiver authorized under section 1915(c) of the
federal Social Security Act; and.
    (5) individuals admitted to a certified nursing facility for a short-term stay, which
is expected to be 14 days or less in duration based upon a physician's certification, and
who have been assessed and approved for nursing facility admission within the previous
six months. This exemption applies only if the consultation team member determines at
the time of the initial assessment of the six-month period that it is appropriate to use the
nursing facility for short-term stays and that there is an adequate plan of care for return to
the home or community-based setting. If a stay exceeds 14 days, the individual must be
referred no later than the first county working day following the 14th resident day for a
screening, which must be completed within five working days of the referral. The payment
limitations in subdivision 7 apply to an individual found at screening to not meet the level
of care criteria for admission to a certified nursing facility.
    (c) Persons admitted to a Medicaid-certified nursing facility from the community
on an emergency basis as described in paragraph (d) or from an acute care facility on a
nonworking day must be screened the first working day after admission.
    (d) Emergency admission to a nursing facility prior to screening is permitted when
all of the following conditions are met:
    (1) a person is admitted from the community to a certified nursing or certified
boarding care facility during county nonworking hours;
    (2) a physician has determined that delaying admission until preadmission screening
is completed would adversely affect the person's health and safety;
    (3) there is a recent precipitating event that precludes the client from living safely in
the community, such as sustaining an injury, sudden onset of acute illness, or a caregiver's
inability to continue to provide care;
    (4) the attending physician has authorized the emergency placement and has
documented the reason that the emergency placement is recommended; and
    (5) the county is contacted on the first working day following the emergency
admission.
Transfer of a patient from an acute care hospital to a nursing facility is not considered
an emergency except for a person who has received hospital services in the following
situations: hospital admission for observation, care in an emergency room without hospital
admission, or following hospital 24-hour bed care.
    (e) A nursing facility must provide a written notice to persons who satisfy the criteria
in paragraph (a), clause (3), information to all persons admitted regarding the person's
right to request and receive long-term care consultation services as defined in subdivision
1a. The notice information must be provided prior to the person's discharge from the
facility and in a format specified by the commissioner.

    Sec. 25. Minnesota Statutes 2006, section 256B.0911, subdivision 4c, is amended to
read:
    Subd. 4c. Screening requirements. (a) A person may be screened for nursing
facility admission by telephone or in a face-to-face screening interview. Consultation team
members shall identify each individual's needs using the following categories:
    (1) the person needs no face-to-face screening interview to determine the need
for nursing facility level of care based on information obtained from other health care
professionals;
    (2) the person needs an immediate face-to-face screening interview to determine the
need for nursing facility level of care and complete activities required under subdivision
4a; or
    (3) the person may be exempt from screening requirements as outlined in subdivision
4b, but will need transitional assistance after admission or in-person follow-along after
a return home.
    (b) Persons admitted on a nonemergency basis to a Medicaid-certified nursing
facility must be screened prior to admission.
    (c) The long-term care consultation team shall recommend a case mix classification
for persons admitted to a certified nursing facility when sufficient information is received
to make that classification. The nursing facility is authorized to conduct all case mix
assessments for persons who have been screened prior to admission for whom the county
did not recommend a case mix classification. The nursing facility is authorized to conduct
all case mix assessments for persons admitted to the facility prior to a preadmission
screening. The county retains the responsibility of distributing appropriate case mix
forms to the nursing facility.
    (d) (c) The county screening or intake activity must include processes to identify
persons who may require transition assistance as described in subdivision 3b.

    Sec. 26. Minnesota Statutes 2006, section 256B.0911, subdivision 6, is amended to
read:
    Subd. 6. Payment for long-term care consultation services. (a) The total payment
for each county must be paid monthly by certified nursing facilities in the county. The
monthly amount to be paid by each nursing facility for each fiscal year must be determined
by dividing the county's annual allocation for long-term care consultation services by 12
to determine the monthly payment and allocating the monthly payment to each nursing
facility based on the number of licensed beds in the nursing facility. Payments to counties
in which there is no certified nursing facility must be made by increasing the payment
rate of the two facilities located nearest to the county seat.
    (b) The commissioner shall include the total annual payment determined under
paragraph (a) for each nursing facility reimbursed under section 256B.431 or 256B.434
according to section 256B.431, subdivision 2b, paragraph (g), or 256B.435.
    (c) In the event of the layaway, delicensure and decertification, or removal from
layaway of 25 percent or more of the beds in a facility, the commissioner may adjust
the per diem payment amount in paragraph (b) and may adjust the monthly payment
amount in paragraph (a). The effective date of an adjustment made under this paragraph
shall be on or after the first day of the month following the effective date of the layaway,
delicensure and decertification, or removal from layaway.
    (d) Payments for long-term care consultation services are available to the county
or counties to cover staff salaries and expenses to provide the services described in
subdivision 1a. The county shall employ, or contract with other agencies to employ, within
the limits of available funding, sufficient personnel to provide long-term care consultation
services while meeting the state's long-term care outcomes and objectives as defined in
section 256B.0917, subdivision 1. The county shall be accountable for meeting local
objectives as approved by the commissioner in the biennial home and community-based
services quality assurance plan on a form provided by the commissioner.
    (e) Notwithstanding section 256B.0641, overpayments attributable to payment of the
screening costs under the medical assistance program may not be recovered from a facility.
    (f) The commissioner of human services shall amend the Minnesota medical
assistance plan to include reimbursement for the local consultation teams.
    (g) The county may bill, as case management services, assessments, support
planning, and follow-along provided to persons determined to be eligible for case
management under Minnesota health care programs. No individual or family member
shall be charged for an initial assessment or initial support plan development provided
under subdivision 3a or 3b.

    Sec. 27. Minnesota Statutes 2006, section 256B.0911, is amended by adding a
subdivision to read:
    Subd. 6a. Withholding. If any provider obligated to pay the long-term care
consultation amount as described in subdivision 6 is more than two months delinquent in
the timely payment of the monthly installment, the commissioner may withhold payments,
penalties, and interest in accordance with the methods outlined in section 256.9657,
subdivision 7a. Any amount withheld under this provision must be returned to the county
to whom the delinquent payments were due.

    Sec. 28. Minnesota Statutes 2006, section 256B.0911, subdivision 7, is amended to
read:
    Subd. 7. Reimbursement for certified nursing facilities. (a) Medical assistance
reimbursement for nursing facilities shall be authorized for a medical assistance recipient
only if a preadmission screening has been conducted prior to admission or the county has
authorized an exemption. Medical assistance reimbursement for nursing facilities shall
not be provided for any recipient who the local screener has determined does not meet the
level of care criteria for nursing facility placement or, if indicated, has not had a level II
OBRA evaluation as required under the federal Omnibus Budget Reconciliation Act of
1987 completed unless an admission for a recipient with mental illness is approved by the
local mental health authority or an admission for a recipient with developmental disability
is approved by the state developmental disability authority.
    (b) The nursing facility must not bill a person who is not a medical assistance
recipient for resident days that preceded the date of completion of screening activities as
required under subdivisions 4a, 4b, and 4c. The nursing facility must include unreimbursed
resident days in the nursing facility resident day totals reported to the commissioner.
    (c) The commissioner shall make a request to the Centers for Medicare and Medicaid
Services for a waiver allowing team approval of Medicaid payments for certified nursing
facility care. An individual has a choice and makes the final decision between nursing
facility placement and community placement after the screening team's recommendation,
except as provided in subdivision 4a, paragraph (c).

    Sec. 29. Minnesota Statutes 2006, 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 135 days of admission
to a nursing facility;
    (4) the person is not ineligible for the payment of long-term care services by the
medical assistance program due to an asset transfer penalty under section 256B.0595 or
equity interest in the home exceeding $500,000 as stated in section 256B.056;
    (5) the person needs long-term care services that are not funded through other state
or federal funding;
    (6) the monthly cost of the alternative care services funded by the program for
this person does not exceed 75 percent of the 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 care-related supplies and
equipment or environmental modifications and adaptations 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 lead agency to ensure prompt fee
payments.
    The county shall lead agency may 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, alternative care funds may not be used to pay for any service the cost of which:
(i) is payable by medical assistance; (ii) is used by a recipient to meet a 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 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 fiscal
year for which alternative care eligibility is determined, who would be eligible for the
elderly waiver with a waiver obligation.

    Sec. 30. Minnesota Statutes 2006, section 256B.0913, subdivision 5, is amended to
read:
    Subd. 5. Services covered under alternative care. Alternative care funding may
be used for payment of costs of:
    (1) adult day care;
    (2) home health aide;
    (3) homemaker services;
    (4) personal care;
    (5) case management;
    (6) respite care;
    (7) care-related supplies and equipment;
    (8) meals delivered to the home;
    (9) nonmedical transportation;
    (10) nursing services;
    (11) chore services;
    (12) companion services;
    (13) nutrition services;
    (14) training for direct informal caregivers;
    (15) telehome care to provide services in their own homes in conjunction with
in-home visits;
    (16) discretionary 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 consumer-directed
community services under the alternative care programs which 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;
    (17) environmental modifications and adaptations; and
    (18) 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 discretionary services, for which lead agencies may make payment from
their alternative care program allocation for services not otherwise defined in this section
or section 256B.0625, following approval by the commissioner.
    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 served by a lead agency must not exceed 25 percent of
that county's lead agency'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.

    Sec. 31. Minnesota Statutes 2006, section 256B.0913, subdivision 5a, is amended to
read:
    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 alternative care does not cover transitional
support services, assisted living services, adult foster care services, and residential care
services and benefits defined under section 256B.0625 that meet primary and acute
health care needs.
    (b) The county lead agency must ensure that the funds are not used to supplant
or supplement services available through other public assistance or services programs.,
including supplementation of client co-pays, deductibles, premiums, or other cost-sharing
arrangements for health-related benefits and services or entitlement programs and services
that are available to the person, but in which they have elected not to enroll. 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
lead 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 lead 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 lead agency 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.

    Sec. 32. Minnesota Statutes 2006, 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 lead agency shall be held harmless for damages or
injuries sustained through the use of volunteers under this subdivision including workers'
compensation liability. The county of service case manager 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 any county; however, the county or tribe 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) The county of service or tribe must provide access to and arrange for case
management services, including assuring implementation of the plan. "County of service"
has the meaning given it in Minnesota Rules, part 9505.0015, subpart 11. The county of
service must notify the county of financial responsibility of the approved care plan and
the amount of encumbered funds.

    Sec. 33. Minnesota Statutes 2006, section 256B.0913, subdivision 9, is amended to
read:
    Subd. 9. Contracting provisions for providers. Alternative care funds paid to
service providers are subject to audit by the commissioner for fiscal and utilization control.
    The lead agency must select providers for contracts or agreements using the
following criteria and other criteria established by the county lead agency:
    (1) the need for the particular services offered by the provider;
    (2) the population to be served, including the number of clients, the length of time
services will be provided, and the medical condition of clients;
    (3) the geographic area to be served;
    (4) quality assurance methods, including appropriate licensure, certification, or
standards, and supervision of employees when needed;
    (5) rates for each service and unit of service exclusive of county lead agency
administrative costs;
    (6) evaluation of services previously delivered by the provider; and
    (7) contract or agreement conditions, including billing requirements, cancellation,
and indemnification.
    The county lead agency must evaluate its own agency services under the criteria
established for other providers.

    Sec. 34. Minnesota Statutes 2006, 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 15 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 lead agency is the county's lead agency'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 lead agency, 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 lead agency'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 lead agency'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 lead agency allocations for a biennium, the
commissioner shall distribute to each county lead agency the entire annual appropriation
as that county's lead agency'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. 35. Minnesota Statutes 2006, section 256B.0913, subdivision 11, is amended to
read:
    Subd. 11. Targeted funding. (a) The purpose of targeted funding is to make
additional money available to counties lead agencies with the greatest need. Targeted
funds are not intended to be distributed equitably among all counties lead agencies, but
rather, allocated to those with long-term care strategies that meet state goals.
    (b) The funds available for targeted funding shall be the total appropriation for each
fiscal year minus county lead agency allocations determined under subdivision 10 as
adjusted for any inflation increases provided in appropriations for the biennium.
    (c) The commissioner shall allocate targeted funds to counties lead agencies that
demonstrate to the satisfaction of the commissioner that they have developed feasible
plans to increase alternative care spending. In making targeted funding allocations, the
commissioner shall use the following priorities:
    (1) counties lead agencies that received a lower allocation in fiscal year 1991 than in
fiscal year 1990. Counties remain in this priority until they have been restored to their
fiscal year 1990 level plus inflation;
    (2) counties lead agencies that sustain a base allocation reduction for failure to spend
95 percent of the allocation if they demonstrate that the base reduction should be restored;
    (3) counties lead agencies that propose projects to divert community residents from
nursing home placement or convert nursing home residents to community living; and
    (4) counties lead agencies that can otherwise justify program growth by
demonstrating the existence of waiting lists, demographically justified needs, or other
unmet needs.
    (d) Counties Lead agencies that would receive targeted funds according to
paragraph (c) must demonstrate to the commissioner's satisfaction that the funds
would be appropriately spent by showing how the funds would be used to further the
state's alternative care goals as described in subdivision 1, and that the county has the
administrative and service delivery capability to use them.
    (e) The commissioner shall request applications make applications available for
targeted funds by November 1 of each year. The counties lead agencies selected for
targeted funds shall be notified of the amount of their additional funding. Targeted funds
allocated to a county lead agency in one year shall be treated as part of the county's lead
agency's base allocation for that year in determining allocations for subsequent years. No
reallocations between counties lead agencies shall be made.

    Sec. 36. Minnesota Statutes 2006, section 256B.0913, subdivision 12, is amended to
read:
    Subd. 12. Client fees. (a) A fee is required for all alternative care eligible clients
to help pay for the cost of participating in the program. The amount of the 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 less than 100 percent of the federal poverty guideline effective on July 1 of
the state fiscal year in which the 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 fee is being
computed, and total assets are less than $10,000, the fee is five percent of the cost of
alternative care services;
    (3) when the alternative care client's 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 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 shall be included in the estimated costs for the purpose
of determining the fee.
    Fees are due and payable each month alternative care services are received unless the
actual cost of the services is less than the 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 married couple is requesting an asset assessment under the spousal
impoverishment provisions;
    (3) a person is found eligible for alternative care, but is not yet receiving alternative
care services including case management services; or
    (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 fee amount or the reason the fee has been waived. The commissioner will bill
and collect the 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 lead agency with the client's Social Security number at the time of
application. The county lead agency shall supply the commissioner with the client's Social
Security number and other information the commissioner requires to collect the fee from
the client. The commissioner shall collect unpaid fees using the Revenue Recapture Act in
chapter 270A and other methods available to the commissioner. The commissioner may
require counties lead agencies to inform clients of the collection procedures that may be
used by the state if a 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 fees billed to clients;
    (2) total collections of fees billed; and
    (3) balance of fees owed by clients.
If a county lead agency 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 lead agency involved to operate under the procedures set forth in this paragraph.

    Sec. 37. Minnesota Statutes 2006, section 256B.0913, subdivision 13, is amended to
read:
    Subd. 13. County Lead agency biennial plan. The county lead agency biennial
plan for long-term care consultation services under section 256B.0911, the alternative
care program under this section, and waivers for the elderly under section 256B.0915,
shall be submitted by the lead agency as the home and community-based services quality
assurance plan on a form provided by the commissioner.

    Sec. 38. Minnesota Statutes 2006, section 256B.0913, subdivision 14, is amended to
read:
    Subd. 14. Provider requirements, payment, and rate adjustments. (a) Unless
otherwise specified in statute, providers must be enrolled as Minnesota health care
program providers and abide by the requirements for provider participation according to
Minnesota Rules, part 9505.0195.
    (b) Payment for provided alternative care services as approved by the client's
case manager shall occur through the invoice processing procedures of the department's
Medicaid Management Information System (MMIS). To receive payment, the county lead
agency or vendor must submit invoices within 12 months following the date of service.
The county lead agency and its vendors under contract shall not be reimbursed for services
which exceed the county allocation.
    (c) The county lead agency shall negotiate individual rates with vendors and may
authorize service payment for actual costs up to the county's current approved rate.
Notwithstanding any other rule or statutory provision to the contrary, the commissioner
shall not be authorized to increase rates by an annual inflation factor, unless so authorized
by the legislature. To improve access to community services and eliminate payment
disparities between the alternative care program and the elderly waiver program, the
commissioner shall establish statewide maximum service rate limits and eliminate
county-specific service rate limits.
    (1) Effective July 1, 2001, for service rate limits, except those in subdivision 5,
paragraphs (d) and (i), 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) Counties Lead agencies may negotiate individual service rates with vendors for
actual costs up to the statewide maximum service rate limit.

    Sec. 39. Minnesota Statutes 2006, section 256B.0919, subdivision 3, is amended to
read:
    Subd. 3. County certification of persons providing adult foster care to related
persons. A person exempt from licensure under section 245A.03, subdivision 2, who
provides adult foster care to a related individual age 65 and older, and who meets the
requirements in Minnesota Rules, parts 9555.5105 to 9555.6265, may be certified by the
county to provide adult foster care. A person certified by the county to provide adult foster
care may be reimbursed for services provided and eligible for funding under sections
256B.0913 and section 256B.0915, if the relative would suffer a financial hardship as
a result of providing care. For purposes of this subdivision, financial hardship refers
to a situation in which a relative incurs a substantial reduction in income as a result of
resigning from a full-time job or taking a leave of absence without pay from a full-time
job to care for the client.

    Sec. 40. Minnesota Statutes 2006, section 256B.27, subdivision 2a, is amended to read:
    Subd. 2a. On-site Cost and statistical data audits. Each year The commissioner
shall provide for the on-site an audit of the cost reports and statistical data of nursing homes
facilities participating as vendors of medical assistance. The commissioner shall select for
audit at least 15 percent of these the nursing homes facilities' data reported at random or
using factors including, but not limited to: data reported to the public as criteria for rating
nursing facilities; data used to set limits for other medical assistance programs or vendors
of services to nursing facilities; change in ownership; frequent changes in administration
in excess of normal turnover rates; complaints to the commissioner of health about care,
safety, or rights; where previous inspections or reinspections under section 144A.10 have
resulted in correction orders related to care, safety, or rights; or where persons involved in
ownership or administration of the facility have been indicted for alleged criminal activity.
    The commissioner shall meet the 15 percent requirement by either conducting an
audit focused on an individual nursing facility, a group of facilities, or targeting specific
data categories in multiple nursing facilities. These audits may be conducted on site
at the nursing facility, at office space used by a nursing facility or a nursing facility's
parent organization, or at the commissioner's office. Data being audited may be collected
electronically, in person, or by any other means the commissioner finds acceptable.

    Sec. 41. Minnesota Statutes 2006, section 256B.431, subdivision 1, is amended to read:
    Subdivision 1. In general. The commissioner shall determine prospective
payment rates for resident care costs. For rates established on or after July 1, 1985, the
commissioner shall develop procedures for determining operating cost payment rates that
take into account the mix of resident needs, geographic location, and other factors as
determined by the commissioner. The commissioner shall consider whether the fact that a
facility is attached to a hospital or has an average length of stay of 180 days or less should
be taken into account in determining rates. The commissioner shall consider the use of the
standard metropolitan statistical areas when developing groups by geographic location.
The commissioner shall provide notice to each nursing facility on or before May 1 August
15 of the rates effective for the following rate year except that if legislation is pending on
May 1 August 15 that may affect rates for nursing facilities, the commissioner shall set the
rates after the legislation is enacted and provide notice to each facility as soon as possible.
    Compensation for top management personnel shall continue to be categorized as a
general and administrative cost and is subject to any limits imposed on that cost category.

    Sec. 42. Minnesota Statutes 2006, section 256B.431, subdivision 3f, is amended to
read:
    Subd. 3f. Property costs after July 1, 1988. (a) Investment per bed limit. For the
rate year beginning July 1, 1988, the replacement-cost-new per bed limit must be $32,571
per licensed bed in multiple bedrooms and $48,857 per licensed bed in a single bedroom.
For the rate year beginning July 1, 1989, the replacement-cost-new per bed limit for a
single bedroom must be $49,907 adjusted according to Minnesota Rules, part 9549.0060,
subpart 4, item A, subitem (1). Beginning January 1, 1990, the replacement-cost-new per
bed limits must be adjusted annually as specified in Minnesota Rules, part 9549.0060,
subpart 4, item A, subitem (1). Beginning January 1, 1991, the replacement-cost-new per
bed limits will be adjusted annually as specified in Minnesota Rules, part 9549.0060,
subpart 4, item A, subitem (1), except that the index utilized will be the Bureau of the
Census: Composite fixed-weighted price index as published in the C30 Report, Value
of New Construction Put in Place Economic Analysis: Price Indexes for Private Fixed
Investments in Structures; Special Care.
    (b) Rental factor. For the rate year beginning July 1, 1988, the commissioner shall
increase the rental factor as established in Minnesota Rules, part 9549.0060, subpart 8,
item A, by 6.2 percent rounded to the nearest 100th percent for the purpose of reimbursing
nursing facilities for soft costs and entrepreneurial profits not included in the cost valuation
services used by the state's contracted appraisers. For rate years beginning on or after July
1, 1989, the rental factor is the amount determined under this paragraph for the rate year
beginning July 1, 1988.
    (c) Occupancy factor. For rate years beginning on or after July 1, 1988, in order
to determine property-related payment rates under Minnesota Rules, part 9549.0060,
for all nursing facilities except those whose average length of stay in a skilled level of
care within a nursing facility is 180 days or less, the commissioner shall use 95 percent
of capacity days. For a nursing facility whose average length of stay in a skilled level of
care within a nursing facility is 180 days or less, the commissioner shall use the greater of
resident days or 80 percent of capacity days but in no event shall the divisor exceed 95
percent of capacity days.
    (d) Equipment allowance. For rate years beginning on July 1, 1988, and July 1,
1989, the commissioner shall add ten cents per resident per day to each nursing facility's
property-related payment rate. The ten-cent property-related payment rate increase is not
cumulative from rate year to rate year. For the rate year beginning July 1, 1990, the
commissioner shall increase each nursing facility's equipment allowance as established
in Minnesota Rules, part 9549.0060, subpart 10, by ten cents per resident per day. For
rate years beginning on or after July 1, 1991, the adjusted equipment allowance must be
adjusted annually for inflation as in Minnesota Rules, part 9549.0060, subpart 10, item E.
For the rate period beginning October 1, 1992, the equipment allowance for each nursing
facility shall be increased by 28 percent. For rate years beginning after June 30, 1993, the
allowance must be adjusted annually for inflation.
    (e) Post chapter 199 related-organization debts and interest expense. For rate
years beginning on or after July 1, 1990, Minnesota Rules, part 9549.0060, subpart 5, item
E, shall not apply to outstanding related organization debt incurred prior to May 23, 1983,
provided that the debt was an allowable debt under Minnesota Rules, parts 9510.0010
to 9510.0480, the debt is subject to repayment through annual principal payments, and
the nursing facility demonstrates to the commissioner's satisfaction that the interest rate
on the debt was less than market interest rates for similar arm's-length transactions at
the time the debt was incurred. If the debt was incurred due to a sale between family
members, the nursing facility must also demonstrate that the seller no longer participates
in the management or operation of the nursing facility. Debts meeting the conditions of
this paragraph are subject to all other provisions of Minnesota Rules, parts 9549.0010
to 9549.0080.
    (f) Building capital allowance for nursing facilities with operating leases. For
rate years beginning on or after July 1, 1990, a nursing facility with operating lease costs
incurred for the nursing facility's buildings shall receive its building capital allowance
computed in accordance with Minnesota Rules, part 9549.0060, subpart 8. If an operating
lease provides that the lessee's rent is adjusted to recognize improvements made by the
lessor and related debt, the costs for capital improvements and related debt shall be allowed
in the computation of the lessee's building capital allowance, provided that reimbursement
for these costs under an operating lease shall not exceed the rate otherwise paid.

    Sec. 43. Minnesota Statutes 2006, section 256B.431, subdivision 17e, is amended to
read:
    Subd. 17e. Replacement-costs-new per bed limit effective July October 1, 2001
2007. Notwithstanding Minnesota Rules, part 9549.0060, subpart 11, item C, subitem
(2), for a total replacement, as defined in paragraph (f) subdivision 17d, authorized
under section 144A.071 or 144A.073 after July 1, 1999, or any building project that is a
relocation, renovation, upgrading, or conversion completed on or after July 1, 2001, or
any building project eligible for reimbursement under section 256B.434, subdivision 4f,
the replacement-costs-new per bed limit shall be $74,280 per licensed bed in multiple-bed
rooms, $92,850 per licensed bed in semiprivate rooms with a fixed partition separating
the resident beds, and $111,420 per licensed bed in single rooms. Minnesota Rules, part
9549.0060, subpart 11, item C, subitem (2), does not apply. These amounts must be
adjusted annually as specified in subdivision 3f, paragraph (a), beginning January 1, 2000.

    Sec. 44. Minnesota Statutes 2006, section 256B.431, subdivision 41, is amended to
read:
    Subd. 41. Rate increases for October 1, 2005, and October 1, 2006. (a) For the
rate period beginning October 1, 2005, the commissioner shall make available to each
nursing facility reimbursed under this section or section 256B.434 an adjustment equal to
2.2553 percent of the total operating payment rate, and for the rate year beginning October
1, 2006, the commissioner shall make available to each nursing facility reimbursed
under this section or section 256B.434 an adjustment equal to 1.2553 percent of the total
operating payment rate.
    (b) 75 percent of the money resulting from the rate adjustment under paragraph (a)
must be used to increase wages and benefits and pay associated costs for all employees,
except management fees, the administrator, and central office staff. Except as provided
in paragraph (c), 75 percent of the money received by a facility as a result of the rate
adjustment provided in paragraph (a) must be used only for wage, benefit, and staff
increases implemented on or after the effective date of the rate increase each year, and
must not be used for increases implemented prior to that date.
    (c) With respect only to the October 1, 2005, rate increase, a nursing facility that
incurred costs for salary and employee benefit increases first provided after July 1, 2003,
may count those costs towards the amount required to be spent on salaries and benefits
under paragraph (b). These costs must be reported to the commissioner in the form and
manner specified by the commissioner.
    (d) Nursing facilities may apply for the portion of the rate adjustment under
paragraph (a) for employee wages and benefits and associated costs. The application
must be made to the commissioner and contain a plan by which the nursing facility
will distribute the funds according to paragraph (b). For nursing facilities in which the
employees are represented by an exclusive bargaining representative, an agreement
negotiated and agreed to by the employer and the exclusive bargaining representative
constitutes the plan. A negotiated agreement may constitute the plan only if the agreement
is finalized after the date of enactment of all increases for the rate year and signed by both
parties prior to submission to the commissioner. The commissioner shall review the
plan to ensure that the rate adjustments are used as provided in paragraph (b). To be
eligible, a facility must submit its distribution plan by March 31, 2006, and March 31,
2007, respectively. The commissioner may approve distribution plans on or before June
30, 2006, and June 30, 2007, respectively. The commissioner may waive the deadlines in
this paragraph under extraordinary circumstances, either retroactively or prospectively, to
be determined at the sole discretion of the commissioner. If a facility's distribution plan is
effective after the first day of the applicable rate period that the funds are available, the
rate adjustments are effective the same date as the facility's plan.
    (e) A copy of the approved distribution plan must be made available to all employees
by giving each employee a copy or by posting a copy in an area of the nursing facility
to which all employees have access. If an employee does not receive the wage and
benefit adjustment described in the facility's approved plan and is unable to resolve the
problem with the facility's management or through the employee's union representative,
the employee may contact the commissioner at an address or telephone number provided
by the commissioner and included in the approved plan.
EFFECTIVE DATE.This section is effective upon enactment and is retroactive
from October 1, 2005.

    Sec. 45. Minnesota Statutes 2006, section 256B.49, subdivision 11, is amended to read:
    Subd. 11. Authority. (a) The commissioner is authorized to apply for home and
community-based service waivers, as authorized under section 1915(c) of the Social
Security Act to serve persons under the age of 65 who are determined to require the level
of care provided in a nursing home and persons who require the level of care provided in a
hospital. The commissioner shall apply for the home and community-based waivers in
order to:
    (i) promote the support of persons with disabilities in the most integrated settings;
    (ii) expand the availability of services for persons who are eligible for medical
assistance;
    (iii) promote cost-effective options to institutional care; and
    (iv) obtain federal financial participation.
    (b) The provision of waivered services to medical assistance recipients with
disabilities shall comply with the requirements outlined in the federally approved
applications for home and community-based services and subsequent amendments,
including provision of services according to a service plan designed to meet the needs of
the individual. For purposes of this section, the approved home and community-based
application is considered the necessary federal requirement.
    (c) The commissioner shall provide interested persons serving on agency advisory
committees and, task forces, the Centers for Independent Living, and others upon who
request, with to be on a list to receive, notice of, and an opportunity to comment on,
at least 30 days before any effective dates, (1) any substantive changes to the state's
disability services program manual, or (2) changes or amendments to the federally
approved applications for home and community-based waivers, prior to their submission
to the federal Centers for Medicare and Medicaid Services.
    (d) The commissioner shall seek approval, as authorized under section 1915(c) of
the Social Security Act, to allow medical assistance eligibility under this section for
children under age 21 without deeming of parental income or assets.
    (e) The commissioner shall seek approval, as authorized under section 1915(c) of
the Social Act, to allow medical assistance eligibility under this section for individuals
under age 65 without deeming the spouse's income or assets.

    Sec. 46. Laws 2000, chapter 340, section 19, is amended to read:
    Sec. 19. ALTERNATIVE CARE PILOT PROJECTS.
    (a) Expenditures for housing with services and adult foster care shall be excluded
when determining average monthly expenditures per client for alternative care pilot
projects authorized in Laws 1993, First Special Session chapter 1, article 5, section 133.
    (b) Alternative care pilot projects shall not expire on June 30, 2001, but shall
continue until June 30, 2005 2007.
EFFECTIVE DATE.This section is effective retroactively from June 29, 2005, for
activities related to discontinuing pilot projects under this section.

    Sec. 47. LICENSURE; SERVICES FOR YOUTH WITH DISABILITIES.
    (a) Notwithstanding the requirements of Minnesota Statutes, chapter 245A, upon
the recommendation of a county agency, the commissioner of human services shall
grant a license with any necessary variances to a nonresidential program for youth
that provides services to youth with disabilities under age 21 during nonschool hours
established to ensure health and safety, prevent out-of-home placement, and increase
community inclusion of youth with disabilities. The nonresidential youth program is
subject to the conditions of any variances granted and to consumer rights standards under
Minnesota Statutes, section 245B.04; consumer protection standards under Minnesota
Statutes, section 245B.05; service standards under Minnesota Statutes, section 245B.06;
management standards under Minnesota Statutes, section 245B.07; and fire marshal
inspections under Minnesota Statutes, section 245A.151, until the commissioner develops
other licensure requirements for this type of program.
    (b) By February 1, 2008, the commissioner shall recommend amendments to
licensure requirements in Minnesota Statutes, chapter 245A, to allow licensure of
appropriate services for school-age youth with disabilities under age 21 who need
supervision and services to develop skills necessary to maintain personal safety and
increase their independence, productivity, and participation in their communities during
nonschool hours. As part of developing the recommendations, the commissioner shall
survey county agencies to determine how the needs of youth with disabilities under age 21
who require supervision and support services are being met and the funding sources used.
The recommendations must be provided to the house and senate chairs of the committees
with jurisdiction over licensing of programs for youth with disabilities.

ARTICLE 7
CONTINUING CARE

    Section 1. Minnesota Statutes 2006, section 144A.073, subdivision 4, is amended to
read:
    Subd. 4. Criteria for review. The following criteria shall be used in a consistent
manner to compare, evaluate, and rank all proposals submitted. Except for the criteria
specified in clause (3), the application of criteria listed under this subdivision shall not
reflect any distinction based on the geographic location of the proposed project:
    (1) the extent to which the proposal furthers state long-term care goals, including
the goal of enhancing the availability and use of alternative care services and the goal of
reducing the number of long-term care resident rooms with more than two beds;
    (2) the proposal's long-term effects on state costs including the cost estimate of the
project according to section 144A.071, subdivision 5a;
    (3) the extent to which the proposal promotes equitable access to long-term care
services in nursing homes through redistribution of the nursing home bed supply, as
measured by the number of beds relative to the population 85 or older, projected to the
year 2000 by the state demographer, and according to items (i) to (iv):
    (i) reduce beds in counties where the supply is high, relative to the statewide mean,
and increase beds in counties where the supply is low, relative to the statewide mean;
    (ii) adjust the bed supply so as to create the greatest benefits in improving the
distribution of beds;
    (iii) adjust the existing bed supply in counties so that the bed supply in a county
moves toward the statewide mean; and
    (iv) adjust the existing bed supply so that the distribution of beds as projected for the
year 2020 would be consistent with projected need, based on the methodology outlined in
the Interagency Long-Term Care Committee's nursing home bed distribution study;
    (4) the extent to which the project improves conditions that affect the health or
safety of residents, such as narrow corridors, narrow door frames, unenclosed fire exits,
and wood frame construction, and similar provisions contained in fire and life safety
codes and licensure and certification rules;
    (5) the extent to which the project improves conditions that affect the comfort or
quality of life of residents in a facility or the ability of the facility to provide efficient
care, such as a relatively high number of residents in a room; inadequate lighting or
ventilation; poor access to bathing or toilet facilities; a lack of available ancillary space for
dining rooms, day rooms, or rooms used for other activities; problems relating to heating,
cooling, or energy efficiency; inefficient location of nursing stations; narrow corridors; or
other provisions contained in the licensure and certification rules;
    (6) the extent to which the applicant demonstrates the delivery of quality care, as
defined in state and federal statutes and rules, to residents as evidenced by the two most
recent state agency certification surveys and the applicants' response to those surveys;
    (7) the extent to which the project removes the need for waivers or variances
previously granted by either the licensing agency, certifying agency, fire marshal, or
local government entity;
    (8) the extent to which the project increases the number of private or single bed
rooms; and
    (9) the extent to which the applicant demonstrates the continuing need for nursing
facility care in the community and adjacent communities; and
    (10) other factors that may be developed in permanent rule by the commissioner of
health that evaluate and assess how the proposed project will further promote or protect
the health, safety, comfort, treatment, or well-being of the facility's residents.
EFFECTIVE DATE.This section is effective July 1, 2007.

    Sec. 2. Minnesota Statutes 2006, 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 to the cost of services used by making monthly payments
on a sliding scale based on income, 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. The parental contribution
is a partial or full payment for medical services provided for diagnostic, therapeutic,
curing, treating, mitigating, rehabilitation, maintenance, and personal care services as
defined in United States Code, title 26, section 213, needed by the child with a chronic
illness or disability.
    (b) For households with adjusted gross income equal to or greater than 100 percent
of federal poverty guidelines, the parental contribution shall be computed by applying the
following schedule of rates to the adjusted gross income of the natural or adoptive parents:
    (1) 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) if the adjusted gross income is equal to or greater than 175 percent of federal
poverty guidelines and less than or equal to 545 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 545 percent of federal poverty
guidelines;
    (3) if the adjusted gross income is greater than 545 percent of federal poverty
guidelines and less than 675 percent of federal poverty guidelines, the parental
contribution shall be 7.5 percent of adjusted gross income;
    (4) if the adjusted gross income is equal to or greater than 675 percent of federal
poverty guidelines and less than 975 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 7.5 percent of adjusted gross income at 675 percent of
federal poverty guidelines and increases to ten percent of adjusted gross income for those
with adjusted gross income up to 975 percent of federal poverty guidelines; 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 annual adjusted gross income is reduced by
$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, 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,
except, effective retroactive to July 1, 2003, taxable capital gains to the extent the funds
have been used to purchase a home shall not be counted as income.
    (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). 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 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.

    Sec. 3. [252.295] LICENSING EXCEPTION.
    (a) Notwithstanding section 252.294, the commissioner may license two six-bed,
level B intermediate care facilities for persons with developmental disabilities (ICF's/MR)
to replace a 15-bed level A facility in Minneapolis that is not accessible to persons with
disabilities. The new facilities must be accessible to persons with disabilities and must
be located on a different site or sites in Hennepin County. Notwithstanding section
256B.5012, the payment rate at the new facilities is $200.47 plus any rate adjustments for
ICF's/MR effective on or after July 1, 2007.
    (b) Notwithstanding section 252.294, the commissioner may license one six-bed
level B intermediate care facility for persons with developmental disabilities to replace
a downsized 21-bed facility attached to a day training and habilitation program in
Chisholm. Notwithstanding section 256B.5012, the facility must serve persons who
require substantial nursing care and are able to leave the facility to receive day training
and habilitation services. The payment rate at this facility is $274.50.
    (c) Notwithstanding section 256B.5012, the payment rate of a six-bed level B
intermediate care facility for persons with developmental disabilities in Hibbing, with a
per diem rate of $164.13 as of March 1, 2007, for persons who require substantial nursing
care and are able to leave the facility to receive day training and habilitation services shall
be increased to $250.84.
    (d) The payment rates in paragraphs (b) and (c) are effective October 1, 2009.

    Sec. 4. Minnesota Statutes 2006, section 256.01, is amended by adding a subdivision
to read:
    Subd. 24. Disability linkage line. The commissioner shall establish the disability
linkage line, a statewide consumer information, referral, and assistance system for people
with disabilities and chronic illnesses that:
    (1) provides information about state and federal eligibility requirements, benefits,
and service options;
    (2) makes referrals to appropriate support entities;
    (3) delivers information and assistance based on national and state standards;
    (4) assists people to make well-informed decisions; and
    (5) supports the timely resolution of service access and benefit issues.

    Sec. 5. Minnesota Statutes 2006, section 256.975, subdivision 7, is amended to read:
    Subd. 7. Consumer information and assistance; senior linkage. (a) The
Minnesota Board on Aging shall operate a statewide information and assistance service
to aid older Minnesotans and their families in making informed choices about long-term
care options and health care benefits. Language services to persons with limited English
language skills may be made available. The service, known as Senior LinkAge Line, must
be available during business hours through a statewide toll-free number and must also
be available through the Internet.
    (b) The service must assist older adults, caregivers, and providers in accessing
information about choices in long-term care services that are purchased through private
providers or available through public options. The service must:
    (1) develop a comprehensive database that includes detailed listings in both
consumer- and provider-oriented formats;
    (2) make the database accessible on the Internet and through other telecommunication
and media-related tools;
    (3) link callers to interactive long-term care screening tools and make these tools
available through the Internet by integrating the tools with the database;
    (4) develop community education materials with a focus on planning for long-term
care and evaluating independent living, housing, and service options;
    (5) conduct an outreach campaign to assist older adults and their caregivers in
finding information on the Internet and through other means of communication;
    (6) implement a messaging system for overflow callers and respond to these callers
by the next business day;
    (7) link callers with county human services and other providers to receive more
in-depth assistance and consultation related to long-term care options; and
    (8) link callers with quality profiles for nursing facilities and other providers
developed by the commissioner of health.; and
    (9) incorporate information about housing with services and consumer rights
within the MinnesotaHelp.info network long-term care database to facilitate consumer
comparison of services and costs among housing with services establishments and with
other in-home services and to support financial self-sufficiency as long as possible.
Housing with services establishments and their arranged home care providers shall provide
information to the commissioner of human services that is consistent with information
required by the commissioner of health under section 144G.06, the Uniform Consumer
Information Guide. The commissioner of human services shall provide the data to the
Minnesota Board on Aging for inclusion in the MinnesotaHelp.info network long-term
care database.
    (c) The Minnesota Board on Aging shall conduct an evaluation of the effectiveness
of the statewide information and assistance, and submit this evaluation to the legislature
by December 1, 2002. The evaluation must include an analysis of funding adequacy, gaps
in service delivery, continuity in information between the service and identified linkages,
and potential use of private funding to enhance the service.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2006, section 256B.0625, subdivision 18a, is amended to
read:
    Subd. 18a. Access to medical services. (a) Medical assistance reimbursement for
meals for persons traveling to receive medical care may not exceed $5.50 for breakfast,
$6.50 for lunch, or $8 for dinner.
    (b) Medical assistance reimbursement for lodging for persons traveling to receive
medical care may not exceed $50 per day unless prior authorized by the local agency.
    (c) Medical assistance direct mileage reimbursement to the eligible person or the
eligible person's driver may not exceed 20 cents per mile.
    (d) Regardless of the number of employees that an enrolled health care provider
may have, medical assistance covers sign and oral language interpreter services when
provided by an enrolled health care provider during the course of providing a direct,
person-to-person covered health care service to an enrolled recipient with limited English
proficiency or who has a hearing loss and uses interpreting services.

    Sec. 7. Minnesota Statutes 2006, section 256B.0625, is amended by adding a
subdivision to read:
    Subd. 50. Self-directed supports option. Upon federal approval, medical
assistance covers the self-directed supports option as defined under section 256B.0657 and
section 6087 of the Federal Deficit Reduction Act of 2005, Public Law 109-171.
EFFECTIVE DATE.This section is effective upon federal approval of the state
Medicaid plan amendment. The commissioner of human services shall inform the Office
of the Revisor of Statutes when approval is obtained.

    Sec. 8. Minnesota Statutes 2006, section 256B.0651, subdivision 7, is amended to read:
    Subd. 7. Prior authorization; time limits. The commissioner or the commissioner's
designee shall determine the time period for which a prior authorization shall be effective
and, if flexible use has been requested, whether to allow the flexible use option. If
the recipient continues to require home care services beyond the duration of the prior
authorization, the home care provider must request a new prior authorization. A personal
care provider agency must request a new personal care assistant services assessment, or
service update if allowed, at least 60 days prior to the end of the current prior authorization
time period. The request for the assessment must be made on a form approved by the
commissioner. Under no circumstances, other than the exceptions in subdivision 4, shall a
prior authorization be valid prior to the date the commissioner receives the request or for
more than 12 months. A recipient who appeals a reduction in previously authorized home
care services may continue previously authorized services, other than temporary services
under subdivision 8, pending an appeal under section 256.045. The commissioner must
provide a detailed explanation of why the authorized services are reduced in amount from
those requested by the home care provider.

    Sec. 9. Minnesota Statutes 2006, section 256B.0655, subdivision 1b, is amended to
read:
    Subd. 1b. Assessment. "Assessment" means a review and evaluation of a recipient's
need for home care services conducted in person. 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 or sections 256B.0651, 256B.0653, 256B.0654, and 256B.0656, 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 may be completed by telephone, used when there
is no need for an increase in personal care assistant services, and used for two consecutive
assessments if followed by a face-to-face assessment. A service update must be completed
on a form approved by the commissioner. 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 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 or personal care
provider agency.

    Sec. 10. Minnesota Statutes 2006, section 256B.0655, subdivision 3, is amended to
read:
    Subd. 3. Assessment and service plan. Assessments under subdivision 1b
and sections 256B.0651, subdivision 1, paragraph (b), and 256B.0654, subdivision 1,
paragraph (a), shall be conducted initially, and at least annually thereafter, in person
with the recipient and result in a completed service plan using forms specified by
the commissioner. A personal care provider agency must use a form approved by
the commissioner to request a county public health nurse to conduct a personal care
assistant services assessment. When requesting a reassessment, the personal care provider
agency must notify the county and the recipient at least 60 days prior to the end of the
current prior authorization for personal care assistant services. The recipient notice
shall include information on the recipient's appeal rights. Within 30 days of recipient
or responsible party or personal care assistant provider agency request for home care
services, the assessment, the service plan, and other information necessary to determine
medical necessity such as diagnostic or testing information, social or medical histories,
and hospital or facility discharge summaries shall be submitted to the commissioner.
Notwithstanding the provisions of subdivision 8, the commissioner shall maximize
federal financial participation to pay for public health nurse assessments for personal care
services. For personal care assistant services:
    (1) The amount and type of service authorized based upon the assessment and
service plan will follow the recipient if the recipient chooses to change providers.
    (2) If the recipient's need changes, the recipient's provider may assess the need for
a change in service authorization and request the change from the county public health
nurse. The request must be made on a form approved by the commissioner. Within 30
days of the request, the public health nurse will determine whether to request the change
in services based upon the provider assessment, or conduct a home visit to assess the need
and determine whether the change is appropriate. If the change in service need is due to
a change in medical condition, a new physician's statement of need required by section
256B.0625, subdivision 19c, must be obtained.
    (3) To continue to receive personal care assistant services after the first year,
the recipient or the responsible party, in conjunction with the public health nurse,
may complete a service update on forms developed by the commissioner according to
criteria and procedures in subdivisions 1a to 1i and sections 256B.0651, subdivision 1;
256B.0653, subdivision 1; and 256B.0654, subdivision 1.

    Sec. 11. Minnesota Statutes 2006, section 256B.0655, subdivision 8, is amended to
read:
    Subd. 8. Public health nurse assessment rate. (a) The reimbursement rates for
public health nurse visits that relate to the provision of personal care services under this
section and section 256B.0625, subdivision 19a, are:
    (i) $210.50 for a face-to-face assessment visit;
    (ii) $105.25 for each service update; and
    (iii) $105.25 for each request for a temporary service increase.
    (b) The rates specified in paragraph (a) must be adjusted to reflect provider rate
increases for personal care assistant services that are approved by the legislature for the
fiscal year ending June 30, 2000, and subsequent fiscal years. Any requirements applied
by the legislature to provider rate increases for personal care assistant services also apply
to adjustments under this paragraph.
    (c) Effective July 1, 2008, the payment rate for an assessment under this section and
section 256B.0651 shall be reduced by 25 percent when the assessment is not completed
on time or the service agreement documentation is not submitted in time to continue
services. The commissioner shall recoup these amounts on a retroactive basis.

    Sec. 12. [256B.0657] SELF-DIRECTED SUPPORTS OPTION.
    Subdivision 1. Definition. "Self-directed supports option" means personal
assistance, supports, items, and related services purchased under an approved budget
plan and budget by a recipient.
    Subd. 2. Eligibility. (a) The self-directed supports option is available to a person
who:
    (1) is a recipient of medical assistance as determined under sections 256B.055,
256B.056, and 256B.057, subdivision 9;
    (2) is eligible for personal care assistant services under section 256B.0655;
    (3) lives in the person's own apartment or home, which is not owned, operated, or
controlled by a provider of services not related by blood or marriage;
    (4) has the ability to hire, fire, supervise, establish staff compensation for, and
manage the individuals providing services, and to choose and obtain items, related
services, and supports as described in the participant's plan. If the recipient is not able to
carry out these functions but has a legal guardian or parent to carry them out, the guardian
or parent may fulfill these functions on behalf of the recipient; and
    (5) has not been excluded or disenrolled by the commissioner.
    (b) The commissioner may disenroll or exclude recipients, including guardians and
parents, under the following circumstances:
    (1) recipients who have been restricted by the Primary Care Utilization Review
Committee may be excluded for a specified time period;
    (2) recipients who exit the self-directed supports option during the recipient's
service plan year shall not access the self-directed supports option for the remainder of
that service plan year; and
    (3) when the department determines that the recipient cannot manage recipient
responsibilities under the program.
    Subd. 3. Eligibility for other services. Selection of the self-directed supports
option by a recipient shall not restrict access to other medically necessary care and
services furnished under the state plan medical assistance benefit, including home care
targeted case management, except that a person receiving home and community-based
waiver services, a family support grant or a consumer support grant is not eligible for
funding under the self-directed supports option.
    Subd. 4. Assessment requirements. (a) The self-directed supports option
assessment must meet the following requirements:
    (1) it shall be conducted by the county public health nurse or a certified public
health nurse under contract with the county;
    (2) it shall be conducted face-to-face in the recipient's home initially, and at least
annually thereafter; when there is a significant change in the recipient's condition; and
when there is a change in the need for personal care assistant services. A recipient who is
residing in a facility may be assessed for the self-directed support option for the purpose
of returning to the community using this option; and
    (3) it shall be completed using the format established by the commissioner.
    (b) The results of the assessment and recommendations shall be communicated to
the commissioner and the recipient by the county public health nurse or certified public
health nurse under contract with the county.
    Subd. 5. Self-directed supports option plan requirements. (a) The plan for the
self-directed supports option must meet the following requirements:
    (1) the plan must be completed using a person-centered process that:
    (i) builds upon the recipient's capacity to engage in activities that promote
community life;
    (ii) respects the recipient's preferences, choices, and abilities;
    (iii) involves families, friends, and professionals in the planning or delivery of
services or supports as desired or required by the recipient; and
    (iv) addresses the need for personal care assistant services identified in the recipient's
self-directed supports option assessment;
    (2) the plan shall be developed by the recipient or by the guardian of an adult
recipient or by a parent or guardian of a minor child, with the assistance of an enrolled
medical assistance home care targeted case manager provider who meets the requirements
established for using a person-centered planning process and shall be reviewed at least
annually upon reassessment or when there is a significant change in the recipient's
condition; and
    (3) the plan must include the total budget amount available divided into monthly
amounts that cover the number of months of personal care assistant services authorization
included in the budget. The amount used each month may vary, but additional funds shall
not be provided above the annual personal care assistant services authorized amount
unless a change in condition is documented.
    (b) The commissioner shall:
    (1) establish the format and criteria for the plan as well as the requirements for
providers who assist with plan development;
    (2) review the assessment and plan and, within 30 days after receiving the
assessment and plan, make a decision on approval of the plan;
    (3) notify the recipient, parent, or guardian of approval or denial of the plan and
provide notice of the right to appeal under section 256.045; and
    (4) provide a copy of the plan to the fiscal support entity selected by the recipient.
    Subd. 6. Services covered. (a) Services covered under the self-directed supports
option include:
    (1) personal care assistant services under section 256B.0655; and
    (2) items, related services, and supports, including assistive technology, that increase
independence or substitute for human assistance to the extent expenditures would
otherwise be used for human assistance.
    (b) Items, supports, and related services purchased under this option shall not be
considered home care services for the purposes of section 144A.43.
    Subd. 7. Noncovered services. Services or supports that are not eligible for
payment under the self-directed supports option include:
    (1) services, goods, or supports that do not benefit the recipient;
    (2) any fees incurred by the recipient, such as Minnesota health care program fees
and co-pays, legal fees, or costs related to advocate agencies;
    (3) insurance, except for insurance costs related to employee coverage or fiscal
support entity payments;
    (4) room and board and personal items that are not related to the disability, except
that medically prescribed specialized diet items may be covered if they reduce the need for
human assistance;
    (5) home modifications that add square footage;
    (6) home modifications for a residence other than the primary residence of the
recipient, or in the event of a minor with parents not living together, the primary residences
of the parents;
    (7) expenses for travel, lodging, or meals related to training the recipient, the parent
or guardian of an adult recipient, or the parent or guardian of a minor child, or paid or
unpaid caregivers that exceed $500 in a 12-month period;
    (8) experimental treatment;
    (9) any service or item covered by other medical assistance state plan services,
including prescription and over-the-counter medications, compounds, and solutions and
related fees, including premiums and co-payments;
    (10) membership dues or costs, except when the service is necessary and appropriate
to treat a physical condition or to improve or maintain the recipient's physical condition.
The condition must be identified in the recipient's plan of care and monitored by a
Minnesota health care program enrolled physician;
    (11) vacation expenses other than the cost of direct services;
    (12) vehicle maintenance or modifications not related to the disability;
    (13) tickets and related costs to attend sporting or other recreational events; and
    (14) costs related to Internet access, except when necessary for operation of assistive
technology, to increase independence, or to substitute for human assistance.
    Subd. 8. Self-directed budget requirements. The budget for the provision of the
self-directed service option shall be equal to the greater of either:
    (1) the annual amount of personal care assistant services under section 256B.0655
that the recipient has used in the most recent 12-month period; or
    (2) the amount determined using the consumer support grant methodology under
section 256.476, subdivision 11, except that the budget amount shall include the federal
and nonfederal share of the average service costs.
    Subd. 9. Quality assurance and risk management. (a) The commissioner
shall establish quality assurance and risk management measures for use in developing
and implementing self-directed plans and budgets that (1) recognize the roles and
responsibilities involved in obtaining services in a self-directed manner, and (2) assure
the appropriateness of such plans and budgets based upon a recipient's resources and
capabilities. These measures must include (i) background studies, and (ii) backup and
emergency plans, including disaster planning.
    (b) The commissioner shall provide ongoing technical assistance and resource and
educational materials for families and recipients selecting the self-directed option.
    (c) Performance assessments measures, such as of a recipient's satisfaction with the
services and supports, and ongoing monitoring of health and well-being shall be identified
in consultation with the stakeholder group.
    Subd. 10. Fiscal support entity. (a) Each recipient shall choose a fiscal support
entity provider certified by the commissioner to make payments for services, items,
supports, and administrative costs related to managing a self-directed service plan
authorized for payment in the approved plan and budget. Recipients shall also choose
the payroll, agency with choice, or the fiscal conduit model of financial and service
management.
    (b) The fiscal support entity:
    (1) may not limit or restrict the recipient's choice of service or support providers,
including use of the payroll, agency with choice, or fiscal conduit model of financial
and service management;
    (2) must have a written agreement with the recipient or the recipient's representative
that identifies the duties and responsibilities to be performed and the specific related
charges;
    (3) must provide the recipient and the home care targeted case manager with a
monthly written summary of the self-directed supports option services that were billed,
including charges from the fiscal support entity;
    (4) must be knowledgeable of and comply with Internal Revenue Service
requirements necessary to process employer and employee deductions, provide appropriate
and timely submission of employer tax liabilities, and maintain documentation to support
medical assistance claims;
    (5) must have current and adequate liability insurance and bonding and sufficient
cash flow and have on staff or under contract a certified public accountant or an individual
with a baccalaureate degree in accounting; and
    (6) must maintain records to track all self-directed supports option services
expenditures, including time records of persons paid to provide supports and receipts for
any goods purchased. The records must be maintained for a minimum of five years from
the claim date and be available for audit or review upon request. Claims submitted by
the fiscal support entity must correspond with services, amounts, and time periods as
authorized in the recipient's self-directed supports option plan.
    (c) The commissioner shall have authority to:
    (1) set or negotiate rates with fiscal support entities;
    (2) limit the number of fiscal support entities;
    (3) identify a process to certify and recertify fiscal support entities and assure fiscal
support entities are available to recipients throughout the state; and
    (4) establish a uniform format and protocol to be used by eligible fiscal support
entities.
    Subd. 11. Stakeholder consultation. The commissioner shall consult with a
statewide consumer-directed services stakeholder group, including representatives of
all types of consumer-directed service users, advocacy organizations, counties, and
consumer-directed service providers. The commissioner shall seek recommendations
from this stakeholder group in developing:
    (1) the self-directed plan format;
    (2) requirements and guidelines for the person-centered plan assessment and
planning process;
    (3) implementation of the option and the quality assurance and risk management
techniques; and
    (4) standards and requirements, including rates for the personal support plan
development provider and the fiscal support entity; policies; training; and implementation.
The stakeholder group shall provide recommendations on the repeal of the personal care
assistant choice option, transition issues, and whether the consumer support grant program
under section 256.476 should be modified. The stakeholder group shall meet at least
three times each year to provide advice on policy, implementation, and other aspects of
consumer and self-directed services.
EFFECTIVE DATE.Subdivisions 1 to 10 are effective upon federal approval of
the state Medicaid plan amendment. The commissioner of human services shall inform
the Office of the Revisor of Statutes when federal approval is obtained. Subdivision 11
is effective July 1, 2007.

    Sec. 13. Minnesota Statutes 2006, section 256B.0911, subdivision 3a, is amended to
read:
    Subd. 3a. Assessment and support planning. (a) Persons requesting assessment,
services planning, or other assistance intended to support community-based living,
including persons who need assessment in order to determine waiver or alternative care
program eligibility, must be visited by a long-term care consultation team within ten
working days after the date on which an assessment was requested or recommended.
Assessments must be conducted according to paragraphs (b) to (g) (i).
    (b) The county may utilize a team of either the social worker or public health nurse,
or both, to conduct the assessment in a face-to-face interview. The consultation team
members must confer regarding the most appropriate care for each individual screened or
assessed.
    (c) The long-term care consultation team must assess the health and social needs of
the person, using an assessment form provided by the commissioner.
    (d) The team must conduct the assessment in a face-to-face interview with the
person being assessed and the person's legal representative, if applicable.
    (e) The team must provide the person, or the person's legal representative, with
written recommendations for facility- or community-based services. The team must
document that the most cost-effective alternatives available were offered to the individual.
For purposes of this requirement, "cost-effective alternatives" means community services
and living arrangements that cost the same as or less than nursing facility care.
    (f) If the person chooses to use community-based services, the team must provide
the person or the person's legal representative with a written community support plan,
regardless of whether the individual is eligible for Minnesota health care programs.
The person may request assistance in developing a community support plan without
participating in a complete assessment.
    (g) The person has the right to make the final decision between nursing facility
placement and community placement after the screening team's recommendation, except
as provided in subdivision 4a, paragraph (c).
    (h) The team must give the person receiving assessment or support planning, or
the person's legal representative, materials, and forms supplied by the commissioner
containing the following information:
    (1) the need for and purpose of preadmission screening and assessment if the person
selects nursing facility placement;
    (2) the role of the long-term care consultation assessment and support planning in
waiver and alternative care program eligibility determination;
    (2) (3) information about Minnesota health care programs;
    (3) (4) the person's freedom to accept or reject the recommendations of the team;
    (4) (5) the person's right to confidentiality under the Minnesota Government Data
Practices Act, chapter 13; and
    (6) the long-term care consultant's decision regarding the person's need for nursing
facility level of care;
    (5) (7) the person's right to appeal the decision regarding the need for nursing facility
level of care or the county's final decisions regarding public programs eligibility according
to section 256.045, subdivision 3.
    (i) Face-to-face assessment completed as part of eligibility determination for
the alternative care, elderly waiver, community alternatives for disabled individuals,
community alternative care, and traumatic brain injury waiver programs under sections
256B.0915, 256B.0917, and 256B.49 is valid to establish service eligibility for no more
than 60 calendar days after the date of assessment. The effective eligibility start date
for these programs can never be prior to the date of assessment. If an assessment was
completed more than 60 days before the effective waiver or alternative care program
eligibility start date, assessment and support plan information must be updated in a
face-to-face visit and documented in the department's Medicaid Management Information
System (MMIS). The effective date of program eligibility in this case cannot be prior to
the date the updated assessment is completed.

    Sec. 14. Minnesota Statutes 2006, section 256B.0911, is amended by adding a
subdivision to read:
    Subd. 3c. Transition to housing with services. (a) Housing with services
establishments offering or providing assisted living under chapter 144G shall inform
all prospective residents of the availability of and contact information for transitional
consultation services under this subdivision prior to executing a lease or contract with the
prospective resident. The purpose of transitional long-term care consultation is to support
persons with current or anticipated long-term care needs in making informed choices
among options that include the most cost-effective and least restrictive settings, and to
delay spenddown to eligibility for publicly funded programs by connecting people to
alternative services in their homes before transition to housing with services. Regardless
of the consultation, prospective residents maintain the right to choose housing with
services or assisted living if that option is their preference.
    (b) Transitional consultation services are provided as determined by the
commissioner of human services in partnership with county long-term care consultation
units, and the Area Agencies on Aging, and are a combination of telephone-based
and in-person assistance provided under models developed by the commissioner. The
consultation shall be performed in a manner that provides objective and complete
information. Transitional consultation must be provided within five working days of the
request of the prospective resident as follows:
    (1) the consultation must be provided by a qualified professional as determined by
the commissioner;
    (2) the consultation must include a review of the prospective resident's reasons for
considering assisted living, the prospective resident's personal goals, a discussion of the
prospective resident's immediate and projected long-term care needs, and alternative
community services or assisted living settings that may meet the prospective resident's
needs; and
    (3) the prospective resident shall be informed of the availability of long-term care
consultation services described in subdivision 3a that are available at no charge to the
prospective resident to assist the prospective resident in assessment and planning to meet
the prospective resident's long-term care needs.
EFFECTIVE DATE.This section is effective October 1, 2008.

    Sec. 15. Minnesota Statutes 2006, section 256B.0915, is amended to read:
256B.0915 MEDICAID WAIVER FOR ELDERLY SERVICES.
    Subdivision 1. Authority. The commissioner is authorized to apply for a home
and community-based services waiver for the elderly, authorized under section 1915(c)
of the Social Security Act, in order to obtain federal financial participation to expand
the availability of services for persons who are eligible for medical assistance. The
commissioner may apply for additional waivers or pursue other federal financial
participation which is advantageous to the state for funding home care services for the
frail elderly who are eligible for medical assistance. The provision of waivered services
to elderly and disabled medical assistance recipients must comply with the criteria for
service definitions and provider standards approved in the waiver.
    Subd. 1a. Elderly waiver case management services. (a) Elderly case management
services under the home and community-based services waiver for elderly individuals are
available from providers meeting qualification requirements and the standards specified
in subdivision 1b. Eligible recipients may choose any qualified provider of elderly case
management services.
    Case management services assist individuals who receive waiver services in gaining
access to needed waiver and other state plan services, as well as needed medical, social,
educational, and other services regardless of the funding source for the services to which
access is gained.
    A case aide shall provide assistance to the case manager in carrying out
administrative activities of the case management function. The case aide may not assume
responsibilities that require professional judgment including assessments, reassessments,
and care plan development. The case manager is responsible for providing oversight of
the case aide.
    Case managers shall be responsible for ongoing monitoring of the provision of
services included in the individual's plan of care. Case managers shall initiate and oversee
the process of assessment and reassessment of the individual's care and review plan of
care at intervals specified in the federally approved waiver plan.
    (b) The county of service or tribe must provide access to and arrange for case
management services. County of service has the meaning given it in Minnesota Rules,
part 9505.0015, subpart 11.
    Subd. 1b. Provider qualifications and standards. The commissioner must
enroll qualified providers of elderly case management services under the home
and community-based waiver for the elderly under section 1915(c) of the Social
Security Act. The enrollment process shall ensure the provider's ability to meet the
qualification requirements and standards in this subdivision and other federal and state
requirements of this service. An elderly case management provider is an enrolled medical
assistance provider who is determined by the commissioner to have all of the following
characteristics:
    (1) the demonstrated capacity and experience to provide the components of
case management to coordinate and link community resources needed by the eligible
population;
    (2) administrative capacity and experience in serving the target population for
whom it will provide services and in ensuring quality of services under state and federal
requirements;
    (3) a financial management system that provides accurate documentation of services
and costs under state and federal requirements;
    (4) the capacity to document and maintain individual case records under state and
federal requirements; and
    (5) the county lead agency may allow a case manager employed by the county lead
agency to delegate certain aspects of the case management activity to another individual
employed by the county lead agency 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.
Lead agencies include counties, health plans, and federally recognized tribes who
authorize services under this section.
    Subd. 1c. Case management activities under the state plan. The commissioner
shall seek an amendment to the home and community-based services waiver for the
elderly to implement the provisions of subdivisions 1a and 1b. If the commissioner
is unable to secure the approval of the secretary of health and human services for the
requested waiver amendment by December 31, 1993, the commissioner shall amend
the medical assistance state plan to provide that case management provided under the
home and community-based services waiver for the elderly is performed by counties
as an administrative function for the proper and effective administration of the state
medical assistance plan. The state shall reimburse counties for the nonfederal share of
costs for case management performed as an administrative function under the home and
community-based services waiver for the elderly.
    Subd. 1d. Posteligibility treatment of income and resources for elderly waiver.
    Notwithstanding the provisions of section 256B.056, the commissioner shall make the
following amendment to the medical assistance elderly waiver program effective July 1,
1999, or upon federal approval, whichever is later.
    A recipient's maintenance needs will be an amount equal to the Minnesota
supplemental aid equivalent rate as defined in section 256I.03, subdivision 5, plus the
medical assistance personal needs allowance as defined in section 256B.35, subdivision
1
, paragraph (a), when applying posteligibility treatment of income rules to the gross
income of elderly waiver recipients, except for individuals whose income is in excess of
the special income standard according to Code of Federal Regulations, title 42, section
435.236. Recipient maintenance needs shall be adjusted under this provision each July 1.
    Subd. 2. Spousal impoverishment policies. The commissioner shall seek to amend
the federal waiver and the medical assistance state plan to allow apply:
    (1) the spousal impoverishment criteria as authorized under United States Code, title
42, section 1396r-5, and as implemented in sections 256B.0575, 256B.058, and 256B.059,
except that the amendment shall seek to add to;
    (2) the personal needs allowance permitted in section 256B.0575,; and
    (3) an amount equivalent to the group residential housing rate as set by section
256I.03, subdivision 5, and according to the approved federal waiver and medical
assistance state plan.
    Subd. 3. Limits of cases. The number of medical assistance waiver recipients that
a county lead agency 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.
    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 percentage rate increase or the
average statewide percentage increase in nursing facility payment rates.
    (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 (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 (a).
    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 256B.438 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 256B.438 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 256B.438 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 percentage rate increase or
the average statewide percentage increase in nursing facility payment rates. The limit
under this 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.
For conversions from the nursing home to the elderly waiver with consumer directed
community support services, the conversion rate limit is equal to the nursing facility rate
reduced by a percentage equal to the percentage difference between the consumer directed
services budget limit that would be assigned according to the federally approved waiver
plan and the corresponding community case mix cap, but not to exceed 50 percent.
    (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 adaptations; and
    (2) cost of skilled nursing, home health aide, and personal care services reimbursable
by medical assistance.
    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.
    (b) A county lead agency 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.
    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 lead 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 (a).
    Subd. 3e. Assisted living Customized living service rate. (a) Payment for assisted
living service customized living 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. lead agency within the parameters established by
the commissioner. The payment agreement must delineate the services that have been
customized for each recipient and specify the amount of each service to be provided. The
lead agency shall ensure that there is a documented need for all services authorized.
Customized living services must not include rent or raw food costs. The negotiated
payment rate must be based on services to be provided. Negotiated rates must not exceed
payment rates for comparable elderly waiver or medical assistance services and must
reflect economies of scale.
    (b) The individualized monthly negotiated payment for assisted living customized
living services as described in section 256B.0913, subdivisions 5d to 5f, and residential
care services as described in section 256B.0913, 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 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.
    (c) The individualized monthly negotiated payment for assisted Customized living
services described in section 144A.4605 and are delivered by a provider licensed by the
Department of Health as a class A or class F 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 subdivision 3a.
    Subd. 3f. Individual service rates; expenditure forecasts. (a) The county lead
agency shall negotiate individual service rates with vendors and may authorize payment
for actual costs up to the county's lead agency's current approved rate. Persons or agencies
must be employed by or under a contract with the county lead 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.
    (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.
    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 lead agency-specific service rate limits.
    (b) Effective July 1, 2001, for service rate limits, except those described or defined in
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.
    (c) Counties Lead agencies may negotiate individual service rates with vendors for
actual costs up to the statewide maximum service rate limit.
    Subd. 3h. Service rate limits; 24-hour customized living services. The payment
rates for 24-hour customized living services is a monthly rate negotiated and authorized by
the lead agency within the parameters established by the commissioner of human services.
The payment agreement must delineate the services that have been customized for each
recipient and specify the amount of each service to be provided. The lead agency shall
ensure that there is a documented need for all services authorized. The lead agency shall
not authorize 24-hour customized living services unless there is a documented need for
24-hour supervision. For purposes of this section, "24-hour supervision" means that the
recipient requires assistance due to needs related to one or more of the following:
    (1) intermittent assistance with toileting or transferring;
    (2) cognitive or behavioral issues;
    (3) a medical condition that requires clinical monitoring; or
    (4) other conditions or needs as defined by the commissioner of human services.
The lead agency shall ensure that the frequency and mode of supervision of the recipient
and the qualifications of staff providing supervision are described and meet the needs
of the recipient. Customized living services must not include rent or raw food costs.
The negotiated payment rate for 24-hour customized living services must be based on
services to be provided. Negotiated rates must not exceed payment rates for comparable
elderly waiver or medical assistance services and must reflect economies of scale. The
individually negotiated 24-hour customized living payments, in combination with the
payment for other elderly waiver services, including case management, must not exceed
the recipient's community budget cap specified in subdivision 3a.
    Subd. 4. Termination notice. The case manager must give the individual a ten-day
written notice of any denial, reduction, or termination of waivered services.
    Subd. 5. Assessments and reassessments for waiver clients. Each client shall
receive an initial assessment of strengths, informal supports, and need for services in
accordance with section 256B.0911, subdivisions 3, 3a, and 3b. A reassessment of a
client served under the elderly waiver must be conducted at least every 12 months and
at other times when the case manager determines that there has been significant change
in the client's functioning. This may include instances where the client is discharged
from the hospital.
    Subd. 6. Implementation of care plan. Each elderly waiver client shall be provided
a copy of a written care plan that meets the requirements outlined in section 256B.0913,
subdivision 8
. The care plan must be implemented by the county administering waivered
services of service when it is different than the county of financial responsibility. The
county of service administering waivered services must notify the county of financial
responsibility of the approved care plan.
    Subd. 7. Prepaid elderly waiver services. An individual for whom a prepaid health
plan is liable for nursing home services or elderly waiver services according to section
256B.69, subdivision 6a, is not eligible to also receive county-administered elderly waiver
services under this section.
    Subd. 8. Services and supports. (a) Services and supports shall meet the
requirements set out in United States Code, title 42, section 1396n.
    (b) Services and supports shall promote consumer choice and be arranged and
provided consistent with individualized, written care plans.
    (c) The state of Minnesota, county, managed care organization, or tribal government
under contract to administer the elderly waiver 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 representatives with funds received through
consumer-directed community support services under the federally approved waiver plan.
Liabilities include, but are not limited to, workers' compensation liability, the Federal
Insurance Contributions Act (FICA), or the Federal Unemployment Tax Act (FUTA).
    Subd. 9. Tribal management of elderly waiver. Notwithstanding contrary
provisions of this section, or those in other state laws or rules, the commissioner may
develop a model for tribal management of the elderly waiver program and implement this
model through a contract between the state and any of the state's federally recognized tribal
governments. The model shall include the provision of tribal waiver case management,
assessment for personal care assistance, and administrative requirements otherwise carried
out by counties lead agencies but shall not include tribal financial eligibility determination
for medical assistance.
EFFECTIVE DATE.Subdivision 3h is effective the day following final enactment.

    Sec. 16. Minnesota Statutes 2006, section 256B.095, is amended to read:
256B.095 QUALITY ASSURANCE SYSTEM ESTABLISHED.
    (a) Effective July 1, 1998, a quality assurance system for persons with developmental
disabilities, which includes an alternative quality assurance licensing system for programs,
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 or may continue regulation of these programs under
the licensing system operated by the commissioner. The project expires on June 30,
2009 2014.
    (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.
    (d) Effective July 1, 2007, the quality assurance system may be expanded to include
programs for persons with disabilities and older adults.

    Sec. 17. Minnesota Statutes 2006, section 256B.0951, subdivision 1, is amended to
read:
    Subdivision 1. Membership. The 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. 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, 2009 2014.

    Sec. 18. [256B.096] QUALITY MANAGEMENT, ASSURANCE, AND
IMPROVEMENT SYSTEM FOR MINNESOTANS RECEIVING DISABILITY
SERVICES.
    Subdivision 1. Scope. In order to improve the quality of services provided to
Minnesotans with disabilities and to meet the requirements of the federally approved home
and community-based waivers under section 1915c of the Social Security Act, a statewide
quality assurance and improvement system for Minnesotans receiving disability services
shall be developed. The disability services included are the home and community-based
services waiver programs for persons with developmental disabilities under section
256B.092, subdivision 4, and for persons with disabilities under section 256B.49.
    Subd. 2. Stakeholder advisory group. The commissioner shall consult with a
stakeholder advisory group on the development and implementation of the state quality
management, assurance, and improvement system, including representatives of disability
service recipients, disability service providers, disability advocacy groups, county human
service agencies, and state agency staff from the Departments of Human Services and
Health, and the ombudsman for mental health and developmental disabilities on the
development of a statewide quality assurance and improvement system.
    Subd. 3. Annual survey of service recipients. The commissioner, in consultation
with the stakeholder advisory group, shall develop an annual independent random
statewide survey of between five and ten percent of service recipients to determine the
effectiveness and quality of disability services. The survey shall be consistent with the
system performance expectations of the Centers for Medicare and Medicaid Services
quality management requirements and framework. The survey shall analyze whether
desired outcomes have been achieved for persons with different demographic, diagnostic,
health, and functional needs receiving different types of services, in different settings,
with different costs. The survey shall be field tested during 2008. The biennial report
established in subdivision 5 shall include recommendations on statewide and regional
reports of the survey results that, if published, would be useful to regions, counties, and
providers to plan and measure the impact of quality improvement activities.
    Subd. 4. Improvements for incident reporting, investigation, analysis, and
follow-up. In consultation with the stakeholder advisory group, the commissioner shall
identify the information, data sources, and technology needed to improve the system
of incident reporting, including:
    (1) reports made under the Maltreatment of Minors and Vulnerable Adults Acts; and
    (2) investigation, analysis, and follow-up for disability services.
The commissioner must ensure that the federal home and community-based waiver
requirements are met and that incidents that may have jeopardized safety and health or
violated service-related assurances, civil and human rights, and other protections designed
to prevent abuse, neglect, and exploitation, are reviewed, investigated, and acted upon
in a timely manner.
    Subd. 5. Biennial report. The commissioner shall provide a biennial report to the
chairs of the legislative committees with jurisdiction over health and human services
policy and funding beginning January 15, 2009, on the development and activities of the
quality management, assurance, and improvement system designed to meet the federal
requirements under the home and community-based services waiver programs for persons
with disabilities. By January 15, 2008, the commissioner shall provide a preliminary
report on priorities for meeting the federal requirements, progress on development and
field testing of the annual survey, appropriations necessary to implement an annual survey
of service recipients once field testing is completed, recommendations for improvements
in the incident reporting system, and a plan for incorporating quality assurance efforts
under section 256B.095 and other regional efforts into the statewide system.

    Sec. 19. Minnesota Statutes 2006, section 256B.431, subdivision 2e, is amended to
read:
    Subd. 2e. Contracts for services for ventilator-dependent persons. (a)
The commissioner may negotiate with a nursing facility eligible to receive medical
assistance payments to provide services to a ventilator-dependent person identified by the
commissioner according to criteria developed by the commissioner, including:
    (1) nursing facility care has been recommended for the person by a preadmission
screening team;
    (2) the person has been hospitalized and no longer requires inpatient acute care
hospital services; and
    (3) the commissioner has determined that necessary services for the person cannot
be provided under existing nursing facility rates.
    The commissioner may negotiate an adjustment to the operating cost payment
rate for a nursing facility with a resident who is ventilator-dependent, for that resident.
The negotiated adjustment must reflect only the actual additional cost of meeting the
specialized care needs of a ventilator-dependent person identified by the commissioner
for whom necessary services cannot be provided under existing nursing facility rates and
which are not otherwise covered under Minnesota Rules, parts 9549.0010 to 9549.0080 or
9505.0170 to 9505.0475. For persons who are initially admitted to a nursing facility before
July 1, 2001, and have their payment rate under this subdivision negotiated after July 1,
2001, the negotiated payment rate must not exceed 200 percent of the highest multiple
bedroom payment rate for the facility, as initially established by the commissioner for the
rate year for case mix classification K; or, upon implementation of the RUG's-based case
mix system, 200 percent of the highest RUG's rate. For persons initially admitted to a
nursing facility on or after July 1, 2001, the negotiated payment rate must not exceed 300
percent of the facility's multiple bedroom payment rate for case mix classification K; or,
upon implementation of the RUG's-based case mix system, 300 percent of the highest
RUG's rate. The negotiated adjustment shall not affect the payment rate charged to private
paying residents under the provisions of section 256B.48, subdivision 1.
    (b) Effective July 1, 2007, or upon opening a unit of at least ten beds dedicated to
care of ventilator-dependent persons in partnership with Mayo Health Systems, whichever
is later, the operating payment rates for residents determined eligible under paragraph (a)
of a nursing facility in Waseca County that on February 1, 2007, was licensed for 70 beds
and reimbursed under this section, section 256B.434, or section 256B.441, shall be 300
percent of the facility's highest RUG rate.

    Sec. 20. Minnesota Statutes 2006, section 256B.431, subdivision 17a, is amended to
read:
    Subd. 17a. Allowable interest expense. (a) Notwithstanding Minnesota Rules, part
9549.0060, subparts 5, item A, subitems (1) and (3), and 7, item D, allowable interest
expense on debt shall include:
    (1) interest expense on debt related to the cost of purchasing or replacing depreciable
equipment, excluding vehicles, not to exceed six ten percent of the total historical cost
of the project; and
    (2) interest expense on debt related to financing or refinancing costs, including costs
related to points, loan origination fees, financing charges, legal fees, and title searches; and
issuance costs including bond discounts, bond counsel, underwriter's counsel, corporate
counsel, printing, and financial forecasts. Allowable debt related to items in this clause
shall not exceed seven percent of the total historical cost of the project. To the extent
these costs are financed, the straight-line amortization of the costs in this clause is not an
allowable cost; and
    (3) interest on debt incurred for the establishment of a debt reserve fund, net of the
interest earned on the debt reserve fund.
    (b) Debt incurred for costs under paragraph (a) is not subject to Minnesota Rules,
part 9549.0060, subpart 5, item A, subitem (5) or (6).
EFFECTIVE DATE.This section is effective October 1, 2007.

    Sec. 21. Minnesota Statutes 2006, 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 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, July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007,
and July 1, 2008, October 1, 2009, and October 1, 2010, 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. Beginning in 2005, adjustment to the property payment rate under this
section and section 256B.431 shall be effective on October 1. 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 a facility's operating payment rate for achieving outcomes specified
in a contract. The commissioner may solicit contract amendments and implement those
which, on a competitive basis, best meet the state's policy objectives. The commissioner
shall limit the amount of any incentive payment and the number of contract amendments
under this paragraph to operate the incentive payments within funds appropriated for this
purpose. The contract amendments may specify various levels of payment for various
levels of performance. Incentive payments to facilities under this paragraph may be in the
form of time-limited rate adjustments or onetime supplemental payments. In establishing
the specified outcomes and related criteria, the commissioner shall consider the following
state policy objectives:
    (1) successful diversion or discharge of residents to the residents' prior home or other
community-based alternatives;
    (2) adoption of new technology to improve quality or efficiency;
    (3) improved quality as measured in the Nursing Home Report Card;
    (4) reduced acute care costs; and
    (5) any additional outcomes proposed by a nursing facility that the commissioner
finds desirable.
    (e) Notwithstanding the threshold in section 256B.431, subdivision 16, facilities that
take action to come into compliance with existing or pending requirements of the life
safety code provisions or federal regulations governing sprinkler systems must receive
reimbursement for the costs associated with compliance if all of the following conditions
are met:
    (1) the expenses associated with compliance occurred on or after January 1, 2005,
and before December 31, 2008;
    (2) the costs were not otherwise reimbursed under subdivision 4f or section
144A.071 or 144A.073; and
    (3) the total allowable costs reported under this paragraph are less than the minimum
threshold established under section 256B.431, subdivision 15, paragraph (e), and
subdivision 16.
The commissioner shall use money appropriated for this purpose to provide to qualifying
nursing facilities a rate adjustment beginning October 1, 2007, and ending September 30,
2008. Nursing facilities that have spent money or anticipate the need to spend money
to satisfy the most recent life safety code requirements by (1) installing a sprinkler
system or (2) replacing all or portions of an existing sprinkler system may submit to the
commissioner by June 30, 2007, on a form provided by the commissioner the actual
costs of a completed project or the estimated costs, based on a project bid, of a planned
project. The commissioner shall calculate a rate adjustment equal to the allowable
costs of the project divided by the resident days reported for the report year ending
September 30, 2006. If the costs from all projects exceed the appropriation for this
purpose, the commissioner shall allocate the money appropriated on a pro rata basis to the
qualifying facilities by reducing the rate adjustment determined for each facility by an
equal percentage. Facilities that used estimated costs when requesting the rate adjustment
shall report to the commissioner by January 31, 2009, on the use of this money on a
form provided by the commissioner. If the nursing facility fails to provide the report, the
commissioner shall recoup the money paid to the facility for this purpose. If the facility
reports expenditures allowable under this subdivision that are less than the amount received
in the facility's annualized rate adjustment, the commissioner shall recoup the difference.

    Sec. 22. Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:
    Subd. 19. Nursing facility rate increases beginning October 1, 2007. (a) For the
rate year beginning October 1, 2007, the commissioner shall make available to each
nursing facility reimbursed under this section operating payment rate adjustments equal to
1.87 percent of the operating payment rates in effect on September 30, 2007.
    (b) Seventy-five percent of the money resulting from the rate adjustment under
paragraph (a) must be used for increases in compensation-related costs for employees
directly employed by the nursing facility on or after the effective date of the rate
adjustment, except:
    (1) the administrator;
    (2) persons employed in the central office of a corporation that has an ownership
interest in the nursing facility or exercises control over the nursing facility; and
    (3) persons paid by the nursing facility under a management contract.
    (c) Two-thirds of the money available under paragraph (b) must be used for wage
increases for all employees directly employed by the nursing facility on or after the
effective date of the rate adjustment, except those listed in paragraph (b), clauses (1) to
(3). The wage adjustment that employees receive under this paragraph must be paid as
an equal hourly percentage wage increase for all eligible employees. All wage increases
under this paragraph must be effective on the same date. Only costs associated with the
portion of the equal hourly percentage wage increase that goes to all employees shall
qualify under this paragraph. Costs associated with wage increases in excess of the
amount of the equal hourly percentage wage increase provided to all employees shall be
allowed only for meeting the requirements in paragraph (b). This paragraph shall not
apply to employees covered by a collective bargaining agreement.
    (d) The commissioner shall allow as compensation-related costs all costs for:
    (1) wages and salaries;
    (2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers'
compensation;
    (3) the employer's share of health and dental insurance, life insurance, disability
insurance, long-term care insurance, uniform allowance, and pensions; and
    (4) other benefits provided, subject to the approval of the commissioner.
    (e) The portion of the rate adjustment under paragraph (a) that is not subject to the
requirements in paragraphs (b) and (c) shall be provided to nursing facilities effective
October 1, 2007.
    (f) Nursing facilities may apply for the portion of the rate adjustment under
paragraph (a) that is subject to the requirements in paragraphs (b) and (c). The application
must be submitted to the commissioner within six months of the effective date of the
rate adjustment, and the nursing facility must provide additional information required
by the commissioner within nine months of the effective date of the rate adjustment.
The commissioner must respond to all applications within three weeks of receipt.
The commissioner may waive the deadlines in this paragraph under extraordinary
circumstances, to be determined at the sole discretion of the commissioner. The
application must contain:
    (1) an estimate of the amounts of money that must be used as specified in paragraphs
(b) and (c);
    (2) a detailed distribution plan specifying the allowable compensation-related and
wage increases the nursing facility will implement to use the funds available in clause (1);
    (3) a description of how the nursing facility will notify eligible employees of
the contents of the approved application, which must provide for giving each eligible
employee a copy of the approved application, excluding the information required in clause
(1), or posting a copy of the approved application, excluding the information required in
clause (1), for a period of at least six weeks in an area of the nursing facility to which all
eligible employees have access; and
    (4) instructions for employees who believe they have not received the
compensation-related or wage increases specified in clause (2), as approved by the
commissioner, and which must include a mailing address, e-mail address, and the
telephone number that may be used by the employee to contact the commissioner or the
commissioner's representative.
    (g) The commissioner shall ensure that cost increases in distribution plans under
paragraph (f), clause (2), that may be included in approved applications, comply with the
following requirements:
    (1) costs to be incurred during the applicable rate year resulting from wage and
salary increases effective after October 1, 2006, and prior to the first day of the nursing
facility's payroll period that includes October 1, 2007, shall be allowed if they were not
used in the prior year's application;
    (2) a portion of the costs resulting from tenure-related wage or salary increases
may be considered to be allowable wage increases, according to formulas that the
commissioner shall provide, where employee retention is above the average statewide
rate of retention of direct care employees;
    (3) the annualized amount of increases in costs for the employer's share of health
and dental insurance, life insurance, disability insurance, and workers' compensation
shall be allowable compensation-related increases if they are effective on or after April
1, 2007, and prior to April 1, 2008; and
    (4) for nursing facilities in which employees are represented by an exclusive
bargaining representative, the commissioner shall approve the application only upon
receipt of a letter of acceptance of the distribution plan, in regard to members of the
bargaining unit, signed by the exclusive bargaining agent and dated after enactment of
this subdivision. Upon receipt of the letter of acceptance, the commissioner shall deem
all requirements of this section as having been met in regard to the members of the
bargaining unit.
    (h) The commissioner shall review applications received under paragraph (f) and
shall provide the portion of the rate adjustment under paragraphs (b) and (c) if the
requirements of this subdivision have been met. The rate adjustment shall be effective
October 1. Notwithstanding paragraph (a), if the approved application distributes less
money than is available, the amount of the rate adjustment shall be reduced so that the
amount of money made available is equal to the amount to be distributed.

    Sec. 23. Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:
    Subd. 20. Payment of Public Employees Retirement Association costs. Nursing
facilities that participate in the Public Employees Retirement Association (PERA) shall
have the component of their payment rate associated with the costs of PERA determined
for each rate year. Effective for rate years beginning on and after October 1, 2007, the
commissioner shall determine the portion of the payment rate in effect on September 30
each year and shall subtract that amount from the payment rate to be effective on the
following October 1. The portion that shall be deemed to be included in the September 30,
2007, rate that is associated with PERA costs shall be the allowed costs in the facility's
base for determining rates under this section, divided by the resident days reported for that
year. The commissioner shall add to the payment rate to be effective on October 1 each
year an amount equal to the reported costs associated with PERA, for the year ended on
the most recent September 30 for which data is available, divided by total resident days
for that year, as reported by the facility and audited under section 256B.441.

    Sec. 24. Minnesota Statutes 2006, section 256B.437, is amended by adding a
subdivision to read:
    Subd. 10. Big Stone County rate adjustment. Notwithstanding the requirements
of this section, the commissioner shall approve a planned closure rate adjustment in Big
Stone County for an eight-bed facility in Clinton for reassignment to a 50-bed facility in
Graceville. The adjustment shall be calculated according to subdivisions 3 and 6.

    Sec. 25. Minnesota Statutes 2006, section 256B.441, subdivision 1, is amended to read:
    Subdivision 1. Rate determination Rebasing of nursing facility operating cost
payment rates. (a) The commissioner shall establish a value-based nursing facility
reimbursement system which will provide facility-specific, prospective rates for nursing
facilities participating in the medical assistance program. The rates shall be determined
using an annual statistical and cost report filed by each nursing facility. The total payment
rate shall be composed of four rate components: direct care services, support services,
external fixed, and property-related rate components. The payment rate shall be derived
from statistical measures of actual costs incurred in facility operation of nursing facilities.
From this cost basis, the components of the total payment rate shall be adjusted for quality
of services provided, recognition of staffing levels, geographic variation in labor costs, and
resident acuity. The commissioner shall rebase nursing facility operating cost payment
rates to align payments to facilities with the cost of providing care. The rebased operating
cost payment rates shall be calculated using the statistical and cost report filed by each
nursing facility for the report period ending one year prior to the rate year.
    (b) Rates shall be rebased annually. The new operating cost payment rates based on
this section shall take effect beginning with the rate year beginning October 1, 2008, and
shall be phased in over eight rate years through October 1, 2015.
    (c) Operating cost payment rates shall be rebased on October 1, 2016, and every
two years after that date.
    (d) Each cost reporting year shall begin on October 1 and end on the following
September 30. Beginning in 2006, a statistical and cost report shall be filed by each
nursing facility by January 15. Notice of rates shall be distributed by August 15 and the
rates shall go into effect on October 1 for one year.
    (c) The commissioner shall begin to phase in the new reimbursement system
beginning October 1, 2007. Full phase-in shall be completed by October 1, 2011.
    (e) Effective October 1, 2014, property rates shall be rebased in accordance with
section 256B.431 and Minnesota Rules, chapter 9549. The commissioner shall determine
what the property payment rate for a nursing facility would be had the facility not had its
property rate determined under section 256B.434. The commissioner shall allow nursing
facilities to provide information affecting this rate determination that would have been
filed annually under Minnesota Rules, chapter 9549, and nursing facilities shall report
information necessary to determine allowable debt. The commissioner shall use this
information to determine the property payment rate.

    Sec. 26. Minnesota Statutes 2006, section 256B.441, subdivision 2, is amended to read:
    Subd. 2. Definitions. For purposes of this section, the terms in subdivisions 3 to
42 42a have the meanings given unless otherwise provided for in this section.

    Sec. 27. Minnesota Statutes 2006, section 256B.441, subdivision 5, is amended to read:
    Subd. 5. Administrative costs. "Administrative costs" means the direct costs for
administering the overall activities of the nursing home. These costs include salaries and
wages of the administrator, assistant administrator, business office employees, security
guards, and associated fringe benefits and payroll taxes, fees, contracts, or purchases
related to business office functions, licenses, and permits except as provided in the
external fixed costs category, employee recognition, travel including meals and lodging,
training, voice and data communication or transmission, office supplies, liability insurance
and other forms of insurance not designated to other areas, personnel recruitment, legal
services, accounting services, management or business consultants, data processing,
information technology, Web site, central or home office costs, business meetings and
seminars, postage, fees for professional organizations, subscriptions, security services,
advertising, board of director's fees, working capital interest expense, and bad debts and
bad debt collection fees.

    Sec. 28. Minnesota Statutes 2006, section 256B.441, subdivision 6, is amended to read:
    Subd. 6. Allowed costs. "Allowed costs" means the amounts reported by the
facility which are necessary for the operation of the facility and the care of residents
and which are reviewed by the department for accuracy,; reasonableness, in accordance
with the requirements set forth in Title XVIII of the federal Social Security Act and the
interpretations in the provider reimbursement manual; and compliance with this section
and generally accepted accounting principles. All references to costs in this section shall
be assumed to refer to allowed costs.

    Sec. 29. Minnesota Statutes 2006, section 256B.441, subdivision 10, is amended to
read:
    Subd. 10. Dietary costs. "Dietary costs" means the costs for the salaries and wages
of the dietary supervisor, dietitians, chefs, cooks, dishwashers, and other employees
assigned to the kitchen and dining room, and associated fringe benefits and payroll
taxes. Dietary costs also includes the salaries or fees of dietary consultants, direct costs
of raw food (both normal and special diet food), dietary supplies, and food preparation
and serving. Also included are special dietary supplements used for tube feeding or oral
feeding, such as elemental high nitrogen diet, even if written as a prescription item by a
physician.

    Sec. 30. Minnesota Statutes 2006, section 256B.441, subdivision 11, is amended to
read:
    Subd. 11. Direct care costs category. "Direct care costs category" "Direct care
costs" means costs for nursing services, activities, and social services the wages of nursing
administration, staff education, direct care registered nurses, licensed practical nurses,
certified nursing assistants, trained medication aides, and associated fringe benefits and
payroll taxes; services from a supplemental nursing services agency; supplies that are
stocked at nursing stations or on the floor and distributed or used individually, including,
but not limited to: alcohol, applicators, cotton balls, incontinence pads, disposable ice
bags, dressings, bandages, water pitchers, tongue depressors, disposable gloves, enemas,
enema equipment, soap, medication cups, diapers, plastic waste bags, sanitary products,
thermometers, hypodermic needles and syringes, clinical reagents or similar diagnostic
agents, drugs that are not paid on a separate fee schedule by the medical assistance
program or any other payer, and technology related to the provision of nursing care to
residents, such as electronic charting systems.

    Sec. 31. Minnesota Statutes 2006, section 256B.441, subdivision 13, is amended to
read:
    Subd. 13. External fixed costs category. "External fixed costs category" "External
fixed costs" means costs related to the nursing home surcharge under section 256.9657,
subdivision 1
; licensure fees under section 144.122; long-term care consultation fees
under section 256B.0911, subdivision 6; family advisory council fee under section
144A.33; scholarships under section 256B.431, subdivision 36; planned closure rate
adjustments under section 256B.436 or 256B.437; or single bed room incentives under
section 256B.431, subdivision 42; property taxes and property insurance; and PERA.

    Sec. 32. Minnesota Statutes 2006, section 256B.441, subdivision 14, is amended to
read:
    Subd. 14. Facility average case mix index. "Facility average case mix index" or
"CMI" means a numerical value score that describes the relative resource use for all
residents within the groups under the resource utilization group (RUG-III) classification
system prescribed by the commissioner based on an assessment of each resident. The
facility average CMI shall be computed as the standardized days divided by total days for
all residents in the facility. The RUG's weights used in this section shall be as follows
for each RUG's class: SE3 1.605; SE2 1.247; SE1 1.081; RAD 1.509; RAC 1.259; RAB
1.109; RAA 0.957; SSC 1.453; SSB 1.224; SSA 1.047; CC2 1.292; CC1 1.200; CB2
1.086; CB1 1.017; CA2 0.908; CA1 0.834; IB2 0.877; IB1 0.817; IA2 0.720; IA1 0.676;
BB2 0.956; BB1 0.885; BA2 0.716; BA1 0.673; PE2 1.199; PE1 1.104; PD2 1.023;
PD1 0.948; PC2 0.926; PC1 0.860; PB2 0.786; PB1 0.734; PA2 0.691; PA1 0.651; BC1
0.651; and DDF 1.000.

    Sec. 33. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 14a. Facility type groups. Facilities shall be classified into two groups,
called "facility type groups," which shall consist of:
    (1) C&NC/R80: facilities that are hospital-attached, or are licensed under Minnesota
Rules, parts 9570.2000 to 9570.3400; and
    (2) freestanding: all other facilities.

    Sec. 34. Minnesota Statutes 2006, section 256B.441, subdivision 17, is amended to
read:
    Subd. 17. Fringe benefit costs. "Fringe benefit costs" means the costs for group
life, health, dental, workers' compensation, and other employee insurances and pension,
profit-sharing, and retirement plans for which the employer pays all or a portion of the
costs and that are available to at least all employees who work at least 20 hours per week.

    Sec. 35. Minnesota Statutes 2006, section 256B.441, subdivision 20, is amended to
read:
    Subd. 20. Housekeeping costs. "Housekeeping costs" means the costs for the
salaries and wages of the housekeeping supervisor, housekeepers, and other cleaning
employees and associated fringe benefits and payroll taxes. It also includes the cost of
housekeeping supplies, including, but not limited to, cleaning and lavatory supplies and
contract services.

    Sec. 36. Minnesota Statutes 2006, section 256B.441, subdivision 24, is amended to
read:
    Subd. 24. Maintenance and plant operations costs. "Maintenance and plant
operations costs" means the costs for the salaries and wages of the maintenance supervisor,
engineers, heating-plant employees, and other maintenance employees and associated
fringe benefits and payroll taxes. It also includes direct costs for maintenance and
operation of the building and grounds, including, but not limited to, fuel, electricity,
medical waste and garbage removal, water, sewer, supplies, tools, and repairs.

    Sec. 37. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 28a. Other direct care costs. "Other direct care costs" means the costs
for the salaries and wages and associated fringe benefits and payroll taxes of mental
health workers, religious personnel, and other direct care employees not specified in
the definition of direct care costs.

    Sec. 38. Minnesota Statutes 2006, section 256B.441, subdivision 30, is amended to
read:
    Subd. 30. Peer groups. Facilities shall be classified into three groups, called "peer
groups," which by county. The groups shall consist of:
    (1) C&NC/Short Stay/R80 - facilities that have three or more admissions per bed
per year, are hospital-attached, or are licensed under Minnesota Rules, parts 9570.2000
to 9570.3600 group one: facilities in Anoka, Benton, Carlton, Carver, Chisago, Dakota,
Dodge, Goodhue, Hennepin, Isanti, Mille Lacs, Morrison, Olmsted, Ramsey, Rice, Scott,
Sherburne, St. Louis, Stearns, Steele, Wabasha, Washington, Winona, or Wright County;
    (2) boarding care homes - facilities that have more than 50 percent of their beds
licensed as boarding care homes group two: facilities in Aitkin, Beltrami, Blue Earth,
Brown, Cass, Clay, Cook, Crow Wing, Faribault, Fillmore, Freeborn, Houston, Hubbard,
Itasca, Kanabec, Koochiching, Lake, Lake of the Woods, Le Sueur, Martin, McLeod,
Meeker, Mower, Nicollet, Norman, Pine, Roseau, Sibley, Todd, Wadena, Waseca,
Watonwan, or Wilkin County; and
    (3) standard - all other facilities group three: facilities in all other counties.

    Sec. 39. Minnesota Statutes 2006, section 256B.441, subdivision 31, is amended to
read:
    Subd. 31. Prior rate-setting method system operating cost payment rate. "Prior
rate-setting method" "Prior system operating cost payment rate" means the operating cost
payment rate determination process in effect prior to October 1, 2006 on September 30,
2008, under Minnesota Rules and Minnesota Statutes, not including planned closure rate
adjustments under section 256B.436 or 256B.437, or single bed room incentives under
section 256B.431, subdivision 42.

    Sec. 40. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 33a. Raw food costs. "Raw food costs" means the cost of food provided to
nursing facility residents. Also included are special dietary supplements used for tube
feeding or oral feeding, such as elemental high nitrogen diet.

    Sec. 41. Minnesota Statutes 2006, section 256B.441, subdivision 34, is amended to
read:
    Subd. 34. Related organization. "Related organization" means a person that
furnishes goods or services to a nursing facility and that is a close relative of a nursing
facility, an affiliate of a nursing facility, a close relative of an affiliate of a nursing facility,
or an affiliate of a close relative of an affiliate of a nursing facility. As used in this
subdivision, paragraphs (a) to (d) apply:
    (a) "Affiliate" means a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with another
person.
    (b) "Person" means an individual, a corporation, a partnership, an association, a
trust, an unincorporated organization, or a government or political subdivision.
    (c) "Close relative of an affiliate of a nursing facility" means an individual whose
relationship by blood, marriage, or adoption to an individual who is an affiliate of a
nursing facility is no more remote than first cousin.
    (d) "Control" including the terms "controlling," "controlled by," and "under common
control with" means the possession, direct or indirect, of the power to direct or cause the
direction of the management, operations, or policies of a person, whether through the
ownership of voting securities, by contract, or otherwise, or to influence in any manner
other than through an arms length, legal transaction.

    Sec. 42. Minnesota Statutes 2006, section 256B.441, subdivision 38, is amended to
read:
    Subd. 38. Social services costs. "Social services costs" means the costs for the
salaries and wages of the supervisor and other social work employees, associated fringe
benefits and payroll taxes, supplies, services, and consultants. This category includes the
cost of those employees who manage and process admission to the nursing facility.

    Sec. 43. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 42a. Therapy costs. "Therapy costs" means any costs related to medical
assistance therapy services provided to residents that are not billed separately from the
daily operating rate.

    Sec. 44. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 46a. Calculation of quality add-on for the rate year beginning October
1, 2007. (a) The payment rate for the rate year beginning October 1, 2007, for the
quality add-on, is a variable amount based on each facility's quality score. For the rate
year, the maximum quality add-on is .3 percent of the operating payment rate in effect
on September 30, 2007. The commissioner shall determine the quality add-on for each
facility according to paragraphs (b) to (d).
    (b) For each facility, the commissioner shall determine the operating payment rate
in effect on September 30, 2007.
    (c) For each facility, the commissioner shall determine a ratio of the quality score of
the facility determined in subdivision 44, subtract 40, and then divide by 60. If this value
is less than zero, the commissioner shall use the value zero.
    (d) For each facility, the quality add-on is the value determined in paragraph (b),
multiplied by the value determined in paragraph (c), multiplied by .3 percent.

    Sec. 45. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 48. Calculation of operating per diems. The direct care per diem for
each facility shall be the facility's direct care costs divided by its standardized days.
The other care-related per diem shall be the sum of the facility's activities costs, other
direct care costs, raw food costs, therapy costs, and social services costs, divided by the
facility's resident days. The other operating per diem shall be the sum of the facility's
administrative costs, dietary costs, housekeeping costs, laundry costs, and maintenance
and plant operations costs divided by the facility's resident days.

    Sec. 46. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 49. Determination of total care-related per diem. The total care-related
per diem for each facility shall be the sum of the direct care per diem and the other
care-related per diem.

    Sec. 47. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 50. Determination of total care-related limit. (a) The limit on the total
care-related per diem shall be determined for each peer group and facility type group
combination. A facility's total care-related per diems shall be limited to 120 percent of the
median for the facility's peer and facility type group. The facility-specific direct care costs
used in making this comparison and in the calculation of the median shall be based on a
RUG's weight of 1.00. A facility that is above that limit shall have its total care-related per
diem reduced to the limit. If a reduction of the total care-related per diem is necessary
because of this limit, the reduction shall be made proportionally to both the direct care per
diem and the other care-related per diem.
    (b) Beginning with rates determined for October 1, 2016, the total care-related limit
shall be a variable amount based on each facility's quality score, as determined under
section 256B.441, subdivision 44, in accordance with clauses (1) to (4):
    (1) for each facility, the commissioner shall determine the quality score, subtract 40,
divide by 40, and convert to a percentage;
    (2) if the value determined in clause (1) is less than zero, the total care-related limit
shall be 105 percent of the median for the facility's peer and facility type group;
    (3) if the value determined in clause (1) is greater than 100 percent, the total
care-related limit shall be 125 percent of the median for the facility's peer and facility
type group; and
    (4) if the value determined in clause (1) is greater than zero and less than 100
percent, the total care-related limit shall be 105 percent of the median for the facility's peer
and facility type group plus one-fifth of the percentage determined in clause (1).

    Sec. 48. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 50a. Determination of proximity adjustments. For a nursing facility
located in close proximity to another nursing facility of the same facility group type but in
a different peer group and that has higher limits for care-related or other operating costs,
the commissioner shall adjust the limits in accordance with clauses (1) to (4):
    (1) determine the difference between the limits;
    (2) determine the distance between the two facilities, by the shortest driving route. If
the distance exceeds 20 miles, no adjustment shall be made;
    (3) subtract the value in clause (2) from 20 miles, divide by 20, and convert to a
percentage; and
    (4) increase the limits for the nursing facility with the lower limits by the value
determined in clause (1) multiplied by the value determined in clause (3).

    Sec. 49. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 51. Determination of other operating limit. The limit on the other operating
per diem shall be determined for each peer group. A facility's other operating per diem
shall be limited to 105 percent of the median for its peer group. A facility that is above
that limit shall have its other operating per diem reduced to the limit.

    Sec. 50. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 51a. Exception allowing contracting for specialized care. (a) For rate years
beginning on or after October 1, 2016, the commissioner may negotiate increases to
the care-related limit for nursing facilities that provide specialized care, at a cost to the
general fund not to exceed $600,000 per year. The commissioner shall publish a request
for proposals annually, and may negotiate increases to the limits that shall apply for either
one or two years before the increase shall be subject to a new proposal and negotiation.
The care-related limit may be increased by up to 50 percent.
    (b) In selecting facilities with which to negotiate, the commissioner shall consider:
    (1) the diagnoses or other circumstances of residents in the specialized program that
require care that costs substantially more than the RUG's rates associated with those
residents;
    (2) the nature of the specialized program or programs offered to meet the needs
of these individuals; and
    (3) outcomes achieved by the specialized program.

    Sec. 51. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 52. Determination of efficiency incentive. Each facility shall be eligible
for an efficiency incentive based on its other operating per diem. A facility with an other
operating per diem that exceeds the limit in subdivision 51 shall receive no efficiency
incentive. All other facilities shall receive an incentive calculated as 50 percent times the
difference between the facility's other operating per diem and its other operating per diem
limit, up to a maximum incentive of $3.

    Sec. 52. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 53. Calculation of payment rate for external fixed costs. The commissioner
shall calculate a payment rate for external fixed costs.
    (a) For a facility licensed as a nursing home, the portion related to section 256.9657
shall be equal to $8.86. For a facility licensed as both a nursing home and a boarding care
home, the portion related to section 256.9657 shall be equal to $8.86 multiplied by the
result of its number of nursing home beds divided by its total number of licensed beds.
    (b) The portion related to the licensure fee under section 144.122, paragraph (d),
shall be the amount of the fee divided by actual resident days.
    (c) The portion related to scholarships shall be determined under section 256B.431,
subdivision 36.
    (d) The portion related to long-term care consultation shall be determined according
to section 256B.0911, subdivision 6.
    (e) The portion related to development and education of resident and family advisory
councils under section 144A.33 shall be $5 divided by 365.
    (f) The portion related to planned closure rate adjustments shall be as determined
under sections 256B.436 and 256B.437, subdivision 6. Planned closure rate adjustments
that take effect before October 1, 2014, shall no longer be included in the payment rate
for external fixed costs beginning October 1, 2016. Planned closure rate adjustments that
take effect on or after October 1, 2014, shall no longer be included in the payment rate
for external fixed costs beginning on October 1 of the first year not less than two years
after their effective date.
    (g) The portions related to property insurance, real estate taxes, special assessments,
and payments made in lieu of real estate taxes directly identified or allocated to the nursing
facility shall be the actual amounts divided by actual resident days.
    (h) The portion related to the Public Employees Retirement Association shall be
actual costs divided by resident days.
    (i) The single bed room incentives shall be as determined under section 256B.431,
subdivision 42. Single bed room incentives that take effect before October 1, 2014, shall
no longer be included in the payment rate for external fixed costs beginning October 1,
2016. Single bed room incentives that take effect on or after October 1, 2014, shall no
longer be included in the payment rate for external fixed costs beginning on October 1 of
the first year not less than two years after their effective date.
    (j) The payment rate for external fixed costs shall be the sum of the amounts in
paragraphs (a) to (i).

    Sec. 53. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 54. Determination of total payment rates. In rate years when rates are
rebased, the total payment rate for a RUG's weight of 1.00 shall be the sum of the total
care-related payment rate, other operating payment rate, efficiency incentive, external
fixed cost rate, and the property rate determined under section 256B.434. To determine
a total payment rate for each RUG's level, the total care-related payment rate shall be
divided into the direct care payment rate and the other care-related payment rate, and the
direct care payment rate multiplied by the RUG's weight for each RUG's level using the
weights in subdivision 14.

    Sec. 54. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 55. Phase-in of rebased operating cost payment rates. (a) For the rate years
beginning October 1, 2008, to October 1, 2012, the operating cost payment rate calculated
under this section shall be phased in by blending the operating cost rate with the operating
cost payment rate determined under section 256B.434. For the rate year beginning
October 1, 2008, the operating cost payment rate for each facility shall be 13 percent of
the operating cost payment rate from this section, and 87 percent of the operating cost
payment rate from section 256B.434. For the rate year beginning October 1, 2009, the
operating cost payment rate for each facility shall be 14 percent of the operating cost
payment rate from this section, and 86 percent of the operating cost payment rate from
section 256B.434. For the rate year beginning October 1, 2010, the operating cost payment
rate for each facility shall be 14 percent of the operating cost payment rate from this
section, and 86 percent of the operating cost payment rate from section 256B.434. For the
rate year beginning October 1, 2011, the operating cost payment rate for each facility shall
be 31 percent of the operating cost payment rate from this section, and 69 percent of the
operating cost payment rate from section 256B.434. For the rate year beginning October 1,
2012, the operating cost payment rate for each facility shall be 48 percent of the operating
cost payment rate from this section, and 52 percent of the operating cost payment rate
from section 256B.434. For the rate year beginning October 1, 2013, the operating cost
payment rate for each facility shall be 65 percent of the operating cost payment rate from
this section, and 35 percent of the operating cost payment rate from section 256B.434. For
the rate year beginning October 1, 2014, the operating cost payment rate for each facility
shall be 82 percent of the operating cost payment rate from this section, and 18 percent
of the operating cost payment rate from section 256B.434. For the rate year beginning
October 1, 2015, the operating cost payment rate for each facility shall be the operating
cost payment rate determined under this section. The blending of operating cost payment
rates under this section shall be performed separately for each RUG's class.
    (b) A portion of the funds received under this subdivision that are in excess of
operating cost payment rates that a facility would have received under section 256B.434,
as determined in accordance with clauses (1) to (3), shall be subject to the requirements in
section 256B.434, subdivision 19, paragraphs (b) to (h).
    (1) Determine the amount of additional funding available to a facility, which shall be
equal to total medical assistance resident days from the most recent reporting year times
the difference between the blended rate determined in paragraph (a) for the rate year being
computed and the blended rate for the prior year.
    (2) Determine the portion of all operating costs, for the most recent reporting year,
that are compensation related. If this value exceeds 75 percent, use 75 percent.
    (3) Subtract the amount determined in clause (2) from 75 percent.
    (4) The portion of the fund received under this subdivision that shall be subject to
the requirements in section 256B.434, subdivision 19, paragraphs (b) to (h), shall equal
the amount determined in clause (1) times the amount determined in clause (3).

    Sec. 55. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 56. Hold harmless. For the rate years beginning October 1, 2008, to October
1, 2016, no nursing facility shall receive an operating cost payment rate less than its
operating cost payment rate under section 256B.434. The comparison of operating cost
payment rates under this section shall be made for a RUG's rate with a weight of 1.00.

    Sec. 56. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 57. Appeals. Nursing facilities may appeal, as described under section
256B.50, the determination of a payment rate established under this chapter.

    Sec. 57. Minnesota Statutes 2006, section 256B.441, is amended by adding a
subdivision to read:
    Subd. 58. Implementation delay. Within six months prior to the effective date of
(1) rebasing of property payment rates under subdivision 1; (2) quality-based rate limits
under subdivision 50; and (3) the removal of planned closure rate adjustments and single
bed room incentives from external fixed costs under subdivision 53, the commissioner
shall compare the average operating cost for all facilities combined from the most recent
cost reports to the average medical assistance operating payment rates for all facilities
combined from the same time period. Each provision shall not go into effect until the
average medical assistance operating payment rate is at least 92 percent of the average
operating cost.

    Sec. 58. Minnesota Statutes 2006, section 256B.49, is amended by adding a
subdivision to read:
    Subd. 16a. Medical assistance reimbursement. (a) The commissioner shall
seek federal approval for medical assistance reimbursement of independent living skills
services, foster care waiver service, supported employment, prevocational service,
structured day service, and adult day care under the home and community-based waiver
for persons with a traumatic brain injury, the community alternatives for disabled
individuals waivers, and the community alternative care waivers.
    (b) Medical reimbursement shall be made only when the provider demonstrates
evidence of its capacity to meet basic health, safety, and protection standards through
one of the methods in paragraphs (c) to (e).
    (c) The provider is licensed to provide services under chapter 245B and agrees to
apply these standards to services funded through the traumatic brain injury, community
alternatives for disabled, or community alternative care home and community-based
waivers.
    (d) The local agency contracting for the services certifies on a form provided by the
commissioner that the provider has the capacity to meet the individual needs as identified
in each person's individual service plan. When certifying that the service provider meets
the necessary provider qualifications, the local agency shall verify that the provider has
policies and procedures governing the following:
    (1) protection of the consumer's rights and privacy;
    (2) risk assessment and planning;
    (3) record keeping and reporting of incidents and emergencies with documentation
of corrective action if needed;
    (4) service outcomes, regular reviews of progress, and periodic reports;
    (5) complaint and grievance procedures;
    (6) service termination or suspension;
    (7) necessary training and supervision of direct care staff that includes:
    (i) documentation in personnel files of 20 hours of orientation training in providing
training related to service provision;
    (ii) training in recognizing the symptoms and effects of certain disabilities, health
conditions, and positive behavioral supports and interventions; and
    (iii) a minimum of five hours of related training annually; and
    (iv) when applicable:
    (A) safe medication administration;
    (B) proper handling of consumer funds; and
    (C) compliance with prohibitions and standards developed by the commissioner to
satisfy federal requirements regarding the use of restraints and restrictive interventions.
The local agency shall review at least annually each service provider's continued
compliance with the standards governing basic health, safety, and protection of rights.
    (h) The commissioner shall seek federal approval for Medicaid reimbursement
of foster care services under the home and community-based waiver for persons with
a traumatic brain injury, the community alternatives for disabled individuals waiver,
and community alternative care waiver when the provider demonstrates evidence of its
capacity to meet basic health, safety, and protection standards. The local agency shall
verify that the provider is licensed under Minnesota Rules, parts 9555.5105 to 9555.6265,
and certify that the provider has policies and procedures that govern:
    (1) compliance with prohibitions and standards developed by the commissioner to
meet federal requirements regarding the use of restraints and restrictive interventions; and
    (2) documentation of service needs and outcomes, regular reviews of progress,
and periodic reports.
The local agency shall review at least annually each service provider's continued
compliance with the standards governing basic health, safety, and protection of rights
standards.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 59. Minnesota Statutes 2006, section 256B.5012, is amended by adding a
subdivision to read:
    Subd. 7. ICF/MR rate increases effective October 1, 2007, and October 1, 2008.
    (a) For the rate year beginning October 1, 2007, the commissioner shall make available to
each facility reimbursed under this section operating payment rate adjustments equal to 2.0
percent of the operating payment rates in effect on September 30, 2007. For the rate year
beginning July 1, 2008, the commissioner shall make available to each facility reimbursed
under this section operating payment rate adjustments equal to 2.0 percent of the operating
payment rates in effect on June 30, 2008. For each facility, the commissioner shall make
available an adjustment, based on occupied beds, using the percentage specified in this
paragraph multiplied by the total payment rate, including the variable rate but excluding
the property-related payment rate, in effect on the preceding day. The total payment rate
shall include the adjustment provided in section 256B.501, subdivision 12. A facility
whose payment rates are governed by closure agreements, receivership agreements, or
Minnesota Rules, part 9553.0075, is not eligible for an adjustment otherwise granted
under this subdivision.
    (b) Seventy-five percent of the money resulting from the rate adjustments under
paragraph (a) must be used for increases in compensation-related costs for employees
directly employed by the facility on or after the effective date of the rate adjustments,
except:
    (1) the administrator;
    (2) persons employed in the central office of a corporation that has an ownership
interest in the facility or exercises control over the facility; and
    (3) persons paid by the facility under a management contract.
    (c) Two-thirds of the money available under paragraph (b) must be used for wage
increases for all employees directly employed by the facility on or after the effective
date of the rate adjustments, except those listed in paragraph (b), clauses (1) to (3). The
wage adjustment that employees receive under this paragraph must be paid as an equal
hourly percentage wage increase for all eligible employees. All wage increases under this
paragraph must be effective on the same date. Only costs associated with the portion of
the equal hourly percentage wage increase that goes to all employees shall qualify under
this paragraph. Costs associated with wage increases in excess of the amount of the equal
hourly percentage wage increase provided to all employees shall be allowed only for
meeting the requirements in paragraph (b). This paragraph shall not apply to employees
covered by a collective bargaining agreement.
    (d) The commissioner shall allow as compensation-related costs all costs for:
    (1) wages and salaries;
    (2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers'
compensation;
    (3) the employer's share of health and dental insurance, life insurance, disability
insurance, long-term care insurance, uniform allowance, and pensions; and
    (4) other benefits provided, subject to the approval of the commissioner.
    (e) The portion of the rate adjustments under paragraph (a) that is not subject to the
requirements in paragraphs (b) and (c) shall be provided to facilities effective October
1 of each year.
    (f) Facilities may apply for the portion of the rate adjustments under paragraph
(a) that is subject to the requirements in paragraphs (b) and (c). The application
must be submitted to the commissioner within six months of the effective date of the
rate adjustments, and the facility must provide additional information required by
the commissioner within nine months of the effective date of the rate adjustments.
The commissioner must respond to all applications within three weeks of receipt.
The commissioner may waive the deadlines in this paragraph under extraordinary
circumstances, to be determined at the sole discretion of the commissioner. The
application must contain:
    (1) an estimate of the amounts of money that must be used as specified in paragraphs
(b) and (c);
    (2) a detailed distribution plan specifying the allowable compensation-related and
wage increases the facility will implement to use the funds available in clause (1);
    (3) a description of how the facility will notify eligible employees of the contents of
the approved application, which must provide for giving each eligible employee a copy of
the approved application, excluding the information required in clause (1), or posting a
copy of the approved application, excluding the information required in clause (1), for
a period of at least six weeks in an area of the facility to which all eligible employees
have access; and
    (4) instructions for employees who believe they have not received the
compensation-related or wage increases specified in clause (2), as approved by the
commissioner, and which must include a mailing address, e-mail address, and the
telephone number that may be used by the employee to contact the commissioner or the
commissioner's representative.
    (g) The commissioner shall ensure that cost increases in distribution plans under
paragraph (f), clause (2), that may be included in approved applications, comply with
requirements in clauses (1) to (4):
    (1) costs to be incurred during the applicable rate year resulting from wage and
salary increases effective after October 1, 2006, and prior to the first day of the facility's
payroll period that includes October 1 of each year shall be allowed if they were not used
in the prior year's application and they meet the requirements of paragraphs (b) and (c);
    (2) a portion of the costs resulting from tenure-related wage or salary increases
may be considered to be allowable wage increases, according to formulas that the
commissioner shall provide, where employee retention is above the average statewide
rate of retention of direct care employees;
    (3) the annualized amount of increases in costs for the employer's share of health
and dental insurance, life insurance, disability insurance, and workers' compensation shall
be allowable compensation-related increases if they are effective on or after April 1 of
the year in which the rate adjustments are effective and prior to April 1 of the following
year; and
    (4) for facilities in which employees are represented by an exclusive bargaining
representative, the commissioner shall approve the application only upon receipt of a letter
of acceptance of the distribution plan, as regards members of the bargaining unit, signed
by the exclusive bargaining agent and dated after enactment of this subdivision. Upon
receipt of the letter of acceptance, the commissioner shall deem all requirements of this
section as having been met in regard to the members of the bargaining unit.
    (h) The commissioner shall review applications received under paragraph (f) and
shall provide the portion of the rate adjustments under paragraphs (b) and (c) if the
requirements of this subdivision have been met. The rate adjustments shall be effective
October 1 of each year. Notwithstanding paragraph (a), if the approved application
distributes less money than is available, the amount of the rate adjustment shall be reduced
so that the amount of money made available is equal to the amount to be distributed.

    Sec. 60. Minnesota Statutes 2006, section 256B.69, subdivision 23, is amended to read:
    Subd. 23. Alternative services; elderly and disabled persons. (a) The
commissioner may implement demonstration projects to create alternative integrated
delivery systems for acute and long-term care services to elderly persons and persons
with disabilities as defined in section 256B.77, subdivision 7a, that provide increased
coordination, improve access to quality services, and mitigate future cost increases.
The commissioner may seek federal authority to combine Medicare and Medicaid
capitation payments for the purpose of such demonstrations and may contract with
Medicare-approved special needs plans to provide Medicaid services. Medicare funds and
services shall be administered according to the terms and conditions of the federal contract
and demonstration provisions. For the purpose of administering medical assistance funds,
demonstrations under this subdivision are subject to subdivisions 1 to 22. The provisions
of Minnesota Rules, parts 9500.1450 to 9500.1464, apply to these demonstrations,
with the exceptions of parts 9500.1452, subpart 2, item B; and 9500.1457, subpart 1,
items B and C, which do not apply to persons enrolling in demonstrations under this
section. An initial open enrollment period may be provided. Persons who disenroll from
demonstrations under this subdivision remain subject to Minnesota Rules, parts 9500.1450
to 9500.1464. When a person is enrolled in a health plan under these demonstrations and
the health plan's participation is subsequently terminated for any reason, the person shall
be provided an opportunity to select a new health plan and shall have the right to change
health plans within the first 60 days of enrollment in the second health plan. Persons
required to participate in health plans under this section who fail to make a choice of
health plan shall not be randomly assigned to health plans under these demonstrations.
Notwithstanding section 256L.12, subdivision 5, and Minnesota Rules, part 9505.5220,
subpart 1, item A, if adopted, for the purpose of demonstrations under this subdivision,
the commissioner may contract with managed care organizations, including counties, to
serve only elderly persons eligible for medical assistance, elderly and disabled persons, or
disabled persons only. For persons with a primary diagnosis of developmental disability,
serious and persistent mental illness, or serious emotional disturbance, the commissioner
must ensure that the county authority has approved the demonstration and contracting
design. Enrollment in these projects for persons with disabilities shall be voluntary. The
commissioner shall not implement any demonstration project under this subdivision for
persons with a primary diagnosis of developmental disabilities, serious and persistent
mental illness, or serious emotional disturbance, without approval of the county board of
the county in which the demonstration is being implemented.
    (b) Notwithstanding chapter 245B, sections 252.40 to 252.46, 256B.092, 256B.501
to 256B.5015, and Minnesota Rules, parts 9525.0004 to 9525.0036, 9525.1200 to
9525.1330, 9525.1580, and 9525.1800 to 9525.1930, the commissioner may implement
under this section projects for persons with developmental disabilities. The commissioner
may capitate payments for ICF/MR services, waivered services for developmental
disabilities, including case management services, day training and habilitation and
alternative active treatment services, and other services as approved by the state and by
the federal government. Case management and active treatment must be individualized
and developed in accordance with a person-centered plan. Costs under these projects may
not exceed costs that would have been incurred under fee-for-service. Beginning July 1,
2003, and until two four years after the pilot project implementation date, subcontractor
participation in the long-term care developmental disability pilot is limited to a nonprofit
long-term care system providing ICF/MR services, home and community-based waiver
services, and in-home services to no more than 120 consumers with developmental
disabilities in Carver, Hennepin, and Scott Counties. The commissioner shall report to the
legislature prior to expansion of the developmental disability pilot project. This paragraph
expires two four years after the implementation date of the pilot project.
    (c) Before implementation of a demonstration project for disabled persons, the
commissioner must provide information to appropriate committees of the house of
representatives and senate and must involve representatives of affected disability groups
in the design of the demonstration projects.
    (d) A nursing facility reimbursed under the alternative reimbursement methodology
in section 256B.434 may, in collaboration with a hospital, clinic, or other health care entity
provide services under paragraph (a). The commissioner shall amend the state plan and
seek any federal waivers necessary to implement this paragraph.
    (e) The commissioner, in consultation with the commissioners of commerce and
health, may approve and implement programs for all-inclusive care for the elderly (PACE)
according to federal laws and regulations governing that program and state laws or rules
applicable to participating providers. The process for approval of these programs shall
begin only after the commissioner receives grant money in an amount sufficient to cover
the state share of the administrative and actuarial costs to implement the programs during
state fiscal years 2006 and 2007. Grant amounts for this purpose shall be deposited in an
account in the special revenue fund and are appropriated to the commissioner to be used
solely for the purpose of PACE administrative and actuarial costs. A PACE provider is
not required to be licensed or certified as a health plan company as defined in section
62Q.01, subdivision 4. Persons age 55 and older who have been screened by the county
and found to be eligible for services under the elderly waiver or community alternatives
for disabled individuals or who are already eligible for Medicaid but meet level of
care criteria for receipt of waiver services may choose to enroll in the PACE program.
Medicare and Medicaid services will be provided according to this subdivision and
federal Medicare and Medicaid requirements governing PACE providers and programs.
PACE enrollees will receive Medicaid home and community-based services through the
PACE provider as an alternative to