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1999 Minnesota Session Laws

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                            CHAPTER 245-S.F.No. 2225 
                  An act relating to the operation of state government; 
                  modifying provisions relating to health; health 
                  department; human services; human services department; 
                  long-term care; medical assistance; general assistance 
                  medical care; MinnesotaCare; senior drug program; home 
                  and community-based waivers; services for persons with 
                  disabilities; medical assistance reimbursement for 
                  special education and other services; county-based 
                  purchasing; group residential housing; state-operated 
                  services; chemical dependency; mental health; 
                  Minnesota family investment program; general 
                  assistance program; child support enforcement; 
                  adoption; recreational licenses; paternity; children 
                  in need of protection or services; termination of 
                  parental rights; child protection; veterans nursing 
                  homes board; health-related licensing boards; 
                  emergency medical services regulatory board; Minnesota 
                  state council on disability; ombudsman for mental 
                  health and mental retardation; ombudsman for families; 
                  creating a medical education endowment fund and a 
                  tobacco use prevention and local public health 
                  endowment fund; establishing the state board of 
                  physical therapy; modifying fees; providing penalties; 
                  requiring reports; appropriating money; amending 
                  Minnesota Statutes 1998, sections 13.46, subdivision 
                  2; 13.99, subdivision 38a, and by adding a 
                  subdivision; 15.059, subdivision 5a; 16C.10, 
                  subdivision 5; 62A.045; 62E.11, by adding a 
                  subdivision; 62J.04, subdivision 3; 62J.06; 62J.07, 
                  subdivisions 1 and 3; 62J.09, subdivision 8; 62J.2930, 
                  subdivision 3; 62Q.03, subdivision 5a; 62Q.075; 
                  62R.06, subdivision 1; 116L.02; 122A.09, subdivision 
                  4; 125A.08; 125A.744, subdivision 3; 125A.76, 
                  subdivision 2; 144.05, by adding a subdivision; 
                  144.065; 144.121, by adding a subdivision; 144.148; 
                  144.1483; 144.1492, subdivision 3; 144.1761, 
                  subdivision 1; 144.413, subdivision 2; 144.414, 
                  subdivision 1; 144.4165; 144.56, subdivision 2b; 
                  144.99, subdivision 1, and by adding a subdivision; 
                  144A.073, subdivision 5; 144A.10, by adding 
                  subdivisions; 144A.46, subdivision 2; 144A.4605, 
                  subdivision 2; 144D.01, subdivision 4; 144E.001, by 
                  adding subdivisions; 144E.10, subdivision 1; 144E.11, 
                  by adding a subdivision; 144E.16, subdivision 4; 
                  144E.18; 144E.27, by adding subdivisions; 144E.50, by 
                  adding a subdivision; 145.924; 145.9255, subdivisions 
                  1 and 4; 145A.02, subdivision 10; 148.5194, 
                  subdivisions 2, 3, 4, and by adding a subdivision; 
                  148.66; 148.67; 148.70; 148.705; 148.71; 148.72, 
                  subdivisions 1, 2, and 4; 148.73; 148.74; 148.75; 
                  148.76; 148.78; 198.003, by adding a subdivision; 
                  214.01, subdivision 2; 245.462, subdivisions 4 and 17; 
                  245.4711, subdivision 1; 245.4712, subdivision 2; 
                  245.4871, subdivisions 4 and 26; 245.4881, subdivision 
                  1; 245A.04, subdivision 3a; 245A.08, subdivision 5; 
                  245A.30; 245B.05, subdivision 7; 245B.07, subdivisions 
                  5, 8, and 10; 246.18, subdivision 6; 252.28, 
                  subdivision 1; 252.291, by adding a subdivision; 
                  252.32, subdivision 3a; 252.46, subdivision 6; 
                  253B.045, by adding subdivisions; 253B.07, subdivision 
                  1; 253B.185, by adding a subdivision; 254B.01, by 
                  adding a subdivision; 254B.03, subdivision 2; 254B.04, 
                  subdivision 1; 254B.05, subdivision 1; 256.01, 
                  subdivisions 2, 6, and by adding a subdivision; 
                  256.014, by adding a subdivision; 256.015, 
                  subdivisions 1 and 3; 256.485; 256.87, subdivision 1a; 
                  256.955, subdivisions 3, 4, 7, 8, and 9; 256.9685, 
                  subdivision 1a; 256.969, subdivision 1; 256.978, 
                  subdivision 1; 256B.04, subdivision 16, and by adding 
                  a subdivision; 256B.042, subdivisions 1, 2, and 3; 
                  256B.055, subdivision 3a; 256B.056, subdivision 4; 
                  256B.057, subdivision 3, and by adding a subdivision; 
                  256B.0575; 256B.061; 256B.0625, subdivisions 6a, 8, 
                  8a, 13, 19c, 20, 26, 28, 30, 32, 35, and by adding 
                  subdivisions; 256B.0627, subdivisions 1, 2, 4, 5, 8, 
                  and by adding subdivisions; 256B.0635, subdivision 3; 
                  256B.0911, subdivision 6; 256B.0913, subdivisions 5, 
                  10, 12, and 16; 256B.0916; 256B.0917, subdivision 8; 
                  256B.094, subdivisions 3, 5, and 6; 256B.0951, 
                  subdivisions 1 and 3; 256B.0955; 256B.37, subdivision 
                  2; 256B.431, subdivisions 2i, 17, 26, and by adding a 
                  subdivision; 256B.434, subdivisions 3, 4, 13, and by 
                  adding a subdivision; 256B.435; 256B.48, subdivisions 
                  1, 1a, 1b, and 6; 256B.50, subdivision 1e; 256B.501, 
                  subdivision 8a; 256B.5011, subdivisions 1 and 2; 
                  256B.69, subdivisions 3a, 5a, 5b, 5c, 6a, 6b, and by 
                  adding subdivisions; 256B.692, subdivision 2; 256B.75; 
                  256B.76; 256B.77, subdivisions 7a, 8, 10, 14, and by 
                  adding subdivisions; 256D.03, subdivisions 3, 4, and 
                  8; 256D.051, subdivision 2a, and by adding a 
                  subdivision; 256D.053, subdivision 1; 256D.06, 
                  subdivision 5; 256F.03, subdivision 5; 256F.05, 
                  subdivision 8; 256F.10, subdivisions 1, 4, 6, 7, 8, 9, 
                  and 10; 256I.04, subdivision 3; 256I.05, subdivisions 
                  1, 1a, and by adding a subdivision; 256J.02, 
                  subdivision 2; 256J.08, subdivisions 11, 24, 65, 82, 
                  83, 86a, and by adding subdivisions; 256J.11, 
                  subdivisions 2 and 3; 256J.12, subdivisions 1a and 2; 
                  256J.14; 256J.20, subdivision 3; 256J.21, subdivisions 
                  2, 3, and 4; 256J.24, subdivisions 2, 3, 7, 8, 9, and 
                  by adding a subdivision; 256J.26, subdivision 1; 
                  256J.30, subdivisions 2, 7, 8, and 9; 256J.31, 
                  subdivisions 5 and 12; 256J.32, subdivisions 4 and 6; 
                  256J.33; 256J.34, subdivisions 1, 3, and 4; 256J.35; 
                  256J.36; 256J.37, subdivisions 1, 1a, 2, 9, and 10; 
                  256J.38, subdivision 4; 256J.39, subdivision 1; 
                  256J.42, subdivisions 1 and 5; 256J.43; 256J.45, 
                  subdivision 1, and by adding a subdivision; 256J.46, 
                  subdivisions 1, 2, and 2a; 256J.47, subdivision 4; 
                  256J.48, subdivisions 2 and 3; 256J.50, subdivision 1; 
                  256J.515; 256J.52, subdivisions 1, 3, 4, 5, and by 
                  adding a subdivision; 256J.54, subdivision 2; 256J.55, 
                  subdivision 4; 256J.56; 256J.57, subdivision 1; 
                  256J.62, subdivisions 1, 6, 7, 8, 9, and by adding a 
                  subdivision; 256J.67, subdivision 4; 256J.74, 
                  subdivision 2; 256J.76, subdivisions 1, 2, and 4; 
                  256L.03, subdivisions 5 and 6; 256L.04, subdivisions 
                  2, 8, 11, and 13; 256L.05, subdivision 4, and by 
                  adding a subdivision; 256L.06, subdivision 3; 256L.07; 
                  256L.15, subdivisions 1, 1b, and 2; 257.071, 
                  subdivisions 1, 1a, 1c, 1d, 1e, 3, and 4; 257.62, 
                  subdivision 5; 257.66, subdivision 3; 257.75, 
                  subdivision 2; 257.85, subdivisions 2, 3, 4, 5, 6, 7, 
                  9, and 11; 259.67, subdivisions 6 and 7; 259.73; 
                  259.85, subdivisions 2, 3, and 5; 259.89, by adding a 
                  subdivision; 260.011, subdivision 2; 260.012; 260.015, 
                  subdivisions 2a, 13, and 29; 260.131, subdivision 1a; 
                  260.133, subdivisions 1 and 2; 260.135, by adding a 
                  subdivision; 260.155, subdivisions 4 and 8; 260.172, 
                  subdivision 1, and by adding a subdivision; 260.191, 
                  subdivisions 1, 1a, 1b, and 3b; 260.192; 260.221, 
                  subdivisions 1, 1a, 1b, 1c, 3, and 5; 326.40, 
                  subdivisions 2, 4, and 5; 518.10; 518.551, by adding a 
                  subdivision; 518.5851, by adding a subdivision; 
                  518.5853, by adding a subdivision; 518.64, subdivision 
                  2; 548.09, subdivision 1; 548.091, subdivisions 1, 1a, 
                  2a, 3a, 4, 10, 11, 12, and by adding a subdivision; 
                  626.556, subdivisions 2, 3, 4, 7, 10, 10b, 10d, 10e, 
                  10f, 10i, 10j, 11, 11b, 11c, and by adding a 
                  subdivision; 626.558, subdivision 1; Laws 1995, 
                  chapters 178, article 2, section 46, subdivision 10; 
                  207, articles 3, section 21; 8, section 41, as 
                  amended; 257, article 1, section 35, subdivision 1; 
                  Laws 1997, chapters 203, article 9, section 19; 225, 
                  article 4, section 4; and Laws 1998 chapter 407, 
                  article 7, section 2, subdivision 3; proposing coding 
                  for new law in Minnesota Statutes, chapters 16A; 62J; 
                  116L; 127A; 137; 144; 144A; 144E; 148; 214; 245; 246; 
                  252; 254A; 256; 256B; 256J; and 626; repealing 
                  Minnesota Statutes 1998, sections 13.99, subdivision 
                  19m; 62J.69; 62J.77; 62J.78; 62J.79; 144.0723; 
                  144.9507, subdivision 4; 144.9511; 144E.16, 
                  subdivisions 1, 2, 3, and 6; 144E.17; 144E.25; 
                  144E.30, subdivisions 1, 2, and 6; 145.46; 254A.145; 
                  256.973; 256B.434, subdivision 17; 256B.501, 
                  subdivision 3g; 256B.5011, subdivision 3; 256B.74, 
                  subdivisions 2 and 5; 256D.051, subdivisions 6 and 19; 
                  256D.053, subdivision 4; 256J.03; 256J.30, subdivision 
                  6; 256J.62, subdivisions 2, 3, and 5; 257.071, 
                  subdivisions 8 and 10; 462A.208; 548.091, subdivisions 
                  3, 5, and 6; Laws 1997, chapters 85, article 1, 
                  section 63; 203, article 4, section 55; 225, article 
                  6, section 8; and Laws 1998, chapter 407, article 2, 
                  section 104; Minnesota Rules, parts 4690.0100, 
                  subparts 4, 13, 15, 19, 20, 21, 22, 23, 24, 26, 27, 
                  and 29; 4690.0300; 4690.0400; 4690.0500; 4690.0600; 
                  4690.0700; 4690.0800, subparts 1 and 2; 4690.0900; 
                  4690.1000; 4690.1100; 4690.1200; 4690.1300; 4690.1600; 
                  4690.1700; 4690.2100; 4690.2200, subparts 1, 3, 4, and 
                  5; 4690.2300; 4690.2400, subparts 1, 2, and 3; 
                  4690.2500; 4690.2900; 4690.3000; 4690.3700; 4690.3900; 
                  4690.4000; 4690.4100; 4690.4200; 4690.4300; 4690.4400; 
                  4690.4500; 4690.4600; 4690.4700; 4690.4800; 4690.4900; 
                  4690.5000; 4690.5100; 4690.5200; 4690.5300; 4690.5400; 
                  4690.5500; 4690.5700; 4690.5800; 4690.5900; 4690.6000; 
                  4690.6100; 4690.6200; 4690.6300; 4690.6400; 4690.6500; 
                  4690.6600; 4690.6700; 4690.6800; 4690.7000; 4690.7100; 
                  4690.7200; 4690.7300; 4690.7400; 4690.7500; 4690.7600; 
                  4690.7700; 4690.7800; 4690.8300, subparts 1, 2, 3, 4, 
                  and 5; and 4735.5000. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                                 APPROPRIATIONS 
        Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
           The sums shown in the columns marked "APPROPRIATIONS" are 
        appropriated from the general fund, or any other fund named, to 
        the agencies and for the purposes specified in the following 
        sections of this article, to be available for the fiscal years 
        indicated for each purpose.  The figures "2000" and "2001" where 
        used in this article, mean that the appropriation or 
        appropriations listed under them are available for the fiscal 
        year ending June 30, 2000, or June 30, 2001, respectively.  
        Where a dollar amount appears in parentheses, it means a 
        reduction of an appropriation.  
                                SUMMARY BY FUND 
        APPROPRIATIONS                                      BIENNIAL
                                  2000          2001           TOTAL
        General          $2,650,812,000 $2,774,558,000 $5,425,370,000
        State Government
        Special Revenue      36,424,000     36,103,000     72,527,000
        Health Care
        Access              146,224,000    175,017,000    321,241,000
        Trunk Highway         1,726,000      1,773,000      3,499,000
        Lottery Prize         1,300,000      1,300,000      2,600,000
        TOTAL            $2,836,486,000 $2,988,751,000 $5,825,237,000
                                                   APPROPRIATIONS 
                                               Available for the Year 
                                                   Ending June 30 
                                                  2000         2001 
        Sec. 2.  COMMISSIONER OF 
        HUMAN SERVICES 
        Subdivision 1.  Total 
        Appropriation                     $2,694,991,000 $2,847,745,000
                      Summary by Fund
        General           2,556,927,000 2,680,977,000
        State Government
        Special Revenue         485,000       507,000
        Health Care 
        Access              136,279,000   164,961,000
        Lottery Prize         1,300,000     1,300,000
        [INDIRECT COSTS NOT TO FUND PROGRAMS.] 
        The commissioner shall not use indirect 
        cost allocations to pay for the 
        operational costs of any program for 
        which the commissioner is responsible. 
        [FUND AND ACCOUNT REPORTING REQUIRED.] 
        On December 1, 1999, and December 1, 
        2000, the commissioner shall provide 
        the chairs of the house health and 
        human services finance committee and 
        the senate health and family security 
        budget division with detailed fund 
        balance statements for:  (1) each fund 
        or account used by the commissioner in 
        the ongoing operations of the agency; 
        (2) each state-operated computer system 
        under Minnesota Statutes, section 
        256.014, including but not limited to 
        MAXIS, the current Medicaid management 
        information system (MMIS II), the child 
        support enforcement system (PRISM), the 
        electronic benefit transfer system 
        (EBT), and the executive information 
        system (EIS); and (3) the social 
        services information system (SSIS). 
        Subd. 2.  Agency Management 
        General              28,311,000    28,345,000
        State Government
        Special Revenue         371,000       392,000
        Health Care 
        Access                3,268,000     3,321,000
        The amounts that may be spent from the 
        appropriation for each purpose are as 
        follows: 
        (a) Financial Operations 
        General               7,471,000     7,647,000
        Health Care
        Access                  691,000       702,000
        [RECEIPTS FOR SYSTEMS PROJECTS.] 
        Appropriations and federal receipts for 
        information system projects for MAXIS, 
        electronic benefit system, social 
        services information system, child 
        support enforcement, and Minnesota 
        Medicaid information system (MMIS II) 
        must be deposited in the state system 
        account authorized in Minnesota 
        Statutes, section 256.014.  Money 
        appropriated for computer projects 
        approved by the Minnesota office of 
        technology, funded by the legislature, 
        and approved by the commissioner of 
        finance may be transferred from one 
        project to another and from development 
        to operations as the commissioner of 
        human services considers necessary.  
        Any unexpended balance in the 
        appropriation for these projects does 
        not cancel but is available for ongoing 
        development and operations. 
        (b) Legal & Regulation Operations 
        General               6,541,000     6,593,000
        State Government
        Special Revenue         371,000       392,000
        Health Care
        Access                  141,000       145,000
        [REIMBURSEMENT OF COUNTY COSTS.] Of the 
        general fund appropriation, $10,000 is 
        for the commissioner for the biennium 
        beginning July 1, 1999, to reimburse 
        counties for the legal and related 
        costs of contesting through the 
        administrative and judicial systems 
        decisions that affect state spending 
        but not county spending on programs 
        administered or financed by the 
        commissioner.  The commissioner may 
        reimburse expenses that occurred on or 
        after January 1, 1998. 
        (c) Management Operations 
        General              14,299,000    14,105,000
        Health Care
        Access                2,436,000     2,474,000
        Subd. 3.  Children's Grants
        General              52,845,000    54,931,000
        [ADOPTION ASSISTANCE.] Federal funds 
        available during the biennium ending 
        June 30, 2001, for adoption incentive 
        grants, adoption and foster care 
        recruitment, and other adoption 
        services, are appropriated to the 
        commissioner for these purposes. 
        Subd. 4.  Children's Services Management
        General               3,900,000     3,740,000
        Subd. 5.  Basic Health Care Grants
                      Summary by Fund
        General             867,174,000   916,234,000
        Health Care
        Access              116,490,000   145,469,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Minnesota Care Grants-
        Health Care
        Access              116,490,000   145,469,000
        [HOSPITAL INPATIENT COPAYMENTS.] The 
        commissioner of human services may 
        require hospitals to refund hospital 
        inpatient copayments paid by enrollees 
        pursuant to Minnesota Statutes, section 
        256L.03, subdivision 5, between March 
        1, 1999, and December 31, 1999.  If the 
        commissioner requires hospitals to 
        refund these copayments, the hospitals 
        shall collect the copayment directly 
        from the commissioner. 
        [MINNESOTACARE OUTREACH FEDERAL 
        MATCHING FUNDS.] Any federal matching 
        funds received as a result of the 
        MinnesotaCare outreach activities 
        authorized by Laws 1997, chapter 225, 
        article 7, section 2, subdivision 1, 
        shall be deposited in the health care 
        access fund and dedicated to the 
        commissioner to be used for those 
        outreach purposes. 
        [FEDERAL RECEIPTS FOR ADMINISTRATION.] 
        Receipts received as a result of 
        federal participation pertaining to 
        administrative costs of the Minnesota 
        health care reform waiver shall be 
        deposited as nondedicated revenue in 
        the health care access fund.  Receipts 
        received as a result of federal 
        participation pertaining to grants 
        shall be deposited in the federal fund 
        and shall offset health care access 
        funds for payments to providers. 
        [HEALTH CARE ACCESS FUND.] The 
        commissioner may expend money 
        appropriated from the health care 
        access fund for MinnesotaCare in either 
        fiscal year of the biennium. 
        (b) MA Basic Health Care Grants-
        Families and Children
        General             307,053,000   320,112,000
        [COMMUNITY DENTAL CLINICS.] Of this 
        appropriation, $600,000 in fiscal year 
        2000 is for the commissioner to provide 
        start-up grants to establish community 
        dental clinics under Minnesota 
        Statutes, section 256B.76, paragraph 
        (b), clause (5).  The commissioner 
        shall award grants and shall require 
        grant recipients to match the state 
        grant with nonstate funding on a 
        one-to-one basis.  This is a one-time 
        appropriation and shall not become part 
        of base level funding for this activity 
        for the 2002-2003 biennium. 
        (c) MA Basic Health Care Grants- 
        Elderly & Disabled
        General             404,814,000   451,928,000
        [SURCHARGE COMPLIANCE.] In the event 
        that federal financial participation in 
        the Minnesota medical assistance 
        program is reduced as a result of a 
        determination that the surcharge and 
        intergovernmental transfers governed by 
        Minnesota Statutes, sections 256.9657 
        and 256B.19 are out of compliance with 
        United States Code, title 42, section 
        1396b(w), or its implementing 
        regulations or with any other federal 
        law designed to restrict provider tax 
        programs or intergovernmental 
        transfers, the commissioner shall 
        appeal the determination to the fullest 
        extent permitted by law and may ratably 
        reduce all medical assistance and 
        general assistance medical care 
        payments to providers other than the 
        state of Minnesota in order to 
        eliminate any shortfall resulting from 
        the reduced federal funding.  Any 
        amount later recovered through the 
        appeals process shall be used to 
        reimburse providers for any ratable 
        reductions taken. 
        [BLOOD PRODUCTS LITIGATION.] To the 
        extent permitted by federal law, 
        Minnesota Statutes, section 256.015, 
        256B.042, and 256B.15, are waived as 
        necessary for the limited purpose of 
        resolving the state's claims in 
        connection with In re Factor VIII or IX 
        Concentrate Blood Products Litigation, 
        MDL-986, No. 93-C7452 (N.D.III.). 
        (d) General Assistance Medical Care
        General             141,805,000   128,012,000
        (e) Basic Health Care - Nonentitlement
        General              13,502,000    16,182,000
        [DENTAL ACCESS GRANT.] Of this 
        appropriation, $75,000 is from the 
        general fund to the commissioner in 
        fiscal year 2000 for a grant to a 
        nonprofit dental provider group 
        operating a dental clinic in Clay 
        county.  The grant must be used to 
        increase access to dental services for 
        recipients of medical assistance, 
        general assistance medical care, and 
        the MinnesotaCare program in the 
        northwest area of the state.  This 
        appropriation is available the day 
        following final enactment. 
        Subd. 6.  Basic Health Care Management
        General              23,268,000    23,227,000
        Health Care
        Access               15,208,000    14,853,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Health Care Policy Administration
        General               3,109,000     3,008,000
        Health Care 
        Access                  570,000       582,000
        [TELEMEDICINE REPORT.] The commissioner 
        shall report to the legislature by 
        January 15, 2001, with an analysis of 
        whether the expansion of medical 
        assistance and general assistance 
        medical care to cover certain 
        telemedicine services resulted in cost 
        savings or other benefits to the health 
        care system and with a recommendation 
        on whether coverage of telemedicine 
        services should be continued beyond 
        June 30, 2001. 
        (b) Health Care Operations
        General              20,159,000    20,219,000
        Health Care
        Access               14,638,000    14,271,000
        [MINNESOTACARE STAFF.] Of this 
        appropriation, $1,060,000 for fiscal 
        year 2000 and $733,000 for fiscal year 
        2001 is from the health care access 
        fund to the commissioner for staff and 
        other administrative services 
        associated with improving MinnesotaCare 
        processing and caseload management.  Of 
        this appropriation, $483,000 shall 
        become part of the base. 
        [WORK INCENTIVES FOR DISABLED.] Of this 
        appropriation, $28,000 each year is for 
        the commissioner to provide the five 
        percent state match that is required in 
        order for the state to access federal 
        funding in the amount of $550,000 
        annually in fiscal years 2000 to 2003, 
        for the Social Security 
        Administration's work incentives 
        demonstration project.  The 
        commissioner shall transfer these 
        matching funds to the commissioner of 
        economic security.  The base level 
        funding for this activity must be 
        established at $28,000 for the 
        2002-2003 biennium. 
        [SYSTEMS CONTINUITY.] In the event of 
        disruption of technical systems or 
        computer operations, the commissioner 
        may use available grant appropriations 
        to ensure continuity of payments for 
        maintaining the health, safety, and 
        well-being of clients served by 
        programs administered by the department 
        of human services.  Grant funds must be 
        used in a manner consistent with the 
        original intent of the appropriation. 
        [PREPAID MEDICAL PROGRAMS.] The 
        nonfederal share of the prepaid medical 
        assistance program fund, which has been 
        appropriated to fund county managed 
        care advocacy and enrollment operating 
        costs, shall be disbursed as grants 
        using either a reimbursement or block 
        grant mechanism and may also be 
        transferred between grants and nongrant 
        administration costs with approval of 
        the commissioner of finance. 
        Subd. 7.  State-Operated Services
        General             206,929,000   212,002,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) SOS-Campus Based Programs
        General             185,696,000   190,143,000
        [DAY TRAINING SERVICES.] In order to 
        ensure eligible individuals have access 
        to day training and habilitation 
        services, the regional treatment 
        centers, the Minnesota extended 
        treatment options program, and 
        state-operated community services 
        operating according to Minnesota 
        Statutes, section 252.50, are exempt 
        from the provisions of Minnesota 
        Statutes, section 252.41, subdivision 
        9, clause (2).  Notwithstanding section 
        13, this provision shall not expire. 
        [MITIGATION RELATED TO DEVELOPMENTAL 
        DISABILITIES DOWNSIZING.] Money 
        appropriated to finance mitigation 
        expenses related to the downsizing of 
        regional treatment center developmental 
        disabilities programs may be 
        transferred between fiscal years within 
        the biennium. 
        [REGIONAL TREATMENT CENTER CHEMICAL 
        DEPENDENCY PROGRAMS.] When the 
        operations of the regional treatment 
        center chemical dependency fund created 
        in Minnesota Statutes, section 246.18, 
        subdivision 2, are impeded by projected 
        cash deficiencies resulting from delays 
        in the receipt of grants, dedicated 
        income, or other similar receivables, 
        and when the deficiencies would be 
        corrected within the budget period 
        involved, the commissioner of finance 
        may transfer general fund cash reserves 
        into this account as necessary to meet 
        cash demands.  The cash flow transfers 
        must be returned to the general fund in 
        the fiscal year that the transfer was 
        made.  Any interest earned on general 
        fund cash flow transfers accrues to the 
        general fund and not the regional 
        treatment center chemical dependency 
        fund. 
        [LEAVE LIABILITIES.] The accrued leave 
        liabilities of state employees 
        transferred to state-operated community 
        services programs may be paid from the 
        appropriation in this subdivision for 
        state-operated services.  Funds set 
        aside for this purpose shall not exceed 
        the amount of the actual leave 
        liability calculated as of June 30, 
        2000, and shall be available until 
        expended. 
        [REGIONAL TREATMENT CENTER 
        RESTRUCTURING.] For purposes of 
        restructuring the regional treatment 
        centers and state nursing homes, any 
        regional treatment center or state 
        nursing home employee whose position is 
        to be eliminated shall be afforded the 
        options provided in applicable 
        collective bargaining agreements.  All 
        salary and mitigation allocations from 
        fiscal year 2000 shall be carried 
        forward into fiscal year 2001.  
        Provided there is no conflict with any 
        collective bargaining agreement, any 
        regional treatment center or state 
        nursing home position reduction must 
        only be accomplished through 
        mitigation, attrition, transfer, and 
        other measures as provided in state or 
        applicable collective bargaining 
        agreements and in Minnesota Statutes, 
        section 252.50, subdivision 11, and not 
        through layoff. 
        [REGIONAL TREATMENT CENTER POPULATION.] 
        If the resident population at the 
        regional treatment centers is projected 
        to be higher than the estimates upon 
        which the medical assistance forecast 
        and budget recommendations for the 
        2000-2001 biennium is based, the amount 
        of the medical assistance appropriation 
        that is attributable to the cost of 
        services that would have been provided 
        as an alternative to regional treatment 
        center services, including resources 
        for community placements and waivered 
        services for persons with mental 
        retardation and related conditions, is 
        transferred to the residential 
        facilities appropriation. 
        [REPAIRS AND BETTERMENTS.] The 
        commissioner may transfer unencumbered 
        appropriation balances between fiscal 
        years for the state residential 
        facilities repairs and betterments 
        account and special equipment. 
        [PROJECT LABOR.] Wages for project 
        labor may be paid by the commissioner 
        out of repairs and betterments money if 
        the individual is to be engaged in a 
        construction project or a repair 
        project of short-term and nonrecurring 
        nature.  Compensation for project labor 
        shall be based on the prevailing wage 
        rates, as defined in Minnesota 
        Statutes, section 177.42, subdivision 
        6.  Project laborers are excluded from 
        the provisions of Minnesota Statutes, 
        sections 43A.22 to 43A.30, and shall 
        not be eligible for state-paid 
        insurance and benefits. 
        [YEAR 2000 COSTS AT RTCS.] Of this 
        appropriation, $44,000 is for the costs 
        associated with addressing potential 
        year 2000 problems.  Of this amount, 
        $19,000 is available the day following 
        final enactment. 
        (b) State-Operated Community
        Services - Northeast Minnesota
        Mental Health Services
        General               3,983,000     4,055,000
        (c) State-Operated Community 
        Services - Statewide DD Supports
        General              15,493,000    16,047,000
        (d) State-Operated Services - 
        Enterprise Activities 
        General               1,757,000     1,757,000
        Subd. 8.  Continuing Care and 
        Community Support Grants
        General           1,174,195,000 1,259,767,000
        Lottery Prize         1,158,000     1,158,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Community Social Services
        Block Grants
            42,597,000     43,498,000 
        [CSSA TRADITIONAL APPROPRIATION.] 
        Notwithstanding Minnesota Statutes, 
        section 256E.06, subdivisions 1 and 2, 
        the appropriations available under that 
        section in fiscal years 2000 and 2001 
        must be distributed to each county 
        proportionately to the aid received by 
        the county in calendar year 1998.  The 
        commissioner, in consultation with 
        counties, shall study the formula 
        limitations in subdivision 2 of that 
        section, and report findings and any 
        recommendations for revision of the 
        CSSA formula and its formula limitation 
        provisions to the legislature by 
        January 15, 2000. 
        (b) Consumer Support Grants
             1,123,000      1,123,000 
        (c) Aging Adult Service Grants
             7,965,000      7,765,000 
        [LIVING-AT-HOME/BLOCK NURSE PROGRAM.] 
        Of the general fund appropriation, 
        $120,000 in fiscal year 2000 and 
        $120,000 in fiscal year 2001 is for the 
        commissioner to provide funding to six 
        additional living-at-home/block nurse 
        programs.  This appropriation shall 
        become part of the base for the 
        2002-2003 biennium. 
        [MINNESOTA SENIOR SERVICE CORPS.] Of 
        this appropriation, $160,000 for the 
        biennium is from the general fund to 
        the commissioner for the following 
        purposes: 
        (a) $40,000 in fiscal year 2000 and 
        $40,000 in fiscal year 2001 is to 
        increase the hourly stipend by ten 
        cents per hour in the foster 
        grandparent program, the retired and 
        senior volunteer program, and the 
        senior companion program. 
        (b) $40,000 in fiscal year 2000 and 
        $40,000 in fiscal year 2001 is for a 
        grant to the tri-valley opportunity 
        council in Crookston to expand services 
        in the ten-county area of northwestern 
        Minnesota. 
        (c) This appropriation shall become 
        part of the base for the 2002-2003 
        biennium.
        [HEALTH INSURANCE COUNSELING.] Of this 
        appropriation, $100,000 in fiscal year 
        2000 and $100,000 in fiscal year 2001 
        is from the general fund to the 
        commissioner to transfer to the board 
        on aging for the purpose of awarding 
        health insurance counseling and 
        assistance grants to the area agencies 
        on aging providing state-funded health 
        insurance counseling services.  Access 
        to health insurance counseling programs 
        shall be provided by the senior linkage 
        line service of the board on aging and 
        the area agencies on aging. The board 
        on aging shall explore opportunities 
        for obtaining alternative funding from 
        nonstate sources, including 
        contributions from individuals seeking 
        health insurance counseling services.  
        This is a one-time appropriation and 
        shall not become part of base level 
        funding for this activity for the 
        2002-2003 biennium. 
        (d) Deaf and Hard-of-Hearing 
        Services Grants
             1,859,000      1,760,000 
        [SERVICES TO DEAF PERSONS WITH MENTAL 
        ILLNESS.] Of this appropriation, 
        $100,000 each year is to the 
        commissioner for a grant to a nonprofit 
        agency that currently serves deaf and 
        hard-of-hearing adults with mental 
        illness through residential programs 
        and supported housing outreach.  The 
        grant must be used to operate a 
        community support program for persons 
        with mental illness that is 
        communicatively accessible for persons 
        who are deaf or hard-of-hearing.  This 
        is a one-time appropriation and shall 
        not become part of base level funding 
        for this activity for the 2002-2003 
        biennium. 
        [DEAF-BLIND ORIENTATION AND MOBILITY 
        SERVICES.] Of this appropriation, 
        $120,000 for the biennium is to the 
        commissioner for a grant to DeafBlind 
        Services Minnesota to hire an 
        orientation and mobility specialist to 
        work with deaf-blind people.  The 
        specialist will provide services to 
        deaf-blind Minnesotans, and training to 
        teachers and rehabilitation counselors, 
        on a statewide basis.  This is a 
        one-time appropriation and shall not 
        become part of base level funding for 
        this activity for the 2002-2003 
        biennium. 
        (e) Mental Health Grants
        General          45,169,000     46,528,000 
        Lottery Prize     1,158,000      1,158,000 
        [CRISIS HOUSING.] Of the general fund 
        appropriation, $126,000 in fiscal year 
        2000 and $150,000 in fiscal year 2001 
        is to the commissioner for the adult 
        mental illness crisis housing 
        assistance program under Minnesota 
        Statutes, section 245.99.  This 
        appropriation shall become part of the 
        base for the 2002-2003 biennium. 
        [ADOLESCENT COMPULSIVE GAMBLING GRANT.] 
        $150,000 in fiscal year 2000 and 
        $150,000 in fiscal year 2001 is 
        appropriated from the lottery prize 
        fund created under Minnesota Statutes, 
        section 349A.10, subdivision 2, to the 
        commissioner for the purposes of a 
        grant to a compulsive gambling council 
        located in St. Louis county for a 
        statewide compulsive gambling 
        prevention and education project for 
        adolescents. 
        (f) Developmental Disabilities
        Community Support Grants
           9,323,000     10,958,000 
        [CRISIS INTERVENTION PROJECT.] Of this 
        appropriation, $40,000 in fiscal year 
        2000 is to the commissioner for the 
        action, support, and prevention project 
        of southeastern Minnesota. 
        [SILS FUNDING.] Of this appropriation, 
        $1,000,000 each year is for 
        semi-independent living services under 
        Minnesota Statutes, section 252.275. 
        This appropriation must be added to the 
        base level funding for this activity 
        for the 2002-2003 biennium.  Unexpended 
        funds for fiscal year 2000 do not 
        cancel but are available to the 
        commissioner for this purpose in fiscal 
        year 2001. 
        [FAMILY SUPPORT GRANTS.] Of this 
        appropriation, $1,000,000 in fiscal 
        year 2000 and $2,500,000 in fiscal year 
        2001 is to increase the availability of 
        family support grants under Minnesota 
        Statutes, section 252.32.  This 
        appropriation must be added to the base 
        level funding for this activity for the 
        2002-2003 biennium.  Unexpended funds 
        for fiscal year 2000 do not cancel but 
        are available to the commissioner for 
        this purpose in fiscal year 2001. 
        (g) Medical Assistance Long-Term 
        Care Waivers and Home Care
           349,052,000    414,240,000 
        [PROVIDER RATE INCREASES.] (a) The 
        commissioner shall increase 
        reimbursement rates by four percent the 
        first year of the biennium and by three 
        percent the second year for the 
        providers listed in paragraph (b).  The 
        increases shall be effective for 
        services rendered on or after July 1 of 
        each year. 
        (b) The rate increases described in 
        this section shall be provided to home 
        and community-based waivered services 
        for persons with mental retardation or 
        related conditions under Minnesota 
        Statutes, section 256B.501; home and 
        community-based waivered services for 
        the elderly under Minnesota Statutes, 
        section 256B.0915; waivered services 
        under community alternatives for 
        disabled individuals under Minnesota 
        Statutes, section 256B.49; community 
        alternative care waivered services 
        under Minnesota Statutes, section 
        256B.49; traumatic brain injury 
        waivered services under Minnesota 
        Statutes, section 256B.49; nursing 
        services and home health services under 
        Minnesota Statutes, section 256B.0625, 
        subdivision 6a; personal care services 
        and nursing supervision of personal 
        care services under Minnesota Statutes, 
        section 256B.0625, subdivision 19a; 
        private-duty nursing services under 
        Minnesota Statutes, section 256B.0625, 
        subdivision 7; day training and 
        habilitation services for adults with 
        mental retardation or related 
        conditions under Minnesota Statutes, 
        sections 252.40 to 252.46; alternative 
        care services under Minnesota Statutes, 
        section 256B.0913; adult residential 
        program grants under Minnesota Rules, 
        parts 9535.2000 to 9535.3000; adult and 
        family community support grants under 
        Minnesota Rules, parts 9535.1700 to 
        9535.1760; semi-independent living 
        services under Minnesota Statutes, 
        section 252.275, including SILS funding 
        under county social services grants 
        formerly funded under Minnesota 
        Statutes, chapter 256I; and community 
        support services for deaf and 
        hard-of-hearing adults with mental 
        illness who use or wish to use sign 
        language as their primary means of 
        communication. 
        (c) The commissioner shall increase 
        reimbursement rates by two percent for 
        the group residential housing 
        supplementary service rate under 
        Minnesota Statutes, section 256I.05, 
        subdivision 1a, for services rendered 
        on or after January 1, 2000. 
        (d) Providers that receive a rate 
        increase under this section shall use 
        at least 80 percent of the additional 
        revenue to increase the compensation 
        paid to employees other than the 
        administrator and central office staff. 
        (e) A copy of the provider's plan for 
        complying with paragraph (d) must be 
        made available to all employees.  This 
        must be done by giving each employee a 
        copy or by posting it in an area of the 
        provider's operation to which all 
        employees have access.  If an employee 
        does not receive the salary adjustment 
        described in the plan and is unable to 
        resolve the problem with the provider, 
        the employee may contact the employee's 
        union representative.  If the employee 
        is not covered by a collective 
        bargaining agreement, the employee may 
        contact the commissioner at a phone 
        number provided by the commissioner and 
        included in the provider's plan. 
        (f) Section 13, sunset of uncodified 
        language, does not apply to this 
        provision. 
        [DEVELOPMENTAL DISABILITIES WAIVER 
        SLOTS.] Of this appropriation, 
        $1,746,000 in fiscal year 2000 and 
        $4,683,000 in fiscal year 2001 is to 
        increase the availability of home and 
        community-based waiver services for 
        persons with mental retardation or 
        related conditions.  
        (h) Medical Assistance Long-Term
        Care Facilities
           546,228,000    558,349,000 
        [MORATORIUM EXCEPTIONS.] Of this 
        appropriation, $250,000 in fiscal year 
        2000 and $250,000 in fiscal year 2001 
        is from the general fund to the 
        commissioner for the medical assistance 
        costs of moratorium exceptions approved 
        by the commissioner of health under 
        Minnesota Statutes, section 144A.073.  
        Unexpended money appropriated for 
        fiscal year 2000 shall not cancel but 
        shall be available for fiscal year 2001.
        [NURSING FACILITY OPERATED BY THE RED 
        LAKE BAND OF CHIPPEWA INDIANS.] (1) The 
        medical assistance payment rates for 
        the 47-bed nursing facility operated by 
        the Red Lake Band of Chippewa Indians 
        must be calculated according to 
        allowable reimbursement costs under the 
        medical assistance program, as 
        specified in Minnesota Statutes, 
        section 246.50, and are subject to the 
        facility-specific Medicare upper limits.
        (2) In addition, the commissioner shall 
        make available an operating payment 
        rate adjustment effective July 1, 1999, 
        and July 1, 2000, that is equal to the 
        adjustment provided under Minnesota 
        Statutes, section 256B.431, subdivision 
        28.  The commissioner must use the 
        facility's final 1998 and 1999 Medicare 
        cost reports, respectively, to 
        calculate the adjustment.  The 
        adjustment shall be available based on 
        a plan submitted and approved according 
        to Minnesota Statutes, section 
        256B.431, subdivision 28.  Section 13, 
        sunset of uncodified language, does not 
        apply to this paragraph. 
        [ICF/MR DISALLOWANCES.] Of this 
        appropriation, $65,000 in fiscal 2000 
        is to reimburse a four-bed ICF/MR in 
        Ramsey county for disallowances 
        resulting from field audit findings.  
        This is a one-time appropriation and 
        shall not become part of base level 
        funding for this activity for the 
        2002-2003 biennium.* (The preceding 
        text beginning "ICF/MR DISALLOWANCES." 
        was vetoed by the governor.) 
        [COSTS RELATED TO FACILITY 
        CERTIFICATION.] Of this appropriation, 
        $168,000 is for the costs of providing 
        one-half the state share of medical 
        assistance reimbursement for 
        residential and day habilitation 
        services under article 3, section 39.  
        This amount is available the day 
        following final enactment. 
        (i) Alternative Care Grants  
        General              60,873,000    59,981,000
        [ALTERNATIVE CARE TRANSFER.] Any money 
        allocated to the alternative care 
        program that is not spent for the 
        purposes indicated does not cancel but 
        shall be transferred to the medical 
        assistance account. 
        [PREADMISSION SCREENING AMOUNT.] The 
        preadmission screening payment to all 
        counties shall continue at the payment 
        amount in effect for fiscal year 1999. 
        [ALTERNATIVE CARE APPROPRIATION.] The 
        commissioner may expend the money 
        appropriated for the alternative care 
        program for that purpose in either year 
        of the biennium. 
        (j) Group Residential Housing
        General              66,477,000    70,390,000
        [GROUP RESIDENTIAL FACILITY FOR WOMEN 
        IN RAMSEY COUNTY.] (a) Notwithstanding 
        Minnesota Statutes 1998, section 
        256I.05, subdivision 1d, the new 23-bed 
        group residential facility for women in 
        Ramsey county, with approval by the 
        county agency, may negotiate a 
        supplementary service rate in addition 
        to the board and lodging rate for 
        facilities licensed and registered by 
        the Minnesota department of health 
        under Minnesota Statutes, section 
        15.17.  The supplementary service rate 
        shall not exceed $564 per person per 
        month and the total rate may not exceed 
        $1,177 per person per month. 
        (b) Of the general fund appropriation, 
        $19,000 in fiscal year 2000 and $38,000 
        in fiscal year 2001 is to the 
        commissioner for the costs associated 
        with paragraph (a).  This appropriation 
        shall become part of the base for the 
        2002-2003 biennium. 
        (k) Chemical Dependency
        Entitlement Grants
        General              36,751,000    38,847,000
        (l) Chemical Dependency 
        Nonentitlement Grants
        General               6,778,000     6,328,000
        [CHEMICAL DEPENDENCY SERVICES.] Of this 
        appropriation, $450,000 in fiscal year 
        2000 is to the commissioner for 
        chemical dependency services to persons 
        who qualify under Minnesota Statutes, 
        section 254B.04, subdivision 1, 
        paragraph (b). 
        [REPEAT DWI OFFENDER PROGRAM.] Of this 
        appropriation, $100,000 in fiscal year 
        2000 and $100,000 in fiscal year 2001 
        is for the commissioner to pay for 
        chemical dependency treatment for 
        repeat DWI offenders at Brainerd 
        regional human services center.  
        Payment to the Brainerd regional human 
        services center may only be authorized 
        from this appropriation after all 
        potential public and private 
        third-party payers have been billed and 
        a determination made that the offender 
        is not eligible for reimbursement of 
        the treatment costs.  This 
        appropriation shall not become part of 
        the base for the 2002-2003 biennium.* 
        (The preceding text beginning "REPEAT 
        DWI OFFENDER PROGRAM." was vetoed by 
        the governor.) 
        Subd. 9.  Continuing Care and
        Community Support Management
        General              17,318,000    17,616,000
        Lottery Prize           142,000       142,000
        State Government
        Special Revenue         114,000       115,000
        [MINNESOTA SENIOR HEALTH OPTIONS 
        PROJECT.] Of the general fund 
        appropriation, up to $200,000 may be 
        transferred to the Minnesota senior 
        health options project special revenue 
        account during the biennium ending June 
        30, 2001, to serve as matching funds. 
        [PERSONS WITH BRAIN INJURIES.] (a) The 
        commissioner shall study and report to 
        the legislature by January 15, 2000, on 
        the status of persons with brain 
        injuries residing in public and private 
        institutions.  The report shall include 
        information on lengths of stay, ages of 
        institutionalized persons, and on the 
        supports and services needed to allow 
        these persons to return to their 
        communities. 
        (b) The commissioner shall apply to the 
        Health Care Financing Administration 
        for a grant to carry out a 
        demonstration project to transition 
        disabled persons out of nursing homes.  
        The project must: 
        (1) identify persons with brain 
        injuries and other disabled persons 
        residing in nursing homes who could 
        live successfully in the community with 
        appropriate supports; 
        (2) develop community-based services 
        and supports for institutionalized 
        persons; 
        (3) eliminate incentives to keep these 
        persons in institutions; 
        (4) foster the independence of 
        institutionalized persons by involving 
        them in the selection and management of 
        community-based services, such as 
        personal care assistance; 
        (5) develop innovative funding 
        arrangements to enable funding to 
        follow the individual; and 
        (6) empower disabled persons, families, 
        and advocacy groups by including them 
        in the design and implementation of 
        service delivery models that maximize 
        consumer choice and direction. 
        (c) Paragraph (b) is effective the day 
        following final enactment. 
        [CAMP.] Of this appropriation, $15,000 
        each year is from the mental health 
        special projects account, for adults 
        and children with mental illness from 
        across the state, for a camping program 
        which utilizes the Boundary Waters 
        Canoe Area and is cooperatively 
        sponsored by client advocacy, mental 
        health treatment, and outdoor 
        recreation agencies. 
        [DEMO PROJECT EXTERNAL ADVOCACY FUNDING 
        CAP.] Of the appropriation for the 
        demonstration project for people with 
        disabilities under Minnesota Statutes, 
        section 256B.77, no more than $79,000 
        per year may be paid for external 
        advocacy under Minnesota Statutes, 
        section 256B.77, subdivision 14. 
        [REGION 10 QUALITY ASSURANCE 
        COMMISSION.] (1) Of this appropriation, 
        $210,000 each year is appropriated to 
        the commissioner for a grant to the 
        region 10 quality assurance commission 
        established under Minnesota Statutes, 
        section 256B.0951, for the purposes 
        specified in clauses (2) to (4).  
        Unexpended funds for fiscal year 2000 
        do not cancel, but are available to the 
        commission for fiscal year 2001. 
        (2) $180,000 each year is for the 
        operating costs of the alternative 
        quality assurance licensing system 
        pilot project, and for the commission 
        to provide grants to counties 
        participating in the alternative 
        quality assurance licensing system 
        under Minnesota Statutes, section 
        256B.0953. 
        (3) $20,000 each year is for the 
        commission to contract with an 
        independent entity to conduct a 
        financial review of the alternative 
        quality assurance licensing system, 
        including an evaluation of possible 
        budgetary savings within the affected 
        state agencies as the result of 
        implementing the system. 
        (4) $10,000 each year is for the 
        commission, in consultation with the 
        commissioner of human services, to 
        establish an ongoing review process for 
        the alternative quality assurance 
        licensing system. 
        (5) This appropriation shall not become 
        part of the base for the 2002-2003 
        biennium. 
        Subd. 10.  Economic Support Grants
        General             142,037,000   124,758,000
        [GIFTS.] Notwithstanding Minnesota 
        Statutes, chapter 7, the commissioner 
        may accept on behalf of the state 
        additional funding from sources other 
        than state funds for the purpose of 
        financing the cost of assistance 
        program grants or nongrant 
        administration.  All additional funding 
        is appropriated to the commissioner for 
        use as designated by the grantee of 
        funding. 
        [CHILD SUPPORT PAYMENT CENTER 
        RECOUPMENT ACCOUNT.] The child support 
        payment center is authorized to 
        establish an account to cover checks 
        issued in error or in cases where 
        insufficient funds are available to pay 
        the checks.  All recoupments against 
        payments from the account must be 
        deposited in the child support payment 
        center recoupment account and are 
        appropriated to the commissioner for 
        the purposes of the account.  Any 
        unexpended balance in the account does 
        not cancel, but is available until 
        expended. 
        [FEDERAL TANF FUNDS.] (1) Federal 
        Temporary Assistance for Needy Families 
        block grant funds authorized under 
        title I, Public Law Number 104-193, the 
        Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, 
        and awarded in federal fiscal years 
        1997 to 2002 are appropriated to the 
        commissioner in amounts up to 
        $256,265,000 is fiscal year 2000 and 
        $249,682,000 in fiscal year 2001.  In 
        addition to these funds, the 
        commissioner may draw or transfer any 
        other appropriations or transfers of 
        federal TANF block grant funds that are 
        enacted into state law. 
        (2) Of the amounts in clause (1), 
        $15,000,000 is transferred each year of 
        the biennium to the state's federal 
        Title XX block grant.  Notwithstanding 
        the provisions of Minnesota Statutes, 
        section 256E.07, in each year of the 
        biennium the commissioner shall 
        allocate $15,000,000 of the state's 
        Title XX block grant funds based on the 
        community social services aids formula 
        in Minnesota Statutes, section 
        256E.06.  The commissioner shall ensure 
        that money allocated to counties under 
        this provision is used according to the 
        requirements of United States Code, 
        title 42, section 604(d)(3)(B).  
        (3) Of the amounts in clause (1), 
        $10,990,000 is transferred each year 
        from the state's federal TANF block 
        grant to the state's federal Title XX 
        block grant.  In each year $140,000 is 
        for grants according to Minnesota 
        Statutes, section 257.3571, subdivision 
        2a, to the Indian child welfare defense 
        corporation to promote statewide 
        compliance with the Indian Child 
        Welfare Act of 1978; $4,650,000 is for 
        grants to counties for concurrent 
        permanency planning; and $6,200,000 is 
        for the commissioner to distribute 
        according to the formula in Minnesota 
        Statutes, section 256E.07.  The 
        commissioner shall ensure that money 
        allocated under this clause is used 
        according to the requirements of United 
        States Code, title 42, section 
        604(d)(3)(B).  In fiscal years 2002 and 
        2003, $140,000 per year is for grants 
        according to Minnesota Statutes, 
        section 257.3571, subdivision 2a, to 
        the Indian child welfare defense 
        corporation to promote statewide 
        compliance with the Indian Child 
        Welfare Act of 1978.  Section 13, 
        sunset of uncodified language, does not 
        apply to this provision. 
        (4) Of the amounts in clause (1), 
        $13,360,000 each year is for increased 
        employment and training efforts and 
        shall be expended as follows: 
        (a) $140,000 each year is for a grant 
        to the new chance program.  The new 
        chance program shall provide 
        comprehensive services through a 
        private, nonprofit agency to young 
        parents in Hennepin county who have 
        dropped out of school and are receiving 
        public assistance.  The program 
        administrator shall report annually to 
        the commissioner on skills development, 
        education, job training, and job 
        placement outcomes for program 
        participants.  This appropriation is 
        available for either year of the 
        biennium. 
        (b) $260,000 each year is for grants to 
        counties to operate the parents fair 
        share program to assist unemployed, 
        noncustodial parents with job search 
        and parenting skills. 
        (c) $12,960,000 each year is to 
        increase employment and training 
        services grants for MFIP of which 
        $750,000 each year is to be transferred 
        to the job skills partnership board for 
        the health care and human services 
        worker training and retention program. 
        (d) $10,400,000 of these appropriations 
        shall become part of the base for the 
        2002-2003 biennium. 
        (5) Of the amounts in clause (1), 
        $1,094,000 in fiscal year 2000 and 
        $1,676,000 in fiscal year 2001 is 
        transferred from the state's federal 
        TANF block grant to the state's federal 
        child care and development fund block 
        grant, and is appropriated to the 
        commissioner of children, families, and 
        learning for the purposes of Minnesota 
        Statutes, section 119B.05. 
        (6) Of the amounts in clause (1), 
        $1,000,000 for the biennium is for the 
        purposes of creating and expanding 
        adult-supervised supportive living 
        arrangement services under Minnesota 
        Statutes, section 256J.14.  The 
        commissioner shall request proposals 
        from interested parties that have 
        knowledge and experience in the area of 
        adult-supervised adolescent housing and 
        supportive services, and award grants 
        for the purpose of either expanding 
        existing or creating new living 
        arrangements and supportive services.  
        Minor parents who are MFIP participants 
        shall be given priority for housing, 
        and excess living arrangements may be 
        used by minor parents who are not MFIP 
        participants. 
        (7) In order to maximize transfers from 
        Minnesota's 1998 and 1999 federal TANF 
        block grant awards, the commissioner 
        may implement the transfers of TANF 
        funds in clauses (2), (3), and (5) in 
        the first year of the biennium.  This 
        must only be done to the extent allowed 
        by federal law and to the extent that 
        program funding requirements can be met 
        in the second year of the biennium. 
        (8) The commissioner shall ensure that 
        sufficient qualified state expenditures 
        are made each year to meet the TANF 
        basic maintenance of effort 
        requirements.  The commissioner may 
        apply any allowable source of state 
        expenditures toward these requirements, 
        as necessary to meet minimum basic 
        maintenance of effort requirements and 
        to prevent the loss of federal funds. 
        [WORKER TRAINING AND RETENTION 
        ELIGIBILITY PROCEDURES.] The 
        commissioner shall develop eligibility 
        procedures for TANF expenditures under 
        Minnesota Statutes, section 256J.02, 
        subdivision 2, clause (5). 
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Assistance to Families Grants
        General              64,870,000    66,117,000
        [EMPLOYMENT SERVICES CARRYOVER.] 
        General fund and federal TANF block 
        grant appropriations for employment 
        services that remain unexpended 
        subsequent to the reallocation process 
        required in Minnesota Statutes, section 
        256J.62, do not cancel but are 
        available for these purposes in fiscal 
        year 2001. 
        (b) Work Grants              
        General              10,731,000    10,731,000
        (c) Aid to Families With     
        Dependent Children and Other
        Assistance
        General               1,053,000       374,000
        (d) Child Support Enforcement
        General               5,359,000     5,359,000
        [CHILD SUPPORT PAYMENT CENTER.] 
        Payments to the commissioner from other 
        governmental units, private 
        enterprises, and individuals for 
        services performed by the child support 
        payment center must be deposited in the 
        state systems account authorized under 
        Minnesota Statutes, section 256.014.  
        These payments are appropriated to the 
        commissioner for the operation of the 
        child support payment center or system, 
        according to Minnesota Statutes, 
        section 256.014. 
        [CHILD SUPPORT EXPEDITED PROCESS.] Of 
        this appropriation for child support 
        enforcement, $2,340,000 for the 
        biennium shall be transferred to the 
        state court administrator to fund the 
        child support expedited process, in 
        accordance with a cooperative agreement 
        to be negotiated between the parties.  
        State funds transferred for this 
        purpose in fiscal year 2000 may exceed 
        the base funding amount of $1,170,000 
        to the extent that there is an increase 
        in the number of orders issued in the 
        expedited process, but may not exceed 
        $1,420,000 in any case.  Unexpended 
        expedited process appropriations in 
        fiscal year 2000 may be transferred to 
        fiscal year 2001 for this purpose.  
        Base funding for this program is set at 
        $1,170,000 for each year of the 
        2002-2003 biennium.  The commissioner 
        shall include cost reimbursement claims 
        from the state court administrator for 
        the child support expedited process in 
        the department of human services 
        federal cost reimbursement claim 
        process according to federal law.  
        Federal dollars earned under these 
        claims are appropriated to the 
        commissioner and shall be disbursed to 
        the state court administrator according 
        to department procedures and schedules. 
        (e) General Assistance
        General              33,927,000    14,973,000
        [TRANSFERS FROM STATE TANF RESERVE.] 
        $4,666,000 in fiscal year 2000 is 
        transferred from the state TANF reserve 
        account to the general fund. 
        [GENERAL ASSISTANCE STANDARD.] The 
        commissioner shall set the monthly 
        standard of assistance for general 
        assistance units consisting of an adult 
        recipient who is childless and 
        unmarried or living apart from his or 
        her parents or a legal guardian at 
        $203.  The commissioner may reduce this 
        amount in accordance with Laws 1997, 
        chapter 85, article 3, section 54. 
        (f) Minnesota Supplemental Aid
        General              25,767,000    26,874,000
        (g) Refugee Services         
        General                 330,000       330,000
        Subd. 11.  Economic Support  
        Management
        General              40,950,000    40,357,000
        Health Care
        Access                1,313,000     1,318,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Economic Support Policy  
        Administration
        General               7,100,000     6,951,000
        [FOOD STAMP ADMINISTRATIVE 
        REIMBURSEMENT.] The commissioner shall 
        reduce quarterly food stamp 
        administrative reimbursement to 
        counties in fiscal years 1999, 2000, 
        and 2001 by the amount that the United 
        States Department of Health and Human 
        Services determines to be the county 
        random moment study share of the food 
        stamp adjustment under Public Law 
        Number 105-185.  The reductions shall 
        be allocated to each county in 
        proportion to each county's 
        contribution, if any, to the amount of 
        the adjustment.  Any adjustment to 
        medical assistance administrative 
        reimbursement that is based on the 
        United States Department of Health and 
        Human Services' determinations under 
        Public Law Number 105-185 shall be 
        distributed to counties in the same 
        manner.  This provision is effective 
        the day following final enactment. 
        [SPENDING AUTHORITY FOR FOOD STAMP 
        ENHANCED FUNDING.] In the event that 
        Minnesota qualifies for United States 
        Department of Agriculture Food and 
        Nutrition Services Food Stamp Program 
        enhanced funding beginning in federal 
        fiscal year 1998, the money is 
        appropriated to the commissioner for 
        the purposes of the program.  The 
        commissioner may retain 25 percent of 
        the enhanced funding, with the 
        remaining 75 percent divided among the 
        counties according to a formula that 
        takes into account each county's impact 
        on the statewide food stamp error rate. 
        [ELIGIBILITY DETERMINATION FUNDING.] 
        Increased federal funds for the costs 
        of eligibility determination and other 
        permitted activities that are available 
        to the state through section 114 of the 
        Personal Responsibility and Work 
        Opportunity Reconciliation Act, Public 
        Law Number 104-193, are appropriated to 
        the commissioner. 
        (b) Economic Support Operations  
        General              33,850,000    33,406,000
        Health Care 
        Access                1,313,000     1,318,000
        [MAXIS BASE REDUCTION.] The base level 
        appropriation for MAXIS shall be 
        reduced by $2,500,000 each year of the 
        biennium beginning July 1, 2001.  
        Section 13, sunset of uncodified 
        language, does not apply to this 
        provision. 
        [FRAUD PREVENTION AND CONTROL FUNDING.] 
        Unexpended funds appropriated for the 
        provision of program integrity 
        activities for fiscal year 2000 are 
        also available to the commissioner to 
        fund fraud prevention and control 
        initiatives, and do not cancel but are 
        available to the commissioner for these 
        purposes for fiscal year 2001.  
        Unexpended funds may be transferred 
        between the fraud prevention 
        investigation program and fraud control 
        programs to promote the provisions of 
        Minnesota Statutes, sections 256.983 
        and 256.9861. 
        [TRANSFERS TO TITLE XX FOR CSSA.] When 
        preparing the governor's budget for the 
        2002-2003 biennium, the commissioner of 
        finance shall ensure that the base 
        level funding for the community social 
        services aids includes $11,000,000 in 
        fiscal year 2002 and $11,000,000 in 
        fiscal year 2003 in funding that is 
        transferred from the state's federal 
        TANF block grant to the state's federal 
        Title XX block grant.  Notwithstanding 
        the provisions of Minnesota Statutes, 
        section 256E.07, the commissioner shall 
        allocate the portion of the state's 
        community social services aids funding 
        that is comprised of these transferred 
        funds based on the community social 
        services aids formula in Minnesota 
        Statutes, section 256E.06.  The 
        commissioner shall ensure that money 
        allocated under this provision is used 
        in accordance with the requirements of 
        United States Code, title 42, section 
        604(d)(3)(B). Any reductions to the 
        amount of the state community social 
        services (CSSA) block grant funding in 
        fiscal year 2002 or 2003 shall not 
        reduce the base for the CSSA block 
        grant for the 2004-2005 biennial 
        budget.  Section 13, sunset of 
        uncodified language, does not apply to 
        this provision. 
        Sec. 3.  COMMISSIONER OF HEALTH 
        Subdivision 1.  Total 
        Appropriation                        100,424,000     98,641,000
                      Summary by Fund
        General              64,916,000    63,565,000
        State Government
        Special Revenue      25,563,000    25,020,000
        Health Care
        Access                9,945,000    10,056,000
        [INDIRECT COSTS NOT TO FUND PROGRAMS.] 
        The commissioner shall not use indirect 
        cost allocations to pay for the 
        operational costs of any program for 
        which the commissioner is responsible. 
        [GENERAL FUND GRANT REDUCTIONS.] The 
        commissioner may not reduce general 
        fund appropriations for grants without 
        specific legislative authority. 
        Subd. 2.  Health Systems
        and Special Populations               66,999,000     66,269,000
                      Summary by Fund
        General              46,593,000    46,299,000
        State Government
        Special Revenue      10,557,000    10,012,000
        Health Care 
        Access                9,849,000     9,958,000
        [WIC TRANSFERS.] The general fund 
        appropriation for the women, infants, 
        and children (WIC) food supplement 
        program is available for either year of 
        the biennium.  Transfers of these funds 
        between fiscal years must either be to 
        maximize federal funds or to minimize 
        fluctuations in the number of program 
        participants. 
        [MINNESOTA CHILDREN WITH SPECIAL HEALTH 
        NEEDS CARRYOVER.] General fund 
        appropriations for treatment services 
        in the services for Minnesota children 
        with special health needs program are 
        available for either year of the 
        biennium. 
        [SUICIDE PREVENTION STUDY.] Of the 
        general fund appropriation, $100,000 in 
        fiscal year 2000 is for the 
        commissioner to study suicide issues 
        and develop a suicide prevention plan.  
        The study must be conducted in 
        consultation with local community 
        health boards, mental health 
        professionals, schools, and other 
        interested parties.  The plan must be 
        reported to the legislature by January 
        15, 2000.  
        [FAMILY PRACTICE RESIDENCY PROGRAM.] Of 
        the general fund appropriation, 
        $300,000 in fiscal year 2000 is to the 
        commissioner to make a grant to the 
        city of Duluth for a family practice 
        residency program for northeastern 
        Minnesota. 
        [UNCOMPENSATED CARE.] The commissioner 
        shall study and report to the 
        legislature by January 15, 2000, with: 
        (1) statistical information on the 
        amount of uncompensated health care 
        provided in Minnesota, the types of 
        care provided, the settings in which 
        the care is provided, and, if known, 
        the most common reasons why the care is 
        uncompensated; and 
        (2) recommendations for reducing the 
        level of uncompensated care, including, 
        but not limited to, methods to enroll 
        eligible persons in public health care 
        programs through simplification of the 
        application process and other efforts. 
        [RURAL HOSPITAL CAPITAL IMPROVEMENT 
        GRANT PROGRAM.] (a) Of this 
        appropriation, $2,800,000 for each 
        fiscal year is from the health care 
        access fund to the commissioner for the 
        rural hospital capital improvement 
        grant program described in Minnesota 
        Statutes, section 144.148. This 
        appropriation shall not become part of 
        the base for the 2002-2003 biennium. 
        (b) The commissioner may provide up to 
        $300,000 for the Westbrook health 
        center for hospital and clinic 
        improvements, upon receipt of 
        information from the Westbrook health 
        center indicating how it has fulfilled 
        the requirements of Minnesota Statutes, 
        section 144.148, and evidence that it 
        has raised at least a dollar-for-dollar 
        match from nonstate sources. 
        [ACCESS TO SUMMARY MINIMUM DATA SET 
        (MDS).] The commissioner, in 
        cooperation with the commissioner of 
        administration, shall work to obtain 
        access to Minimum Data Set (MDS) data 
        that is electronically transmitted by 
        nursing facilities to the health 
        department.  The MDS data shall be made 
        available on a quarterly basis to 
        industry trade associations for use in 
        quality improvement efforts and 
        comparative analysis.  The MDS data 
        shall be provided to the industry trade 
        associations in the form of summary 
        aggregate data, without patient 
        identifiers, to ensure patient 
        privacy.  The commissioner may charge 
        for the actual cost of production of 
        these documents. 
        [NURSING HOME MORATORIUM REPORT.] In 
        preparing the report required by 
        Minnesota Statutes, section 144A.071, 
        subdivision 5, the commissioner and the 
        commissioner of human services shall 
        analyze the adequacy of the supply of 
        nursing home beds by measuring the 
        ability of hospitals to promptly 
        discharge patients to a nursing home 
        within the hospital's primary service 
        area.  If it is determined that a 
        shortage of beds exists, the report 
        shall present a plan to correct the 
        service deficits.  The report shall 
        also analyze the impact of assisted 
        living services on the medical 
        assistance utilization of nursing homes.
        [HEALTH CARE PURCHASING ALLIANCES.] Of 
        the health care access fund 
        appropriation, $100,000 each year is to 
        the commissioner for grants to two 
        local organizations to develop health 
        care purchasing alliances under 
        Minnesota Statutes, section 62T.02, to 
        negotiate the purchase of health care 
        services from licensed entities.  Of 
        this amount, $50,000 each year is for a 
        grant to the Southwest Regional 
        Development Commissioner to coordinate 
        purchasing alliance development in the 
        southwest area of the state, and 
        $50,000 each year is for a grant to the 
        University of Minnesota extension 
        services in Crookston to coordinate 
        purchasing alliance development in the 
        northwest area of the state.  This is a 
        one-time appropriation and shall not 
        become part of base level funding for 
        this activity for the 2002-2003 
        biennium. 
        [GENERAL FUND TOBACCO BASE REDUCTION.] 
        The general fund base level 
        appropriation for tobacco prevention 
        and control programs and activities 
        shall be reduced by $1,100,000 each 
        year of the biennium beginning July 1, 
        2001.  Section 13, sunset of uncodified 
        language, does not apply to this 
        provision. 
        [STANDARDS FOR SPECIAL CASE AUTOPSIES.] 
        Of this general fund appropriation, 
        $20,000 for the biennium is for a grant 
        to a professional association 
        representing coroners and medical 
        examiners in Minnesota to conduct case 
        studies, and develop and disseminate 
        guidelines, for autopsy practice in 
        special cases.  This is a one-time 
        appropriation and shall not become part 
        of base level funding for the 2002-2003 
        biennium. 
        Subd. 3.  Health Protection          27,046,000     27,240,000
                      Summary by Fund
        General              12,221,000    12,417,000
        State Government 
        Special Revenue      14,825,000    14,823,000
        [PORTABLE WADING POOLS.] (a) Portable 
        wading pools used in the following 
        settings are defined as private 
        residential pools, and not public 
        pools, for purposes of public swimming 
        pool regulation under Minnesota Rules, 
        chapter 4717, provided they have a 
        maximum depth of 24 inches and are 
        capable of being manually emptied and 
        moved: 
        (1) a portable wading pool operated at 
        a family day care or group family day 
        care home that is licensed under 
        Minnesota Rules, chapter 9502; and 
        (2) a portable wading pool operated at 
        a home at which child care services are 
        provided under Minnesota Statutes, 
        section 245A.03, subdivision 2, clause 
        (2), or under Laws 1997, chapter 248, 
        section 46, including subsequent 
        amendments. 
        (b) Portable wading pools may not be 
        used by a child at a setting specified 
        in paragraph (a), clause (1) or (2), 
        unless the parent or legal guardian for 
        the child in care has provided written 
        consent.  The written consent shall 
        include a statement that the parent or 
        legal guardian has received and read 
        material provided by the department of 
        health to the department of human 
        services for distribution to all child 
        care facilities, related to the use of 
        portable wading pools concerning the 
        risk of disease transmission as well as 
        other health risks. 
        (c) This provision is effective the day 
        following final enactment. 
        Subd. 4.  Management and
        Support Services                      6,379,000      5,132,000
                      Summary by Fund
        General               6,102,000     4,849,000
        State Government
        Special Revenue         181,000       185,000
        Health Care
        Access                   96,000        98,000
        [HEALTH NEEDS OF SPECIAL POPULATIONS.] 
        Of the general fund appropriation, 
        $400,000 in fiscal year 2000 is for 
        grants to local health agencies to 
        conduct a health needs assessment that 
        is specific to populations of color.  
        Any portion of this appropriation that 
        is unspent does not cancel but shall be 
        available for these purposes in fiscal 
        year 2001.  This appropriation shall 
        not become part of the base for the 
        2002-2003 biennium. 
        [YEAR 2000 SURVEY OF FACILITIES AND 
        WATER SYSTEMS.] Of this general fund 
        appropriation, $100,000 is for the 
        costs associated with surveying by July 
        1, 1999, all hospitals, nursing homes, 
        nontransient community water systems 
        operated by a public entity, and 
        community water supply systems for year 
        2000 problems and proposed solutions.  
        Of this amount, $50,000 is available 
        the day following final enactment. 
        [SINGLE POINT OF ENTRY.] The 
        commissioner, in consultation with the 
        commissioners of commerce and human 
        services, the ombudsman for mental 
        health and mental retardation, and the 
        board on aging, shall report to the 
        chairs of the senate health and family 
        security committee and the house health 
        and human services committee by January 
        15, 2000, with a plan to: 
        (1) create a single point of entry for 
        health care consumer assistance and 
        advocacy services; 
        (2) integrate state offices of health 
        care consumer assistance; and 
        (3) coordinate and collaborate with 
        other state agencies and 
        nongovernmental entities to provide 
        consumers with assistance and advocacy 
        services related to health insurance 
        and health services. 
        The report shall also discuss the 
        feasibility of obtaining grants and 
        other revenue to provide these services.
        Sec. 4.  VETERANS NURSING   
        HOMES BOARD                           26,121,000     27,103,000 
        [ALLOWANCE FOR FOOD.] The allowance for 
        food may be adjusted annually to 
        reflect changes in the producer price 
        index, as prepared by the United States 
        Bureau of Labor Statistics, with the 
        approval of the commissioner of 
        finance.  Adjustments for fiscal year 
        2000 and fiscal year 2001 must be based 
        on the June 1998 and June 1999 producer 
        price index respectively, but the 
        adjustment must be prorated if it would 
        require money in excess of the 
        appropriation. 
        [IMPROVEMENTS USING DONATED MONEY.] 
        Notwithstanding Minnesota Statutes, 
        section 16B.30, the board may make and 
        maintain the following improvements to 
        the veterans homes using money donated 
        for those purposes: 
        (1) a picnic pavilion at the 
        Minneapolis veterans home; 
        (2) walking trails at the Hastings 
        veterans home; 
        (3) walking trails and landscaping at 
        the Silver Bay veterans home; 
        (4) an entrance canopy at the Fergus 
        Falls veterans home; and 
        (5) a suspended wooden dining deck at 
        the Luverne veterans home. 
        [ASSET PRESERVATION; FACILITY REPAIR.] 
        Of the general fund appropriation, 
        $1,190,000 each year is for asset 
        preservation and facility repair.  The 
        appropriations are available in either 
        year of the biennium and may be used 
        for abatement and repair at the Luverne 
        home.  This appropriation shall become 
        part of the board's base level funding 
        for the 2002-2003 biennium. 
        [VETERANS HOMES SPECIAL REVENUE 
        ACCOUNT.] The general fund 
        appropriations made to the board shall 
        be transferred to a veterans homes 
        special revenue account in the special 
        revenue fund in the same manner as 
        other receipts are deposited according 
        to Minnesota Statutes, section 198.34, 
        and are appropriated to the board for 
        the operation of board facilities and 
        programs. 
        [SETTING COST OF CARE.] (a) The board 
        may set the cost of care at the Fergus 
        Falls facility for fiscal year 2000 
        based on the cost of average skilled 
        nursing care provided to residents of 
        the Minneapolis veterans home for 
        fiscal year 2000. 
        (b) The cost of care for the 
        domiciliary residents at the 
        Minneapolis veterans home and the 
        skilled nursing care residents at the 
        Luverne veterans home for fiscal year 
        2000 and fiscal year 2001 shall be 
        calculated based on 100 percent 
        occupancy at each facility. 
        [LICENSED BED CAPACITY FOR MINNEAPOLIS 
        VETERANS HOME.] The commissioner of 
        health shall not reduce the licensed 
        bed capacity for the Minneapolis 
        veterans home pending completion of the 
        project authorized by Laws 1990, 
        chapter 610, article 1, section 9, 
        subdivision 3. 
        [LUVERNE ENVIRONMENTAL QUALITY.] Of 
        this appropriation, $591,000 in fiscal 
        year 2000 is from the general fund to 
        the board to ensure an adequate 
        staffing complement during the repairs 
        at the Luverne home.  Of that amount, 
        $229,000 is available the day following 
        final enactment. 
        Sec. 5.  HEALTH-RELATED BOARDS 
        Subdivision 1.  Total       
        Appropriation                         10,376,000     10,576,000 
        [STATE GOVERNMENT SPECIAL REVENUE 
        FUND.] The appropriations in this 
        section are from the state government 
        special revenue fund. 
        [NO SPENDING IN EXCESS OF REVENUES.] 
        The commissioner of finance shall not 
        permit the allotment, encumbrance, or 
        expenditure of money appropriated in 
        this section in excess of the 
        anticipated biennial revenues or 
        accumulated surplus revenues from fees 
        collected by the boards.  Neither this 
        provision nor Minnesota Statutes, 
        section 214.06, applies to transfers 
        from the general contingent account. 
        Subd. 2.  Board of Chiropractic 
        Examiners                                350,000        361,000
        Subd. 3.  Board of Dentistry             783,000        806,000
        Subd. 4.  Board of Dietetic
        and Nutrition Practice                    92,000         95,000
        Subd. 5.  Board of Marriage and 
        Family Therapy                           107,000        111,000
        Subd. 6.  Board of Medical  
        Practice                               3,469,000      3,593,000
        Subd. 7.  Board of Nursing             2,202,000      2,245,000
        Subd. 8.  Board of Nursing 
        Home Administrators                      548,000        566,000
        [HEALTH PROFESSIONAL SERVICES 
        ACTIVITY.] Of these appropriations, 
        $368,000 the first year and $380,000 
        the second year are for the Health 
        Professional Services Activity. 
        Subd. 9.  Board of Optometry              87,000         90,000
        Subd. 10.  Board of Pharmacy           1,125,000      1,137,000
        [ADMINISTRATIVE SERVICES UNIT.] Of this 
        appropriation, $259,000 the first year 
        and $270,000 the second year are for 
        the health boards administrative 
        services unit.  The administrative 
        services unit may receive and expend 
        reimbursements for services performed 
        for other agencies. 
        Subd. 11.  Board of Physical Therapy     227,000        185,000
        Subd. 12.  Board of Podiatry              41,000         42,000
        Subd. 13.  Board of Psychology           556,000        534,000
        [PART-TIME POSITIONS FUNDING.] Of this 
        appropriation, $34,000 in fiscal year 
        2000 is from the state government 
        special revenue fund to the board to 
        fund two part-time positions previously 
        funded through the legislative advisory 
        commission and for a budget shortage 
        due to position reallocations.  This 
        appropriation is available the day 
        following final enactment. 
        Subd. 14.  Board of Social Work          641,000        658,000
        Subd. 15.  Board of Veterinary 
        Medicine                                 148,000        153,000
        Sec. 6.  EMERGENCY MEDICAL
        SERVICES BOARD                         2,420,000      2,467,000 
                      Summary by Fund
        General                 694,000       694,000
        Trunk Highway         1,726,000     1,773,000
        [COMPREHENSIVE ADVANCED LIFE SUPPORT 
        (CALS).] Of the general fund 
        appropriation, $108,000 each year is 
        for the board to establish a 
        comprehensive advanced life support 
        educational program under Minnesota 
        Statutes, section 144E.37. 
        [EMERGENCY MEDICAL SERVICES GRANTS.] Of 
        the appropriation from the trunk 
        highway fund, $18,000 in fiscal year 
        2000 and $36,000 in fiscal year 2001 is 
        to the board for grants to regional 
        emergency medical services programs.  
        This appropriation shall become part of 
        the base for the 2002-2003 biennium. 
        Sec. 7.  COUNCIL ON DISABILITY           650,000        670,000
        Sec. 8.  OMBUDSMAN FOR MENTAL 
        HEALTH AND MENTAL RETARDATION          1,338,000      1,378,000
        Sec. 9.  OMBUDSMAN
        FOR FAMILIES                             166,000        171,000
        Sec. 10.  TRANSFERS 
        Subdivision 1.  Grant Programs
        The commissioner of human services, 
        with the approval of the commissioner 
        of finance, and after notification of 
        the chair of the senate health and 
        family security budget division and the 
        chair of the house health and human 
        services finance committee, may 
        transfer unencumbered appropriation 
        balances for the biennium ending June 
        30, 2001, within fiscal years among the 
        MFIP, general assistance, general 
        assistance medical care, medical 
        assistance, Minnesota supplemental aid, 
        and group residential housing programs, 
        and the entitlement portion of the 
        chemical dependency consolidated 
        treatment fund, and between fiscal 
        years of the biennium. 
        Subd. 2.  Approval Required
        Positions, salary money, and nonsalary 
        administrative money may be transferred 
        within the departments of human 
        services and health and within the 
        programs operated by the veterans 
        nursing homes board as the 
        commissioners and the board consider 
        necessary, with the advance approval of 
        the commissioner of finance.  The 
        commissioner or the board shall inform 
        the chairs of the house health and 
        human services finance committee and 
        the senate health and family security 
        budget division quarterly about 
        transfers made under this provision. 
        Sec. 11.  PROVISIONS
        (a) Money appropriated to the 
        commissioner of human services for the 
        purchase of provisions must be used 
        solely for that purpose.  Money 
        provided and not used for the purchase 
        of provisions must be canceled into the 
        fund from which appropriated, except 
        that money provided and not used for 
        the purchase of provisions because of 
        population decreases may be transferred 
        and used for the purchase of drugs and 
        medical and hospital supplies and 
        equipment with the approval of the 
        commissioner of finance after 
        notification of the chairs of the house 
        health and human services finance 
        committee and the senate health and 
        family security budget division. 
        (b) For fiscal year 2000, the allowance 
        for food may be adjusted to the 
        equivalent of the 75th percentile of 
        the comparable raw food costs for 
        community nursing homes as reported to 
        the commissioner of human services.  
        For fiscal year 2001, an adjustment may 
        be made to reflect the annual change in 
        the United States Bureau of Labor 
        Statistics producer price index as of 
        June 2000 with the approval of the 
        commissioner of finance.  The 
        adjustments for either year must be 
        prorated if they would require money in 
        excess of this appropriation. 
        Sec. 12.  CARRYOVER LIMITATION
        None of the appropriations in this act 
        which are allowed to be carried forward 
        from fiscal year 2000 to fiscal year 
        2001 shall become part of the base 
        level funding for the 2002-2003 
        biennial budget, unless specifically 
        directed by the legislature. 
        Sec. 13.  SUNSET OF UNCODIFIED LANGUAGE
        All uncodified language contained in 
        this article expires on June 30, 2001, 
        unless a different expiration date is 
        explicit. 
           Sec. 14.  Minnesota Statutes 1998, section 144.05, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [APPROPRIATION TRANSFERS TO BE REPORTED.] When 
        the commissioner transfers operational money between programs 
        under section 16A.285, in addition to the requirements of that 
        section the commissioner must provide the chairs of the 
        legislative committees that have jurisdiction over the agency's 
        budget with sufficient detail to identify the account to which 
        the money was originally appropriated, and the account to which 
        the money is being transferred. 
           Sec. 15.  Minnesota Statutes 1998, section 198.003, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [APPROPRIATION TRANSFERS TO BE REPORTED.] When 
        the board transfers operational money between programs under 
        section 16A.285, in addition to the requirements of that section 
        the board must provide the chairs of the legislative committees 
        that have jurisdiction over the board's budget with sufficient 
        detail to identify the account to which the money was originally 
        appropriated, and the account to which the money is being 
        transferred. 
           Sec. 16.  Minnesota Statutes 1998, section 256.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
        section 241.021, subdivision 2, the commissioner of human 
        services shall: 
           (1) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (a) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (b) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (c) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (d) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (e) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; 
           (f) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds; and 
           (g) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (2) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (3) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting handicapped, 
        dependent, neglected and delinquent children, and children born 
        to mothers who were not married to the children's fathers at the 
        times of the conception nor at the births of the children; 
        license and supervise child-caring and child-placing agencies 
        and institutions; supervise the care of children in boarding and 
        foster homes or in private institutions; and generally perform 
        all functions relating to the field of child welfare now vested 
        in the state board of control. 
           (4) Administer and supervise all noninstitutional service 
        to handicapped persons, including those who are visually 
        impaired, hearing impaired, or physically impaired or otherwise 
        handicapped.  The commissioner may provide and contract for the 
        care and treatment of qualified indigent children in facilities 
        other than those located and available at state hospitals when 
        it is not feasible to provide the service in state hospitals. 
           (5) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (6) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (7) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (8) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        mentally retarded.  For children under the guardianship of the 
        commissioner whose interests would be best served by adoptive 
        placement, the commissioner may contract with a licensed 
        child-placing agency to provide adoption services.  A contract 
        with a licensed child-placing agency must be designed to 
        supplement existing county efforts and may not replace existing 
        county programs, unless the replacement is agreed to by the 
        county board and the appropriate exclusive bargaining 
        representative or the commissioner has evidence that child 
        placements of the county continue to be substantially below that 
        of other counties.  Funds encumbered and obligated under an 
        agreement for a specific child shall remain available until the 
        terms of the agreement are fulfilled or the agreement is 
        terminated. 
           (9) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (10) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (11) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (12) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (a) The secretary of health, education, and welfare of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity. 
           (b) A comprehensive plan, including estimated project 
        costs, shall be approved by the legislative advisory commission 
        and filed with the commissioner of administration.  
           (13) According to federal requirements, establish 
        procedures to be followed by local welfare boards in creating 
        citizen advisory committees, including procedures for selection 
        of committee members. 
           (14) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, medical assistance, or food stamp program in 
        the following manner:  
           (a) One-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance, MFIP-S, and AFDC 
        programs, disallowances shall be shared by each county board in 
        the same proportion as that county's expenditures for the 
        sanctioned program are to the total of all counties' 
        expenditures for the AFDC, MFIP-S, and medical assistance 
        programs.  For the food stamp program, sanctions shall be shared 
        by each county board, with 50 percent of the sanction being 
        distributed to each county in the same proportion as that 
        county's administrative costs for food stamps are to the total 
        of all food stamp administrative costs for all counties, and 50 
        percent of the sanctions being distributed to each county in the 
        same proportion as that county's value of food stamp benefits 
        issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due. 
           (b) Notwithstanding the provisions of paragraph (a), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in paragraph (a), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to paragraph (a).  
           (15) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (16) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (17) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (a) The commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced. 
           (b) The county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner.  
           (c) If the required reports are not received by the 
        deadlines established in clause (b), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received.  
           (d) A county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of noncompliance.
           (e) The final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period. 
           (f) The commissioner may not delay payments, withhold 
        funds, or require repayment under paragraph (c) or (e) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under paragraph (c) or (e), the county board may appeal the 
        action according to sections 14.57 to 14.69. 
           (g) Counties subject to withholding of funds under 
        paragraph (c) or forfeiture or repayment of funds under 
        paragraph (e) shall not reduce or withhold benefits or services 
        to clients to cover costs incurred due to actions taken by the 
        commissioner under paragraph (c) or (e). 
           (18) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (19) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (20) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (21) Have the authority to administer a drug rebate program 
        for drugs purchased pursuant to the senior citizen 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.  For each drug, the amount of the rebate shall 
        be equal to the basic rebate as defined for purposes of the 
        federal rebate program in United States Code, title 42, section 
        1396r-8(c)(1).  This basic rebate shall be applied to 
        single-source and multiple-source drugs.  The manufacturers must 
        provide full payment within 30 days of receipt of the state 
        invoice for the rebate within the terms and conditions used for 
        the federal rebate program established pursuant to section 1927 
        of title XIX of the Social Security Act.  The manufacturers must 
        provide the commissioner with any information necessary to 
        verify the rebate determined per drug.  The rebate program shall 
        utilize the terms and conditions used for the federal rebate 
        program established pursuant to section 1927 of title XIX of the 
        Social Security Act. 
           (22) 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. 
           (23) 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. 
           (24) Incorporate cost reimbursement claims from First Call 
        Minnesota into the federal cost reimbursement claiming processes 
        of the department according to federal law, rule, and 
        regulations.  Any reimbursement received is appropriated to the 
        commissioner and shall be disbursed to First Call Minnesota 
        according to normal department payment schedules. 
           Sec. 17.  Minnesota Statutes 1998, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [APPROPRIATION TRANSFERS TO BE REPORTED.] When 
        the commissioner transfers operational money between programs 
        under section 16A.285, in addition to the requirements of that 
        section the commissioner must provide the chairs of the 
        legislative committees that have jurisdiction over the agency's 
        budget with sufficient detail to identify the account to which 
        the money was originally appropriated, and the account to which 
        the money is being transferred. 
           Sec. 18.  Minnesota Statutes 1998, section 256.014, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [ISSUANCE OPERATIONS CENTER.] Payments to the 
        commissioner from other governmental units and private 
        enterprises for:  services performed by the issuance operations 
        center; or reports generated by the payment and eligibility 
        systems must be deposited in the account created under 
        subdivision 2.  These payments are appropriated to the 
        commissioner for the operation of the issuance center or system, 
        according to the provisions of this section. 
           Sec. 19.  Minnesota Statutes 1998, section 256J.39, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PAYMENT POLICY.] The following policies 
        apply to monthly assistance payments and corrective payments: 
           (1) Grant payments may be issued in the form of warrants 
        immediately redeemable in cash, electronic benefits transfer, or 
        by direct deposit into the recipient's account in a financial 
        institution. 
           (2) The commissioner shall mail assistance payment checks 
        to the address where a caregiver lives unless the county agency 
        approves an alternate arrangement. 
           (3) The commissioner shall mail monthly assistance payment 
        checks within time to allow postal service delivery to occur no 
        later than the first day of each month.  Monthly assistance 
        payment checks must be dated the first day of the month.  The 
        commissioner shall issue electronic benefits transfer payments 
        so that caregivers have access to the payments no later than the 
        first of the month.  
           (4) The commissioner shall issue replacement checks 
        promptly, but no later than seven calendar days after the 
        provisions of sections 16A.46; 256.01, subdivision 11; and 
        471.415 have been met. 
           (5) The commissioner, with the advance approval of the 
        commissioner of finance, may issue cash assistance grant 
        payments up to three days before the first day of each month, 
        including three days before the start of each state fiscal 
        year.  Of the money appropriated for cash assistance grant 
        payments for each fiscal year, up to three percent of the annual 
        state appropriation is available to the commissioner in the 
        previous fiscal year.  If that amount is insufficient for the 
        costs incurred, an additional amount of the appropriation as 
        needed may be transferred with the advance approval of the 
        commissioner of finance. 
           Sec. 20. [REPEALER.] 
           Minnesota Statutes 1998, section 256J.03, is repealed 
        effective July 2, 1999.  Section 13, sunset of uncodified 
        language, does not apply to this section. 
           Sec. 21.  [EFFECTIVE DATE.] 
           Section 19 is effective the day following final enactment. 
                                   ARTICLE 2 
                               HEALTH DEPARTMENT 
           Section 1.  Minnesota Statutes 1998, section 15.059, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [LATER EXPIRATION.] Notwithstanding subdivision 
        5, the advisory councils and committees listed in this 
        subdivision do not expire June 30, 1997.  These groups expire 
        June 30, 2001, unless the law creating the group or this 
        subdivision specifies an earlier expiration date. 
           Investment advisory council, created in section 11A.08; 
           Intergovernmental information systems advisory council, 
        created in section 16B.42, expires June 30, 1999; 
           Feedlot and manure management advisory committee, created 
        in section 17.136; 
           Aquaculture advisory committee, created in section 17.49; 
           Dairy producers board, created in section 17.76; 
           Pesticide applicator education and examination review 
        board, created in section 18B.305; 
           Advisory seed potato certification task force, created in 
        section 21.112; 
           Food safety advisory committee, created in section 28A.20; 
           Minnesota organic advisory task force, created in section 
        31.95; 
           Public programs risk adjustment work group, created in 
        section 62Q.03, expires June 30, 1999; 
           Workers' compensation self-insurers' advisory committee, 
        created in section 79A.02; 
           Youth corps advisory committee, created in section 84.0887; 
           Iron range off-highway vehicle advisory committee, created 
        in section 85.013; 
           Mineral coordinating committee, created in section 93.002; 
           Game and fish fund citizen advisory committees, created in 
        section 97A.055; 
           Wetland heritage advisory committee, created in section 
        103G.2242; 
           Wastewater treatment technical advisory committee, created 
        in section 115.54; 
           Solid waste management advisory council, created in section 
        115A.12; 
           Nuclear waste council, created in section 116C.711; 
           Genetically engineered organism advisory committee, created 
        in section 116C.93; 
           Environment and natural resources trust fund advisory 
        committee, created in section 116P.06; 
           Child abuse prevention advisory council, created in section 
        119A.13; 
           Chemical abuse and violence prevention council, created in 
        section 119A.27; 
           Youth neighborhood services advisory board, created in 
        section 119A.29; 
           Interagency coordinating council, created in section 
        125A.28, expires June 30, 1999; 
           Desegregation/integration advisory board, created in 
        section 124D.892; 
           Nonpublic education council, created in section 123B.445; 
           Permanent school fund advisory committee, created in 
        section 127A.30; 
           Indian scholarship committee, created in section 124D.84, 
        subdivision 2; 
           American Indian education committees, created in section 
        124D.80; 
           Summer scholarship advisory committee, created in section 
        124D.95; 
           Multicultural education advisory committee, created in 
        section 124D.894; 
           Male responsibility and fathering grants review committee, 
        created in section 124D.33; 
           Library for the blind and physically handicapped advisory 
        committee, created in section 134.31; 
           Higher education advisory council, created in section 
        136A.031; 
           Student advisory council, created in section 136A.031; 
           Cancer surveillance advisory committee, created in section 
        144.672; 
           Maternal and child health task force, created in section 
        145.881; 
           State community health advisory committee, created in 
        section 145A.10; 
           Mississippi River Parkway commission, created in section 
        161.1419; 
           School bus safety advisory committee, created in section 
        169.435; 
           Advisory council on workers' compensation, created in 
        section 175.007; 
           Code enforcement advisory council, created in section 
        175.008; 
           Medical services review board, created in section 176.103; 
           Apprenticeship advisory council, created in section 178.02; 
           OSHA advisory council, created in section 182.656; 
           Health professionals services program advisory committee, 
        created in section 214.32; 
           Rehabilitation advisory council for the blind, created in 
        section 248.10; 
           American Indian advisory council, created in section 
        254A.035; 
           Alcohol and other drug abuse advisory council, created in 
        section 254A.04; 
           Medical assistance drug formulary committee, created in 
        section 256B.0625; 
           Home care advisory committee, created in section 256B.071; 
           Preadmission screening, alternative care, and home and 
        community-based services advisory committee, created in section 
        256B.0911; 
           Traumatic brain injury advisory committee, created in 
        section 256B.093; 
           Minnesota commission serving deaf and hard-of-hearing 
        people, created in section 256C.28; 
           American Indian child welfare advisory council, created in 
        section 257.3579; 
           Juvenile justice advisory committee, created in section 
        268.29; 
           Northeast Minnesota economic development fund technical 
        advisory committees, created in section 298.2213; 
           Iron range higher education committee, created in section 
        298.2214; 
           Northeast Minnesota economic protection trust fund 
        technical advisory committee, created in section 298.297; 
           Pipeline safety advisory committee, created in section 
        299J.06, expires June 30, 1998; 
           Battered women's advisory council, created in section 
        611A.34. 
           Sec. 2.  Minnesota Statutes 1998, section 62J.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COST CONTAINMENT DUTIES.] After obtaining the 
        advice and recommendations of the Minnesota health care 
        commission, The commissioner shall: 
           (1) establish statewide and regional cost containment goals 
        for total health care spending under this section and collect 
        data as described in sections 62J.38 to 62J.41 to monitor 
        statewide achievement of the cost containment goals; 
           (2) divide the state into no fewer than four regions, with 
        one of those regions being the Minneapolis/St. Paul metropolitan 
        statistical area but excluding Chisago, Isanti, Wright, and 
        Sherburne counties, for purposes of fostering the development of 
        regional health planning and coordination of health care 
        delivery among regional health care systems and working to 
        achieve the cost containment goals; 
           (3) provide technical assistance to regional coordinating 
        boards; 
           (4) monitor the quality of health care throughout the state 
        and take action as necessary to ensure an appropriate level of 
        quality; 
           (5) (4) issue recommendations regarding uniform billing 
        forms, uniform electronic billing procedures and data 
        interchanges, patient identification cards, and other uniform 
        claims and administrative procedures for health care providers 
        and private and public sector payers.  In developing the 
        recommendations, the commissioner shall review the work of the 
        work group on electronic data interchange (WEDI) and the 
        American National Standards Institute (ANSI) at the national 
        level, and the work being done at the state and local level.  
        The commissioner may adopt rules requiring the use of the 
        Uniform Bill 82/92 form, the National Council of Prescription 
        Drug Providers (NCPDP) 3.2 electronic version, the Health Care 
        Financing Administration 1500 form, or other standardized forms 
        or procedures; 
           (6) (5) undertake health planning responsibilities as 
        provided in section 62J.15; 
           (7) (6) authorize, fund, or promote research and 
        experimentation on new technologies and health care procedures; 
           (8) (7) within the limits of appropriations for these 
        purposes, administer or contract for statewide consumer 
        education and wellness programs that will improve the health of 
        Minnesotans and increase individual responsibility relating to 
        personal health and the delivery of health care services, 
        undertake prevention programs including initiatives to improve 
        birth outcomes, expand childhood immunization efforts, and 
        provide start-up grants for worksite wellness programs; 
           (9) (8) undertake other activities to monitor and oversee 
        the delivery of health care services in Minnesota with the goal 
        of improving affordability, quality, and accessibility of health 
        care for all Minnesotans; and 
           (10) (9) make the cost containment goal data available to 
        the public in a consumer-oriented manner. 
           Sec. 3.  Minnesota Statutes 1998, section 62J.06, is 
        amended to read: 
           62J.06 [IMMUNITY FROM LIABILITY.] 
           No member of the regional coordinating boards established 
        under section 62J.09, or the health technology advisory 
        committee established under section 62J.15, shall be held 
        civilly or criminally liable for an act or omission by that 
        person if the act or omission was in good faith and within the 
        scope of the member's responsibilities under this chapter.  
           Sec. 4.  Minnesota Statutes 1998, section 62J.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LEGISLATIVE OVERSIGHT.] The legislative 
        commission on health care access reviews the activities of the 
        commissioner of health, the regional coordinating boards, the 
        health technology advisory committee, and all other state 
        agencies involved in the implementation and administration of 
        this chapter, including efforts to obtain federal approval 
        through waivers and other means.  
           Sec. 5.  Minnesota Statutes 1998, section 62J.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REPORTS TO THE COMMISSION.] The commissioner of 
        health, the regional coordinating boards, and the health 
        technology advisory committee shall report on their activities 
        annually and at other times at the request of the legislative 
        commission on health care access.  The commissioners of health, 
        commerce, and human services shall provide periodic reports to 
        the legislative commission on the progress of rulemaking that is 
        authorized or required under this chapter and shall notify 
        members of the commission when a draft of a proposed rule has 
        been completed and scheduled for publication in the State 
        Register.  At the request of a member of the commission, a 
        commissioner shall provide a description and a copy of a 
        proposed rule. 
           Sec. 6.  Minnesota Statutes 1998, section 62J.09, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPEALER.] This section is repealed effective 
        July 1, 2000 1999. 
           Sec. 7.  Minnesota Statutes 1998, section 62J.2930, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONSUMER INFORMATION.] The information 
        clearinghouse or another entity designated by the commissioner 
        shall provide consumer information to health plan company 
        enrollees to: 
           (1) assist enrollees in understanding their rights; 
           (2) explain and assist in the use of all available 
        complaint systems, including internal complaint systems within 
        health carriers, community integrated service networks, and the 
        departments of health and commerce; 
           (3) provide information on coverage options in each 
        regional coordinating board region of the state; 
           (4) provide information on the availability of purchasing 
        pools and enrollee subsidies; and 
           (5) help consumers use the health care system to obtain 
        coverage. 
           The information clearinghouse or other entity designated by 
        the commissioner for the purposes of this subdivision shall not: 
           (1) provide legal services to consumers; 
           (2) represent a consumer or enrollee; or 
           (3) serve as an advocate for consumers in disputes with 
        health plan companies.  
        Nothing in this subdivision shall interfere with the ombudsman 
        program established under section 256B.031, subdivision 6, or 
        other existing ombudsman programs. 
           Sec. 8.  [62J.535] [UNIFORM BILLING REQUIREMENTS.] 
           Subdivision 1.  [DEVELOPMENT OF UNIFORM BILLING 
        TRANSACTIONS.] The commissioner of health, after consultation 
        with the commissioner of commerce, shall adopt uniform billing 
        standards that comply with United States Code, title 42, 
        sections 1320d to 1320d-8, as amended from time to time.  The 
        uniform billing standards shall apply to all paper and 
        electronic claim transactions and shall apply to all Minnesota 
        payers, including government programs.  
           Subd. 2.  [COMPLIANCE.] (a) Concurrent with the effective 
        dates established under United States Code, title 42, sections 
        1320d to 1320d-8, as amended from time to time, for uniform 
        electronic billing standards, all health care providers must 
        conform to the uniform billing standards developed under 
        subdivision 1. 
           (b) Notwithstanding paragraph (a), the requirements for the 
        uniform remittance advice report shall be effective 12 months 
        after the date of the required compliance of the standards for 
        the electronic remittance advice transaction are effective under 
        United States Code, title 42, sections 1320d to 1320d-8, as 
        amended from time to time. 
           Sec. 9.  [62J.691] [PURPOSE.] 
           The legislature finds that medical education and research 
        are important to the health and economic well being of 
        Minnesotans.  The legislature further finds that, as a result of 
        competition in the health care marketplace, these teaching and 
        research institutions are facing increased difficulty funding 
        medical education and research.  The purpose of sections 62J.692 
        and 62J.693 is to help offset lost patient care revenue for 
        those teaching institutions affected by increased competition in 
        the health care marketplace and to help ensure the continued 
        excellence of health care research in Minnesota. 
           Sec. 10.  [62J.692] [MEDICAL EDUCATION.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following definitions apply: 
           (a) "Accredited clinical training" means the clinical 
        training provided by a medical education program that is 
        accredited through an organization recognized by the department 
        of education or the health care financing administration as the 
        official accrediting body for that program. 
           (b) "Commissioner" means the commissioner of health. 
           (c) "Clinical medical education program" means the 
        accredited clinical training of physicians (medical students and 
        residents), doctor of pharmacy practitioners, doctors of 
        chiropractic, dentists, advanced practice nurses (clinical nurse 
        specialists, certified registered nurse anesthetists, nurse 
        practitioners, and certified nurse midwives), and physician 
        assistants. 
           (d) "Sponsoring institution" means a hospital, school, or 
        consortium located in Minnesota that sponsors and maintains 
        primary organizational and financial responsibility for a 
        clinical medical education program in Minnesota and which is 
        accountable to the accrediting body. 
           (e) "Teaching institution" means a hospital, medical 
        center, clinic, or other organization that conducts a clinical 
        medical education program in Minnesota. 
           (f) "Trainee" means a student or resident involved in a 
        clinical medical education program.  
           (g) "Eligible trainee FTEs" means the number of trainees, 
        as measured by full-time equivalent counts, that are at training 
        sites located in Minnesota with a medical assistance provider 
        number where training occurs in either an inpatient or 
        ambulatory patient care setting and where the training is 
        funded, in part, by patient care revenues. 
           Subd. 2.  [MEDICAL EDUCATION AND RESEARCH ADVISORY 
        COMMITTEE.] The commissioner shall appoint an advisory committee 
        to provide advice and oversight on the distribution of funds 
        appropriated for distribution under this section.  In appointing 
        the members, the commissioner shall:  
           (1) consider the interest of all stakeholders; 
           (2) appoint members that represent both urban and rural 
        interests; and 
           (3) appoint members that represent ambulatory care as well 
        as inpatient perspectives.  
        The commissioner shall appoint to the advisory committee 
        representatives of the following groups to ensure appropriate 
        representation of all eligible provider groups and other 
        stakeholders:  public and private medical researchers; public 
        and private academic medical centers, including representatives 
        from academic centers offering accredited training programs for 
        physicians, pharmacists, chiropractors, dentists, nurses, and 
        physician assistants; managed care organizations; employers; 
        consumers and other relevant stakeholders.  The advisory 
        committee is governed by section 15.059 for membership terms and 
        removal of members and expires on June 30, 2001. 
           Subd. 3.  [APPLICATION PROCESS.] (a) A clinical medical 
        education program conducted in Minnesota by a teaching 
        institution is eligible for funds under subdivision 4 if the 
        program: 
           (1) is funded, in part, by patient care revenues; 
           (2) occurs in patient care settings that face increased 
        financial pressure as a result of competition with nonteaching 
        patient care entities; and 
           (3) emphasizes primary care or specialties that are in 
        undersupply in Minnesota. 
           (b) Applications must be submitted to the commissioner by a 
        sponsoring institution on behalf of an eligible clinical medical 
        education program and must be received by September 30 of each 
        year for distribution in the following year.  An application for 
        funds must contain the following information: 
           (1) the official name and address of the sponsoring 
        institution and the official name and site address of the 
        clinical medical education programs on whose behalf the 
        sponsoring institution is applying; 
           (2) the name, title, and business address of those persons 
        responsible for administering the funds; 
           (3) for each clinical medical education program for which 
        funds are being sought; the type and specialty orientation of 
        trainees in the program; the name, site address, and medical 
        assistance provider number of each training site used in the 
        program; the total number of trainees at each training site; and 
        the total number of eligible trainee FTEs at each site; 
           (4) audited clinical training costs per trainee for each 
        clinical medical education program where available or estimates 
        of clinical training costs based on audited financial data; 
           (5) a description of current sources of funding for 
        clinical medical education costs, including a description and 
        dollar amount of all state and federal financial support, 
        including Medicare direct and indirect payments; 
           (6) other revenue received for the purposes of clinical 
        training; and 
           (7) other supporting information the commissioner deems 
        necessary to determine program eligibility based on the criteria 
        in paragraph (a) and to ensure the equitable distribution of 
        funds.  
           (c) An applicant that does not provide information 
        requested by the commissioner shall not be eligible for funds 
        for the current funding cycle. 
           Subd. 4.  [DISTRIBUTION OF FUNDS.] (a) The commissioner 
        shall annually distribute medical education funds to all 
        qualifying applicants based on the following criteria:  
           (1) total medical education funds available for 
        distribution; 
           (2) total number of eligible trainee FTEs in each clinical 
        medical education program; and 
           (3) the statewide average cost per trainee, by type of 
        trainee, in each clinical medical education program.  
           (b) Funds distributed shall not be used to displace current 
        funding appropriations from federal or state sources.  
           (c) Funds shall be distributed to the sponsoring 
        institutions indicating the amount to be distributed to each of 
        the sponsor's clinical medical education programs based on the 
        criteria in this subdivision and in accordance with the 
        commissioner's approval letter.  Each clinical medical education 
        program must distribute funds to the training sites as specified 
        in the commissioner's approval letter.  Sponsoring institutions, 
        which are accredited through an organization recognized by the 
        department of education or the health care financing 
        administration, may contract directly with training sites to 
        provide clinical training.  To ensure the quality of clinical 
        training, those accredited sponsoring institutions must: 
           (1) develop contracts specifying the terms, expectations, 
        and outcomes of the clinical training conducted at sites; and 
           (2) take necessary action if the contract requirements are 
        not met.  Action may include the withholding of payments under 
        this section or the removal of students from the site.  
           (d) Any funds not distributed in accordance with the 
        commissioner's approval letter must be returned to the medical 
        education and research fund within 30 days of receiving notice 
        from the commissioner.  The commissioner shall distribute 
        returned funds to the appropriate training sites in accordance 
        with the commissioner's approval letter. 
           Subd. 5.  [REPORT.] (a) Sponsoring institutions receiving 
        funds under this section must sign and submit a medical 
        education grant verification report (GVR) to verify that the 
        correct grant amount was forwarded to each eligible training 
        site.  If the sponsoring institution fails to submit the GVR by 
        the stated deadline, or to request and meet the deadline for an 
        extension, the sponsoring institution is required to return the 
        full amount of funds received to the commissioner within 30 days 
        of receiving notice from the commissioner.  The commissioner 
        shall distribute returned funds to the appropriate training 
        sites in accordance with the commissioner's approval letter.  
           (b) The reports must provide verification of the 
        distribution of the funds and must include:  
           (1) the total number of eligible trainee FTEs in each 
        clinical medical education program; 
           (2) the name of each funded program and, for each program, 
        the dollar amount distributed to each training site; 
           (3) documentation of any discrepancies between the initial 
        grant distribution notice included in the commissioner's 
        approval letter and the actual distribution; 
           (4) a statement by the sponsoring institution stating that 
        the completed grant verification report is valid and accurate; 
        and 
           (5) other information the commissioner, with advice from 
        the advisory committee, deems appropriate to evaluate the 
        effectiveness of the use of funds for medical education.  
           (c) By February 15 of each year, the commissioner, with 
        advice from the advisory committee, shall provide an annual 
        summary report to the legislature on the implementation of this 
        section. 
           Subd. 6.  [OTHER AVAILABLE FUNDS.] The commissioner is 
        authorized to distribute, in accordance with subdivision 4, 
        funds made available through: 
           (1) voluntary contributions by employers or other entities; 
           (2) allocations for the commissioner of human services to 
        support medical education and research; and 
           (3) other sources as identified and deemed appropriate by 
        the legislature for inclusion in the fund. 
           Subd. 7.  [TRANSFERS FROM THE COMMISSIONER OF HUMAN 
        SERVICES.] (a) The amount transferred according to section 
        256B.69, subdivision 5c, shall be distributed by the 
        commissioner to clinical medical education programs that meet 
        the qualifications of subdivision 3 based on a distribution 
        formula that reflects a summation of two factors: 
           (1) an education factor, which is determined by the total 
        number of eligible trainee FTEs and the total statewide average 
        costs per trainee, by type of trainee, in each clinical medical 
        education program; and 
           (2) a public program volume factor, which is determined by 
        the total volume of public program revenue received by each 
        training site as a percentage of all public program revenue 
        received by all training sites in the fund pool created under 
        this subdivision.  
           In this formula, the education factor shall be weighted at 
        50 percent and the public program volume factor shall be 
        weighted at 50 percent. 
           (b) Public program revenue for the formula in paragraph (a) 
        shall include revenue from medical assistance, prepaid medical 
        assistance, general assistance medical care, and prepaid general 
        assistance medical care. 
           (c) Training sites that receive no public program revenue 
        shall be ineligible for funds available under this subdivision.  
           Subd. 8.  [FEDERAL FINANCIAL PARTICIPATION.] The 
        commissioner of human services shall seek to maximize federal 
        financial participation in payments for medical education and 
        research costs.  If the commissioner of human services 
        determines that federal financial participation is available for 
        the medical education and research, the commissioner of health 
        shall transfer to the commissioner of human services the amount 
        of state funds necessary to maximize the federal funds 
        available.  The amount transferred to the commissioner of human 
        services, plus the amount of federal financial participation, 
        shall be distributed to medical assistance providers in 
        accordance with the distribution methodology described in 
        subdivision 4. 
           Subd. 9.  [REVIEW OF ELIGIBLE PROVIDERS.] The commissioner 
        and the medical education and research costs advisory committee 
        may review provider groups included in the definition of a 
        clinical medical education program to assure that the 
        distribution of the funds continue to be consistent with the 
        purpose of this section.  The results of any such reviews must 
        be reported to the legislative commission on health care access. 
           Sec. 11.  [62J.693] [MEDICAL RESEARCH.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, health care research means approved clinical, outcomes, 
        and health services investigations.  
           Subd. 2.  [GRANT APPLICATION PROCESS.] (a) The commissioner 
        of health shall make recommendations for a process for the 
        submission, review, and approval of research grant 
        applications.  The process shall give priority for grants to 
        applications that are intended to gather preliminary data for 
        submission for a subsequent proposal for funding from a federal 
        agency or foundation, which awards research money on a 
        competitive, peer-reviewed basis.  Grant recipients must be able 
        to demonstrate the ability to comply with federal regulations on 
        human subjects research in accordance with Code of Federal 
        Regulations, title 45, section 46, and shall conduct the 
        proposed research.  Grants may be awarded to the University of 
        Minnesota, the Mayo clinic, or any other public or private 
        organization in the state involved in medical research.  The 
        commissioner shall report to the legislature by January 15, 
        2000, with recommendations.  
           (b) The commissioner may consult with the medical education 
        and research advisory committee established in section 62J.692 
        in developing these recommendations or may appoint a research 
        advisory committee to provide advice and oversight on the grant 
        application process.  If the commissioner appoints a research 
        advisory committee, the committee shall be governed by section 
        15.059 for membership terms and removal of members.  
           Sec. 12.  Minnesota Statutes 1998, section 62Q.03, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [PUBLIC PROGRAMS.] (a) A separate risk 
        adjustment system must be developed for state-run public 
        programs, including medical assistance, general assistance 
        medical care, and MinnesotaCare.  The system must be developed 
        in accordance with the general risk adjustment methodologies 
        described in this section, must include factors in addition to 
        age and sex adjustment, and may include additional demographic 
        factors, different targeted conditions, and/or different payment 
        amounts for conditions.  The risk adjustment system for public 
        programs must attempt to reflect the special needs related to 
        poverty, cultural, or language barriers and other needs of the 
        public program population. 
           (b) The commissioners of health and human services shall 
        jointly convene a public programs risk adjustment work group 
        responsible for advising the commissioners in the design of the 
        public programs risk adjustment system.  The public programs 
        risk adjustment work group is governed by section 15.059 for 
        purposes of membership terms, expiration, and removal of members 
        and shall terminate on June 30, 1999.  The work group shall meet 
        at the discretion of the commissioners of health and human 
        services. The commissioner of health shall work with the risk 
        adjustment association to ensure coordination between the risk 
        adjustment systems for the public and private sectors.  The 
        commissioner of human services shall seek any needed federal 
        approvals necessary for the inclusion of the medical assistance 
        program in the public programs risk adjustment system.  
           (c) The public programs risk adjustment work group must be 
        representative of the persons served by publicly paid health 
        programs and providers and health plans that meet their needs.  
        To the greatest extent possible, the appointing authorities 
        shall attempt to select representatives that have historically 
        served a significant number of persons in publicly paid health 
        programs or the uninsured.  Membership of the work group shall 
        be as follows: 
           (1) one provider member appointed by the Minnesota Medical 
        Association; 
           (2) two provider members appointed by the Minnesota 
        Hospital Association, at least one of whom must represent a 
        major disproportionate share hospital; 
           (3) five members appointed by the Minnesota Council of 
        HMOs, one of whom must represent an HMO with fewer than 50,000 
        enrollees located outside the metropolitan area and one of whom 
        must represent an HMO with at least 50 percent of total 
        membership enrolled through a public program; 
           (4) two representatives of counties appointed by the 
        Association of Minnesota Counties; 
           (5) three representatives of organizations representing the 
        interests of families, children, childless adults, and elderly 
        persons served by the various publicly paid health programs 
        appointed by the governor; 
           (6) two representatives of persons with mental health, 
        developmental or physical disabilities, chemical dependency, or 
        chronic illness appointed by the governor; and 
           (7) three public members appointed by the governor, at 
        least one of whom must represent a community health board.  The 
        risk adjustment association may appoint a representative, if a 
        representative is not otherwise appointed by an appointing 
        authority. 
           (d) The commissioners of health and human services, with 
        the advice of the public programs risk adjustment work group, 
        shall develop a work plan and time frame and shall coordinate 
        their efforts with the private sector risk adjustment 
        association's activities and other state initiatives related to 
        public program managed care reimbursement. 
           (e) Before including risk adjustment in a contract for the 
        prepaid medical assistance program, the prepaid general 
        assistance medical care program, or the MinnesotaCare program, 
        the commissioner of human services shall provide to the 
        contractor an analysis of the expected impact on the contractor 
        of the implementation of risk adjustment.  This analysis may be 
        limited by the available data and resources, as determined by 
        the commissioner, and shall not be binding on future contract 
        periods.  This paragraph shall not apply if the contractor has 
        not supplied information to the commissioner related to the risk 
        adjustment analysis. 
           (f) The commissioner of human services shall report to the 
        public program risk adjustment work group on the methodology the 
        department will use for risk adjustment prior to implementation 
        of the risk adjustment payment methodology.  Upon completion of 
        the report to the work group, the commissioner shall phase in 
        risk adjustment according to the following schedule: 
           (1) for the first contract year, no more than ten percent 
        of reimbursements shall be risk adjusted; and 
           (2) for the second contract year, no more than 30 percent 
        of reimbursements shall be risk adjusted. 
           Sec. 13.  Minnesota Statutes 1998, section 62Q.075, is 
        amended to read: 
           62Q.075 [LOCAL PUBLIC ACCOUNTABILITY AND COLLABORATION 
        PLAN.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "managed care organization" means a health maintenance 
        organization or community integrated service network. 
           Subd. 2.  [REQUIREMENT.] Beginning October 31, 1997, all 
        managed care organizations shall file biennially with the action 
        plans required under section 62Q.07 a plan describing the 
        actions the managed care organization has taken and those it 
        intends to take to contribute to achieving public health goals 
        for each service area in which an enrollee of the managed care 
        organization resides.  This plan must be jointly developed in 
        collaboration with the local public health units, appropriate 
        regional coordinating boards, and other community organizations 
        providing health services within the same service area as the 
        managed care organization.  Local government units with 
        responsibilities and authority defined under chapters 145A and 
        256E may designate individuals to participate in the 
        collaborative planning with the managed care organization to 
        provide expertise and represent community needs and goals as 
        identified under chapters 145A and 256E. 
           Subd. 3.  [CONTENTS.] The plan must address the following: 
           (a) specific measurement strategies and a description of 
        any activities which contribute to public health goals and needs 
        of high risk and special needs populations as defined and 
        developed under chapters 145A and 256E; 
           (b) description of the process by which the managed care 
        organization will coordinate its activities with the community 
        health boards, regional coordinating boards, and other relevant 
        community organizations servicing the same area; 
           (c) documentation indicating that local public health units 
        and local government unit designees were involved in the 
        development of the plan; 
           (d) documentation of compliance with the plan filed the 
        previous year, including data on the previously identified 
        progress measures. 
           Subd. 4.  [REVIEW.] Upon receipt of the plan, the 
        appropriate commissioner shall provide a copy to the regional 
        coordinating boards, local community health boards, and other 
        relevant community organizations within the managed care 
        organization's service area.  After reviewing the plan, these 
        community groups may submit written comments on the plan to 
        either the commissioner of health or commerce, as applicable, 
        and may advise the commissioner of the managed care 
        organization's effectiveness in assisting to achieve regional 
        public health goals.  The plan may be reviewed by the county 
        boards, or city councils acting as a local board of health in 
        accordance with chapter 145A, within the managed care 
        organization's service area to determine whether the plan is 
        consistent with the goals and objectives of the plans required 
        under chapters 145A and 256E and whether the plan meets the 
        needs of the community.  The county board, or applicable city 
        council, may also review and make recommendations on the 
        availability and accessibility of services provided by the 
        managed care organization.  The county board, or applicable city 
        council, may submit written comments to the appropriate 
        commissioner, and may advise the commissioner of the managed 
        care organization's effectiveness in assisting to meet the needs 
        and goals as defined under the responsibilities of chapters 145A 
        and 256E.  The commissioner of health shall develop 
        recommendations to utilize the written comments submitted as 
        part of the licensure process to ensure local public 
        accountability.  These recommendations shall be reported to the 
        legislative commission on health care access by January 15, 
        1996.  Copies of these written comments must be provided to the 
        managed care organization.  The plan and any comments submitted 
        must be filed with the information clearinghouse to be 
        distributed to the public. 
           Sec. 14.  Minnesota Statutes 1998, section 62R.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROVIDER CONTRACTS.] A health provider 
        cooperative and its licensed members may execute marketing and 
        service contracts requiring the provider members to provide some 
        or all of their health care services through the provider 
        cooperative to the enrollees, members, subscribers, or insureds, 
        of a health care network cooperative, community integrated 
        service network, nonprofit health service plan, health 
        maintenance organization, accident and health insurance company, 
        or any other purchaser, including the state of Minnesota and its 
        agencies, instruments, or units of local government.  Each 
        purchasing entity is authorized to execute contracts for the 
        purchase of health care services from a health provider 
        cooperative in accordance with this section.  Any A contract 
        between a provider cooperative and a purchaser must may provide 
        for payment by the purchaser to the health provider cooperative 
        on a substantially capitated or similar risk-sharing basis, by 
        fee-for-service arrangements, or by other financial arrangements 
        authorized under state law.  Each contract between a provider 
        cooperative and a purchaser shall be filed by the provider 
        network cooperative with the commissioner of health and is 
        subject to the provisions of section 62D.19. 
           Sec. 15.  Minnesota Statutes 1998, section 144.065, is 
        amended to read: 
           144.065 [VENEREAL DISEASE TREATMENT CENTERS PREVENTION AND 
        TREATMENT OF SEXUALLY TRANSMITTED INFECTIONS.] 
           The state commissioner of health shall assist local health 
        agencies and organizations throughout the state with the 
        development and maintenance of services for the detection and 
        treatment of venereal diseases sexually transmitted infections.  
        These services shall provide for research, screening and 
        diagnosis, treatment, case finding, investigation, and the 
        dissemination of appropriate educational information.  The state 
        commissioner of health shall promulgate rules relative to 
        determine the composition of such services and shall establish a 
        method of providing funds to local health agencies boards of 
        health as defined in section 145A.02, subdivision 2, state 
        agencies, state councils, and organizations nonprofit 
        corporations, which offer such services.  The state commissioner 
        of health shall provide technical assistance to such agencies 
        and organizations in accordance with the needs of the local 
        area.  Planning and implementation of services, and technical 
        assistance may be conducted in collaboration with boards of 
        health; state agencies, including the University of Minnesota 
        and the department of children, families, and learning; state 
        councils; nonprofit organizations; and representatives of 
        affected populations.  
           Sec. 16.  [144.1201] [DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] For purposes of sections 
        144.1201 to 144.1204, the terms defined in this section have the 
        meanings given to them. 
           Subd. 2.  [BY-PRODUCT NUCLEAR MATERIAL.] "By-product 
        nuclear material" means a radioactive material, other than 
        special nuclear material, yielded in or made radioactive by 
        exposure to radiation created incident to the process of 
        producing or utilizing special nuclear material. 
           Subd. 3.  [RADIATION.] "Radiation" means ionizing radiation 
        and includes alpha rays; beta rays; gamma rays; x-rays; high 
        energy neutrons, protons, or electrons; and other atomic 
        particles. 
           Subd. 4.  [RADIOACTIVE MATERIAL.] "Radioactive material" 
        means a matter that emits radiation.  Radioactive material 
        includes special nuclear material, source nuclear material, and 
        by-product nuclear material. 
           Subd. 5.  [SOURCE NUCLEAR MATERIAL.] "Source nuclear 
        material" means uranium or thorium, or a combination thereof, in 
        any physical or chemical form; or ores that contain by weight 
        1/20 of one percent (0.05 percent) or more of uranium, thorium, 
        or a combination thereof.  Source nuclear material does not 
        include special nuclear material. 
           Subd. 6.  [SPECIAL NUCLEAR MATERIAL.] "Special nuclear 
        material" means: 
           (1) plutonium, uranium enriched in the isotope 233 or in 
        the isotope 235, and any other material that the Nuclear 
        Regulatory Commission determines to be special nuclear material 
        according to United States Code, title 42, section 2071, except 
        that source nuclear material is not included; and 
           (2) a material artificially enriched by any of the 
        materials listed in clause (1), except that source nuclear 
        material is not included. 
           Sec. 17.  [144.1202] [UNITED STATES NUCLEAR REGULATORY 
        COMMISSION AGREEMENT.] 
           Subdivision 1.  [AGREEMENT AUTHORIZED.] In order to have a 
        comprehensive program to protect the public from radiation 
        hazards, the governor, on behalf of the state, is authorized to 
        enter into agreements with the United States Nuclear Regulatory 
        Commission under the Atomic Energy Act of 1954, section 274b, as 
        amended.  The agreement shall provide for the discontinuance of 
        portions of the Nuclear Regulatory Commission's licensing and 
        related regulatory authority over by-product, source, and 
        special nuclear materials, and the assumption of regulatory 
        authority over these materials by the state. 
           Subd. 2.  [HEALTH DEPARTMENT DESIGNATED LEAD.] The 
        department of health is designated as the lead agency to pursue 
        an agreement on behalf of the governor and for any assumption of 
        specified licensing and regulatory authority from the Nuclear 
        Regulatory Commission under an agreement with the commission.  
        The commissioner of health shall establish an advisory group to 
        assist in preparing the state to meet the requirements for 
        reaching an agreement.  The commissioner may adopt rules to 
        allow the state to assume regulatory authority under an 
        agreement under this section, including the licensing and 
        regulation of radioactive materials.  Any regulatory authority 
        assumed by the state includes the ability to set and collect 
        fees. 
           Subd. 3.  [TRANSITION.] A person who, on the effective date 
        of an agreement under this section, possesses a Nuclear 
        Regulatory Commission license that is subject to the agreement 
        is deemed to possess a similar license issued by the department 
        of health.  A department of health license obtained under this 
        subdivision expires on the expiration date specified in the 
        federal license. 
           Subd. 4.  [AGREEMENT; CONDITIONS OF IMPLEMENTATION.] (a) An 
        agreement entered into before August 2, 2002, must remain in 
        effect until terminated under the Atomic Energy Act of 1954, 
        United States Code, title 42, section 2021, paragraph (j).  The 
        governor may not enter into an initial agreement with the 
        Nuclear Regulatory Commission after August 1, 2002.  If an 
        agreement is not entered into by August 1, 2002, any rules 
        adopted under this section are repealed effective August 1, 2002.
           (b) An agreement authorized under subdivision 1 must be 
        approved by law before it may be implemented. 
           Sec. 18.  [144.1203] [TRAINING; RULEMAKING.] 
           The commissioner shall adopt rules to ensure that 
        individuals handling or utilizing radioactive materials under 
        the terms of a license issued by the commissioner under section 
        144.1202 have proper training and qualifications to do so.  The 
        rules adopted must be at least as stringent as federal 
        regulations on proper training and qualifications adopted by the 
        Nuclear Regulatory Commission.  Rules adopted under this section 
        may incorporate federal regulations by reference. 
           Sec. 19.  [144.1204] [SURETY REQUIREMENTS.] 
           Subdivision 1.  [FINANCIAL ASSURANCE REQUIRED.] The 
        commissioner may require an applicant for a license under 
        section 144.1202, or a person who was formerly licensed by the 
        Nuclear Regulatory Commission and is now subject to sections 
        144.1201 to 144.1204, to post financial assurances to ensure the 
        completion of all requirements established by the commissioner 
        for the decontamination, closure, decommissioning, and 
        reclamation of sites, structures, and equipment used in 
        conjunction with activities related to licensure.  The financial 
        assurances posted must be sufficient to restore the site to 
        unrestricted future use and must be sufficient to provide for 
        surveillance and care when radioactive materials remain at the 
        site after the licensed activities cease.  The commissioner may 
        establish financial assurance criteria by rule.  In establishing 
        such criteria, the commissioner may consider: 
           (1) the chemical and physical form of the licensed 
        radioactive material; 
           (2) the quantity of radioactive material authorized; 
           (3) the particular radioisotopes authorized and their 
        subsequent radiotoxicity; 
           (4) the method in which the radioactive material is held, 
        used, stored, processed, transferred, or disposed of; and 
           (5) the potential costs of decontamination, treatment, or 
        disposal of a licensee's equipment and facilities. 
           Subd. 2.  [ACCEPTABLE FINANCIAL ASSURANCES.] The 
        commissioner may, by rule, establish types of financial 
        assurances that meet the requirements of this section.  Such 
        financial assurances may include bank letters of credit, 
        deposits of cash, or deposits of government securities. 
           Subd. 3.  [TRUST AGREEMENTS.] Financial assurances must be 
        established together with trust agreements.  Both the financial 
        assurances and the trust agreements must be in a form and 
        substance that meet requirements established by the commissioner.
           Subd. 4.  [EXEMPTIONS.] The commissioner is authorized to 
        exempt from the requirements of this section, by rule, any 
        category of licensee upon a determination by the commissioner 
        that an exemption does not result in a significant risk to the 
        public health or safety or to the environment and does not pose 
        a financial risk to the state. 
           Subd. 5.  [OTHER REMEDIES UNAFFECTED.] Nothing in this 
        section relieves a licensee of a civil liability incurred, nor 
        may this section be construed to relieve the licensee of 
        obligations to prevent or mitigate the consequences of improper 
        handling or abandonment of radioactive materials. 
           Sec. 20.  Minnesota Statutes 1998, section 144.121, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [EXEMPTION FROM EXAMINATION REQUIREMENTS; 
        OPERATORS OF CERTAIN BONE DENSITOMETERS.] (a) This subdivision 
        applies to a bone densitometer that is used on humans to 
        estimate bone mineral content and bone mineral density in a 
        region of a finger on a person's nondominant hand, gives an 
        x-ray dose equivalent of less than 0.001 microsieverts per scan, 
        and has an x-ray leakage exposure rate of less than two 
        milliroentgens per hour at a distance of one meter, provided 
        that the bone densitometer is operating in accordance with 
        manufacturer specifications. 
           (b) An individual who operates a bone densitometer that 
        satisfies the definition in paragraph (a) and the facility in 
        which an individual operates such a bone densitometer are exempt 
        from the requirements of subdivisions 5 and 6. 
           Sec. 21.  Minnesota Statutes 1998, section 144.148, is 
        amended to read: 
           144.148 [RURAL HOSPITAL CAPITAL IMPROVEMENT GRANT AND LOAN 
        PROGRAM.] 
           Subdivision 1.  [DEFINITION.] (a) For purposes of this 
        section, the following definitions apply. 
           (b) "Eligible rural hospital" means a any nonfederal, 
        general acute care hospital that: 
           (1) is either located in a rural area, as defined in the 
        federal Medicare regulations, Code of Federal Regulations, title 
        42, section 405.1041, or located in a community with a 
        population of less than 5,000, according to United States Census 
        Bureau Statistics, outside the seven-county metropolitan area; 
           (2) has 50 or fewer licensed hospital beds with a net 
        hospital operating margin not greater than two percent in the 
        two fiscal years prior to application; and 
           (3) is 25 miles or more from another hospital not for 
        profit. 
           (c) "Eligible project" means a modernization project to 
        update, remodel, or replace aging hospital facilities and 
        equipment necessary to maintain the operations of a hospital. 
           Subd. 2.  [PROGRAM.] The commissioner of health shall award 
        rural hospital capital improvement grants or loans to eligible 
        rural hospitals.  A grant or loan shall not exceed 
        $1,500,000 $300,000 per hospital.  Grants or loans shall be 
        interest free.  An eligible rural hospital may apply the funds 
        retroactively to capital improvements made during the two fiscal 
        years preceding the fiscal year in which the grant or loan was 
        received, provided the hospital met the eligibility criteria 
        during that time period Prior to the receipt of any grant, the 
        hospital must certify to the commissioner that at least 
        one-quarter of the grant amount, which may include in-kind 
        services, is available for the same purposes from nonstate 
        resources.  
           Subd. 3.  [APPLICATIONS.] Eligible hospitals seeking a 
        grant or loan shall apply to the commissioner.  Applications 
        must include a description of the problem that the proposed 
        project will address, a description of the project including 
        construction and remodeling drawings or specifications, sources 
        of funds for the project, uses of funds for the project, the 
        results expected, and a plan to maintain or operate any facility 
        or equipment included in the project.  The applicant must 
        describe achievable objectives, a timetable, and roles and 
        capabilities of responsible individuals and organization.  
        Applicants must submit to the commissioner evidence that 
        competitive bidding was used to select contractors for the 
        project.  
           Subd. 4.  [CONSIDERATION OF APPLICATIONS.] The commissioner 
        shall review each application to determine whether or not the 
        hospital's application is complete and whether the hospital and 
        the project are eligible for a grant or loan.  In evaluating 
        applications, the commissioner shall score each application on a 
        100 point scale, assigning:  a maximum of 40 points for an 
        applicant's clarity and thoroughness in describing the problem 
        and the project; a maximum of 40 points for the extent to which 
        the applicant has demonstrated that it has made adequate 
        provisions to assure proper and efficient operation of the 
        facility once the project is completed; and a maximum of 20 
        points for the extent to which the proposed project is 
        consistent with the hospital's capital improvement plan or 
        strategic plan.  The commissioner may also take into account 
        other relevant factors.  During application review, the 
        commissioner may request additional information about a proposed 
        project, including information on project cost.  Failure to 
        provide the information requested disqualifies a loan an 
        applicant. 
           Subd. 5.  [PROGRAM OVERSIGHT.] The commissioner of health 
        shall review audited financial information of the hospital to 
        assess eligibility.  The commissioner shall determine the amount 
        of a grant or loan to be given to an eligible rural hospital 
        based on the relative score of each eligible hospital's 
        application and the funds available to the commissioner.  The 
        grant or loan shall be used to update, remodel, or replace aging 
        facilities and equipment necessary to maintain the operations of 
        the hospital.  The commissioner may collect, from the hospitals 
        receiving grants, any information necessary to evaluate the 
        program.  
           Subd. 6.  [LOAN PAYMENT.] Loans shall be repaid as provided 
        in this subdivision over a period of 15 years.  In those years 
        when an eligible rural hospital experiences a positive net 
        operating margin in excess of two percent, the eligible rural 
        hospital shall pay to the state one-half of the excess above two 
        percent, up to the yearly payment amount based upon a loan 
        period of 15 years.  If the amount paid back in any year is less 
        than the yearly payment amount, or if no payment is required 
        because the eligible rural hospital does not experience a 
        positive net operating margin in excess of two percent, the 
        amount unpaid for that year shall be forgiven by the state 
        without any financial penalty.  As a condition of receiving an 
        award through this program, eligible hospitals must agree to any 
        and all collection activities the commissioner finds necessary 
        to collect loan payments in those years a payment is due. 
           Subd. 7.  [ACCOUNTING TREATMENT.] The commissioner of 
        finance shall record as grants in the state accounting system 
        funds obligated by this section.  Loan payments received under 
        this section shall be deposited in the health care access fund. 
           Subd. 8.  [EXPIRATION.] This section expires June 30, 
        1999 2001. 
           Sec. 22.  Minnesota Statutes 1998, section 144.1483, is 
        amended to read: 
           144.1483 [RURAL HEALTH INITIATIVES.] 
           The commissioner of health, through the office of rural 
        health, and consulting as necessary with the commissioner of 
        human services, the commissioner of commerce, the higher 
        education services office, and other state agencies, shall: 
           (1) develop a detailed plan regarding the feasibility of 
        coordinating rural health care services by organizing individual 
        medical providers and smaller hospitals and clinics into 
        referral networks with larger rural hospitals and clinics that 
        provide a broader array of services; 
           (2) develop and implement a program to assist rural 
        communities in establishing community health centers, as 
        required by section 144.1486; 
           (3) administer the program of financial assistance 
        established under section 144.1484 for rural hospitals in 
        isolated areas of the state that are in danger of closing 
        without financial assistance, and that have exhausted local 
        sources of support; 
           (4) develop recommendations regarding health education and 
        training programs in rural areas, including but not limited to a 
        physician assistants' training program, continuing education 
        programs for rural health care providers, and rural outreach 
        programs for nurse practitioners within existing training 
        programs; 
           (5) develop a statewide, coordinated recruitment strategy 
        for health care personnel and maintain a database on health care 
        personnel as required under section 144.1485; 
           (6) develop and administer technical assistance programs to 
        assist rural communities in:  (i) planning and coordinating the 
        delivery of local health care services; and (ii) hiring 
        physicians, nurse practitioners, public health nurses, physician 
        assistants, and other health personnel; 
           (7) study and recommend changes in the regulation of health 
        care personnel, such as nurse practitioners and physician 
        assistants, related to scope of practice, the amount of on-site 
        physician supervision, and dispensing of medication, to address 
        rural health personnel shortages; 
           (8) support efforts to ensure continued funding for medical 
        and nursing education programs that will increase the number of 
        health professionals serving in rural areas; 
           (9) support efforts to secure higher reimbursement for 
        rural health care providers from the Medicare and medical 
        assistance programs; 
           (10) coordinate the development of a statewide plan for 
        emergency medical services, in cooperation with the emergency 
        medical services advisory council; 
           (11) establish a Medicare rural hospital flexibility 
        program pursuant to section 1820 of the federal Social Security 
        Act, United States Code, title 42, section 1395i-4, by 
        developing a state rural health plan and designating, consistent 
        with the rural health plan, rural nonprofit or public hospitals 
        in the state as critical access hospitals.  Critical access 
        hospitals shall include facilities that are certified by the 
        state as necessary providers of health care services to 
        residents in the area.  Necessary providers of health care 
        services are designated as critical access hospitals on the 
        basis of being more than 20 miles, defined as official mileage 
        as reported by the Minnesota department of transportation, from 
        the next nearest hospital or being the sole hospital in the 
        county or being a hospital located in a designated medical 
        underserved area or health professional shortage area.  A 
        critical access hospital located in a designated medical 
        underserved area or a health professional shortage area shall 
        continue to be recognized as a critical access hospital in the 
        event the medical underserved area or health professional 
        shortage area designation is subsequently withdrawn; and 
           (12) carry out other activities necessary to address rural 
        health problems. 
           Sec. 23.  Minnesota Statutes 1998, section 144.1492, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBLE APPLICANTS AND CRITERIA FOR AWARDING OF 
        GRANTS TO RURAL COMMUNITIES.] (a) Funding which the department 
        receives to award grants to rural communities to establish 
        health care networks shall be awarded through a request for 
        proposals process.  Planning grant funds may be used for 
        community facilitation and initial network development 
        activities including incorporation as a nonprofit organization 
        or cooperative, assessment of network models, and determination 
        of the best fit for the community.  Implementation grant funds 
        can be used to enable incorporated nonprofit organizations and 
        cooperatives to purchase technical services needed for further 
        network development such as legal, actuarial, financial, 
        marketing, and administrative services. 
           (b) In order to be eligible to apply for a planning or 
        implementation grant under the federally funded health care 
        network reform program, an organization must be located in a 
        rural area of Minnesota excluding the seven-county Twin Cities 
        metropolitan area and the census-defined urbanized areas of 
        Duluth, Rochester, St. Cloud, and Moorhead.  The proposed 
        network organization must also meet or plan to meet the criteria 
        for a community integrated service network. 
           (c) In determining which organizations will receive grants, 
        the commissioner may consider the following factors: 
           (1) the applicant's description of their plans for health 
        care network development, their need for technical assistance, 
        and other technical assistance resources available to the 
        applicant.  The applicant must clearly describe the service area 
        to be served by the network, how the grant funds will be used, 
        what will be accomplished, and the expected results.  The 
        applicant should describe achievable objectives, a timetable, 
        and roles and capabilities of responsible individuals and 
        organizations; 
           (2) the extent of community support for the applicant and 
        the health care network.  The applicant should demonstrate 
        support from private and public health care providers in the 
        service area, and local community and government leaders, and 
        the regional coordinating board for the area.  Evidence of such 
        support may include a commitment of financial support, in-kind 
        services, or cash, for development of the network; 
           (3) the size and demographic characteristics of the 
        population in the service area for the proposed network and the 
        distance of the service area from the nearest metropolitan area; 
        and 
           (4) the technical assistance resources available to the 
        applicant from nonstate sources and the financial ability of the 
        applicant to purchase technical assistance services with 
        nonstate funds. 
           Sec. 24.  Minnesota Statutes 1998, section 144.413, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PUBLIC PLACE.] "Public place" means any 
        enclosed, indoor area used by the general public or serving as a 
        place of work, including, but not limited to, restaurants, 
        retail stores, offices and other commercial establishments, 
        public conveyances, educational facilities other than public 
        schools, as defined in section 120A.05, subdivision subdivisions 
        9, 11, and 13, hospitals, nursing homes, auditoriums, arenas, 
        meeting rooms, and common areas of rental apartment buildings, 
        but excluding private, enclosed offices occupied exclusively by 
        smokers even though such offices may be visited by nonsmokers. 
           Sec. 25.  Minnesota Statutes 1998, section 144.414, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PUBLIC PLACES.] No person shall smoke in a 
        public place or at a public meeting except in designated smoking 
        areas.  This prohibition does not apply in cases in which an 
        entire room or hall is used for a private social function and 
        seating arrangements are under the control of the sponsor of the 
        function and not of the proprietor or person in charge of the 
        place.  Furthermore, this prohibition shall not apply to 
        factories, warehouses, and similar places of work not usually 
        frequented by the general public, except that the state 
        commissioner of health shall establish rules to restrict or 
        prohibit smoking in factories, warehouses, and those places of 
        work where the close proximity of workers or the inadequacy of 
        ventilation causes smoke pollution detrimental to the health and 
        comfort of nonsmoking employees.  
           Sec. 26.  Minnesota Statutes 1998, section 144.4165, is 
        amended to read: 
           144.4165 [TOBACCO PRODUCTS PROHIBITED IN PUBLIC SCHOOLS.] 
           No person shall at any time smoke, chew, or otherwise 
        ingest tobacco or a tobacco product in a public school, as 
        defined in section 120A.05, subdivision subdivisions 9, 11, and 
        13.  This prohibition extends to all facilities, whether owned, 
        rented, or leased, and all vehicles that a school district owns, 
        leases, rents, contracts for, or controls.  Nothing in this 
        section shall prohibit the lighting of tobacco by an adult as a 
        part of a traditional Indian spiritual or cultural ceremony.  
        For purposes of this section, an Indian is a person who is a 
        member of an Indian tribe as defined in section 257.351, 
        subdivision 9. 
           Sec. 27.  Minnesota Statutes 1998, section 144.56, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [BOARDING CARE HOMES.] The commissioner shall 
        not adopt or enforce any rule that limits: 
           (1) a certified boarding care home from providing nursing 
        services in accordance with the home's Medicaid certification; 
        or 
           (2) a noncertified boarding care home registered under 
        chapter 144D from providing home care services in accordance 
        with the home's registration. 
           Sec. 28.  Minnesota Statutes 1998, section 144.99, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REMEDIES AVAILABLE.] The provisions of 
        chapters 103I and 157 and sections 115.71 to 115.77; 144.12, 
        subdivision 1, paragraphs (1), (2), (5), (6), (10), (12), (13), 
        (14), and (15); 144.1201 to 144.1204; 144.121; 144.1222; 144.35; 
        144.381 to 144.385; 144.411 to 144.417; 144.495; 144.71 to 
        144.74; 144.9501 to 144.9509; 144.992; 326.37 to 326.45; 326.57 
        to 326.785; 327.10 to 327.131; and 327.14 to 327.28 and all 
        rules, orders, stipulation agreements, settlements, compliance 
        agreements, licenses, registrations, certificates, and permits 
        adopted or issued by the department or under any other law now 
        in force or later enacted for the preservation of public health 
        may, in addition to provisions in other statutes, be enforced 
        under this section. 
           Sec. 29.  Minnesota Statutes 1998, section 144.99, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [SECURING RADIOACTIVE MATERIALS.] (a) In the 
        event of an emergency that poses a danger to the public health, 
        the commissioner shall have the authority to impound radioactive 
        materials and the associated shielding in the possession of a 
        person who fails to abide by the provisions of the statutes, 
        rules, and any other item listed in subdivision 1.  If 
        impounding the source of these materials is impractical, the 
        commissioner shall have the authority to lock or otherwise 
        secure a facility that contains the source of such materials, 
        but only the portions of the facility as is necessary to protect 
        the public health.  An action taken under this paragraph is 
        effective for up to 72 hours.  The commissioner must seek an 
        injunction or take other administrative action to secure 
        radioactive materials beyond the initial 72-hour period. 
           (b) The commissioner may release impounded radioactive 
        materials and the associated shielding to the owner of the 
        radioactive materials and associated shielding, upon terms and 
        conditions that are in accordance with the provisions of 
        statutes, rules, and other items listed in subdivision 1.  In 
        the alternative, the commissioner may bring an action in a court 
        of competent jurisdiction for an order directing the disposal of 
        impounded radioactive materials and associated shielding or 
        directing other disposition as necessary to protect the public 
        health and safety and the environment.  The costs of 
        decontamination, transportation, burial, disposal, or other 
        disposition shall be borne by the owner or licensee of the 
        radioactive materials and shielding or by any other person who 
        has used the radioactive materials and shielding for business 
        purposes. 
           Sec. 30.  Minnesota Statutes 1998, section 144A.4605, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ASSISTED LIVING HOME CARE LICENSE ESTABLISHED.] 
        A home care provider license category entitled assisted living 
        home care provider is hereby established.  A home care provider 
        may obtain an assisted living license if the program meets the 
        following requirements: 
           (a) nursing services, delegated nursing services, other 
        services performed by unlicensed personnel, or central storage 
        of medications under the assisted living license are provided 
        solely for residents of one or more housing with services 
        establishments registered under chapter 144D; 
           (b) unlicensed personnel perform home health aide and home 
        care aide tasks identified in Minnesota Rules, parts 4668.0100, 
        subparts 1 and 2, and 4668.0110, subpart 1.  Qualifications to 
        perform these tasks shall be established in accordance with 
        subdivision 3; 
           (c) periodic supervision of unlicensed personnel is 
        provided as required by rule; 
           (d) notwithstanding Minnesota Rules, part 4668.0160, 
        subpart 6, item D, client records shall include: 
           (1) daily records or a weekly summary of the client's 
        status and home care services provided; 
           (2) documentation each time medications are administered to 
        a client; and 
           (3) documentation on the day of occurrence of any 
        significant change in the client's status or any significant 
        incident, such as a fall or refusal to take medications. 
           All entries must be signed by the staff providing the 
        services and entered into the record no later than two weeks 
        after the end of the service day, except as specified in clauses 
        (2) and (3); 
           (e) medication and treatment orders, if any, are included 
        in the client record and are renewed at least every 12 months, 
        or more frequently when indicated by a clinical assessment; 
           (f) the central storage of medications in a housing with 
        services establishment registered under chapter 144D is managed 
        under a system that is established by a registered nurse and 
        addresses the control of medications, handling of medications, 
        medication containers, medication records, and disposition of 
        medications; and 
           (g) in other respects meets the requirements established by 
        rules adopted under sections 144A.45 to 144A.48. 
           Sec. 31.  Minnesota Statutes 1998, section 145.924, is 
        amended to read: 
           145.924 [AIDS PREVENTION GRANTS.] 
           (a) The commissioner may award grants to boards of health 
        as defined in section 145A.02, subdivision 2, state agencies, 
        state councils, or nonprofit corporations to provide evaluation 
        and counseling services to populations at risk for acquiring 
        human immunodeficiency virus infection, including, but not 
        limited to, minorities, adolescents, intravenous drug users, and 
        homosexual men. 
           (b) The commissioner may award grants to agencies 
        experienced in providing services to communities of color, for 
        the design of innovative outreach and education programs for 
        targeted groups within the community who may be at risk of 
        acquiring the human immunodeficiency virus infection, including 
        intravenous drug users and their partners, adolescents, gay and 
        bisexual individuals and women.  Grants shall be awarded on a 
        request for proposal basis and shall include funds for 
        administrative costs.  Priority for grants shall be given to 
        agencies or organizations that have experience in providing 
        service to the particular community which the grantee proposes 
        to serve; that have policymakers representative of the targeted 
        population; that have experience in dealing with issues relating 
        to HIV/AIDS; and that have the capacity to deal effectively with 
        persons of differing sexual orientations.  For purposes of this 
        paragraph, the "communities of color" are:  the American-Indian 
        community; the Hispanic community; the African-American 
        community; and the Asian-Pacific community. 
           (c) All state grants awarded under this section for 
        programs targeted to adolescents shall include the promotion of 
        abstinence from sexual activity and drug use. 
           Sec. 32.  Minnesota Statutes 1998, section 145.9255, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
        health, in consultation with a representative from Minnesota 
        planning, the commissioner of human services, and the 
        commissioner of children, families, and learning, shall develop 
        and implement the Minnesota education now and babies later (MN 
        ENABL) program, targeted to adolescents ages 12 to 14, with the 
        goal of reducing the incidence of adolescent pregnancy in the 
        state and promoting abstinence until marriage.  The program must 
        provide a multifaceted, primary prevention, community health 
        promotion approach to educating and supporting adolescents in 
        the decision to postpone sexual involvement modeled after the 
        ENABL program in California.  The commissioner of health shall 
        consult with the chief of the health education section of the 
        California department of health services for general guidance in 
        developing and implementing the program. 
           Sec. 33.  Minnesota Statutes 1998, section 145.9255, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PROGRAM COMPONENTS.] The program must include 
        the following four major components: 
           (a) A community organization component in which the 
        community-based local contractors shall include: 
           (1) use of a postponing sexual involvement education 
        curriculum targeted to boys and girls ages 12 to 14 in schools 
        and/or community settings; 
           (2) planning and implementing community organization 
        strategies to convey and reinforce the MN ENABL message of 
        postponing sexual involvement, including activities promoting 
        awareness and involvement of parents and other primary 
        caregivers/significant adults, schools, and community; and 
           (3) development of local media linkages.  
           (b) A statewide, comprehensive media and public relations 
        campaign to promote changes in sexual attitudes and behaviors, 
        and reinforce the message of postponing adolescent sexual 
        involvement and promoting abstinence from sexual activity until 
        marriage.  Nothing in this paragraph shall be construed to 
        prevent the commissioner from targeting populations that 
        historically have had a high incidence of adolescent pregnancy 
        with culturally appropriate messages on abstinence from sexual 
        activity. 
           The commissioner of health, in consultation with the 
        commissioner of children, families, and learning, shall contract 
        with the attorney general's office to develop and implement the 
        media and public relations campaign.  In developing the 
        campaign, the attorney general's office commissioner of health 
        shall coordinate and consult with representatives from ethnic 
        and local communities to maximize effectiveness of the social 
        marketing approach to health promotion among the culturally 
        diverse population of the state.  The development and 
        implementation of the campaign is subject to input and approval 
        by the commissioner of health.  The commissioner may continue to 
        use any campaign materials or media messages developed or 
        produced prior to July 1, 1999. 
           The local community-based contractors shall collaborate and 
        coordinate efforts with other community organizations and 
        interested persons to provide school and community-wide 
        promotional activities that support and reinforce the message of 
        the MN ENABL curriculum. 
           (c) An evaluation component which evaluates the process and 
        the impact of the program. 
           The "process evaluation" must provide information to the 
        state on the breadth and scope of the program.  The evaluation 
        must identify program areas that might need modification and 
        identify local MN ENABL contractor strategies and procedures 
        which are particularly effective.  Contractors must keep 
        complete records on the demographics of clients served, number 
        of direct education sessions delivered and other appropriate 
        statistics, and must document exactly how the program was 
        implemented.  The commissioner may select contractor sites for 
        more in-depth case studies. 
           The "impact evaluation" must provide information to the 
        state on the impact of the different components of the MN ENABL 
        program and an assessment of the impact of the program on 
        adolescents' related sexual knowledge, attitudes, and 
        risk-taking behavior. 
           The commissioner shall compare the MN ENABL evaluation 
        information and data with similar evaluation data from other 
        states pursuing a similar adolescent pregnancy prevention 
        program modeled after ENABL and use the information to improve 
        MN ENABL and build on aspects of the program that have 
        demonstrated a delay in adolescent sexual involvement. 
           (d) A training component requiring the commissioner of 
        health, in consultation with the commissioner of children, 
        families, and learning, to provide comprehensive uniform 
        training to the local MN ENABL community-based local contractors 
        and the direct education program staff.  
           The local community-based contractors may use adolescent 
        leaders slightly older than the adolescents in the program to 
        impart the message to postpone sexual involvement provided: 
           (1) the contractor follows a protocol for adult 
        mentors/leaders and older adolescent leaders established by the 
        commissioner of health; 
           (2) the older adolescent leader is accompanied by an adult 
        leader; and 
           (3) the contractor uses the curriculum as directed and 
        required by the commissioner of the department of health to 
        implement this part of the program.  The commissioner of health 
        shall provide technical assistance to community-based local 
        contractors. 
           Sec. 34.  Minnesota Statutes 1998, section 148.5194, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BIENNIAL REGISTRATION FEE.] The fee for initial 
        registration and biennial registration, temporary registration, 
        or renewal is $160 $200.  
           Sec. 35.  Minnesota Statutes 1998, section 148.5194, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BIENNIAL REGISTRATION FEE FOR DUAL REGISTRATION 
        AS A SPEECH-LANGUAGE PATHOLOGIST AND AUDIOLOGIST.] The fee for 
        initial registration and biennial registration, temporary 
        registration, or renewal is $160 $200.  
           Sec. 36.  Minnesota Statutes 1998, section 148.5194, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [SURCHARGE FEE.] Notwithstanding section 
        16A.1285, subdivision 2, for a period of four years following 
        the effective date of this subdivision, an applicant for 
        registration or registration renewal must pay a surcharge fee of 
        $25 in addition to any other fees due upon registration or 
        registration renewal.  This subdivision expires June 30, 2003. 
           Sec. 37.  Minnesota Statutes 1998, section 148.5194, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PENALTY FEE FOR LATE RENEWALS.] The penalty fee 
        for late submission of a renewal application is $15 $45.  
           Sec. 38.  Minnesota Statutes 1998, section 256B.69, 
        subdivision 5c, is amended to read: 
           Subd. 5c.  [MEDICAL EDUCATION AND RESEARCH TRUST FUND.] (a) 
        Beginning in January 1999 and each year thereafter: 
           (1) the commissioner of human services shall transfer an 
        amount equal to the reduction in the prepaid medical assistance 
        and prepaid general assistance medical care payments resulting 
        from clause (2), excluding nursing facility and elderly waiver 
        payments, to the medical education and research trust fund 
        established under section 62J.69 62J.692; 
           (2) the county medical assistance and general assistance 
        medical care capitation base rate prior to plan specific 
        adjustments shall be reduced 6.3 percent for Hennepin county, 
        two percent for the remaining metropolitan counties, and 1.6 
        percent for nonmetropolitan Minnesota counties; and 
           (3) the amount calculated under clause (1) shall not be 
        adjusted for subsequent changes to the capitation payments for 
        periods already paid.  
           (b) This subdivision shall be effective upon approval of a 
        federal waiver which allows federal financial participation in 
        the medical education and research trust fund.  
           Sec. 39.  Minnesota Statutes 1998, section 326.40, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MASTER PLUMBER'S LICENSE; BOND AND; INSURANCE 
        REQUIREMENTS.] The applicant for a master plumber license may 
        give bond to the state in the total penal sum of $2,000 
        conditioned upon the faithful and lawful performance of all work 
        entered upon within the state.  Any person contracting to do 
        plumbing work must give bond to the state in the amount of 
        $25,000 for all work entered into within the state.  The bond 
        shall be for the benefit of persons injured or suffering 
        financial loss by reason of failure of performance to comply 
        with the requirements of the plumbing code.  The term of the 
        bond shall be concurrent with the term of the license.  The A 
        bond given to the state shall be filed with the secretary of 
        state and shall be in lieu of all other license bonds to any 
        political subdivision required for plumbing work.  The bond 
        shall be written by a corporate surety licensed to do business 
        in the state. 
           In addition, each applicant for a master plumber license or 
        renewal thereof, may provide evidence of public liability 
        insurance, including products liability insurance with limits of 
        at least $50,000 per person and $100,000 per occurrence and 
        property damage insurance with limits of at least $10,000.  The 
        insurance shall be written by an insurer licensed to do business 
        in the state of Minnesota and each licensed master plumber shall 
        maintain on file with the state commissioner of health a 
        certificate evidencing the insurance providing that the 
        insurance shall not be canceled without the insurer first giving 
        15 days written notice to the commissioner.  The term of the 
        insurance shall be concurrent with the term of the license.  The 
        certificate shall be in lieu of all other certificates required 
        by any political subdivision for licensing purposes. 
           Sec. 40.  Minnesota Statutes 1998, section 326.40, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ALTERNATIVE COMPLIANCE.] Compliance with the 
        local bond requirements of a locale within which work is to be 
        performed shall be deemed to satisfy the bond and insurance 
        requirements of subdivision 2, provided the local ordinance 
        requires at least a $25,000 bond. 
           Sec. 41.  Minnesota Statutes 1998, section 326.40, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEE.] The state commissioner of health may 
        charge each applicant for a master plumber license or for a 
        renewal of a master plumber license and an additional fee person 
        giving bond an annual bond filing fee commensurate with the cost 
        of administering the bond and insurance requirements of 
        subdivision 2. 
           Sec. 42.  [STUDY REGARDING THE EXPANSION OF PLUMBER 
        LICENSURE AND PLUMBING INSPECTION REQUIREMENTS.] 
           (a) The commissioner of health, in consultation with 
        representatives of the plumbing industry and other interested 
        individuals, shall study and make recommendations to the 
        legislature on the following issues: 
           (1) whether licensure requirements for plumbers should be 
        expanded to require all persons and firms working as master 
        plumbers or journeyman plumbers in any home rule city or 
        statutory city to be licensed by the commissioner; 
           (2) whether any modifications are necessary to the 
        education requirements for licensure for master plumbers and 
        journeyman plumbers; 
           (3) whether the commissioner may charge fees to fund the 
        hiring of inspectors and plan reviewers to inspect and review 
        all new plumbing installations, and the amounts of such fees; 
        and 
           (4) whether the commissioner's authority to inspect new 
        plumbing installations should be expanded to require inspections 
        of all new plumbing installations for new construction and 
        additions, regardless of location or the population of the city 
        or town in which the installation is located. 
           (b) These recommendations, and draft legislation if 
        appropriate, must be presented to the legislature by January 15, 
        2000.  
           Sec. 43.  [CASE STUDIES TO DEVELOP STANDARDS FOR AUTOPSY 
        PRACTICE IN SPECIAL CASES.] 
           Subdivision 1.  [CASE STUDIES.] (a) If a professional 
        association representing coroners and medical examiners in 
        Minnesota accepts a grant from the commissioner of health for 
        purposes of this section, it must comply with the terms of this 
        section.  A professional association representing coroners and 
        medical examiners in Minnesota may conduct a series of case 
        studies to examine cases in which performing autopsies are 
        controversial or in which autopsies are opposed by a decedent's 
        relative or friend based on the decedent's religious beliefs.  
        The cases to be examined may be cases in which it is not 
        immediately apparent that an autopsy is needed to determine the 
        person's cause of death but that, upon further investigation, 
        the coroner or medical examiner determines that an autopsy is 
        necessary to determine the cause of death and that the cause of 
        death must be determined.  Using these case studies, the 
        professional association may develop: 
           (1) guidelines for coroners and medical examiners regarding 
        when to perform autopsies in controversial situations or in 
        situations in which autopsies are opposed based on a decedent's 
        religious beliefs; and 
           (2) special autopsy methods and procedures, if appropriate, 
        for autopsies in controversial situations or situations in which 
        autopsies are opposed based on a decedent's religious beliefs. 
           (b) The professional association may conduct 12 case 
        studies or more for the purposes in paragraph (a).  Upon 
        completion of the case studies, the professional association may 
        disseminate the guidelines and procedures developed to all 
        coroners and medical examiners conducting autopsies in Minnesota.
           Subd. 2.  [REPORT TO LEGISLATURE.] The professional 
        association may report to the legislature by January 15, 2000, 
        on the results of the case studies, the guidelines developed for 
        autopsy practice, the special autopsy methods and procedures 
        developed, and efforts or plans to disseminate the guidelines 
        and procedures developed to coroners and medical examiners 
        conducting autopsies in Minnesota. 
           Subd. 3.  [DATA PRIVACY.] All records held by the 
        professional association for purposes of completing the case 
        studies must be held in confidence.  The guidelines for 
        autopsies and special autopsy methods and procedures that are 
        disseminated to coroners and medical examiners shall contain no 
        individually identifiable information. 
           Sec. 44.  [AMENDMENT TO RULES.] 
           The commissioner of health shall amend Minnesota Rules, 
        chapter 4730 to conform with Minnesota Statutes, section 
        144.121, subdivision 8.  The amendments required by this section 
        may be done in the manner specified in Minnesota Statutes, 
        section 14.388, under the authority of clause (3) of that 
        section.  Minnesota Statutes, section 14.386, paragraph (b), 
        does not apply to amendments to rules made under this section. 
           Sec. 45.  [REPEALER.] 
           (a) Minnesota Statutes 1998, sections 13.99, subdivision 
        19m; 62J.77; 62J.78; and 62J.79, are repealed. 
           (b) Minnesota Statutes 1998, sections 62J.69; 144.9507, 
        subdivision 4; 144.9511; and 145.46, are repealed. 
           (c) Laws 1998, chapter 407, article 2, section 104, is 
        repealed. 
           Sec. 46.  [EFFECTIVE DATE.] 
           (a) Sections 33 to 35 are effective January 1, 2000. 
           (b) Sections 16, 20 to 22, and 37 are effective the day 
        following final enactment. 
                                   ARTICLE 3 
                                 LONG-TERM CARE 
           Section 1.  Minnesota Statutes 1998, section 144A.073, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPLACEMENT RESTRICTIONS.] (a) Proposals 
        submitted or approved under this section involving replacement 
        must provide for replacement of the facility on the existing 
        site except as allowed in this subdivision.  
           (b) Facilities located in a metropolitan statistical area 
        other than the Minneapolis-St. Paul seven-county metropolitan 
        area may relocate to a site within the same census tract or a 
        contiguous census tract.  
           (c) Facilities located in the Minneapolis-St. Paul 
        seven-county metropolitan area may relocate to a site within the 
        same or contiguous health planning area as adopted in March 1982 
        by the metropolitan council.  
           (d) Facilities located outside a metropolitan statistical 
        area may relocate to a site within the same city or township, or 
        within a contiguous township.  
           (e) A facility relocated to a different site under 
        paragraph (b), (c), or (d) must not be relocated to a site more 
        than six miles from the existing site. 
           (f) The relocation of part of an existing first facility to 
        a second location, under paragraphs (d) and (e), may include the 
        relocation to the second location of up to four beds from part 
        of an existing third facility located in a township contiguous 
        to the location of the first facility.  The six-mile limit in 
        paragraph (e) does not apply to this relocation from the third 
        facility. 
           (g) For proposals approved on January 13, 1994, under this 
        section involving the replacement of 102 licensed and certified 
        beds, the relocation of the existing first facility to the 
        second and third locations new location under paragraphs (d) and 
        (e) may include the relocation of up to 50 percent of the 75 
        beds of the existing first facility to each of the locations.  
        The six-mile limit in paragraph (e) does not apply to this 
        relocation to the third location.  Notwithstanding subdivision 
        3, construction of this project may be commenced any time prior 
        to January 1, 1996. 
           Sec. 2.  Minnesota Statutes 1998, section 144A.10, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [TRAINING AND EDUCATION FOR NURSING FACILITY 
        PROVIDERS.] The commissioner of health must establish and 
        implement a prescribed process and program for providing 
        training and education to providers licensed by the department 
        of health, either by itself or in conjunction with the industry 
        trade associations, before using any new regulatory guideline, 
        regulation, interpretation, program letter or memorandum, or any 
        other materials used in surveyor training to survey licensed 
        providers.  The process should include, but is not limited to, 
        the following key components: 
           (1) facilitate the implementation of immediate revisions to 
        any course curriculum for nursing assistants which reflect any 
        new standard of care practice that has been adopted or 
        referenced by the health department concerning the issue in 
        question; 
           (2) conduct training of long-term care providers and health 
        department survey inspectors either jointly or during the same 
        time frame on the department's new expectations; and 
           (3) within available resources the commissioner shall 
        cooperate in the development of clinical standards, work with 
        vendors of supplies and services regarding hazards, and identify 
        research of interest to the long-term care community.  
           Sec. 3.  Minnesota Statutes 1998, section 144A.10, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [DATA ON FOLLOW-UP SURVEYS.] (a) If requested, 
        and not prohibited by federal law, the commissioner shall make 
        available to the nursing home associations and the public 
        photocopies of statements of deficiencies and related letters 
        from the department pertaining to federal certification 
        surveys.  The commissioner may charge for the actual cost of 
        reproduction of these documents. 
           (b) The commissioner shall also make available on a 
        quarterly basis aggregate data for all statements of 
        deficiencies issued after federal certification follow-up 
        surveys related to surveys that were conducted in the quarter 
        prior to the immediately preceding quarter.  The data shall 
        include the number of facilities with deficiencies, the total 
        number of deficiencies, the number of facilities that did not 
        have any deficiencies, the number of facilities for which a 
        resurvey or follow-up survey was not performed, and the average 
        number of days between the follow-up or resurvey and the exit 
        date of the preceding survey. 
           Sec. 4.  Minnesota Statutes 1998, section 144A.10, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [NURSE AIDE TRAINING WAIVERS.] Because any 
        disruption or delay in the training and registration of nurse 
        aides may reduce access to care in certified facilities, the 
        commissioner shall grant all possible waivers for the 
        continuation of an approved nurse aide training and competency 
        evaluation program or nurse aide training program or competency 
        evaluation program conducted by or on the site of any certified 
        nursing facility or skilled nursing facility that would 
        otherwise lose approval for the program or programs.  The 
        commissioner shall take into consideration the distance to other 
        training programs, the frequency of other training programs, and 
        the impact that the loss of the onsite training will have on the 
        nursing facility's ability to recruit and train nurse aides. 
           Sec. 5.  Minnesota Statutes 1998, section 144A.10, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [IMMEDIATE JEOPARDY.] When conducting survey 
        certification and enforcement activities related to regular, 
        expanded, or extended surveys under Code of Federal Regulations, 
        title 42, part 488, the commissioner may not issue a finding of 
        immediate jeopardy unless the specific event or omission that 
        constitutes the violation of the requirements of participation 
        poses an imminent risk of life-threatening or serious injury to 
        a resident.  The commissioner may not issue any findings of 
        immediate jeopardy after the conclusion of a regular, expanded, 
        or extended survey unless the survey team identified the 
        deficient practice or practices that constitute immediate 
        jeopardy and the residents at risk prior to the close of the 
        exit conference. 
           Sec. 6.  Minnesota Statutes 1998, section 144A.10, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [INFORMAL DISPUTE RESOLUTION.] The commissioner 
        shall respond in writing to a request from a nursing facility 
        certified under the federal Medicare and Medicaid programs for 
        an informal dispute resolution within 30 days of the exit date 
        of the facility's survey.  The commissioner's response shall 
        identify the commissioner's decision regarding the continuation 
        of each deficiency citation challenged by the nursing facility, 
        as well as a statement of any changes in findings, level of 
        severity or scope, and proposed remedies or sanctions for each 
        deficiency citation. 
           Sec. 7.  [144A.102] [USE OF CIVIL MONEY PENALTIES; WAIVER 
        FROM STATE AND FEDERAL RULES AND REGULATIONS.] 
           By January 2000, the commissioner of health shall work with 
        providers to examine state and federal rules and regulations 
        governing the provision of care in licensed nursing facilities 
        and apply for federal waivers and identify necessary changes in 
        state law to:  
           (1) allow the use of civil money penalties imposed upon 
        nursing facilities to abate any deficiencies identified in a 
        nursing facility's plan of correction; and 
           (2) stop the accrual of any fine imposed by the health 
        department when a follow-up inspection survey is not conducted 
        by the department within the regulatory deadline. 
           Sec. 8.  Minnesota Statutes 1998, section 144D.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HOUSING WITH SERVICES ESTABLISHMENT OR 
        ESTABLISHMENT.] "Housing with services establishment" or 
        "establishment" means an establishment providing sleeping 
        accommodations to one or more adult residents, at least 80 
        percent of which are 55 years of age or older, and offering or 
        providing, for a fee, one or more regularly scheduled 
        health-related services or two or more regularly scheduled 
        supportive services, whether offered or provided directly by the 
        establishment or by another entity arranged for by the 
        establishment. 
           Housing with services establishment does not include: 
           (1) a nursing home licensed under chapter 144A; 
           (2) a hospital, certified boarding care home, or supervised 
        living facility licensed under sections 144.50 to 144.56; 
           (3) a board and lodging establishment licensed under 
        chapter 157 and Minnesota Rules, parts 9520.0500 to 9520.0670, 
        9525.0215 to 9525.0355, 9525.0500 to 9525.0660, or 9530.4100 to 
        9530.4450, or under chapter 245B; 
           (4) a board and lodging establishment which serves as a 
        shelter for battered women or other similar purpose; 
           (5) a family adult foster care home licensed by the 
        department of human services; 
           (6) private homes in which the residents are related by 
        kinship, law, or affinity with the providers of services; 
           (7) residential settings for persons with mental 
        retardation or related conditions in which the services are 
        licensed under Minnesota Rules, parts 9525.2100 to 9525.2140, or 
        applicable successor rules or laws; 
           (8) a home-sharing arrangement such as when an elderly or 
        disabled person or single-parent family makes lodging in a 
        private residence available to another person in exchange for 
        services or rent, or both; 
           (9) a duly organized condominium, cooperative, common 
        interest community, or owners' association of the foregoing 
        where at least 80 percent of the units that comprise the 
        condominium, cooperative, or common interest community are 
        occupied by individuals who are the owners, members, or 
        shareholders of the units; or 
           (10) services for persons with developmental disabilities 
        that are provided under a license according to Minnesota Rules, 
        parts 9525.2000 to 9525.2140 in effect until January 1, 1998, or 
        under chapter 245B. 
           Sec. 9.  Minnesota Statutes 1998, section 252.28, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DETERMINATIONS; REDETERMINATIONS.] In 
        conjunction with the appropriate county boards, the commissioner 
        of human services shall determine, and shall redetermine at 
        least every four years, the need, location, size, and program of 
        public and private residential services and day training and 
        habilitation services for persons with mental retardation or 
        related conditions.  This subdivision does not apply to 
        semi-independent living services and residential-based 
        habilitation services provided to four or fewer persons at a 
        single site funded as home and community-based services.  A 
        determination of need shall not be required for a change in 
        ownership.  
           Sec. 10.  [252.282] [ICF/MR LOCAL SYSTEM NEEDS PLANNING.] 
           Subdivision 1.  [HOST COUNTY RESPONSIBILITY.] (a) For 
        purposes of this section, "local system needs planning" means 
        the determination of need for ICF/MR services by program type, 
        location, demographics, and size of licensed services for 
        persons with developmental disabilities or related conditions. 
           (b) This section does not apply to semi-independent living 
        services and residential-based habilitation services funded as 
        home and community-based services. 
           (c) In collaboration with the commissioner and ICF/MR 
        providers, counties shall complete a local system needs planning 
        process for each ICF/MR facility.  Counties shall evaluate the 
        preferences and needs of persons with developmental disabilities 
        to determine resource demands through a systematic assessment 
        and planning process by May 15, 2000, and by July 1 every two 
        years thereafter beginning in 2001. 
           (d) A local system needs planning process shall be 
        undertaken more frequently when the needs or preferences of 
        consumers change significantly to require reformation of the 
        resources available to persons with developmental disabilities. 
           (e) A local system needs plan shall be amended anytime 
        recommendations for modifications to existing ICF/MR services 
        are made to the host county, including recommendations for: 
           (1) closure; 
           (2) relocation of services; 
           (3) downsizing; 
           (4) rate adjustments exceeding 90 days duration to address 
        access; or 
           (5) modification of existing services for which a change in 
        the framework of service delivery is advocated. 
           Subd. 2.  [CONSUMER NEEDS AND PREFERENCES.] In conducting 
        the local system needs planning process, the host county must 
        use information from the individual service plans of persons for 
        whom the county is financially responsible and of persons from 
        other counties for whom the county has agreed to be the host 
        county.  The determination of services and supports offered 
        within the county shall be based on the preferences and needs of 
        consumers.  The host county shall also consider the community 
        social services plan, waiting lists, and other sources that 
        identify unmet needs for services.  A review of ICF/MR facility 
        licensing and certification surveys, substantiated maltreatment 
        reports, and established service standards shall be employed to 
        assess the performance of providers and shall be considered in 
        the county's recommendations.  Consumer satisfaction surveys may 
        also be considered in this process. 
           Subd. 3.  [RECOMMENDATIONS.] (a) Upon completion of the 
        local system needs planning assessment, the host county shall 
        make recommendations by May 15, 2000, and by July 1 every two 
        years thereafter beginning in 2001.  If no change is 
        recommended, a copy of the assessment along with corresponding 
        documentation shall be provided to the commissioner by July 1 
        prior to the contract year. 
           (b) Except as provided in section 252.292, subdivision 4, 
        recommendations regarding closures, relocations, or downsizings 
        that include a rate increase and recommendations regarding rate 
        adjustments exceeding 90 days shall be submitted to the 
        statewide advisory committee for review and determination, along 
        with the assessment, plan, and corresponding budget. 
           (c) Recommendations for closures, relocations, and 
        downsizings that do not include a rate increase and for 
        modification of existing services for which a change in the 
        framework of service delivery is necessary shall be provided to 
        the commissioner by July 1 prior to the contract year or at 
        least 90 days prior to the anticipated change, along with the 
        assessment and corresponding documentation. 
           Subd. 4.  [THE STATEWIDE ADVISORY COMMITTEE.] (a) The 
        commissioner shall appoint a five-member statewide advisory 
        committee.  The advisory committee shall include representatives 
        of providers and counties and the commissioner or the 
        commissioner's designee. 
           (b) The criteria for ranking proposals, already developed 
        in 1997 by a task force authorized by the legislature, shall be 
        adopted and incorporated into the decision-making process.  
        Specific guidelines, including time frame for submission of 
        requests, shall be established and announced through the State 
        Register, and all requests shall be considered in comparison to 
        each other and the ranking criteria.  The advisory committee 
        shall review and recommend requests for facility rate 
        adjustments to address closures, downsizing, relocation, or 
        access needs within the county and shall forward recommendations 
        and documentation to the commissioner.  The committee shall 
        ensure that: 
           (1) applications are in compliance with applicable state 
        and federal law and with the state plan; and 
           (2) cost projections for the proposed service are within 
        fiscal limitations. 
           (c) The advisory committee shall review proposals and 
        submit recommendations to the commissioner within 60 days 
        following the published deadline for submission under 
        subdivision 5. 
           Subd. 5.  [RESPONSIBILITIES OF THE COMMISSIONER.] (a) In 
        collaboration with counties, providers, and the statewide 
        advisory committee, the commissioner shall ensure that services 
        recognize the preferences and needs of persons with 
        developmental disabilities and related conditions through a 
        recurring systemic review and assessment of ICF/MR facilities 
        within the state. 
           (b) The commissioner shall publish a notice in the State 
        Register twice each calendar year to announce the opportunity 
        for counties or providers to submit requests for rate 
        adjustments associated with plans for downsizing, relocation, 
        and closure of ICF/MR facilities. 
           (c) The commissioner shall designate funding parameters to 
        counties and to the statewide advisory committee for the overall 
        implementation of system needs within the fiscal resources 
        allocated by the legislature. 
           (d) The commissioner shall contract with ICF/MR providers.  
        The initial contracts shall cover the period from October 1, 
        2000, to December 31, 2001.  Subsequent contracts shall be for 
        two-year periods beginning January 1, 2002. 
           Sec. 11.  Minnesota Statutes 1998, section 252.291, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [EXCEPTION FOR LAKE OWASSO PROJECT.] (a) The 
        commissioner shall authorize and grant a license under chapter 
        245A to a new intermediate care facility for persons with mental 
        retardation effective January 1, 2000, under the following 
        circumstances: 
           (1) the new facility replaces an existing 64-bed 
        intermediate care facility for the mentally retarded located in 
        Ramsey county; 
           (2) the new facility is located upon a parcel of land 
        contiguous to the parcel upon which the existing 64-bed facility 
        is located; 
           (3) the new facility is comprised of no more than eight 
        twin home style buildings and an administration building; 
           (4) the total licensed bed capacity of the facility does 
        not exceed 64 beds; and 
           (5) the existing 64-bed facility is demolished. 
           (b) The medical assistance payment rate for the new 
        facility shall be the higher of the rate specified in paragraph 
        (c) or as otherwise provided by law. 
           (c) The new facility shall be considered a newly 
        established facility for rate setting purposes, and shall be 
        eligible for the investment per bed limit specified in section 
        256B.501, subdivision 11, paragraph (c), and the interest 
        expense limitation specified in section 256B.501, subdivision 
        11, paragraph (d).  Notwithstanding section 256B.5011, the newly 
        established facility's initial payment rate shall be set 
        according to Minnesota Rules, part 9553.0075, and shall not be 
        subject to the provisions of section 256B.501, subdivision 5b. 
           (d) During the construction of the new facility, Ramsey 
        county shall work with residents, families, and service 
        providers to explore all service options open to current 
        residents of the facility. 
           Sec. 12.  Minnesota Statutes 1998, section 256B.0911, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PAYMENT FOR PREADMISSION SCREENING.] (a) The 
        total screening 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 
        screenings 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. 
           (b) The commissioner shall include the total annual payment 
        for screening for each nursing facility according to section 
        256B.431, subdivision 2b, paragraph (g), or 256B.435. 
           (c) Payments for screening activities are available to the 
        county or counties to cover staff salaries and expenses to 
        provide the screening function.  The lead agency shall employ, 
        or contract with other agencies to employ, within the limits of 
        available funding, sufficient personnel to conduct the 
        preadmission screening activity while meeting the state's 
        long-term care outcomes and objectives as defined in section 
        256B.0917, subdivision 1.  The local agency shall be accountable 
        for meeting local objectives as approved by the commissioner in 
        the CSSA biennial plan. 
           (c) (d) Notwithstanding section 256B.0641, overpayments 
        attributable to payment of the screening costs under the medical 
        assistance program may not be recovered from a facility.  
           (d) (e) The commissioner of human services shall amend the 
        Minnesota medical assistance plan to include reimbursement for 
        the local screening teams. 
           Sec. 13.  Minnesota Statutes 1998, section 256B.0913, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SERVICES COVERED UNDER ALTERNATIVE CARE.] (a) 
        Alternative care funding may be used for payment of costs of: 
           (1) adult foster care; 
           (2) adult day care; 
           (3) home health aide; 
           (4) homemaker services; 
           (5) personal care; 
           (6) case management; 
           (7) respite care; 
           (8) assisted living; 
           (9) residential care services; 
           (10) care-related supplies and equipment; 
           (11) meals delivered to the home; 
           (12) transportation; 
           (13) skilled nursing; 
           (14) chore services; 
           (15) companion services; 
           (16) nutrition services; 
           (17) training for direct informal caregivers; and 
           (18) telemedicine devices to monitor recipients in their 
        own homes as an alternative to hospital care, nursing home care, 
        or home visits.; and 
           (19) other services including direct cash payments to 
        clients, approved by the county agency, subject to the 
        provisions of paragraph (m).  Total annual payments for other 
        services for all clients within a county may not exceed either 
        ten percent of that county's annual alternative care program 
        base allocation or $5,000, whichever is greater.  In no case 
        shall this amount exceed the county's total annual alternative 
        care program base allocation. 
           (b) The county agency must ensure that the funds are used 
        only to supplement and not supplant services available through 
        other public assistance or services programs. 
           (c) Unless specified in statute, the service standards for 
        alternative care services shall be the same as the service 
        standards defined in the elderly waiver.  Except for the county 
        agencies' approval of direct cash payments to clients, persons 
        or agencies must be employed by or under a contract with the 
        county agency or the public health nursing agency of the local 
        board of health in order to receive funding under the 
        alternative care program. 
           (d) The adult foster care rate shall be considered a 
        difficulty of care payment and shall not include room and 
        board.  The adult foster care daily rate shall be negotiated 
        between the county agency and the foster care provider.  The 
        rate established under this section shall not exceed 75 percent 
        of the state average monthly nursing home payment for the case 
        mix classification to which the individual receiving foster care 
        is assigned, and it must allow for other alternative care 
        services to be authorized by the case manager. 
           (e) Personal care services may be provided by a personal 
        care provider organization.  A county agency may contract with a 
        relative of the client to provide personal care services, but 
        must ensure nursing supervision.  Covered personal care services 
        defined in section 256B.0627, subdivision 4, must meet 
        applicable standards in Minnesota Rules, part 9505.0335. 
           (f) A county may use alternative care funds to purchase 
        medical supplies and equipment without prior approval from the 
        commissioner when:  (1) there is no other funding source; (2) 
        the supplies and equipment are specified in the individual's 
        care plan as medically necessary to enable the individual to 
        remain in the community according to the criteria in Minnesota 
        Rules, part 9505.0210, item A; and (3) the supplies and 
        equipment represent an effective and appropriate use of 
        alternative care funds.  A county may use alternative care funds 
        to purchase supplies and equipment from a non-Medicaid certified 
        vendor if the cost for the items is less than that of a Medicaid 
        vendor.  A county is not required to contract with a provider of 
        supplies and equipment if the monthly cost of the supplies and 
        equipment is less than $250.  
           (g) For purposes of this section, residential care services 
        are services which are provided to individuals living in 
        residential care homes.  Residential care homes are currently 
        licensed as board and lodging establishments and are registered 
        with the department of health as providing special services.  
        Residential care services are defined as "supportive services" 
        and "health-related services."  "Supportive services" means the 
        provision of up to 24-hour supervision and oversight.  
        Supportive services includes:  (1) transportation, when provided 
        by the residential care center only; (2) socialization, when 
        socialization is part of the plan of care, has specific goals 
        and outcomes established, and is not diversional or recreational 
        in nature; (3) assisting clients in setting up meetings and 
        appointments; (4) assisting clients in setting up medical and 
        social services; (5) providing assistance with personal laundry, 
        such as carrying the client's laundry to the laundry room.  
        Assistance with personal laundry does not include any laundry, 
        such as bed linen, that is included in the room and board rate.  
        Health-related services are limited to minimal assistance with 
        dressing, grooming, and bathing and providing reminders to 
        residents to take medications that are self-administered or 
        providing storage for medications, if requested.  Individuals 
        receiving residential care services cannot receive both personal 
        care services and residential care services.  
           (h) For the purposes of this section, "assisted living" 
        refers to supportive services provided by a single vendor to 
        clients who reside in the same apartment building of three or 
        more units which are not subject to registration under chapter 
        144D.  Assisted living services are defined as up to 24-hour 
        supervision, and oversight, supportive services as defined in 
        clause (1), individualized home care aide tasks as defined in 
        clause (2), and individualized home management tasks as defined 
        in clause (3) provided to residents of a residential center 
        living in their units or apartments with a full kitchen and 
        bathroom.  A full kitchen includes a stove, oven, refrigerator, 
        food preparation counter space, and a kitchen utensil storage 
        compartment.  Assisted living services must be provided by the 
        management of the residential center or by providers under 
        contract with the management or with the county. 
           (1) Supportive services include:  
           (i) socialization, when socialization is part of the plan 
        of care, has specific goals and outcomes established, and is not 
        diversional or recreational in nature; 
           (ii) assisting clients in setting up meetings and 
        appointments; and 
           (iii) providing transportation, when provided by the 
        residential center only.  
           Individuals receiving assisted living services will not 
        receive both assisted living services and homemaking or personal 
        care services.  Individualized means services are chosen and 
        designed specifically for each resident's needs, rather than 
        provided or offered to all residents regardless of their 
        illnesses, disabilities, or physical conditions.  
           (2) Home care aide tasks means:  
           (i) preparing modified diets, such as diabetic or low 
        sodium diets; 
           (ii) reminding residents to take regularly scheduled 
        medications or to perform exercises; 
           (iii) household chores in the presence of technically 
        sophisticated medical equipment or episodes of acute illness or 
        infectious disease; 
           (iv) household chores when the resident's care requires the 
        prevention of exposure to infectious disease or containment of 
        infectious disease; and 
           (v) assisting with dressing, oral hygiene, hair care, 
        grooming, and bathing, if the resident is ambulatory, and if the 
        resident has no serious acute illness or infectious disease.  
        Oral hygiene means care of teeth, gums, and oral prosthetic 
        devices.  
           (3) Home management tasks means:  
           (i) housekeeping; 
           (ii) laundry; 
           (iii) preparation of regular snacks and meals; and 
           (iv) shopping.  
           Assisted living services as defined in this section shall 
        not be authorized in boarding and lodging establishments 
        licensed according to sections 157.011 and 157.15 to 157.22. 
           (i) For establishments registered under chapter 144D, 
        assisted living services under this section means the services 
        described and licensed under section 144A.4605. 
           (j) For the purposes of this section, reimbursement for 
        assisted living services and residential care services shall be 
        a monthly rate negotiated and authorized by the county agency 
        based on an individualized service plan for each resident. The 
        rate shall not exceed the nonfederal share of the greater of 
        either the statewide or any of the geographic groups' weighted 
        average monthly medical assistance nursing facility payment rate 
        of the case mix resident class to which the 180-day eligible 
        client would be assigned under Minnesota Rules, parts 9549.0050 
        to 9549.0059, unless the services are provided by a home care 
        provider licensed by the department of health and are provided 
        in a building that is registered as a housing with services 
        establishment under chapter 144D and that provides 24-hour 
        supervision. 
           (k) For purposes of this section, companion services are 
        defined as nonmedical care, supervision and oversight, provided 
        to a functionally impaired adult.  Companions may assist the 
        individual with such tasks as meal preparation, laundry and 
        shopping, but do not perform these activities as discrete 
        services.  The provision of companion services does not entail 
        hands-on medical care.  Providers may also perform light 
        housekeeping tasks which are incidental to the care and 
        supervision of the recipient.  This service must be approved by 
        the case manager as part of the care plan.  Companion services 
        must be provided by individuals or nonprofit organizations who 
        are under contract with the local agency to provide the 
        service.  Any person related to the waiver recipient by blood, 
        marriage or adoption cannot be reimbursed under this service.  
        Persons providing companion services will be monitored by the 
        case manager. 
           (l) For purposes of this section, training for direct 
        informal caregivers is defined as a classroom or home course of 
        instruction which may include:  transfer and lifting skills, 
        nutrition, personal and physical cares, home safety in a home 
        environment, stress reduction and management, behavioral 
        management, long-term care decision making, care coordination 
        and family dynamics.  The training is provided to an informal 
        unpaid caregiver of a 180-day eligible client which enables the 
        caregiver to deliver care in a home setting with high levels of 
        quality.  The training must be approved by the case manager as 
        part of the individual care plan.  Individuals, agencies, and 
        educational facilities which provide caregiver training and 
        education will be monitored by the case manager. 
           (m) A county agency may make payment from their alternative 
        care program allocation for other services provided to an 
        alternative care program recipient if those services prevent, 
        shorten, or delay institutionalization.  These services may 
        include direct cash payments to the recipient for the purpose of 
        purchasing the recipient's services.  The following provisions 
        apply to payments under this paragraph: 
           (1) a cash payment to a client under this provision cannot 
        exceed 80 percent of the monthly payment limit for that client 
        as specified in subdivision 4, paragraph (a), clause (7); 
           (2) a county may not approve any cash payment for a client 
        who has been assessed as having a dependency in orientation, 
        unless the client has an authorized representative under section 
        256.476, subdivision 2, paragraph (g), or for a client who is 
        concurrently receiving adult foster care, residential care, or 
        assisted living services; 
           (3) any service approved under this section must be a 
        service which meets the purpose and goals of the program as 
        listed in subdivision 1; 
           (4) cash payments must also meet the criteria in section 
        256.476, subdivision 4, paragraph (b), and recipients of cash 
        grants must meet the requirements in section 256.476, 
        subdivision 10; and 
           (5) the county shall report client outcomes, services, and 
        costs under this paragraph in a manner prescribed by the 
        commissioner. 
        Upon implementation of direct cash payments to clients under 
        this section, any person determined eligible for the alternative 
        care program who chooses a cash payment approved by the county 
        agency shall receive the cash payment under this section and not 
        under section 256.476 unless the person was receiving a consumer 
        support grant under section 256.476 before implementation of 
        direct cash payments under this section. 
           Sec. 14.  Minnesota Statutes 1998, section 256B.0913, 
        subdivision 10, is amended to read: 
           Subd. 10.  [ALLOCATION FORMULA.] (a) The alternative care 
        appropriation for fiscal years 1992 and beyond shall cover only 
        180-day eligible clients. 
           (b) Prior to July 1 of each year, the commissioner shall 
        allocate to county agencies the state funds available for 
        alternative care for persons eligible under subdivision 2.  The 
        allocation for fiscal year 1992 shall be calculated using a base 
        that is adjusted to exclude the medical assistance share of 
        alternative care expenditures.  The adjusted base is calculated 
        by multiplying each county's allocation for fiscal year 1991 by 
        the percentage of county alternative care expenditures for 
        180-day eligible clients.  The percentage is determined based on 
        expenditures for services rendered in fiscal year 1989 or 
        calendar year 1989, whichever is greater. 
           (c) If the county expenditures for 180-day eligible clients 
        are 95 percent or more of its adjusted base allocation, the 
        allocation for the next fiscal year is 100 percent of the 
        adjusted base, plus inflation to the extent that inflation is 
        included in the state budget. 
           (d) If the county expenditures for 180-day eligible clients 
        are less than 95 percent of its adjusted base allocation, the 
        allocation for the next fiscal year is the adjusted base 
        allocation less the amount of unspent funds below the 95 percent 
        level. 
           (e) For fiscal year 1992 only, a county may receive an 
        increased allocation if annualized service costs for the month 
        of May 1991 for 180-day eligible clients are greater than the 
        allocation otherwise determined.  A county may apply for this 
        increase by reporting projected expenditures for May to the 
        commissioner by June 1, 1991.  The amount of the allocation may 
        exceed the amount calculated in paragraph (b).  The projected 
        expenditures for May must be based on actual 180-day eligible 
        client caseload and the individual cost of clients' care plans.  
        If a county does not report its expenditures for May, the amount 
        in paragraph (c) or (d) shall be used. 
           (f) Calculations for paragraphs (c) and (d) are to be made 
        as follows:  for each county, the determination of expenditures 
        shall be based on payments for services rendered from April 1 
        through March 31 in the base year, to the extent that claims 
        have been submitted by June 1 of that year.  Calculations for 
        paragraphs (c) and (d) must also include the funds transferred 
        to the consumer support grant program for clients who have 
        transferred to that program from April 1 through March 31 in the 
        base year.  
           (g) For the biennium ending June 30, 2001, the allocation 
        of state funds to county agencies shall be calculated as 
        described in paragraphs (c) and (d).  If the annual legislative 
        appropriation for the alternative care program is inadequate to 
        fund the combined county allocations for fiscal year 2000 or 
        2001, the commissioner shall distribute to each county the 
        entire annual appropriation as that county's percentage of the 
        computed base as calculated in paragraph (f). 
           Sec. 15.  Minnesota Statutes 1998, section 256B.0913, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CLIENT PREMIUMS.] (a) A premium is required for 
        all 180-day eligible clients to help pay for the cost of 
        participating in the program.  The amount of the premium for the 
        alternative care client shall be determined as follows: 
           (1) when the alternative care client's income less 
        recurring and predictable medical expenses is greater than the 
        medical assistance income standard but less than 150 percent of 
        the federal poverty guideline, and total assets are less than 
        $6,000 $10,000, the fee is zero; 
           (2) when the alternative care client's income less 
        recurring and predictable medical expenses is greater than 150 
        percent of the federal poverty guideline, and total assets are 
        less than $6,000 $10,000, the fee is 25 percent of the cost of 
        alternative care services or the difference between 150 percent 
        of the federal poverty guideline and the client's income less 
        recurring and predictable medical expenses, whichever is less; 
        and 
           (3) when the alternative care client's total assets are 
        greater than $6,000 $10,000, the fee is 25 percent of the cost 
        of alternative care services.  
           For married persons, total assets are defined as the total 
        marital assets less the estimated community spouse asset 
        allowance, under section 256B.059, if applicable.  For married 
        persons, total income is defined as the client's income less the 
        monthly spousal allotment, under section 256B.058. 
           All alternative care services except case management shall 
        be included in the estimated costs for the purpose of 
        determining 25 percent of the costs. 
           The monthly premium shall be calculated based on the cost 
        of the first full month of alternative care services and shall 
        continue unaltered until the next reassessment is completed or 
        at the end of 12 months, whichever comes first.  Premiums are 
        due and payable each month alternative care services are 
        received unless the actual cost of the services is less than the 
        premium. 
           (b) The fee shall be waived by the commissioner when: 
           (1) a person who is residing in a nursing facility is 
        receiving case management only; 
           (2) a person is applying for medical assistance; 
           (3) a married couple is requesting an asset assessment 
        under the spousal impoverishment provisions; 
           (4) a person is a medical assistance recipient, but has 
        been approved for alternative care-funded assisted living 
        services; 
           (5) a person is found eligible for alternative care, but is 
        not yet receiving alternative care services; or 
           (6) a person's fee under paragraph (a) is less than $25. 
           (c) The county agency must collect the premium from the 
        client and forward the amounts collected to the commissioner in 
        the manner and at the times prescribed by the commissioner.  
        Money collected must be deposited in the general fund and is 
        appropriated to the commissioner for the alternative care 
        program.  The client must supply the county with the client's 
        social security number at the time of application.  If a client 
        fails or refuses to pay the premium due, the county shall supply 
        the commissioner with the client's social security number and 
        other information the commissioner requires to collect the 
        premium from the client.  The commissioner shall collect unpaid 
        premiums using the Revenue Recapture Act in chapter 270A and 
        other methods available to the commissioner.  The commissioner 
        may require counties to inform clients of the collection 
        procedures that may be used by the state if a premium is not 
        paid.  
           (d) The commissioner shall begin to adopt emergency or 
        permanent rules governing client premiums within 30 days after 
        July 1, 1991, including criteria for determining when services 
        to a client must be terminated due to failure to pay a premium.  
           Sec. 16.  Minnesota Statutes 1998, section 256B.0913, 
        subdivision 16, is amended to read: 
           Subd. 16.  [CONVERSION OF ENROLLMENT.] Upon approval of the 
        elderly waiver amendments described in section 256B.0915, 
        subdivision 1d, persons currently receiving services shall have 
        their eligibility for the elderly waiver program determined 
        under section 256B.0915.  Persons currently receiving 
        alternative care services whose income is under the special 
        income standard according to Code of Federal Regulations, title 
        42, section 435.236, who are eligible for the elderly waiver 
        program shall be transferred to that program and shall receive 
        priority access to elderly waiver slots for six months after 
        implementation of this subdivision, except that persons whose 
        income is above the maintenance needs amount described in 
        section 256B.0915, subdivision 1d, paragraph (a), shall have the 
        option of remaining in the alternative care program.  Persons 
        currently enrolled in the alternative care program who are not 
        eligible for the elderly waiver program shall continue to be 
        eligible for the alternative care program as long as continuous 
        eligibility is maintained.  Continued eligibility for the 
        alternative care program shall be reviewed every six months.  
        Persons who apply for the alternative care program after 
        approval of the elderly waiver amendments in section 256B.0915, 
        subdivision 1d, are not eligible for alternative care if they 
        would qualify for the elderly waiver, with or without a 
        spenddown.  Persons who apply for the alternative care program 
        after approval of the elderly waiver amendments in section 
        256B.0915, subdivision 1d, whose income is under the special 
        income standard according to Code of Federal Regulations, title 
        42, section 435.236, are not eligible for alternative care if 
        they would qualify for the elderly waiver, except that persons 
        whose income is above the maintenance needs amount described in 
        section 256B.0915, subdivision 1d, paragraph (a), shall have the 
        option of remaining in the alternative care program. 
           Sec. 17.  Minnesota Statutes 1998, section 256B.431, 
        subdivision 2i, is amended to read: 
           Subd. 2i.  [OPERATING COSTS AFTER JULY 1, 1988.] (a)  
        [OTHER OPERATING COST LIMITS.] For the rate year beginning July 
        1, 1988, the commissioner shall increase the other operating 
        cost limits established in Minnesota Rules, part 9549.0055, 
        subpart 2, item E, to 110 percent of the median of the array of 
        allowable historical other operating cost per diems and index 
        these limits as in Minnesota Rules, part 9549.0056, subparts 3 
        and 4.  The limits must be established in accordance with 
        subdivision 2b, paragraph (d).  For rate years beginning on or 
        after July 1, 1989, the adjusted other operating cost limits 
        must be indexed as in Minnesota Rules, part 9549.0056, subparts 
        3 and 4.  For the rate period beginning October 1, 1992, and for 
        rate years beginning after June 30, 1993, the amount of the 
        surcharge under section 256.9657, subdivision 1, shall be 
        included in the plant operations and maintenance operating cost 
        category.  The surcharge shall be an allowable cost for the 
        purpose of establishing the payment rate. 
           (b) [CARE-RELATED OPERATING COST LIMITS.] For the rate year 
        beginning July 1, 1988, the commissioner shall increase the 
        care-related operating cost limits established in Minnesota 
        Rules, part 9549.0055, subpart 2, items A and B, to 125 percent 
        of the median of the array of the allowable historical case mix 
        operating cost standardized per diems and the allowable 
        historical other care-related operating cost per diems and index 
        those limits as in Minnesota Rules, part 9549.0056, subparts 1 
        and 2.  The limits must be established in accordance with 
        subdivision 2b, paragraph (d).  For rate years beginning on or 
        after July 1, 1989, the adjusted care-related limits must be 
        indexed as in Minnesota Rules, part 9549.0056, subparts 1 and 2. 
           (c) [SALARY ADJUSTMENT PER DIEM.] Effective July 1, 1998, 
        to June 30, 2000, the commissioner shall make available the 
        salary adjustment per diem calculated in clause (1) or (2) to 
        the total operating cost payment rate of each nursing facility 
        reimbursed under this section or section 256B.434.  The salary 
        adjustment per diem for each nursing facility must be determined 
        as follows:  
           (1) For each nursing facility that reports salaries for 
        registered nurses, licensed practical nurses, and aides, 
        orderlies and attendants separately, the commissioner shall 
        determine the salary adjustment per diem by multiplying the 
        total salaries, payroll taxes, and fringe benefits allowed in 
        each operating cost category, except management fees and 
        administrator and central office salaries and the related 
        payroll taxes and fringe benefits, by 3.0 percent and then 
        dividing the resulting amount by the nursing facility's actual 
        resident days. 
           (2) For each nursing facility that does not report salaries 
        for registered nurses, licensed practical nurses, aides, 
        orderlies, and attendants separately, the salary adjustment per 
        diem is the weighted average salary adjustment per diem increase 
        determined under clause (1).  
           (3) A nursing facility may apply for the salary adjustment 
        per diem calculated under clauses (1) and (2).  The application 
        must be made to the commissioner and contain a plan by which the 
        nursing facility will distribute the salary adjustment to 
        employees of the nursing facility.  In order to apply for a 
        salary adjustment, a nursing facility reimbursed under section 
        256B.434, must report the information required by clause (1) or 
        (2) in the application, in the manner specified by the 
        commissioner.  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, after July 1, 1998, may 
        constitute the plan for the salary distribution.  The 
        commissioner shall review the plan to ensure that the salary 
        adjustment per diem is used solely to increase the compensation 
        of nursing home facility employees.  To be eligible, a facility 
        must submit its plan for the salary distribution by December 31, 
        1998.  If a facility's plan for salary distribution is effective 
        for its employees after July 1, 1998, the salary adjustment cost 
        per diem shall be effective the same date as its plan. 
           (4) Additional costs incurred by nursing facilities as a 
        result of this salary adjustment are not allowable costs for 
        purposes of the September 30, 1998, cost report. 
           (d)  [NEW BASE YEAR.] The commissioner shall establish new 
        base years for both the reporting year ending September 30, 
        1989, and the reporting year ending September 30, 1990.  In 
        establishing new base years, the commissioner must take into 
        account:  
           (1) statutory changes made in geographic groups; 
           (2) redefinitions of cost categories; and 
           (3) reclassification, pass-through, or exemption of certain 
        costs such as Public Employee Retirement Act contributions. 
           (e) (d) [NEW BASE YEAR.] The commissioner shall establish a 
        new base year for the reporting years ending September 30, 1991, 
        and September 30, 1992.  In establishing a new base year, the 
        commissioner must take into account:  
           (1) statutory changes made in geographic groups; 
           (2) redefinitions of cost categories; and 
           (3) reclassification, pass-through, or exemption of certain 
        costs. 
           Sec. 18.  Minnesota Statutes 1998, section 256B.431, 
        subdivision 17, is amended to read: 
           Subd. 17.  [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.] 
        (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3, 
        for rate periods beginning on October 1, 1992, and for rate 
        years beginning after June 30, 1993, a nursing facility that (1) 
        has completed a construction project approved under section 
        144A.071, subdivision 4a, clause (m); (2) has completed a 
        construction project approved under section 144A.071, 
        subdivision 4a, and effective after June 30, 1995; or (3) has 
        completed a renovation, replacement, or upgrading project 
        approved under the moratorium exception process in section 
        144A.073 shall be reimbursed for costs directly identified to 
        that project as provided in subdivision 16 and this subdivision. 
           (b) Notwithstanding Minnesota Rules, part 9549.0060, 
        subparts 5, item A, subitems (1) and (3), and 7, item D, 
        allowable interest expense on debt shall include: 
           (1) interest expense on debt related to the cost of 
        purchasing or replacing depreciable equipment, excluding 
        vehicles, not to exceed six percent of the total historical cost 
        of the project; and 
           (2) interest expense on debt related to financing or 
        refinancing costs, including costs related to points, loan 
        origination fees, financing charges, legal fees, and title 
        searches; and issuance costs including bond discounts, bond 
        counsel, underwriter's counsel, corporate counsel, printing, and 
        financial forecasts.  Allowable debt related to items in this 
        clause shall not exceed seven percent of the total historical 
        cost of the project.  To the extent these costs are financed, 
        the straight-line amortization of the costs in this clause is 
        not an allowable cost; and 
           (3) interest on debt incurred for the establishment of a 
        debt reserve fund, net of the interest earned on the debt 
        reserve fund. 
           (c) Debt incurred for costs under paragraph (b) is not 
        subject to Minnesota Rules, part 9549.0060, subpart 5, item A, 
        subitem (5) or (6). 
           (d) The incremental increase in a nursing facility's rental 
        rate, determined under Minnesota Rules, parts 9549.0010 to 
        9549.0080, and this section, resulting from the acquisition of 
        allowable capital assets, and allowable debt and interest 
        expense under this subdivision shall be added to its 
        property-related payment rate and shall be effective on the 
        first day of the month following the month in which the 
        moratorium project was completed. 
           (e) Notwithstanding subdivision 3f, paragraph (a), for rate 
        periods beginning on October 1, 1992, and for rate years 
        beginning after June 30, 1993, the replacement-costs-new per bed 
        limit to be used in Minnesota Rules, part 9549.0060, subpart 4, 
        item B, for a nursing facility that has completed a renovation, 
        replacement, or upgrading project that has been approved under 
        the moratorium exception process in section 144A.073, or that 
        has completed an addition to or replacement of buildings, 
        attached fixtures, or land improvements for which the total 
        historical cost exceeds the lesser of $150,000 or ten percent of 
        the most recent appraised value, must be $47,500 per licensed 
        bed in multiple-bed rooms and $71,250 per licensed bed in a 
        single-bed room.  These amounts must be adjusted annually as 
        specified in subdivision 3f, paragraph (a), beginning January 1, 
        1993. 
           (f) A nursing facility that completes a project identified 
        in this subdivision and, as of April 17, 1992, has not been 
        mailed a rate notice with a special appraisal for a completed 
        project, or completes a project after April 17, 1992, but before 
        September 1, 1992, may elect either to request a special 
        reappraisal with the corresponding adjustment to the 
        property-related payment rate under the laws in effect on June 
        30, 1992, or to submit their capital asset and debt information 
        after that date and obtain the property-related payment rate 
        adjustment under this section, but not both. 
           (g) For purposes of this paragraph, a total replacement 
        means the complete replacement of the nursing facility's 
        physical plant through the construction of a new physical plant 
        or the transfer of the nursing facility's license from one 
        physical plant location to another.  For total replacement 
        projects completed on or after July 1, 1992, the commissioner 
        shall compute the incremental change in the nursing facility's 
        rental per diem, for rate years beginning on or after July 1, 
        1995, by replacing its appraised value, including the historical 
        capital asset costs, and the capital debt and interest costs 
        with the new nursing facility's allowable capital asset costs 
        and the related allowable capital debt and interest costs.  If 
        the new nursing facility has decreased its licensed capacity, 
        the aggregate investment per bed limit in subdivision 3a, 
        paragraph (d), shall apply.  If the new nursing facility has 
        retained a portion of the original physical plant for nursing 
        facility usage, then a portion of the appraised value prior to 
        the replacement must be retained and included in the calculation 
        of the incremental change in the nursing facility's rental per 
        diem.  For purposes of this part, the original nursing facility 
        means the nursing facility prior to the total replacement 
        project.  The portion of the appraised value to be retained 
        shall be calculated according to clauses (1) to (3): 
           (1) The numerator of the allocation ratio shall be the 
        square footage of the area in the original physical plant which 
        is being retained for nursing facility usage. 
           (2) The denominator of the allocation ratio shall be the 
        total square footage of the original nursing facility physical 
        plant. 
           (3) Each component of the nursing facility's allowable 
        appraised value prior to the total replacement project shall be 
        multiplied by the allocation ratio developed by dividing clause 
        (1) by clause (2). 
           In the case of either type of total replacement as 
        authorized under section 144A.071 or 144A.073, the provisions of 
        this subdivision shall also apply.  For purposes of the 
        moratorium exception authorized under section 144A.071, 
        subdivision 4a, paragraph (s), if the total replacement involves 
        the renovation and use of an existing health care facility 
        physical plant, the new allowable capital asset costs and 
        related debt and interest costs shall include first the 
        allowable capital asset costs and related debt and interest 
        costs of the renovation, to which shall be added the allowable 
        capital asset costs of the existing physical plant prior to the 
        renovation, and if reported by the facility, the related 
        allowable capital debt and interest costs. 
           (h) Notwithstanding Minnesota Rules, part 9549.0060, 
        subpart 11, item C, subitem (2), for a total replacement, as 
        defined in paragraph (g), authorized under section 144A.071 or 
        144A.073 after July 1, 1999, the replacement-costs-new per bed 
        limit shall be $74,280 per licensed bed in multiple-bed rooms, 
        $92,850 per licensed bed in semiprivate rooms with a fixed 
        partition separating the resident beds, and $111,420 per 
        licensed bed in single rooms.  Minnesota Rules, part 9549.0060, 
        subpart 11, item C, subitem (2), does not apply.  These amounts 
        must be adjusted annually as specified in subdivision 3f, 
        paragraph (a), beginning January 1, 2000.  
           (i) For a total replacement, as defined in paragraph (g), 
        authorized under section 144A.073 for a 96-bed nursing home in 
        Carlton county, the replacement costs new per bed limit shall be 
        $74,280 per licensed bed in multiple-bed rooms, $92,850 per 
        licensed bed in semiprivate rooms with a fixed partition 
        separating the resident's beds, and $111,420 per licensed bed in 
        a single room.  Minnesota Rules, part 9549.0060, subpart 11, 
        item C, subitem (2), does not apply.  The resulting maximum 
        allowable replacement costs new multiplied by 1.25 shall 
        constitute the project's dollar threshold for purposes of 
        application of the limit set forth in section 144A.071, 
        subdivision 2.  The commissioner of health may waive the 
        requirements of section 144A.073, subdivision 3b, paragraph (b), 
        clause (2), on the condition that the other requirements of that 
        paragraph are met. 
           Sec. 19.  Minnesota Statutes 1998, section 256B.431, 
        subdivision 26, is amended to read: 
           Subd. 26.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
        BEGINNING JULY 1, 1997.] The nursing facility reimbursement 
        changes in paragraphs (a) to (f) shall apply in the sequence 
        specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and 
        this section, beginning July 1, 1997. 
           (a) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit a nursing facility's allowable 
        operating per diem for each case mix category for each rate year.
        The commissioner shall group nursing facilities into two groups, 
        freestanding and nonfreestanding, within each geographic group, 
        using their operating cost per diem for the case mix A 
        classification.  A nonfreestanding nursing facility is a nursing 
        facility whose other operating cost per diem is subject to the 
        hospital attached, short length of stay, or the rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities in each grouping by their allowable case mix 
        A operating cost per diem.  In calculating a nursing facility's 
        operating cost per diem for this purpose, the commissioner shall 
        exclude the raw food cost per diem related to providing special 
        diets that are based on religious beliefs, as determined in 
        subdivision 2b, paragraph (h).  For those nursing facilities in 
        each grouping whose case mix A operating cost per diem: 
           (1) is at or below the median of the array, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diem 
        as specified in Laws 1996, chapter 451, article 3, section 11, 
        paragraph (h), plus the inflation factor as established in 
        paragraph (d), clause (2), increased by two percentage points, 
        or the current reporting year's corresponding allowable 
        operating cost per diem; or 
           (2) is above the median of the array, the commissioner 
        shall limit the nursing facility's allowable operating cost per 
        diem for each case mix category to the lesser of the prior 
        reporting year's allowable operating cost per diem as specified 
        in Laws 1996, chapter 451, article 3, section 11, paragraph (h), 
        plus the inflation factor as established in paragraph (d), 
        clause (2), increased by one percentage point, or the current 
        reporting year's corresponding allowable operating cost per diem.
           For purposes of paragraph (a), if a nursing facility 
        reports on its cost report a reduction in cost due to a refund 
        or credit for a rate year beginning on or after July 1, 1998, 
        the commissioner shall increase that facility's spend-up limit 
        for the rate year following the current rate year by the amount 
        of the cost reduction divided by its resident days for the 
        reporting year preceding the rate year in which the adjustment 
        is to be made. 
           (b) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit the allowable operating cost per diem 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (a) to each nursing facility's operating 
        cost per diem, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diem are subject 
        to hospital attached, short length of stay, or rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities within each grouping by their allowable case 
        mix A operating cost per diem.  In calculating a nursing 
        facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  For those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diem by three percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diem by two percent.  
        However, in no case shall a nursing facility's operating cost 
        per diem be reduced below its grouping's limit established at 
        0.5 standard deviations above the median. 
           (c) For rate years beginning on or after July 1, 1997, the 
        commissioner shall determine a nursing facility's efficiency 
        incentive by first computing the allowable difference, which is 
        the lesser of $4.50 or the amount by which the facility's other 
        operating cost limit exceeds its nonadjusted other operating 
        cost per diem for that rate year.  The commissioner shall 
        compute the efficiency incentive by: 
           (1) subtracting the allowable difference from $4.50 and 
        dividing the result by $4.50; 
           (2) multiplying 0.20 by the ratio resulting from clause 
        (1), and then; 
           (3) adding 0.50 to the result from clause (2); and 
           (4) multiplying the result from clause (3) times the 
        allowable difference. 
           The nursing facility's efficiency incentive payment shall 
        be the lesser of $2.25 or the product obtained in clause (4). 
           (d) For rate years beginning on or after July 1, 1997, the 
        forecasted price index for a nursing facility's allowable 
        operating cost per diem shall be determined under clauses (1) 
        and (2) using the change in the Consumer Price Index-All Items 
        (United States city average) (CPI-U) as forecasted by Data 
        Resources, Inc.  The commissioner shall use the indices as 
        forecasted in the fourth quarter of the calendar year preceding 
        the rate year, subject to subdivision 2l, paragraph (c).  
           (1) The CPI-U forecasted index for allowable operating cost 
        per diem shall be based on the 21-month period from the midpoint 
        of the nursing facility's reporting year to the midpoint of the 
        rate year following the reporting year. 
           (2) For rate years beginning on or after July 1, 1997, the 
        forecasted index for operating cost limits referred to in 
        subdivision 21, paragraph (b), shall be based on the CPI-U for 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (e) After applying these provisions for the respective rate 
        years, the commissioner shall index these allowable operating 
        cost per diem by the inflation factor provided for in paragraph 
        (d), clause (1), and add the nursing facility's efficiency 
        incentive as computed in paragraph (c). 
           (f) For rate years beginning on or after July 1, 1997, the 
        total operating cost payment rates for a nursing facility shall 
        be the greater of the total operating cost payment rates 
        determined under this section or the total operating cost 
        payment rates in effect on June 30, 1997, subject to rate 
        adjustments due to field audit or rate appeal resolution.  This 
        provision shall not apply to subsequent field audit adjustments 
        of the nursing facility's operating cost rates for rate years 
        beginning on or after July 1, 1997. 
           (g) For the rate years beginning on July 1, 1997, July 1, 
        1998, and July 1, 1999, a nursing facility licensed for 40 beds 
        effective May 1, 1992, with a subsequent increase of 20 
        Medicare/Medicaid certified beds, effective January 26, 1993, in 
        accordance with an increase in licensure is exempt from 
        paragraphs (a) and (b). 
           (h) For a nursing facility whose construction project was 
        authorized according to section 144A.073, subdivision 5, 
        paragraph (g), the operating cost payment rates for the third 
        new location shall be determined based on Minnesota Rules, part 
        9549.0057.  The relocation allowed under section 144A.073, 
        subdivision 5, paragraph (g), and the rate determination allowed 
        under this paragraph must meet the cost neutrality requirements 
        of section 144A.073, subdivision 3c.  Paragraphs (a) and (b) 
        shall not apply until the second rate year after the settle-up 
        cost report is filed.  Notwithstanding subdivision 2b, paragraph 
        (g), real estate taxes and special assessments payable by 
        the third new location, a 501(c)(3) nonprofit corporation, shall 
        be included in the payment rates determined under this 
        subdivision for all subsequent rate years. 
           (i) For the rate year beginning July 1, 1997, the 
        commissioner shall compute the payment rate for a nursing 
        facility licensed for 94 beds on September 30, 1996, that 
        applied in October 1993 for approval of a total replacement 
        under the moratorium exception process in section 144A.073, and 
        completed the approved replacement in June 1995, with other 
        operating cost spend-up limit under paragraph (a), increased by 
        $3.98, and after computing the facility's payment rate according 
        to this section, the commissioner shall make a one-year positive 
        rate adjustment of $3.19 for operating costs related to the 
        newly constructed total replacement, without application of 
        paragraphs (a) and (b).  The facility's per diem, before the 
        $3.19 adjustment, shall be used as the prior reporting year's 
        allowable operating cost per diem for payment rate calculation 
        for the rate year beginning July 1, 1998.  A facility described 
        in this paragraph is exempt from paragraph (b) for the rate 
        years beginning July 1, 1997, and July 1, 1998. 
           (j) For the purpose of applying the limit stated in 
        paragraph (a), a nursing facility in Kandiyohi county licensed 
        for 86 beds that was granted hospital-attached status on 
        December 1, 1994, shall have the prior year's allowable 
        care-related per diem increased by $3.207 and the prior year's 
        other operating cost per diem increased by $4.777 before adding 
        the inflation in paragraph (d), clause (2), for the rate year 
        beginning on July 1, 1997. 
           (k) For the purpose of applying the limit stated in 
        paragraph (a), a 117 bed nursing facility located in Pine county 
        shall have the prior year's allowable other operating cost per 
        diem increased by $1.50 before adding the inflation in paragraph 
        (d), clause (2), for the rate year beginning on July 1, 1997. 
           (l) For the purpose of applying the limit under paragraph 
        (a), a nursing facility in Hibbing licensed for 192 beds shall 
        have the prior year's allowable other operating cost per diem 
        increased by $2.67 before adding the inflation in paragraph (d), 
        clause (2), for the rate year beginning July 1, 1997. 
           Sec. 20.  Minnesota Statutes 1998, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 28.  [NURSING FACILITY RATE INCREASES BEGINNING JULY 
        1, 1999, AND JULY 1, 2000.] (a) For the rate years beginning 
        July 1, 1999, and July 1, 2000, the commissioner shall make 
        available to each nursing facility reimbursed under this section 
        or section 256B.434 an adjustment to the total operating payment 
        rate.  For each facility, total operating costs shall be 
        separated into costs that are compensation related and all other 
        costs.  Compensation related costs include salaries, payroll 
        taxes, and fringe benefits for all employees except management 
        fees, the administrator, and central office staff. 
           (b) For the rate year beginning July 1, 1999, the 
        commissioner shall make available a rate increase for 
        compensation related costs of 4.843 percent and a rate increase 
        for all other operating costs of 3.446 percent. 
           (c) For the rate year beginning July 1, 2000, the 
        commissioner shall make available a rate increase for 
        compensation related costs of 3.632 percent and a rate increase 
        for all other operating costs of 2.585 percent. 
           (d) The payment rate adjustment for each nursing facility 
        must be determined under clause (1) or (2): 
           (1) for each nursing facility that reports salaries for 
        registered nurses, licensed practical nurses, aides, orderlies, 
        and attendants separately, the commissioner shall determine the 
        payment rate adjustment using the categories specified in 
        paragraph (a) multiplied by the rate increases specified in 
        paragraph (b) or (c), and then dividing the resulting amount by 
        the nursing facility's actual resident days.  In determining the 
        amount of a payment rate adjustment for a nursing facility 
        reimbursed under section 256B.434, the commissioner shall 
        determine the proportions of the facility's rates that are 
        compensation related costs and all other operating costs based 
        on the facility's most recent cost report; and 
           (2) for each nursing facility that does not report salaries 
        for registered nurses, licensed practical nurses, aides, 
        orderlies, and attendants separately, the payment rate 
        adjustment shall be computed using the facility's total 
        operating costs, separated into the categories specified in 
        paragraph (a) in proportion to the weighted average of all 
        facilities determined under clause (1), multiplied by the rate 
        increases specified in paragraph (b) or (c), and then dividing 
        the resulting amount by the nursing facility's actual resident 
        days. 
           (e) A nursing facility may apply for the 
        compensation-related payment rate adjustment calculated under 
        this subdivision.  The application must be made to the 
        commissioner and contain a plan by which the nursing facility 
        will distribute the compensation-related portion of the payment 
        rate adjustment to employees of the nursing facility.  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.  The commissioner shall 
        review the plan to ensure that the payment rate adjustment per 
        diem is used as provided in paragraphs (a) to (c).  To be 
        eligible, a facility must submit its plan for the compensation 
        distribution by December 31 each year.  A facility may amend its 
        plan for the second rate year by submitting a revised plan by 
        December 31, 2000.  If a facility's plan for compensation 
        distribution is effective for its employees after July 1 of the 
        year that the funds are available, the payment rate adjustment 
        per diem shall be effective the same date as its plan. 
           (f) A copy of the approved distribution plan must be made 
        available to all employees.  This must be done by giving each 
        employee a copy or by posting it in an area of the nursing 
        facility to which all employees have access.  If an employee 
        does not receive the compensation adjustment described in their 
        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 phone number provided by the commissioner and 
        included in the approved plan.  
           (g) If the reimbursement system under section 256B.435 is 
        not implemented until July 1, 2001, the salary adjustment per 
        diem authorized in subdivision 2i, paragraph (c), shall continue 
        until June 30, 2001.  
           (h) For the rate year beginning July 1, 1999, the following 
        nursing facilities shall be allowed a rate increase equal to 67 
        percent of the rate increase that would be allowed if 
        subdivision 26, paragraph (a), was not applied: 
           (1) a nursing facility in Carver county licensed for 33 
        nursing home beds and four boarding care beds; 
           (2) a nursing facility in Faribault county licensed for 159 
        nursing home beds on September 30, 1998; and 
           (3) a nursing facility in Houston county licensed for 68 
        nursing home beds on September 30, 1998. 
           (i) For the rate year beginning July 1, 1999, the following 
        nursing facilities shall be allowed a rate increase equal to 67 
        percent of the rate increase that would be allowed if 
        subdivision 26, paragraphs (a) and (b), were not applied: 
           (1) a nursing facility in Chisago county licensed for 135 
        nursing home beds on September 30, 1998; and 
           (2) a nursing facility in Murray county licensed for 62 
        nursing home beds on September 30, 1998. 
           (j) For the rate year beginning July 1, 1999, a nursing 
        facility in Hennepin county licensed for 134 beds on September 
        30, 1998, shall: 
           (1) have the prior year's allowable care-related per diem 
        increased by $3.93 and the prior year's other operating cost per 
        diem increased by $1.69 before adding the inflation in 
        subdivision 26, paragraph (d), clause (2); and 
           (2) be allowed a rate increase equal to 67 percent of the 
        rate increase that would be allowed if subdivision 26, 
        paragraphs (a) and (b), were not applied. 
           Sec. 21.  Minnesota Statutes 1998, section 256B.434, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DURATION AND TERMINATION OF CONTRACTS.] (a) 
        Subject to available resources, the commissioner may begin to 
        execute contracts with nursing facilities November 1, 1995. 
           (b) All contracts entered into under this section are for a 
        term of one year.  Either party may terminate a contract at any 
        time without cause by providing 30 90 calendar days advance 
        written notice to the other party.  The decision to terminate a 
        contract is not appealable.  If neither party provides written 
        notice of termination the contract shall be renegotiated for 
        additional one-year terms, for up to a total of four consecutive 
        one-year terms Notwithstanding section 16C.05, subdivision 2, 
        paragraph (a), clause (5), the contract shall be renegotiated 
        for additional one-year terms, unless either party provides 
        written notice of termination.  The provisions of the contract 
        shall be renegotiated annually by the parties prior to the 
        expiration date of the contract.  The parties may voluntarily 
        renegotiate the terms of the contract at any time by mutual 
        agreement. 
           (c) If a nursing facility fails to comply with the terms of 
        a contract, the commissioner shall provide reasonable notice 
        regarding the breach of contract and a reasonable opportunity 
        for the facility to come into compliance.  If the facility fails 
        to come into compliance or to remain in compliance, the 
        commissioner may terminate the contract.  If a contract is 
        terminated, the contract payment remains in effect for the 
        remainder of the rate year in which the contract was terminated, 
        but in all other respects the provisions of this section do not 
        apply to that facility effective the date the contract is 
        terminated.  The contract shall contain a provision governing 
        the transition back to the cost-based reimbursement system 
        established under section 256B.431, subdivision 25, and 
        Minnesota Rules, parts 9549.0010 to 9549.0080.  A contract 
        entered into under this section may be amended by mutual 
        agreement of the parties. 
           Sec. 22.  Minnesota Statutes 1998, section 256B.434, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
        nursing facilities which have their payment rates determined 
        under this section rather than section 256B.431, subdivision 25, 
        the commissioner shall establish a rate under this subdivision.  
        The nursing facility must enter into a written contract with the 
        commissioner. 
           (b) A nursing facility's case mix payment rate for the 
        first rate year of a facility's contract under this section is 
        the payment rate the facility would have received under section 
        256B.431, subdivision 25. 
           (c) A nursing facility's case mix payment rates for the 
        second and subsequent years of a facility's contract under this 
        section are the previous rate year's contract payment rates plus 
        an inflation adjustment.  The index for the inflation adjustment 
        must be based on the change in the Consumer Price Index-All 
        Items (United States City average) (CPI-U) forecasted by Data 
        Resources, Inc., as forecasted in the fourth quarter of the 
        calendar year preceding the rate year.  The inflation adjustment 
        must be based on the 12-month period from the midpoint of the 
        previous rate year to the midpoint of the rate year for which 
        the rate is being determined.  For the rate years beginning on 
        July 1, 1999, and July 1, 2000, this paragraph shall apply only 
        to the property related payment rate.  In determining the amount 
        of the property related payment rate adjustment under this 
        paragraph, the commissioner shall determine the proportion of 
        the facility's rates that are property related based on the 
        facility's most recent cost report. 
           (d) The commissioner shall develop additional 
        incentive-based payments of up to five percent above the 
        standard contract rate for achieving outcomes specified in each 
        contract.  The specified facility-specific outcomes must be 
        measurable and approved by the commissioner.  The commissioner 
        may establish, for each contract, various levels of achievement 
        within an outcome.  After the outcomes have been specified the 
        commissioner shall assign various levels of payment associated 
        with achieving the outcome.  Any incentive-based payment cancels 
        if there is a termination of the contract.  In establishing the 
        specified outcomes and related criteria the commissioner shall 
        consider the following state policy objectives: 
           (1) improved cost effectiveness and quality of life as 
        measured by improved clinical outcomes; 
           (2) successful diversion or discharge to community 
        alternatives; 
           (3) decreased acute care costs; 
           (4) improved consumer satisfaction; 
           (5) the achievement of quality; or 
           (6) any additional outcomes proposed by a nursing facility 
        that the commissioner finds desirable. 
           Sec. 23.  Minnesota Statutes 1998, section 256B.434, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [FACILITY RATE INCREASES.] For the rate year 
        beginning July 1, 1999, the nursing facilities described in 
        clauses (1) to (5) shall receive the rate increases indicated.  
        The increases provided under this subdivision shall be included 
        in the facility's total payment rates for the purpose of 
        determining future rates under this section or any other section:
           (1) a nursing facility in Becker county licensed for 102 
        nursing home beds on September 30, 1998, shall receive an 
        increase of $1.30 in its case mix class A payment rate; an 
        increase of $1.33 in its case mix class B payment rate; an 
        increase of $1.36 in its case mix class C payment rate; an 
        increase of $1.39 in its case mix class D payment rate; an 
        increase of $1.42 in its case mix class E payment rate; an 
        increase of $1.42 in its case mix class F payment rate; an 
        increase of $1.45 in its case mix class G payment rate; an 
        increase of $1.49 in its case mix class H payment rate; an 
        increase of $1.51 in its case mix class I payment rate; an 
        increase of $1.54 in its case mix class J payment rate; and an 
        increase of $1.59 in its case mix class K payment rate; 
           (2) a nursing facility in Chisago county licensed for 101 
        nursing home beds on September 30, 1998, shall receive an 
        increase of $3.67 in each case mix payment rate; 
           (3) a nursing facility in Canby, licensed for 75 beds shall 
        have its property-related per diem rate increased by $1.21.  
        This increase shall be recognized in the facility's contract 
        payment rate under this section; 
           (4) a nursing facility in Golden Valley with all its beds 
        licensed to provide residential rehabilitative services to young 
        adults under Minnesota Rules, parts 9570.2000 to 9570.3400, 
        shall have the payment rate computed according to this section 
        increased by $14.83; and 
           (5) a county-owned 130-bed nursing facility in Park Rapids 
        shall have its per diem contract payment rate increased by $1.02 
        for costs related to compliance with comparable worth 
        requirements.  
           Sec. 24.  Minnesota Statutes 1998, section 256B.434, 
        subdivision 13, is amended to read: 
           Subd. 13.  [PAYMENT SYSTEM REFORM ADVISORY COMMITTEE.] (a) 
        The commissioner, in consultation with an advisory committee, 
        shall study options for reforming the regulatory and 
        reimbursement system for nursing facilities to reduce the level 
        of regulation, reporting, and procedural requirements, and to 
        provide greater flexibility and incentives to stimulate 
        competition and innovation.  The advisory committee shall 
        include, at a minimum, representatives from the long-term care 
        provider community, the department of health, and consumers of 
        long-term care services.  The advisory committee sunsets on June 
        30, 1997.  Among other things, the commissioner shall consider 
        the feasibility and desirability of changing from a 
        certification requirement to an accreditation requirement for 
        participation in the medical assistance program, options to 
        encourage early discharge of short-term residents through the 
        provision of intensive therapy, and further modifications needed 
        in rate equalization.  The commissioner shall also include 
        detailed recommendations for a permanent managed care payment 
        system to replace the contractual alternative payment 
        demonstration project authorized under this section.  The 
        commissioner shall submit a report with findings and 
        recommendations to the legislature by January 15, 1997. 
           (b) If a permanent managed care payment system has not been 
        enacted into law by July 1, 1997, the commissioner shall develop 
        and implement a transition plan to enable nursing facilities 
        under contract with the commissioner under this section to 
        revert to the cost-based payment system at the expiration of the 
        alternative payment demonstration project.  The commissioner 
        shall include in the alternative payment demonstration project 
        contracts entered into under this section a provision to permit 
        an amendment to the contract to be made after July 1, 1997, 
        governing the transition back to the cost-based payment system.  
        The transition plan and contract amendments are not subject to 
        rulemaking requirements.  
           Sec. 25.  Minnesota Statutes 1998, section 256B.435, is 
        amended to read: 
           256B.435 [NURSING FACILITY REIMBURSEMENT SYSTEM EFFECTIVE 
        JULY 1, 2000 2001.] 
           Subdivision 1.  [IN GENERAL.] Effective July 1, 2000 2001, 
        the commissioner shall implement a performance-based contracting 
        system to replace the current method of setting operating cost 
        payment rates under sections 256B.431 and 256B.434 and Minnesota 
        Rules, parts 9549.0010 to 9549.0080.  Operating cost payment 
        rates for newly established facilities under Minnesota Rules, 
        part 9549.0057, shall be established using section 256B.431 and 
        Minnesota Rules, parts 9549.0010 to 9549.0070.  A nursing 
        facility in operation on May 1, 1998, with payment rates not 
        established under section 256B.431 or 256B.434 on that date, is 
        ineligible for this performance-based contracting system.  In 
        determining prospective payment rates of nursing facility 
        services, the commissioner shall distinguish between operating 
        costs and property-related costs.  The commissioner of finance 
        shall include an annual inflationary adjustment in operating 
        costs for nursing facilities using the inflation factor 
        specified in subdivision 3 and funding for incentive-based 
        payments as a budget change request in each biennial detailed 
        expenditure budget submitted to the legislature under section 
        16A.11.  Property related payment rates, including real estate 
        taxes and special assessments, shall be determined under section 
        256B.431 or 256B.434 or under a new property-related 
        reimbursement system, if one is implemented by the commissioner 
        under subdivision 3.  The commissioner shall present additional 
        recommendations for performance-based contracting for nursing 
        facilities to the legislature by February 15, 2000, in the 
        following specific areas: 
           (1) development of an interim default payment mechanism for 
        nursing facilities that do not respond to the state's request 
        for proposal but wish to continue participation in the medical 
        assistance program, and nursing facilities the state does not 
        select in the request for proposal process, and nursing 
        facilities whose contract has been canceled; 
           (2) development of criteria for facilities to earn 
        performance-based incentive payments based on relevant outcomes 
        negotiated by nursing facilities and the commissioner and that 
        recognize both continuous quality efforts and quality 
        improvement; 
           (3) development of criteria and a process under which 
        nursing facilities can request rate adjustments for low base 
        rates, geographic disparities, or other reasons; 
           (4) development of a dispute resolution mechanism for 
        nursing facilities that are denied a contract, denied incentive 
        payments, or denied a rate adjustment; 
           (5) development of a property payment system to address the 
        capital needs of nursing facilities that will be funded with 
        additional appropriations; 
           (6) establishment of a transitional plan to move from dual 
        assessment instruments to the federally mandated resident 
        assessment system, whereby the financial impact for each 
        facility would be budget neutral; 
           (7) identification of net cost implications for facilities 
        and to the department of preparing for and implementing 
        performance-based contracting or any proposed alternative 
        system; 
           (8) identification of facility financial and statistical 
        reporting requirements; and 
           (9) identification of exemptions from current regulations 
        and statutes applicable under performance-based contracting.  
           Subd. 1a.  [REQUESTS FOR PROPOSALS.] (a) For nursing 
        facilities with rates established under section 256B.434 on 
        January 1, 2001, the commissioner shall renegotiate contracts 
        without requiring a response to a request for proposal, 
        notwithstanding the solicitation process described in chapter 
        16C. 
           (b) Prior to July 1, 2001, the commissioner shall publish 
        in the State Register a request for proposals to provide nursing 
        facility services according to this section.  The commissioner 
        will consider proposals from all nursing facilities that have 
        payment rates established under section 256B.431.  The 
        commissioner must respond to all proposals in a timely manner. 
           (c) In issuing a request for proposals, the commissioner 
        may develop reasonable requirements which, in the judgment of 
        the commissioner, are necessary to protect residents or ensure 
        that the performance-based contracting system furthers the 
        interests of the state of Minnesota.  The request for proposals 
        may include, but need not be limited to: 
           (1) a requirement that a nursing facility make reasonable 
        efforts to maximize Medicare payments on behalf of eligible 
        residents; 
           (2) requirements designed to prevent inappropriate or 
        illegal discrimination against residents enrolled in the medical 
        assistance program as compared to private paying residents; 
           (3) requirements designed to ensure that admissions to a 
        nursing facility are appropriate and that reasonable efforts are 
        made to place residents in home and community-based settings 
        when appropriate; 
           (4) a requirement to agree to participate in the 
        development of data collection systems and outcome-based 
        standards.  Among other requirements specified by the 
        commissioner, each facility entering into a contract may be 
        required to pay an annual fee not to exceed $1,000.  The 
        commissioner must use revenue generated from the fees to 
        contract with a qualified consultant or contractor to develop 
        data collection systems and outcome-based contracting standards; 
           (5) a requirement that Medicare-certified contractors agree 
        to maintain Medicare cost reports and to submit them to the 
        commissioner upon request, or at times specified by the 
        commissioner; and that contractors that are not 
        Medicare-certified agree to maintain a uniform cost report in a 
        format established by the commissioner and to submit the report 
        to the commissioner upon request, or at times specified by the 
        commissioner; 
           (6) a requirement that demonstrates willingness and ability 
        to develop and maintain data collection and retrieval systems to 
        measure outcomes; and 
           (7) a requirement to provide all information and assurances 
        required by the terms and conditions of the federal waiver or 
        federal approval. 
           (d) In addition to the information and assurances contained 
        in the submitted proposals, the commissioner may consider the 
        following criteria in developing the terms of the contract: 
           (1) the facility's history of compliance with federal and 
        state laws and rules.  A facility deemed to be in substantial 
        compliance with federal and state laws and rules is eligible to 
        respond to a request for proposals.  A facility's compliance 
        history shall not be the sole determining factor in situations 
        where the facility has been sold and the new owners have 
        submitted a proposal; 
           (2) whether the facility has a record of excessive 
        licensure fines or sanctions or fraudulent cost reports; 
           (3) the facility's financial history and solvency; and 
           (4) other factors identified by the commissioner deemed 
        relevant to developing the terms of the contract, including a 
        determination that a contract with a particular facility is not 
        in the best interests of the residents of the facility or the 
        state of Minnesota. 
           (e) Notwithstanding the requirements of the solicitation 
        process described in chapter 16C, the commissioner may contract 
        with nursing facilities established according to section 
        144A.073 without issuing a request for proposals. 
           (f) Notwithstanding subdivision 1, after July 1, 2001, the 
        commissioner may contract with additional nursing facilities, 
        according to requests for proposals. 
           Subd. 2.  [CONTRACT PROVISIONS.] (a) The performance-based 
        contract with each nursing facility must include provisions that:
           (1) apply the resident case mix assessment provisions of 
        Minnesota Rules, parts 9549.0051, 9549.0058, and 9549.0059, or 
        another assessment system, with the goal of moving to a single 
        assessment system; 
           (2) monitor resident outcomes through various methods, such 
        as quality indicators based on the minimum data set and other 
        utilization and performance measures; 
           (3) require the establishment and use of a continuous 
        quality improvement process that integrates information from 
        quality indicators and regular resident and family satisfaction 
        interviews; 
           (4) require annual reporting of facility statistical 
        information, including resident days by case mix category, 
        productive nursing hours, wages and benefits, and raw food costs 
        for use by the commissioner in the development of facility 
        profiles that include trends in payment and service utilization; 
           (5) require from each nursing facility an annual certified 
        audited financial statement consisting of a balance sheet, 
        income and expense statements, and an opinion from either a 
        licensed or certified public accountant, if a certified audit 
        was prepared, or unaudited financial statements if no certified 
        audit was prepared; and 
           (6) specify the method for resolving disputes; and 
           (7) establish additional requirements and penalties for 
        nursing facilities not meeting the standards set forth in the 
        performance-based contract. 
           (b) The commissioner may develop additional incentive-based 
        payments for achieving specified outcomes specified in each 
        contract.  The specified facility-specific outcomes must be 
        measurable and approved by the commissioner.  
           (c) The commissioner may also contract with nursing 
        facilities in other ways through requests for proposals, 
        including contracts on a risk or nonrisk basis, with nursing 
        facilities or consortia of nursing facilities, to provide 
        comprehensive long-term care coverage on a premium or capitated 
        basis. 
           (d) The commissioner may negotiate different contract terms 
        for different nursing facilities. 
           Subd. 2a.  [DURATION AND TERMINATION OF CONTRACTS.] (a) All 
        contracts entered into under this section are for a term of one 
        year.  Either party may terminate this contract at any time 
        without cause by providing 90 calendar days' advance written 
        notice to the other party.  Notwithstanding section 16C.05, 
        subdivisions 2, paragraph (a), and 5, if neither party provides 
        written notice of termination, the contract shall be 
        renegotiated for additional one-year terms or the terms of the 
        existing contract will be extended for one year.  The provisions 
        of the contract shall be renegotiated annually by the parties 
        prior to the expiration date of the contract.  The parties may 
        voluntarily renegotiate the terms of the contract at any time by 
        mutual agreement. 
           (b) If a nursing facility fails to comply with the terms of 
        a contract, the commissioner shall provide reasonable notice 
        regarding the breach of contract and a reasonable opportunity 
        for the facility to come into compliance.  If the facility fails 
        to come into compliance or to remain in compliance, the 
        commissioner may terminate the contract.  If a contract is 
        terminated, provisions of section 256B.48, subdivision 1a, shall 
        apply. 
           Subd. 3.  [PAYMENT RATE PROVISIONS.] (a) For rate years 
        beginning on or after July 1, 2000 2001, within the limits of 
        appropriations specifically for this purpose, the commissioner 
        shall determine operating cost payment rates for each licensed 
        and certified nursing facility by indexing its operating cost 
        payment rates in effect on June 30, 2000 2001, for inflation.  
        The inflation factor to be used must be based on the change in 
        the Consumer Price Index-All Items, United States city average 
        (CPI-U) as forecasted by Data Resources, Inc. in the fourth 
        quarter preceding the rate year.  For rate years beginning on or 
        after July 1, 2001, the inflation factor must be based on the 
        change in the Employment Cost Index for Private Industry Workers 
        - Total Compensation as forecasted by the commissioner of 
        finance's national economic consultant, in the fourth quarter 
        preceding the rate year.  The CPI-U forecasted index for 
        operating cost payment rates shall be based on the 12-month 
        period from the midpoint of the nursing facility's prior rate 
        year to the midpoint of the rate year for which the operating 
        payment rate is being determined.  The operating cost payment 
        rate to be inflated shall be the total payment rate in effect on 
        June 30, 2001, minus the portion determined to be the 
        property-related payment rate, minus the per diem amount of the 
        preadmission screening cost included in the nursing facility's 
        last payment rate established under section 256B.431. 
           (b) Beginning July 1, 2000, each nursing facility subject 
        to a performance-based contract under this section shall choose 
        one of two methods of payment for property-related costs: 
           (1) the method established in section 256B.434; or 
           (2) the method established in section 256B.431. 
           Once the nursing facility has made the election in this 
        paragraph, that election shall remain in effect for at least 
        four years or until an alternative property payment system is 
        developed.  A per diem amount for preadmission screening will be 
        added onto the contract payment rates according to the method of 
        distribution of county allocation described in section 
        256B.0911, subdivision 6, paragraph (a). 
           (c) For rate years beginning on or after July 1, 2000 2001, 
        the commissioner may implement a new method of payment for 
        property-related costs that addresses the capital needs of 
        facilities.  Notwithstanding paragraph (b), The new property 
        payment system or systems, if implemented, shall replace the 
        current method methods of setting property payment rates under 
        sections 256B.431 and 256B.434. 
           Subd. 4.  [CONTRACT PAYMENT RATES; APPEALS.] If an appeal 
        is pending concerning the cost-based payment rates that are the 
        basis for the calculation of the payment rate under this 
        section, the commissioner and the nursing facility may agree on 
        an interim contract rate to be used until the appeal is 
        resolved.  When the appeal is resolved, the contract rate must 
        be adjusted retroactively according to the appeal decision. 
           Subd. 5.  [CONSUMER PROTECTION.] In addition to complying 
        with all applicable laws regarding consumer protection, as a 
        condition of entering into a contract under this section, a 
        nursing facility must agree to: 
           (1) establish resident grievance procedures; 
           (2) establish expedited grievance procedures to resolve 
        complaints made by short-stay residents; and 
           (3) make available to residents and families a copy of the 
        performance-based contract and outcomes to be achieved. 
           Subd. 6.  [CONTRACTS ARE VOLUNTARY.] Participation of 
        nursing facilities in the medical assistance program is 
        voluntary.  The terms and procedures governing the 
        performance-based contract are determined under this section and 
        through negotiations between the commissioner and nursing 
        facilities.  
           Subd. 7.  [FEDERAL REQUIREMENTS.] The commissioner shall 
        implement the performance-based contracting system subject to 
        any required federal waivers or approval and in a manner that is 
        consistent with federal requirements.  If a provision of this 
        section is inconsistent with a federal requirement, the federal 
        requirement supersedes the inconsistent provision.  The 
        commissioner shall seek federal approval and request waivers as 
        necessary to implement this section. 
           Sec. 26.  Minnesota Statutes 1998, section 256B.48, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROHIBITED PRACTICES.] A nursing facility 
        is not eligible to receive medical assistance payments unless it 
        refrains from all of the following: 
           (a) Charging private paying residents rates for similar 
        services which exceed those which are approved by the state 
        agency for medical assistance recipients as determined by the 
        prospective desk audit rate, except under the following 
        circumstances:  the nursing facility may (1) charge private 
        paying residents a higher rate for a private room, and (2) 
        charge for special services which are not included in the daily 
        rate if medical assistance residents are charged separately at 
        the same rate for the same services in addition to the daily 
        rate paid by the commissioner.  Services covered by the payment 
        rate must be the same regardless of payment source.  Special 
        services, if offered, must be available to all residents in all 
        areas of the nursing facility and charged separately at the same 
        rate.  Residents are free to select or decline special 
        services.  Special services must not include services which must 
        be provided by the nursing facility in order to comply with 
        licensure or certification standards and that if not provided 
        would result in a deficiency or violation by the nursing 
        facility.  Services beyond those required to comply with 
        licensure or certification standards must not be charged 
        separately as a special service if they were included in the 
        payment rate for the previous reporting year.  A nursing 
        facility that charges a private paying resident a rate in 
        violation of this clause is subject to an action by the state of 
        Minnesota or any of its subdivisions or agencies for civil 
        damages.  A private paying resident or the resident's legal 
        representative has a cause of action for civil damages against a 
        nursing facility that charges the resident rates in violation of 
        this clause.  The damages awarded shall include three times the 
        payments that result from the violation, together with costs and 
        disbursements, including reasonable attorneys' fees or their 
        equivalent.  A private paying resident or the resident's legal 
        representative, the state, subdivision or agency, or a nursing 
        facility may request a hearing to determine the allowed rate or 
        rates at issue in the cause of action.  Within 15 calendar days 
        after receiving a request for such a hearing, the commissioner 
        shall request assignment of an administrative law judge under 
        sections 14.48 to 14.56 to conduct the hearing as soon as 
        possible or according to agreement by the parties.  The 
        administrative law judge shall issue a report within 15 calendar 
        days following the close of the hearing.  The prohibition set 
        forth in this clause shall not apply to facilities licensed as 
        boarding care facilities which are not certified as skilled or 
        intermediate care facilities level I or II for reimbursement 
        through medical assistance. 
           (b) Requiring (1) Charging, soliciting, accepting, or 
        receiving from an applicant for admission to the facility, or 
        the guardian or conservator from anyone acting in behalf of the 
        applicant, as a condition of admission, to pay expediting the 
        admission, or as a requirement for the individual's continued 
        stay, any fee or, deposit in excess of $100, gift, money, 
        donation, or other consideration not otherwise required as 
        payment under the state plan; 
           (2) requiring an individual, or anyone acting in behalf of 
        the individual, to loan any money to the nursing facility, or; 
           (3) requiring an individual, or anyone acting in behalf of 
        the individual, to promise to leave all or part of the 
        applicant's individual's estate to the facility; or 
           (4) requiring a third-party guarantee of payment to the 
        facility as a condition of admission, expedited admission, or 
        continued stay in the facility.  
        Nothing in this paragraph would prohibit discharge for 
        nonpayment of services in accordance with state and federal 
        regulations. 
           (c) Requiring any resident of the nursing facility to 
        utilize a vendor of health care services chosen by the nursing 
        facility. 
           (d) Providing differential treatment on the basis of status 
        with regard to public assistance.  
           (e) Discriminating in admissions, services offered, or room 
        assignment on the basis of status with regard to public 
        assistance or refusal to purchase special services.  Admissions 
        discrimination shall include, but is not limited to:  
           (1) basing admissions decisions upon assurance by the 
        applicant to the nursing facility, or the applicant's guardian 
        or conservator, that the applicant is neither eligible for nor 
        will seek public assistance for payment of nursing facility care 
        costs; and 
           (2) engaging in preferential selection from waiting lists 
        based on an applicant's ability to pay privately or an 
        applicant's refusal to pay for a special service. 
           The collection and use by a nursing facility of financial 
        information of any applicant pursuant to a preadmission 
        screening program established by law shall not raise an 
        inference that the nursing facility is utilizing that 
        information for any purpose prohibited by this paragraph.  
           (f) Requiring any vendor of medical care as defined by 
        section 256B.02, subdivision 7, who is reimbursed by medical 
        assistance under a separate fee schedule, to pay any amount 
        based on utilization or service levels or any portion of the 
        vendor's fee to the nursing facility except as payment for 
        renting or leasing space or equipment or purchasing support 
        services from the nursing facility as limited by section 
        256B.433.  All agreements must be disclosed to the commissioner 
        upon request of the commissioner.  Nursing facilities and 
        vendors of ancillary services that are found to be in violation 
        of this provision shall each be subject to an action by the 
        state of Minnesota or any of its subdivisions or agencies for 
        treble civil damages on the portion of the fee in excess of that 
        allowed by this provision and section 256B.433.  Damages awarded 
        must include three times the excess payments together with costs 
        and disbursements including reasonable attorney's fees or their 
        equivalent.  
           (g) Refusing, for more than 24 hours, to accept a resident 
        returning to the same bed or a bed certified for the same level 
        of care, in accordance with a physician's order authorizing 
        transfer, after receiving inpatient hospital services. 
           The prohibitions set forth in clause (b) shall not apply to 
        a retirement facility with more than 325 beds including at least 
        150 licensed nursing facility beds and which:  
           (1) is owned and operated by an organization tax-exempt 
        under section 290.05, subdivision 1, clause (i); and 
           (2) accounts for all of the applicant's assets which are 
        required to be assigned to the facility so that only expenses 
        for the cost of care of the applicant may be charged against the 
        account; and 
           (3) agrees in writing at the time of admission to the 
        facility to permit the applicant, or the applicant's guardian, 
        or conservator, to examine the records relating to the 
        applicant's account upon request, and to receive an audited 
        statement of the expenditures charged against the applicant's 
        individual account upon request; and 
           (4) agrees in writing at the time of admission to the 
        facility to permit the applicant to withdraw from the facility 
        at any time and to receive, upon withdrawal, the balance of the 
        applicant's individual account. 
           For a period not to exceed 180 days, the commissioner may 
        continue to make medical assistance payments to a nursing 
        facility or boarding care home which is in violation of this 
        section if extreme hardship to the residents would result.  In 
        these cases the commissioner shall issue an order requiring the 
        nursing facility to correct the violation.  The nursing facility 
        shall have 20 days from its receipt of the order to correct the 
        violation.  If the violation is not corrected within the 20-day 
        period the commissioner may reduce the payment rate to the 
        nursing facility by up to 20 percent.  The amount of the payment 
        rate reduction shall be related to the severity of the violation 
        and shall remain in effect until the violation is corrected.  
        The nursing facility or boarding care home may appeal the 
        commissioner's action pursuant to the provisions of chapter 14 
        pertaining to contested cases.  An appeal shall be considered 
        timely if written notice of appeal is received by the 
        commissioner within 20 days of notice of the commissioner's 
        proposed action.  
           In the event that the commissioner determines that a 
        nursing facility is not eligible for reimbursement for a 
        resident who is eligible for medical assistance, the 
        commissioner may authorize the nursing facility to receive 
        reimbursement on a temporary basis until the resident can be 
        relocated to a participating nursing facility.  
           Certified beds in facilities which do not allow medical 
        assistance intake on July 1, 1984, or after shall be deemed to 
        be decertified for purposes of section 144A.071 only.  
           Sec. 27.  Minnesota Statutes 1998, section 256B.48, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TERMINATION.] If a nursing facility terminates 
        its participation in the medical assistance program, whether 
        voluntarily or involuntarily, the commissioner may authorize the 
        nursing facility to receive continued medical assistance 
        reimbursement only on a temporary basis until medical assistance 
        residents can be relocated to nursing facilities participating 
        in the medical assistance program. 
           Sec. 28.  Minnesota Statutes 1998, section 256B.48, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [EXCEPTION.] Notwithstanding any agreement 
        between a nursing facility and the department of human services 
        or the provisions of this section or section 256B.411, other 
        than subdivision 1a, the commissioner may authorize continued 
        medical assistance payments to a nursing facility which ceased 
        intake of medical assistance recipients prior to July 1, 1983, 
        and which charges private paying residents rates that exceed 
        those permitted by subdivision 1, paragraph (a), for (i) 
        residents who resided in the nursing facility before July 1, 
        1983, or (ii)  residents for whom the commissioner or any 
        predecessors of the commissioner granted a permanent individual 
        waiver prior to October 1, 1983.  Nursing facilities seeking 
        continued medical assistance payments under this subdivision 
        shall make the reports required under subdivision 2, except that 
        on or after December 31, 1985, the financial statements required 
        need not be audited by or contain the opinion of a certified 
        public accountant or licensed public accountant, but need only 
        be reviewed by a certified public accountant or licensed public 
        accountant.  In the event that the state is determined by the 
        federal government to be no longer eligible for the federal 
        share of medical assistance payments made to a nursing facility 
        under this subdivision, the commissioner may cease medical 
        assistance payments, under this subdivision, to that nursing 
        facility.  Between October 1, 1992, and July 1, 1993, a facility 
        governed by this subdivision may elect to resume full 
        participation in the medical assistance program by agreeing to 
        comply with all of the requirements of the medical assistance 
        program, including the rate equalization law in subdivision 1, 
        paragraph (a), and all other requirements established in law or 
        rule, and to resume intake of new medical assistance recipients. 
           Sec. 29.  Minnesota Statutes 1998, section 256B.48, 
        subdivision 6, is amended to read: 
           Subd. 6.  [MEDICARE CERTIFICATION.] (a) [DEFINITION.] For 
        purposes of this subdivision, "nursing facility" means a nursing 
        facility that is certified as a skilled nursing facility or, 
        after September 30, 1990, a nursing facility licensed under 
        chapter 144A that is certified as a nursing facility.  
           (b) [MEDICARE PARTICIPATION REQUIRED.] All nursing 
        facilities shall participate in Medicare part A and part B 
        unless, after submitting an application, Medicare certification 
        is denied by the federal health care financing administration.  
        Medicare review shall be conducted at the time of the annual 
        medical assistance review.  Charges for Medicare-covered 
        services provided to residents who are simultaneously eligible 
        for medical assistance and Medicare must be billed to Medicare 
        part A or part B before billing medical assistance.  Medical 
        assistance may be billed only for charges not reimbursed by 
        Medicare.  
           (c) [UNTIL SEPTEMBER 30, 1990.] Until September 30, 1990, a 
        nursing facility satisfies the requirements of paragraph (b) 
        if:  (1) at least 50 percent of the facility's beds that are 
        licensed under section 144A and certified as skilled nursing 
        beds under the medical assistance program are Medicare 
        certified; or (2) if a nursing facility's beds are licensed 
        under section 144A, and some are medical assistance certified as 
        skilled nursing beds and others are medical assistance certified 
        as intermediate care facility I beds, at least 50 percent of the 
        facility's total skilled nursing beds and intermediate care 
        facility I beds or 100 percent of its skilled nursing beds, 
        whichever is less, are Medicare certified. 
           (d) [AFTER SEPTEMBER 30, 1990.] After September 30, 1990, a 
        nursing facility satisfies the requirements of paragraph (b) if 
        at least 50 percent of the facility's beds certified as nursing 
        facility beds under the medical assistance program are Medicare 
        certified. 
           (e) (d) [CONFLICT WITH MEDICARE DISTINCT PART 
        REQUIREMENTS.] At the request of a facility, the commissioner of 
        human services may reduce the 50 percent Medicare participation 
        requirement in paragraphs paragraph (c) and (d) to no less than 
        20 percent if the commissioner of health determines that, due to 
        the facility's physical plant configuration, the facility cannot 
        satisfy Medicare distinct part requirements at the 50 percent 
        certification level.  To receive a reduction in the 
        participation requirement, a facility must demonstrate that the 
        reduction will not adversely affect access of Medicare-eligible 
        residents to Medicare-certified beds. 
           (f) (e) [INSTITUTIONS FOR MENTAL DISEASE.] The commissioner 
        may grant exceptions to the requirements of paragraph (b) for 
        nursing facilities that are designated as institutions for 
        mental disease. 
           (g) (f) [NOTICE OF RIGHTS.] The commissioner shall inform 
        recipients of their rights under this subdivision and section 
        144.651, subdivision 29. 
           Sec. 30.  Minnesota Statutes 1998, section 256B.50, 
        subdivision 1e, is amended to read: 
           Subd. 1e.  [ATTORNEY'S FEES AND COSTS.] (a) Notwithstanding 
        section 15.472, paragraph (a), for an issue appealed under 
        subdivision 1, the prevailing party in a contested case 
        proceeding or, if appealed, in subsequent judicial review, must 
        be awarded reasonable attorney's fees and costs incurred in 
        litigating the appeal, if the prevailing party shows that the 
        position of the opposing party was not substantially justified.  
        The procedures for awarding fees and costs set forth in section 
        15.474 must be followed in determining the prevailing party's 
        fees and costs except as otherwise provided in this 
        subdivision.  For purposes of this subdivision, "costs" means 
        subpoena fees and mileage, transcript costs, court reporter 
        fees, witness fees, postage and delivery costs, photocopying and 
        printing costs, amounts charged the commissioner by the office 
        of administrative hearings, and direct administrative costs of 
        the department; and "substantially justified" means that a 
        position had a reasonable basis in law and fact, based on the 
        totality of the circumstances prior to and during the contested 
        case proceeding and subsequent review. 
           (b) When an award is made to the department under this 
        subdivision, attorney fees must be calculated at the cost to the 
        department.  When an award is made to a provider under this 
        subdivision, attorney fees must be calculated at the rate 
        charged to the provider except that attorney fees awarded must 
        be the lesser of the attorney's normal hourly fee or $100 per 
        hour. 
           (c) In contested case proceedings involving more than one 
        issue, the administrative law judge shall determine what portion 
        of each party's attorney fees and costs is related to the issue 
        or issues on which it prevailed and for which it is entitled to 
        an award.  In making that determination, the administrative law 
        judge shall consider the amount of time spent on each issue, the 
        precedential value of the issue, the complexity of the issue, 
        and other factors deemed appropriate by the administrative law 
        judge.  
           (d) When the department prevails on an issue involving more 
        than one provider, the administrative law judge shall allocate 
        the total amount of any award for attorney fees and costs among 
        the providers.  In determining the allocation, the 
        administrative law judge shall consider each provider's monetary 
        interest in the issue and other factors deemed appropriate by 
        the administrative law judge.  
           (e) Attorney fees and costs awarded to the department for 
        proceedings under this subdivision must not be reported or 
        treated as allowable costs on the provider's cost report.  
           (f) Fees and costs awarded to a provider for proceedings 
        under this subdivision must be reimbursed to them by reporting 
        the amount of fees and costs awarded as allowable costs on the 
        provider's cost report for the reporting year in which they were 
        awarded.  Fees and costs reported pursuant to this subdivision 
        must be included in the general and administrative cost category 
        but are not subject to categorical or overall cost limitations 
        established in rule or statute within 120 days of the final 
        decision on the award of attorney fees and costs. 
           (g) If the provider fails to pay the awarded attorney fees 
        and costs within 120 days of the final decision on the award of 
        attorney fees and costs, the department may collect the amount 
        due through any method available to it for the collection of 
        medical assistance overpayments to providers.  Interest charges 
        must be assessed on balances outstanding after 120 days of the 
        final decision on the award of attorney fees and costs.  The 
        annual interest rate charged must be the rate charged by the 
        commissioner of revenue for late payment of taxes that is in 
        effect on the 121st day after the final decision on the award of 
        attorney fees and costs.  
           (h) Amounts collected by the commissioner pursuant to this 
        subdivision must be deemed to be recoveries pursuant to section 
        256.01, subdivision 2, clause (15). 
           (i) This subdivision applies to all contested case 
        proceedings set on for hearing by the commissioner on or after 
        April 29, 1988, regardless of the date the appeal was filed. 
           Sec. 31.  Minnesota Statutes 1998, section 256B.5011, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IN GENERAL.] Effective October 1, 2000, 
        the commissioner shall implement a performance-based contracting 
        system to replace the current method of setting total cost 
        payment rates under section 256B.501 and Minnesota Rules, parts 
        9553.0010 to 9553.0080.  In determining prospective payment 
        rates of intermediate care facilities for persons with mental 
        retardation or related conditions, the commissioner shall index 
        each facility's total operating payment rate by an inflation 
        factor as described in subdivision 3 section 256B.5012.  The 
        commissioner of finance shall include annual inflation 
        adjustments in operating costs for intermediate care facilities 
        for persons with mental retardation and related conditions as a 
        budget change request in each biennial detailed expenditure 
        budget submitted to the legislature under section 16A.11. 
           Sec. 32.  Minnesota Statutes 1998, section 256B.5011, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTRACT PROVISIONS.] (a) The 
        performance-based service contract with each intermediate care 
        facility must include provisions for: 
           (1) modifying payments when significant changes occur in 
        the needs of the consumers; 
           (2) monitoring service quality using performance indicators 
        that measure consumer outcomes; 
           (3) the establishment and use of continuous quality 
        improvement processes using the results attained through service 
        quality monitoring; 
           (4) the annual reporting of facility statistical 
        information on all supervisory personnel, direct care personnel, 
        specialized support personnel, hours, wages and benefits, 
        staff-to-consumer ratios, and staffing patterns 
           (3) appropriate and necessary statistical information 
        required by the commissioner; 
           (5) (4) annual aggregate facility financial information or 
        an annual certified audited financial statement, including a 
        balance sheet and income and expense statements for each 
        facility, if a certified audit was prepared; and 
           (6) (5) additional requirements and penalties for 
        intermediate care facilities not meeting the standards set forth 
        in the performance-based service contract. 
           (b) The commissioner shall recommend to the legislature by 
        January 15, 2000, whether the contract should include service 
        quality monitoring that may utilize performance indicators that 
        measure consumer and program outcomes.  Performance measurement 
        shall not increase or duplicate regulatory requirements. 
           Sec. 33.  [256B.5012] [ICF/MR PAYMENT SYSTEM 
        IMPLEMENTATION.] 
           Subdivision 1.  [TOTAL PAYMENT RATE.] The total payment 
        rate effective October 1, 2000, for existing ICF/MR facilities 
        is the total of the operating payment rate and the property 
        payment rate plus inflation factors as defined in this section.  
        The initial rate year shall run from October 1, 2000, through 
        December 31, 2001.  Subsequent rate years shall run from January 
        1 through December 31 beginning in the year 2002. 
           Subd. 2.  [OPERATING PAYMENT RATE.] (a) The operating 
        payment rate equals the facility's total payment rate in effect 
        on September 30, 2000, minus the property rate.  The operating 
        payment rate includes the special operating rate and the 
        efficiency incentive in effect as of September 30, 2000.  Within 
        the limits of appropriations specifically for this purpose, the 
        operating payment shall be increased for each rate year by the 
        annual percentage change in the Employment Cost Index for 
        Private Industry Workers - Total Compensation, as forecasted by 
        the commissioner of finance's economic consultant, in the second 
        quarter of the calendar year preceding the start of each rate 
        year.  In the case of the initial rate year beginning October 1, 
        2000, and continuing through December 31, 2001, the percentage 
        change shall be based on the percentage change in the Employment 
        Cost Index for Private Industry Workers - Total Compensation for 
        the 15-month period beginning October 1, 2000, as forecast by 
        Data Resources, Inc., in the first quarter of 2000. 
           (b) Effective October 1, 2000, the operating payment rate 
        shall be adjusted to reflect an occupancy rate equal to 100 
        percent of the facility's capacity days as of September 30, 2000.
           Subd. 3.  [PROPERTY PAYMENT RATE.] (a) The property payment 
        rate effective October 1, 2000, is based on the facility's 
        modified property payment rate in effect on September 30, 2000.  
        The modified property payment rate is the actual property 
        payment rate exclusive of the effect of gains or losses on 
        disposal of capital assets or adjustments for excess 
        depreciation claims.  Effective October 1, 2000, a facility 
        minimum property rate of $8.13 shall be applied to all existing 
        ICF/MR facilities.  Facilities with a modified property payment 
        rate effective September 30, 2000, which is below the minimum 
        property rate shall receive an increase effective October 1, 
        2000, equal to the difference between the minimum property 
        payment rate and the modified property payment rate in effect as 
        of September 30, 2000.  Facilities with a modified property 
        payment rate at or above the minimum property payment rate 
        effective September 30, 2000, shall receive the modified 
        property payment rate effective October 1, 2000. 
           (b) Within the limits of appropriations specifically for 
        this purpose, facility property payment rates shall be increased 
        annually for inflation, effective January 1, 2002.  The increase 
        shall be based on each facility's property payment rate in 
        effect on September 30, 2000.  Modified property payment rates 
        effective September 30, 2000, shall be arrayed from highest to 
        lowest before applying the minimum property payment rate in 
        paragraph (a).  For modified property payment rates at the 90th 
        percentile or above, the annual inflation increase shall be 
        zero.  For modified property payment rates below the 90th 
        percentile but equal to or above the 75th percentile, the annual 
        inflation increase shall be one percent.  For modified property 
        payment rates below the 75th percentile, the annual inflation 
        increase shall be two percent.  
           Sec. 34.  [256B.5013] [PAYMENT RATE ADJUSTMENTS.] 
           Subdivision 1.  [VARIABLE RATE ADJUSTMENTS.] When there is 
        a documented increase in the resource needs of a current ICF/MR 
        recipient or recipients, or a person is admitted to a facility 
        who requires additional resources, the county of financial 
        responsibility may approve an enhanced rate for one or more 
        persons in the facility.  Resource needs directly attributable 
        to an individual that may be considered under the variable rate 
        adjustment include increased direct staff hours and other 
        specialized services, equipment, and human resources.  The 
        guidelines in paragraphs (a) to (d) apply for the payment rate 
        adjustments under this section. 
           (a) All persons must be screened according to section 
        256B.092, subdivisions 7 and 8, prior to implementation of the 
        new payment system and annually thereafter.  Screening data 
        shall be analyzed to develop broad profiles of the functional 
        characteristics of recipients.  Three components shall be used 
        to distinguish recipients based on the following broad profiles: 
           (1) functional ability to care for and maintain one's own 
        basic needs; 
           (2) the intensity of any aggressive or destructive 
        behavior; and 
           (3) any history of obstructive behavior in combination with 
        a diagnosis of psychosis or neurosis.  
           The profile groups shall be used to link resource needs to 
        funding.  The resource profile shall determine the level of 
        funding that may be authorized by the county.  The county of 
        financial responsibility may approve a rate adjustment for an 
        individual.  The commissioner shall recommend to the legislature 
        by January 15, 2000, a methodology using the profile groups to 
        determine variable rates.  The variable rate must be applied to 
        expenses related to increased direct staff hours and other 
        specialized services, equipment, and human resources.  This 
        variable rate component plus the facility's current operating 
        payment rate equals the individual's total operating payment 
        rate. 
           (b) A recipient must be screened by the county of financial 
        responsibility using the developmental disabilities screening 
        document completed immediately prior to approval of a variable 
        rate by the county.  A comparison of the updated screening and 
        the previous screening must demonstrate an increase in resource 
        needs. 
           (c) Rate adjustments projected to exceed the authorized 
        funding level associated with the person's profile must be 
        submitted to the commissioner. 
           (d) The new rate approved through this process shall not be 
        averaged across all persons living at a facility but shall be an 
        individual rate.  The county of financial responsibility must 
        indicate the projected length of time that the additional 
        funding may be needed by the individual.  The need to continue 
        an individual variable rate must be reviewed at the end of the 
        anticipated duration of need but at least annually through the 
        completion of the developmental disabilities screening document. 
           Subd. 2.  [OTHER PAYMENT RATE ADJUSTMENTS.] Facility total 
        payment rates may be adjusted by the host county, with 
        authorization from a statewide advisory committee, if, through 
        the local system needs planning process, it is determined that a 
        need exists to amend the package of purchased services with a 
        resulting increase or decrease in costs.  Except as provided in 
        section 252.292, subdivision 4, if a provider demonstrates that 
        the loss of revenues caused by the downsizing or closure of a 
        facility cannot be absorbed by the facility based on current 
        operations, the host county or the provider may submit a request 
        to the statewide advisory committee for a facility base rate 
        adjustment. 
           Subd. 3.  [RELOCATION.] (a) Property rates for all 
        facilities relocated after December 31, 1997, and up to and 
        including October 1, 2000, shall have the full annual costs of 
        relocation included in their October 1, 2000, property rate.  
        The property rate for the relocated home is subject to the costs 
        that were allowable under Minnesota Rules, chapter 9553, and the 
        investment per bed limitation for newly constructed or newly 
        established class B facilities.  
           (b) In ensuing years, all relocated homes shall be subject 
        to the investment per bed limit for newly constructed or newly 
        established class B facilities under section 256B.501, 
        subdivision 11.  The limits shall be adjusted on January 1 of 
        each year by the percentage increase in the construction index 
        published by the Bureau of Economic Analysis of the United 
        States Department of Commerce in the Survey of Current Business 
        Statistics in October of the previous two years.  Facilities 
        that are relocated within the investment per bed limit may be 
        approved by the statewide advisory committee.  Costs for 
        relocation of a facility that exceed the investment per bed 
        limit must be absorbed by the facility. 
           (c) The payment rate shall take effect when the new 
        facility is licensed and certified by the commissioner of 
        health.  Rates for facilities that are relocated after December 
        31, 1997, through October 1, 2000, shall be adjusted to reflect 
        the full inclusion of the relocation costs, subject to the 
        investment per bed limit in paragraph (b).  The investment per 
        bed limit calculated rate for the year in which the facility was 
        relocated shall be the investment per bed limit used. 
           Subd. 4.  [TEMPORARY RATE ADJUSTMENTS TO ADDRESS OCCUPANCY 
        AND ACCESS.] If a facility is operating at less than 100 percent 
        occupancy on September 30, 2000, or if a recipient is discharged 
        from a facility, the commissioner shall adjust the total payment 
        rate for up to 90 days for the remaining recipients.  This 
        mechanism shall not be used to pay for hospital or therapeutic 
        leave days beyond the maximums allowed.  Facility payment 
        adjustments exceeding 90 days to address a demonstrated need for 
        access must be submitted to the statewide advisory committee 
        with a local system needs assessment, plan, and budget for 
        review and recommendation. 
           Sec. 35.  [256B.5014] [FINANCIAL REPORTING.] 
           All facilities shall maintain financial records and shall 
        provide annual income and expense reports to the commissioner of 
        human services on a form prescribed by the commissioner no later 
        than April 30 of each year in order to receive medical 
        assistance payments.  The reports for the reporting year ending 
        December 31 must include: 
           (1) salaries and related expenses, including program 
        salaries, administrative salaries, other salaries, payroll 
        taxes, and fringe benefits; 
           (2) general operating expenses, including supplies, 
        training, repairs, purchased services and consultants, 
        utilities, food, licenses and fees, real estate taxes, 
        insurance, and working capital interest; 
           (3) property related costs, including depreciation, capital 
        debt interest, rent, and leases; and 
           (4) total annual resident days. 
           Sec. 36.  [256B.5015] [PASS-THROUGH OF TRAINING AND 
        HABILITATION SERVICES COSTS.] 
           Training and habilitation services costs shall be paid as a 
        pass-through payment at the lowest rate paid for the comparable 
        services at that site under sections 252.40 to 252.46.  The 
        pass-through payments for training and habilitation services 
        shall be paid separately by the commissioner and shall not be 
        included in the computation of the total payment rate. 
           Sec. 37.  Minnesota Statutes 1998, section 256B.69, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [NURSING HOME SERVICES.] (a) Notwithstanding 
        Minnesota Rules, part 9500.1457, subpart 1, item B, up to 90 
        days of nursing facility services as defined in section 
        256B.0625, subdivision 2, which are provided in a nursing 
        facility certified by the Minnesota department of health for 
        services provided and eligible for payment under Medicaid, shall 
        be covered under the prepaid medical assistance program for 
        individuals who are not residing in a nursing facility at the 
        time of enrollment in the prepaid medical assistance program.  
        Liability for coverage of nursing facility services by a 
        participating health plan is limited to 365 days for any person 
        enrolled under the prepaid medical assistance program. 
           (b) For individuals enrolled in the Minnesota senior health 
        options project authorized under subdivision 23, nursing 
        facility services shall be covered according to the terms and 
        conditions of the federal waiver agreement governing that 
        demonstration project. 
           Sec. 38.  Minnesota Statutes 1998, section 256B.69, 
        subdivision 6b, is amended to read: 
           Subd. 6b.  [ELDERLY HOME AND COMMUNITY-BASED WAIVER 
        SERVICES.] Notwithstanding Minnesota Rules, part 9500.1457, 
        subpart 1, item C, elderly waiver services shall be covered 
        under the prepaid medical assistance program for all individuals 
        who are eligible according to section 256B.0915.  (a) For 
        individuals enrolled in the Minnesota senior health options 
        project authorized under subdivision 23, elderly waiver services 
        shall be covered according to the terms and conditions of the 
        federal waiver agreement governing that demonstration project. 
           (b) For individuals under age 65 with physical disabilities 
        but without a primary diagnosis of mental illness or 
        developmental disabilities, except for related conditions, 
        enrolled in the Minnesota senior health options project 
        authorized under subdivision 23, home and community-based waiver 
        services shall be covered according to the terms and conditions 
        of the federal agreement governing that demonstration project. 
           Sec. 39.  Minnesota Statutes 1998, section 256I.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MORATORIUM ON THE DEVELOPMENT OF GROUP 
        RESIDENTIAL HOUSING BEDS.] (a) County agencies shall not enter 
        into agreements for new group residential housing beds with 
        total rates in excess of the MSA equivalent rate except:  (1) 
        for group residential housing establishments meeting the 
        requirements of subdivision 2a, clause (2) with department 
        approval; (2) for group residential housing establishments 
        licensed under Minnesota Rules, parts 9525.0215 to 9525.0355, 
        provided the facility is needed to meet the census reduction 
        targets for persons with mental retardation or related 
        conditions at regional treatment centers; (3) to ensure 
        compliance with the federal Omnibus Budget Reconciliation Act 
        alternative disposition plan requirements for inappropriately 
        placed persons with mental retardation or related conditions or 
        mental illness; (4) up to 80 beds in a single, specialized 
        facility located in Hennepin county that will provide housing 
        for chronic inebriates who are repetitive users of 
        detoxification centers and are refused placement in emergency 
        shelters because of their state of intoxication, and planning 
        for the specialized facility must have been initiated before 
        July 1, 1991, in anticipation of receiving a grant from the 
        housing finance agency under section 462A.05, subdivision 20a, 
        paragraph (b); or (5) notwithstanding the provisions of 
        subdivision 2a, for up to 190 supportive housing units in Anoka, 
        Dakota, Hennepin, or Ramsey county for homeless adults with a 
        mental illness, a history of substance abuse, or human 
        immunodeficiency virus or acquired immunodeficiency syndrome.  
        For purposes of this section, "homeless adult" means a person 
        who is living on the street or in a shelter or discharged from a 
        regional treatment center, community hospital, or residential 
        treatment program and has no appropriate housing available and 
        lacks the resources and support necessary to access appropriate 
        housing.  At least 70 percent of the supportive housing units 
        must serve homeless adults with mental illness, substance abuse 
        problems, or human immunodeficiency virus or acquired 
        immunodeficiency syndrome who are about to be or, within the 
        previous six months, has been discharged from a regional 
        treatment center, or a state-contracted psychiatric bed in a 
        community hospital, or a residential mental health or chemical 
        dependency treatment program.  If a person meets the 
        requirements of subdivision 1, paragraph (a), and receives a 
        federal or state housing subsidy, the group residential housing 
        rate for that person is limited to the supplementary rate under 
        section 256I.05, subdivision 1a, and is determined by 
        subtracting the amount of the person's countable income that 
        exceeds the MSA equivalent rate from the group residential 
        housing supplementary rate.  A resident in a demonstration 
        project site who no longer participates in the demonstration 
        program shall retain eligibility for a group residential housing 
        payment in an amount determined under section 256I.06, 
        subdivision 8, using the MSA equivalent rate.  Service funding 
        under section 256I.05, subdivision 1a, will end June 30, 1997, 
        if federal matching funds are available and the services can be 
        provided through a managed care entity.  If federal matching 
        funds are not available, then service funding will continue 
        under section 256I.05, subdivision 1a.; or (6) for group 
        residential housing beds in settings meeting the requirements of 
        subdivision 2a, clauses (1) and (3), which are used exclusively 
        for recipients receiving home and community-based waiver 
        services under sections 256B.0915, 256B.092, subdivision 5, 
        256B.093, and 256B.49, and who resided in a nursing facility for 
        the six months immediately prior to the month of entry into the 
        group residential housing setting.  The group residential 
        housing rate for these beds must be set so that the monthly 
        group residential housing payment for an individual occupying 
        the bed when combined with the nonfederal share of services 
        delivered under the waiver for that person does not exceed the 
        nonfederal share of the monthly medical assistance payment made 
        for the person to the nursing facility in which the person 
        resided prior to entry into the group residential housing 
        establishment.  The rate may not exceed the MSA equivalent rate 
        plus $426.37 for any case. 
           (b) A county agency may enter into a group residential 
        housing agreement for beds with rates in excess of the MSA 
        equivalent rate in addition to those currently covered under a 
        group residential housing agreement if the additional beds are 
        only a replacement of beds with rates in excess of the MSA 
        equivalent rate which have been made available due to closure of 
        a setting, a change of licensure or certification which removes 
        the beds from group residential housing payment, or as a result 
        of the downsizing of a group residential housing setting.  The 
        transfer of available beds from one county to another can only 
        occur by the agreement of both counties. 
           Sec. 40.  Minnesota Statutes 1998, section 256I.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MAXIMUM RATES.] Monthly room and board 
        rates negotiated by a county agency for a recipient living in 
        group residential housing must not exceed the MSA equivalent 
        rate specified under section 256I.03, subdivision 5, with the 
        exception that a county agency may negotiate a supplementary 
        room and board rate that exceeds the MSA equivalent rate by up 
        to $426.37 for recipients of waiver services under title XIX of 
        the Social Security Act.  This exception is subject to the 
        following conditions: 
           (1) that the Secretary of Health and Human Services has not 
        approved a state request to include room and board costs which 
        exceed the MSA equivalent rate in an individual's set of waiver 
        services under title XIX of the Social Security Act; or 
           (2) that the Secretary of Health and Human Services has 
        approved the inclusion of room and board costs which exceed the 
        MSA equivalent rate, but in an amount that is insufficient to 
        cover costs which are included in a group residential housing 
        agreement in effect on June 30, 1994; and 
           (3) the amount of the rate that is above the MSA equivalent 
        rate has been approved by the commissioner the setting is 
        licensed by the commissioner of human services under Minnesota 
        Rules, parts 9555.5050 to 9555.6265; 
           (2) the setting is not the primary residence of the license 
        holder and in which the license holder is not the primary 
        caregiver; and 
           (3) the average supplementary room and board rate in a 
        county for a calendar year may not exceed the average 
        supplementary room and board rate for that county in effect on 
        January 1, 2000.  For calendar years beginning on or after 
        January 1, 2002, within the limits of appropriations 
        specifically for this purpose, the commissioner shall increase 
        each county's supplemental room and board rate average on an 
        annual basis by a factor consisting of the percentage change in 
        the Consumer Price Index-All items, United States city average 
        (CPI-U) for that calendar year compared to the preceding 
        calendar year as forecasted by Data Resources, Inc., in the 
        third quarter of the preceding calendar year.  If a county has 
        not negotiated supplementary room and board rates for any 
        facilities located in the county as of January 1, 2000, or has 
        an average supplemental room and board rate under $100 per 
        person as of January 1, 2000, it may submit a supplementary room 
        and board rate request with budget information for a facility to 
        the commissioner for approval. 
        The county agency may at any time negotiate a higher or lower 
        room and board rate than the average supplementary room and 
        board rate that would otherwise be paid under this subdivision. 
           Sec. 41.  Minnesota Statutes 1998, section 256I.05, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [SUPPLEMENTARY SERVICE RATES.] (a) Subject to 
        the provisions of section 256I.04, subdivision 3, in addition to 
        the room and board rate specified in subdivision 1, the county 
        agency may negotiate a payment not to exceed $426.37 for other 
        services necessary to provide room and board provided by the 
        group residence if the residence is licensed by or registered by 
        the department of health, or licensed by the department of human 
        services to provide services in addition to room and board, and 
        if the provider of services is not also concurrently receiving 
        funding for services for a recipient under a home and 
        community-based waiver under title XIX of the Social Security 
        Act; or funding from the medical assistance program under 
        section 256B.0627, subdivision 4, for personal care services for 
        residents in the setting; or residing in a setting which 
        receives funding under Minnesota Rules, parts 9535.2000 to 
        9535.3000.  If funding is available for other necessary services 
        through a home and community-based waiver, or personal care 
        services under section 256B.0627, subdivision 4, then the GRH 
        rate is limited to the rate set in subdivision 1.  Unless 
        otherwise provided in law, in no case may the supplementary 
        service rate plus the supplementary room and board rate exceed 
        $426.37.  The registration and licensure requirement does not 
        apply to establishments which are exempt from state licensure 
        because they are located on Indian reservations and for which 
        the tribe has prescribed health and safety requirements.  
        Service payments under this section may be prohibited under 
        rules to prevent the supplanting of federal funds with state 
        funds.  The commissioner shall pursue the feasibility of 
        obtaining the approval of the Secretary of Health and Human 
        Services to provide home and community-based waiver services 
        under title XIX of the Social Security Act for residents who are 
        not eligible for an existing home and community-based waiver due 
        to a primary diagnosis of mental illness or chemical dependency 
        and shall apply for a waiver if it is determined to be 
        cost-effective.  
           (b) The commissioner is authorized to make cost-neutral 
        transfers from the GRH fund for beds under this section to other 
        funding programs administered by the department after 
        consultation with the county or counties in which the affected 
        beds are located.  The commissioner may also make cost-neutral 
        transfers from the GRH fund to county human service agencies for 
        beds permanently removed from the GRH census under a plan 
        submitted by the county agency and approved by the 
        commissioner.  The commissioner shall report the amount of any 
        transfers under this provision annually to the legislature. 
           (c) The provisions of paragraph (b) do not apply to a 
        facility that has its reimbursement rate established under 
        section 256B.431, subdivision 4, paragraph (c). 
           Sec. 42.  Minnesota Statutes 1998, section 256I.05, is 
        amended by adding a subdivision to read: 
           Subd. 1e.  [SUPPLEMENTARY RATE FOR CERTAIN FACILITIES.] 
        Notwithstanding the provisions of subdivisions 1a and 1c, 
        beginning July 1, 1999, a county agency shall negotiate a 
        supplementary rate in addition to the rate specified in 
        subdivision 1, equal to 25 percent of the amount specified in 
        subdivision 1a, for a group residential housing provider that: 
           (1) is located in Hennepin county and has had a group 
        residential housing contract with the county since June 1996; 
           (2) operates in three separate locations a 56-bed facility, 
        a 40-bed facility, and a 30-bed facility; and 
           (3) serves a chemically dependent clientele, providing 24 
        hours per day supervision and limiting a resident's maximum 
        length of stay to 13 months out of a consecutive 24-month period.
           Sec. 43.  Laws 1995, chapter 207, article 3, section 21, is 
        amended to read: 
           Sec. 21.  [FACILITY CERTIFICATION.] 
           Notwithstanding Minnesota Statutes, section 252.291, 
        subdivisions 1 and 2, the commissioner of health shall inspect 
        to certify a large community-based facility currently licensed 
        under Minnesota Rules, parts 9525.0215 to 9525.0355, for more 
        than 16 beds and located in Northfield.  The facility may be 
        certified for up to 44 beds.  The commissioner of health must 
        inspect to certify the facility as soon as possible after the 
        effective date of this section.  The commissioner of human 
        services shall work with the facility and affected counties to 
        relocate any current residents of the facility who do not meet 
        the admission criteria for an ICF/MR.  Until January 1, 1999, in 
        order to fund the ICF/MR services and relocations of current 
        residents authorized, the commissioner of human services may 
        transfer on a quarterly basis to the medical assistance account 
        from each affected county's community social service allocation, 
        an amount equal to the state share of medical assistance 
        reimbursement for the residential and day habilitation services 
        funded by medical assistance and provided to clients for whom 
        the county is financially responsible.  After January 1, 1999, 
        the commissioner of human services shall fund the services under 
        the state medical assistance program and may transfer on a 
        quarterly basis to the medical assistance account from each 
        affected county's community social service allocation, an amount 
        equal to one-half of the state share of medical assistance 
        reimbursement for the residential and day habilitation services 
        funded by medical assistance and provided to clients for whom 
        the county is financially responsible.  For nonresidents of 
        Minnesota seeking admission to the facility, Rice county shall 
        be notified in order to assure that appropriate funding is 
        guaranteed from their state or country of residence. 
           Sec. 44.  [DEADLINE EXTENSION.] 
           Notwithstanding Minnesota Statutes, section 144A.073, 
        subdivision 3, the commissioner of health shall extend approval 
        to May 31, 2000, for a total replacement of a 96-bed nursing 
        home located in Carlton county previously approved under 
        Minnesota Statutes, section 144A.073. 
           Sec. 45.  [STATE LICENSURE CONFLICTS WITH FEDERAL 
        REGULATIONS.] 
           (a) Notwithstanding the provisions of Minnesota Rules, part 
        4658.0520, an incontinent resident must be checked according to 
        a specific time interval written in the resident's care plan.  
        The resident's attending physician must authorize in writing any 
        interval longer than two hours. 
           (b) This section expires July 1, 2001. 
           Sec. 46.  [GROUP RESIDENTIAL HOUSING STUDY.] 
           The commissioner of human services shall submit to the 
        legislature by February 15, 2000, a study of the cost of 
        providing housing for individuals eligible for group residential 
        housing payments and an analysis of the relationship of the 
        costs to market rate housing costs in a representative number of 
        regions in the state.  In preparing the study, the commissioner 
        shall consult with representatives of affected industries, 
        counties, and consumers. 
           Sec. 47.  [ICF/MR SERVICE RECONFIGURATION PROJECT.] 
           (a) The commissioner of human services may authorize a 
        project to reconfigure two existing intermediate care facilities 
        for persons with mental retardation or related conditions 
        (ICFs/MR) located on the same campus in Carver county and 
        totaling 60 licensed beds in one 46-bed facility and one 14-bed 
        facility.  The reconfiguration project will involve the 
        relocation of up to six beds to a six-bed ICF/MR.  The remaining 
        two ICFs/MR shall consist of one 34-bed ICF/MR and one ten-bed 
        ICF/MR. 
           (b) The project shall include the development of 
        alternative home and community-based services for individuals 
        relocated from the existing facilities.  In conjunction with 
        this project, two beds in the 34-bed facility shall be reserved 
        for temporary care services for individuals receiving 
        alternative home and community-based services.  The ICF/MR may 
        seek county approval to modify its need determinations in order 
        to serve fewer clients, or to provide additional beds for 
        temporary care services. 
           (c) The project must be approved by the commissioner under 
        Minnesota Statutes, section 252.28, and must include criteria 
        for determining how individuals are selected for alternative 
        services and the use of a request for proposal process in 
        selecting vendors for the alternative services.  The 
        commissioner is authorized to develop the two additional beds 
        required, and set aside waivered service slots as needed for 
        individuals choosing alternative home and community-based 
        services. 
           (d) Upon approval of the project, the following additional 
        conditions shall apply to rate setting: 
           (1) the two existing facilities' aggregate 
        investment-per-bed limits in effect before the downsizing shall 
        be the investment-per-bed limit after the downsizing; 
           (2) the ten-bed and the 34-bed facilities shall be eligible 
        for a one-time rate adjustment to be negotiated with the 
        commissioner taking into consideration estimated excess revenues 
        available from the six-bed facility; 
           (3) the relocated six-bed facility shall receive the 
        payment rates established for the former 46-bed facility until 
        each facility files a cost report for a period of five months or 
        longer ending on December 31 following their opening and those 
        reports are desk audited by the commissioner.  The two remaining 
        facilities shall file their regularly scheduled annual cost 
        reports; 
           (4) all facilities are exempt from the spend-up and high 
        cost limits in Minnesota Statutes, section 256B.501, subdivision 
        5b, for the rate year following the first cost report submitted 
        under clause (3); and 
           (5) the maintenance limit for the 34-bed facility shall be 
        established using the methodology in Minnesota Statutes, section 
        256B.501, subdivision 5d.  The maintenance limit for the ten-bed 
        facility shall be adjusted by the same ratio used to adjust the 
        34-bed facility's maintenance limit. 
           Sec. 48.  [ICF/MR REIMBURSEMENT EFFECTIVE OCTOBER 1, 1999.] 
           (a) For the rate year beginning October 1, 1999, the 
        commissioner of human services shall exempt an intermediate care 
        facility for persons with mental retardation from reductions to 
        the payment rates under Minnesota Statutes, section 256B.501, 
        subdivision 5b, paragraph (d), clause (6), if the facility: 
           (1) has had a settle-up payment rate established in the 
        reporting year preceding the rate year for the one-time rate 
        adjustment; 
           (2) is a newly established facility; 
           (3) is an A to B conversion that has been converted under 
        Minnesota Statutes, section 252.292, since rate year 1990; 
           (4) has a payment rate subject to a community conversion 
        project under Minnesota Statutes, section 252.292; 
           (5) has a payment rate established under Minnesota 
        Statutes, section 245A.12 or 245A.13; or 
           (6) is a facility created by the relocation of more than 25 
        percent of the capacity of a related facility during the 
        reporting year. 
           (b) Notwithstanding any contrary provision in Minnesota 
        Statutes, section 256B.501, for the rate year beginning October 
        1, 1999, the commissioner of human services shall, for purposes 
        of the spend-up limit, array facilities within each grouping 
        established under Minnesota Statutes, section 256B.501, 
        subdivision 5b, paragraph (d), clause (4), by each facility's 
        cost per resident day.  A facility's cost per resident day shall 
        be determined by dividing its allowable historical general 
        operating cost for the reporting year by the facility's resident 
        days for the reporting year.  Facilities with a cost per 
        resident day at or above the median shall be limited to the 
        lesser of: 
           (1) the current reporting year's cost per resident day; or 
           (2) the prior report year's cost per resident day plus the 
        inflation factor established under Minnesota Statutes, section 
        256B.501, subdivision 3c, clause (2), increased by three 
        percentage points.  In no case shall the amount of this 
        reduction exceed:  (i) three percent for a facility with a 
        licensed capacity greater than 16 beds; (ii) two percent for a 
        facility with a licensed capacity of nine to 16 beds; and (iii) 
        one percent for a facility with a licensed capacity of eight or 
        fewer beds. 
           (c) The commissioner shall not apply the limits established 
        under Minnesota Statutes, section 256B.501, subdivision 5b, 
        paragraph (d), clause (8), for the rate year beginning October 
        1, 1999. 
           (d) Notwithstanding paragraphs (b) and (c), the 
        commissioner must utilize facility payment rates based on the 
        laws in effect for October 1, 1998, payment rates and use the 
        resulting allowable operating cost per diems as the basis for 
        the spend-up limits for the rate year beginning October 1, 1999. 
           Sec. 49.  [DEADLINE EXTENSION.] 
           Notwithstanding Minnesota Statutes, section 144A.073, 
        subdivision 3, the commissioner of health shall extend approval 
        to May 31, 2000, for a total replacement of a 96-bed nursing 
        home located in Carlton county previously approved under 
        Minnesota Statutes, section 144A.073. 
           Sec. 50.  [GROUP RESIDENTIAL HOUSING STUDY.] 
           The commissioner of human services shall submit to the 
        legislature by February 15, 2000, a study of the cost of 
        providing housing for individuals eligible for group residential 
        housing payments and an analysis of the relationship of the 
        costs to market rate housing costs in a representative number of 
        regions in the state.  In preparing the study, the commissioner 
        shall consult with representatives of affected industries, 
        counties, and consumers. 
           Sec. 51.  [REPEALER.] 
           (a) Minnesota Statutes 1998, sections 144.0723; and 
        256B.5011, subdivision 3, are repealed. 
           (b) Minnesota Statutes 1998, section 256B.434, subdivision 
        17, is repealed effective July 1, 1999.  
           (c) Minnesota Statutes 1998, section 256B.501, subdivision 
        3g, is repealed effective October 1, 2000. 
           (d) Laws 1997, chapter 203, article 4, section 55, is 
        repealed. 
           (e) Section 45 is repealed effective July 1, 2001. 
           Sec. 52.  [EFFECTIVE DATE.] 
           Sections 3 to 7 and 45 are effective the day following 
        final enactment. 
                                   ARTICLE 4 
                              HEALTH CARE PROGRAMS 
           Section 1.  Minnesota Statutes 1998, section 62A.045, is 
        amended to read: 
           62A.045 [PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT 
        HEALTH PROGRAMS.] 
           (a) No health plan issued or renewed to provide coverage to 
        a Minnesota resident shall contain any provision denying or 
        reducing benefits because services are rendered to a person who 
        is eligible for or receiving medical benefits pursuant to title 
        XIX of the Social Security Act (Medicaid) in this or any other 
        state; chapter 256; 256B; or 256D or services pursuant to 
        section 252.27; 256L.01 to 256L.10; 260.251, subdivision 1a; or 
        393.07, subdivision 1 or 2.  No health carrier providing 
        benefits under plans covered by this section shall use 
        eligibility for medical programs named in this section as an 
        underwriting guideline or reason for nonacceptance of the risk. 
           (b) If payment for covered expenses has been made under 
        state medical programs for health care items or services 
        provided to an individual, and a third party has a legal 
        liability to make payments, the rights of payment and appeal of 
        an adverse coverage decision for the individual, or in the case 
        of a child their responsible relative or caretaker, will be 
        subrogated to the state and/or its authorized agent agency.  The 
        state agency may assert its rights under this section within 
        three years of the date the service was rendered.  For purposes 
        of this section, "state agency" includes prepaid health plans 
        under contract with the commissioner according to sections 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing homes under the alternative payment 
        demonstration project under section 256B.434; and county-based 
        purchasing entities under section 256B.692.  
           (c) Notwithstanding any law to the contrary, when a person 
        covered by a health plan receives medical benefits according to 
        any statute listed in this section, payment for covered services 
        or notice of denial for services billed by the provider must be 
        issued directly to the provider.  If a person was receiving 
        medical benefits through the department of human services at the 
        time a service was provided, the provider must indicate this 
        benefit coverage on any claim forms submitted by the provider to 
        the health carrier for those services.  If the commissioner of 
        human services notifies the health carrier that the commissioner 
        has made payments to the provider, payment for benefits or 
        notices of denials issued by the health carrier must be issued 
        directly to the commissioner.  Submission by the department to 
        the health carrier of the claim on a department of human 
        services claim form is proper notice and shall be considered 
        proof of payment of the claim to the provider and supersedes any 
        contract requirements of the health carrier relating to the form 
        of submission.  Liability to the insured for coverage is 
        satisfied to the extent that payments for those benefits are 
        made by the health carrier to the provider or the commissioner 
        as required by this section. 
           (d) When a state agency has acquired the rights of an 
        individual eligible for medical programs named in this section 
        and has health benefits coverage through a health carrier, the 
        health carrier shall not impose requirements that are different 
        from requirements applicable to an agent or assignee of any 
        other individual covered. 
           (e) For the purpose of this section, health plan includes 
        coverage offered by community integrated service networks, any 
        plan governed under the federal Employee Retirement Income 
        Security Act of 1974 (ERISA), United States Code, title 29, 
        sections 1001 to 1461, and coverage offered under the exclusions 
        listed in section 62A.011, subdivision 3, clauses (2), (6), (9), 
        (10), and (12).  
           Sec. 2.  Minnesota Statutes 1998, section 122A.09, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LICENSE AND RULES.] (a) The board must adopt 
        rules to license public school teachers and interns subject to 
        chapter 14. 
           (b) The board must adopt rules requiring a person to 
        successfully complete a skills examination in reading, writing, 
        and mathematics as a requirement for initial teacher licensure.  
        Such rules must require college and universities offering a 
        board approved teacher preparation program to provide remedial 
        assistance to persons who did not achieve a qualifying score on 
        the skills examination, including those for whom English is a 
        second language. 
           (c) The board must adopt rules to approve teacher 
        preparation programs. 
           (d) The board must provide the leadership and shall adopt 
        rules for the redesign of teacher education programs to 
        implement a research based, results-oriented curriculum that 
        focuses on the skills teachers need in order to be effective.  
        The board shall implement new systems of teacher preparation 
        program evaluation to assure program effectiveness based on 
        proficiency of graduates in demonstrating attainment of program 
        outcomes. 
           (e) The board must adopt rules requiring successful 
        completion of an examination of general pedagogical knowledge 
        and examinations of licensure-specific teaching skills.  The 
        rules shall be effective on the dates determined by the board, 
        but not later than July 1, 1999. 
           (f) The board must adopt rules requiring teacher educators 
        to work directly with elementary or secondary school teachers in 
        elementary or secondary schools to obtain periodic exposure to 
        the elementary or secondary teaching environment. 
           (g) The board must grant licenses to interns and to 
        candidates for initial licenses. 
           (h) The board must design and implement an assessment 
        system which requires a candidate for an initial license and 
        first continuing license to demonstrate the abilities necessary 
        to perform selected, representative teaching tasks at 
        appropriate levels. 
           (i) The board must receive recommendations from local 
        committees as established by the board for the renewal of 
        teaching licenses. 
           (j) The board must grant life licenses to those who qualify 
        according to requirements established by the board, and suspend 
        or revoke licenses pursuant to sections 122A.20 and 214.10.  The 
        board must not establish any expiration date for application for 
        life licenses.  
           (k) In adopting rules to license public school teachers who 
        provide health-related services for disabled children, the board 
        shall adopt rules consistent with license or registration 
        requirements of the commissioner of health and the 
        health-related boards who license personnel who perform similar 
        services outside of the school. 
           Sec. 3.  Minnesota Statutes 1998, section 125A.08, is 
        amended to read: 
           125A.08 [SCHOOL DISTRICT OBLIGATIONS.] 
           (a) As defined in this section, to the extent required by 
        federal law as of July 1, 1999 2000, every district must ensure 
        the following: 
           (1) all students with disabilities are provided the special 
        instruction and services which are appropriate to their needs.  
        Where the individual education plan team has determined 
        appropriate goals and objectives based on the student's needs, 
        including the extent to which the student can be included in the 
        least restrictive environment, and where there are essentially 
        equivalent and effective instruction, related services, or 
        assistive technology devices available to meet the student's 
        needs, cost to the district may be among the factors considered 
        by the team in choosing how to provide the appropriate services, 
        instruction, or devices that are to be made part of the 
        student's individual education plan.  The individual education 
        plan team shall consider and may authorize services covered by 
        medical assistance according to section 256B.0625, subdivision 
        26.  The student's needs and the special education instruction 
        and services to be provided must be agreed upon through the 
        development of an individual education plan.  The plan must 
        address the student's need to develop skills to live and work as 
        independently as possible within the community.  By grade 9 or 
        age 14, the plan must address the student's needs for transition 
        from secondary services to post-secondary education and 
        training, employment, community participation, recreation, and 
        leisure and home living.  In developing the plan, districts must 
        inform parents of the full range of transitional goals and 
        related services that should be considered.  The plan must 
        include a statement of the needed transition services, including 
        a statement of the interagency responsibilities or linkages or 
        both before secondary services are concluded; 
           (2) children with a disability under age five and their 
        families are provided special instruction and services 
        appropriate to the child's level of functioning and needs; 
           (3) children with a disability and their parents or 
        guardians are guaranteed procedural safeguards and the right to 
        participate in decisions involving identification, assessment 
        including assistive technology assessment, and educational 
        placement of children with a disability; 
           (4) eligibility and needs of children with a disability are 
        determined by an initial assessment or reassessment, which may 
        be completed using existing data under United States Code, title 
        20, section 33, et seq.; 
           (5) to the maximum extent appropriate, children with a 
        disability, including those in public or private institutions or 
        other care facilities, are educated with children who are not 
        disabled, and that special classes, separate schooling, or other 
        removal of children with a disability from the regular 
        educational environment occurs only when and to the extent that 
        the nature or severity of the disability is such that education 
        in regular classes with the use of supplementary services cannot 
        be achieved satisfactorily; 
           (6) in accordance with recognized professional standards, 
        testing and evaluation materials, and procedures used for the 
        purposes of classification and placement of children with a 
        disability are selected and administered so as not to be 
        racially or culturally discriminatory; and 
           (7) the rights of the child are protected when the parents 
        or guardians are not known or not available, or the child is a 
        ward of the state. 
           (b) For paraprofessionals employed to work in programs for 
        students with disabilities, the school board in each district 
        shall ensure that: 
           (1) before or immediately upon employment, each 
        paraprofessional develops sufficient knowledge and skills in 
        emergency procedures, building orientation, roles and 
        responsibilities, confidentiality, vulnerability, and 
        reportability, among other things, to begin meeting the needs of 
        the students with whom the paraprofessional works; 
           (2) annual training opportunities are available to enable 
        the paraprofessional to continue to further develop the 
        knowledge and skills that are specific to the students with whom 
        the paraprofessional works, including understanding 
        disabilities, following lesson plans, and implementing follow-up 
        instructional procedures and activities; and 
           (3) a districtwide process obligates each paraprofessional 
        to work under the ongoing direction of a licensed teacher and, 
        where appropriate and possible, the supervision of a school 
        nurse. 
           Sec. 4.  Minnesota Statutes 1998, section 125A.744, 
        subdivision 3, is amended to read: 
           Subd. 3.  [IMPLEMENTATION.] Consistent with section 
        256B.0625, subdivision 26, school districts may enroll as 
        medical assistance providers or subcontractors and bill the 
        department of human services under the medical assistance fee 
        for service claims processing system for special education 
        services which are covered services under chapter 256B, which 
        are provided in the school setting for a medical assistance 
        recipient, and for whom the district has secured informed 
        consent consistent with section 13.05, subdivision 4, paragraph 
        (d), and section 256B.77, subdivision 2, paragraph (p), to bill 
        for each type of covered service.  School districts shall be 
        reimbursed by the commissioner of human services for the federal 
        share of individual education plan health-related services that 
        qualify for reimbursement by medical assistance, minus up to 
        five percent retained by the commissioner of human services for 
        administrative costs, not to exceed $350,000 per fiscal year.  
        The commissioner may withhold up to five percent of each payment 
        to a school district.  Following the end of each fiscal year, 
        the commissioner shall settle up with each school district in 
        order to ensure that collections from each district for 
        departmental administrative costs are made on a pro rata basis 
        according to federal earnings for these services in each 
        district.  A school district is not eligible to enroll as a home 
        care provider or a personal care provider organization for 
        purposes of billing home care services under section 256B.0627 
        until the commissioner of human services issues a bulletin 
        instructing county public health nurses on how to assess for the 
        needs of eligible recipients during school hours.  To use 
        private duty nursing services or personal care services at 
        school, the recipient or responsible party must provide written 
        authorization in the care plan identifying the chosen provider 
        and the daily amount of services to be used at school.  Medical 
        assistance services for those enrolled in a prepaid health plan 
        shall remain the responsibility of the contracted health plan 
        subject to their network, credentialing, prior authorization, 
        and determination of medical necessity criteria.  The 
        commissioner of human services shall adjust payments to health 
        plans to reflect increased costs incurred by health plans due to 
        increased payments made to school districts or new payment or 
        delivery arrangements developed by health plans in cooperation 
        with school districts. 
           Sec. 5.  Minnesota Statutes 1998, section 125A.76, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SPECIAL EDUCATION BASE REVENUE.] (a) The special 
        education base revenue equals the sum of the following amounts 
        computed using base year data: 
           (1) 68 percent of the salary of each essential person 
        employed in the district's program for children with a 
        disability during the fiscal year, not including the share of 
        salaries for personnel providing health-related services counted 
        in clause (8), whether the person is employed by one or more 
        districts or a Minnesota correctional facility operating on a 
        fee-for-service basis; 
           (2) for the Minnesota state academy for the deaf or the 
        Minnesota state academy for the blind, 68 percent of the salary 
        of each instructional aide assigned to a child attending the 
        academy, if that aide is required by the child's individual 
        education plan; 
           (3) for special instruction and services provided to any 
        pupil by contracting with public, private, or voluntary agencies 
        other than school districts, in place of special instruction and 
        services provided by the district, 52 percent of the difference 
        between the amount of the contract and the basic revenue of the 
        district for that pupil for the fraction of the school day the 
        pupil receives services under the contract; 
           (4) for special instruction and services provided to any 
        pupil by contracting for services with public, private, or 
        voluntary agencies other than school districts, that are 
        supplementary to a full educational program provided by the 
        school district, 52 percent of the amount of the contract for 
        that pupil; 
           (5) for supplies and equipment purchased or rented for use 
        in the instruction of children with a disability, not including 
        the portion of the expenses for supplies and equipment used to 
        provide health-related services counted in clause (8), an amount 
        equal to 47 percent of the sum actually expended by the 
        district, or a Minnesota correctional facility operating on a 
        fee-for-service basis, but not to exceed an average of $47 in 
        any one school year for each child with a disability receiving 
        instruction; 
           (6) for fiscal years 1997 and later, special education base 
        revenue shall include amounts under clauses (1) to (5) for 
        special education summer programs provided during the base year 
        for that fiscal year; and 
           (7) for fiscal years 1999 and later, the cost of providing 
        transportation services for children with disabilities under 
        section 123B.92, subdivision 1, paragraph (b), clause (4); and 
           (8) for fiscal years 2001 and later, the cost of salaries, 
        supplies and equipment, and other related costs actually 
        expended by the district for the nonfederal share of medical 
        assistance services according to section 256B.0625, subdivision 
        26. 
           (b) If requested by a school district operating a special 
        education program during the base year for less than the full 
        fiscal year, or a school district in which is located a 
        Minnesota correctional facility operating on a fee-for-service 
        basis for less than the full fiscal year, the commissioner may 
        adjust the base revenue to reflect the expenditures that would 
        have occurred during the base year had the program been operated 
        for the full fiscal year. 
           (c) Notwithstanding paragraphs (a) and (b), the portion of 
        a school district's base revenue attributable to a Minnesota 
        correctional facility operating on a fee-for-service basis 
        during the facility's first year of operating on a 
        fee-for-service basis shall be computed using current year data. 
           Sec. 6.  [127A.11] [MONITOR MEDICAL ASSISTANCE SERVICES FOR 
        DISABLED STUDENTS.] 
           The commissioner of children, families, and learning, in 
        cooperation with the commissioner of human services, shall 
        monitor the costs of health-related, special education services 
        provided by public schools. 
           Sec. 7.  [214.045] [COORDINATION WITH BOARD OF TEACHING.] 
           The commissioner of health and the health-related licensing 
        boards must coordinate with the board of teaching when modifying 
        licensure requirements for regulated persons in order to have 
        consistent regulatory requirements for personnel who perform 
        services in schools. 
           Sec. 8.  [245.99] [ADULT MENTAL ILLNESS CRISIS HOUSING 
        ASSISTANCE PROGRAM.] 
           Subdivision 1.  [CREATION.] The adult mental illness crisis 
        housing assistance program is established in the department of 
        human services. 
           Subd. 2.  [RENTAL ASSISTANCE.] The program shall pay up to 
        90 days of housing assistance for persons with a serious and 
        persistent mental illness who require inpatient or residential 
        care for stabilization.  The commissioner of human services may 
        extend the length of assistance on a case-by-case basis. 
           Subd. 3.  [ELIGIBILITY.] Housing assistance under this 
        section is available only to persons of low or moderate income 
        as determined by the commissioner. 
           Subd. 4.  [ADMINISTRATION.] The commissioner may contract 
        with organizations or government units experienced in housing 
        assistance to operate the program under this section. 
           Sec. 9.  Minnesota Statutes 1998, section 245A.04, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [NOTIFICATION TO SUBJECT AND LICENSE HOLDER OF 
        STUDY RESULTS; DETERMINATION OF RISK OF HARM.] (a) The 
        commissioner shall notify the applicant or license holder and 
        the individual who is the subject of the study, in writing or by 
        electronic transmission, of the results of the study.  When the 
        study is completed, a notice that the study was undertaken and 
        completed shall be maintained in the personnel files of the 
        program.  For studies on individuals pertaining to a license to 
        provide family day care or group family day care, foster care 
        for children in the provider's own home, or foster care or day 
        care services for adults in the provider's own home, the 
        commissioner is not required to provide a separate notice of the 
        background study results to the individual who is the subject of 
        the study unless the study results in a disqualification of the 
        individual. 
           The commissioner shall notify the individual studied if the 
        information in the study indicates the individual is 
        disqualified from direct contact with persons served by the 
        program.  The commissioner shall disclose the information 
        causing disqualification and instructions on how to request a 
        reconsideration of the disqualification to the individual 
        studied.  An applicant or license holder who is not the subject 
        of the study shall be informed that the commissioner has found 
        information that disqualifies the subject from direct contact 
        with persons served by the program.  However, only the 
        individual studied must be informed of the information contained 
        in the subject's background study unless the only basis for the 
        disqualification is failure to cooperate, the Data Practices Act 
        provides for release of the information, or the individual 
        studied authorizes the release of the information. 
           (b) 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.  The commissioner shall consider all 
        relevant information available, including the following factors 
        in determining the immediate risk of harm:  the recency of the 
        disqualifying characteristic; the recency of discharge from 
        probation for the crimes; the number of disqualifying 
        characteristics; the intrusiveness or violence of the 
        disqualifying characteristic; the vulnerability of the victim 
        involved in the disqualifying characteristic; and the similarity 
        of the victim to the persons served by the program where the 
        individual studied will have direct contact.  The commissioner 
        may determine that the evaluation of the information immediately 
        available gives the commissioner reason to believe one of the 
        following: 
           (1) The individual poses an imminent risk of harm to 
        persons served by the program where the individual studied will 
        have direct contact.  If the commissioner determines that an 
        individual studied poses an imminent risk of harm to persons 
        served by the program where the individual studied will have 
        direct contact, the individual and the license holder must be 
        sent a notice of disqualification.  The commissioner shall order 
        the license holder to immediately remove the individual studied 
        from direct contact.  The notice to the individual studied must 
        include an explanation of the basis of this determination. 
           (2) The individual poses a risk of harm requiring 
        continuous supervision while providing direct contact services 
        during the period in which the subject may request a 
        reconsideration.  If the commissioner determines that an 
        individual studied poses a risk of harm that requires continuous 
        supervision, the individual and the license holder must be sent 
        a notice of disqualification.  The commissioner shall order the 
        license holder to immediately remove the individual studied from 
        direct contact services or assure that the individual studied is 
        within sight or hearing of another staff person when providing 
        direct contact services during the period in which the 
        individual may request a reconsideration of the 
        disqualification.  If the individual studied does not submit a 
        timely request for reconsideration, or the individual submits a 
        timely request for reconsideration, but the disqualification is 
        not set aside for that license holder, the license holder will 
        be notified of the disqualification and ordered to immediately 
        remove the individual from any position allowing direct contact 
        with persons receiving services from the license holder. 
           (3) The individual does not pose an imminent risk of harm 
        or a risk of harm requiring continuous supervision while 
        providing direct contact services during the period in which the 
        subject may request a reconsideration.  If the commissioner 
        determines that an individual studied does not pose a risk of 
        harm that requires continuous supervision, only the individual 
        must be sent a notice of disqualification.  The license holder 
        must be sent a notice that more time is needed to complete the 
        individual's background study.  If the individual studied 
        submits a timely request for reconsideration, and if the 
        disqualification is set aside for that license holder, the 
        license holder will receive the same notification received by 
        license holders in cases where the individual studied has no 
        disqualifying characteristic.  If the individual studied does 
        not submit a timely request for reconsideration, or the 
        individual submits a timely request for reconsideration, but the 
        disqualification is not set aside for that license holder, the 
        license holder will be notified of the disqualification and 
        ordered to immediately remove the individual from any position 
        allowing direct contact with persons receiving services from the 
        license holder.  
           (c) County licensing agencies performing duties under this 
        subdivision may develop an alternative system for determining 
        the subject's immediate risk of harm to persons served by the 
        program, providing the notices under paragraph (b), and 
        documenting the action taken by the county licensing agency.  
        Each county licensing agency's implementation of the alternative 
        system is subject to approval by the commissioner.  
        Notwithstanding this alternative system, county licensing 
        agencies shall complete the requirements of paragraph (a). 
           Sec. 10.  Minnesota Statutes 1998, section 245A.08, 
        subdivision 5, is amended to read: 
           Subd. 5.  [NOTICE OF THE COMMISSIONER'S FINAL ORDER.] After 
        considering the findings of fact, conclusions, and 
        recommendations of the administrative law judge, the 
        commissioner shall issue a final order.  The commissioner shall 
        consider, but shall not be bound by, the recommendations of the 
        administrative law judge.  The appellant must be notified of the 
        commissioner's final order as required by chapter 14.  The 
        notice must also contain information about the appellant's 
        rights under chapter 14.  The institution of proceedings for 
        judicial review of the commissioner's final order shall not stay 
        the enforcement of the final order except as provided in section 
        14.65.  A license holder and each controlling individual of a 
        license holder whose license has been revoked because of 
        noncompliance with applicable law or rule must not be granted a 
        license for five years following the revocation.  An applicant 
        whose application was denied must not be granted a license for 
        two years following a denial, unless the applicant's subsequent 
        application contains new information which constitutes a 
        substantial change in the conditions that caused the previous 
        denial. 
           Sec. 11.  Minnesota Statutes 1998, section 245B.05, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REPORTING INCIDENTS AND EMERGENCIES.] The 
        license holder must report the following incidents to the 
        consumer's legal representative, caregiver, and case manager 
        within 24 hours of the occurrence, or within 24 hours of receipt 
        of the information: 
           (1) the death of a consumer; 
           (2) any medical emergencies, unexpected serious illnesses, 
        or accidents that require physician treatment or 
        hospitalization; 
           (3) a consumer's unauthorized absence; or 
           (4) any fires and incidents involving a law enforcement 
        agency. 
           Death or serious injury of the consumer must also be 
        reported to the commissioner department of human services 
        licensing division and the ombudsman, as required under sections 
        245.91 and 245.94, subdivision 2a. 
           Sec. 12.  Minnesota Statutes 1998, section 245B.07, 
        subdivision 5, is amended to read: 
           Subd. 5.  [STAFF ORIENTATION.] (a) Within 60 days of hiring 
        staff who provide direct service, the license holder must 
        provide 30 hours of staff orientation.  Direct care staff must 
        complete 15 of the 30 hours orientation before providing any 
        unsupervised direct service to a consumer.  If the staff person 
        has received orientation training from a license holder licensed 
        under this chapter, or provides semi-independent living services 
        only, the 15-hour requirement may be reduced to eight hours.  
        The total orientation of 30 hours may be reduced to 15 hours if 
        the staff person has previously received orientation training 
        from a license holder licensed under this chapter. 
           (b) The 30 hours of orientation must combine supervised 
        on-the-job training with coverage of the following material: 
           (1) review of the consumer's service plans and risk 
        management plan to achieve an understanding of the consumer as a 
        unique individual; 
           (2) review and instruction on the license holder's policies 
        and procedures, including their location and access; 
           (3) emergency procedures; 
           (4) explanation of specific job functions, including 
        implementing objectives from the consumer's individual service 
        plan; 
           (5) explanation of responsibilities related to section 
        245A.65; sections 626.556 and 626.557, governing maltreatment 
        reporting and service planning for children and vulnerable 
        adults; and section 245.825, governing use of aversive and 
        deprivation procedures; 
           (6) medication administration as it applies to the 
        individual consumer, from a training curriculum developed by a 
        health services professional described in section 245B.05, 
        subdivision 5, and when the consumer meets the criteria of 
        having overriding health care needs, then medication 
        administration taught by a health services professional.  Staff 
        may administer medications only after they demonstrate the 
        ability, as defined in the license holder's medication 
        administration policy and procedures.  Once a consumer with 
        overriding health care needs is admitted, staff will be provided 
        with remedial training as deemed necessary by the license holder 
        and the health professional to meet the needs of that consumer. 
           For purposes of this section, overriding health care needs 
        means a health care condition that affects the service options 
        available to the consumer because the condition requires: 
           (i) specialized or intensive medical or nursing 
        supervision; and 
           (ii) nonmedical service providers to adapt their services 
        to accommodate the health and safety needs of the consumer; 
           (7) consumer rights; and 
           (8) other topics necessary as determined by the consumer's 
        individual service plan or other areas identified by the license 
        holder. 
           (c) The license holder must document each employee's 
        orientation received. 
           Sec. 13.  Minnesota Statutes 1998, section 245B.07, 
        subdivision 8, is amended to read: 
           Subd. 8.  [POLICIES AND PROCEDURES.] The license holder 
        must develop and implement the policies and procedures in 
        paragraphs (1) to (3). 
           (1) policies and procedures that promote consumer health 
        and safety by ensuring: 
           (i) consumer safety in emergency situations as identified 
        in section 245B.05, subdivision 7; 
           (ii) consumer health through sanitary practices; 
           (iii) safe transportation, when the license holder is 
        responsible for transportation of consumers, with provisions for 
        handling emergency situations; 
           (iv) a system of recordkeeping for both individuals and the 
        organization, for review of incidents and emergencies, and 
        corrective action if needed; 
           (v) a plan for responding to and reporting all emergencies, 
        including deaths, medical emergencies, illnesses, accidents, 
        missing consumers, fires, severe weather and natural disasters, 
        bomb threats, and other threats; 
           (vi) safe medication administration as identified in 
        section 245B.05, subdivision 5, incorporating an observed skill 
        assessment to ensure that staff demonstrate the ability to 
        administer medications consistent with the license holder's 
        policy and procedures; 
           (vii) psychotropic medication monitoring when the consumer 
        is prescribed a psychotropic medication, including the use of 
        the psychotropic medication use checklist.  If the 
        responsibility for implementing the psychotropic medication use 
        checklist has not been assigned in the individual service plan 
        and the consumer lives in a licensed site, the residential 
        license holder shall be designated; and 
           (viii) criteria for admission or service initiation 
        developed by the license holder; 
           (2) policies and procedures that protect consumer rights 
        and privacy by ensuring: 
           (i) consumer data privacy, in compliance with the Minnesota 
        Data Practices Act, chapter 13; and 
           (ii) that complaint procedures provide consumers with a 
        simple process to bring grievances and consumers receive a 
        response to the grievance within a reasonable time period.  The 
        license holder must provide a copy of the program's grievance 
        procedure and time lines for addressing grievances.  The 
        program's grievance procedure must permit consumers served by 
        the program and the authorized representatives to bring a 
        grievance to the highest level of authority in the program; and 
           (3) policies and procedures that promote continuity and 
        quality of consumer supports by ensuring: 
           (i) continuity of care and service coordination, including 
        provisions for service termination, temporary service 
        suspension, and efforts made by the license holder to coordinate 
        services with other vendors who also provide support to the 
        consumer.  The policy must include the following requirements: 
           (A) the license holder must notify the consumer or 
        consumer's legal representative and the consumer's case manager 
        in writing of the intended termination or temporary service 
        suspension and the consumer's right to seek a temporary order 
        staying the termination or suspension of service according to 
        the procedures in section 256.045, subdivision 4a or subdivision 
        6, paragraph (c); 
           (B) notice of the proposed termination of services, 
        including those situations that began with a temporary service 
        suspension, must be given at least 60 days before the proposed 
        termination is to become effective, unless services are 
        temporarily suspended according to the license holder's written 
        temporary service suspension procedures, in which case notice 
        must be given as soon as possible; 
           (C) the license holder must provide information requested 
        by the consumer or consumer's legal representative or case 
        manager when services are temporarily suspended or upon notice 
        of termination; 
           (D) use of temporary service suspension procedures are 
        restricted to situations in which the consumer's behavior causes 
        immediate and serious danger to the health and safety of the 
        individual or others; 
           (E) prior to giving notice of service termination or 
        temporary service suspension, the license holder must document 
        actions taken to minimize or eliminate the need for service 
        termination or temporary service suspension; and 
           (F) during the period of temporary service suspension, the 
        license holder will work with the appropriate county agency to 
        develop reasonable alternatives to protect the individual and 
        others; and 
           (ii) quality services measured through a program evaluation 
        process including regular evaluations of consumer satisfaction 
        and sharing the results of the evaluations with the consumers 
        and legal representatives. 
           Sec. 14.  Minnesota Statutes 1998, section 245B.07, 
        subdivision 10, is amended to read: 
           Subd. 10.  [CONSUMER FUNDS.] (a) The license holder must 
        ensure that consumers retain the use and availability of 
        personal funds or property unless restrictions are justified in 
        the consumer's individual service plan. 
           (b) The license holder must ensure separation of resident 
        consumer funds from funds of the license holder, the residential 
        program, or program staff. 
           (c) Whenever the license holder assists a consumer with the 
        safekeeping of funds or other property, the license holder 
        must have written authorization to do so by the consumer or the 
        consumer's legal representative, and the case manager.  In 
        addition, the license holder must: 
           (1) document receipt and disbursement of the consumer's 
        funds or the property, and include the signature of the 
        consumer, conservator, or payee; 
           (2) provide a statement at least quarterly itemizing 
        annually survey, document, and implement the preferences of the 
        consumer, consumer's legal representative, and the case manager 
        for frequency of receiving a statement that itemizes receipts 
        and disbursements of resident consumer funds or other property; 
        and 
           (3) return to the consumer upon the consumer's request, 
        funds and property in the license holder's possession subject to 
        restrictions in the consumer's individual service plan, as soon 
        as possible, but no later than three working days after the date 
        of the request. 
           (d) License holders and program staff must not: 
           (1) borrow money from a consumer; 
           (2) purchase personal items from a consumer; 
           (3) sell merchandise or personal services to a consumer; 
           (4) require a resident consumer to purchase items for which 
        the license holder is eligible for reimbursement; or 
           (5) use resident consumer funds in a manner that would 
        violate section 256B.04, or any rules promulgated under that 
        section. 
           Sec. 15.  Minnesota Statutes 1998, section 252.32, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [REPORTS AND ALLOCATIONS.] (a) The commissioner 
        shall specify requirements for quarterly fiscal and annual 
        program reports according to section 256.01, subdivision 2, 
        paragraph (17).  Program reports shall include data which will 
        enable the commissioner to evaluate program effectiveness and to 
        audit compliance.  The commissioner shall reimburse county costs 
        on a quarterly basis. 
           (b) Beginning January 1, 1998, The commissioner shall 
        allocate state funds made available under this section to county 
        social service agencies on a calendar year basis.  The 
        commissioner shall allocate to each county first in amounts 
        equal to each county's guaranteed floor as described in clause 
        (1), and second, any remaining funds, after the allocation of 
        funds to the newly participating counties as provided for in 
        clause (3), shall be allocated in proportion to each county's 
        total number of families receiving a grant on July 1 of the most 
        recent calendar year will be allocated to county agencies to 
        support children in their family homes.  
           (1) Each county's guaranteed floor shall be calculated as 
        follows:  
           (i) 95 percent of the county's allocation received in the 
        preceding calendar year.  For the calendar year 1998 allocation, 
        the preceding calendar year shall be considered to be double the 
        six-month allocation as provided in clause (2); 
           (ii) when the amount of funds available for allocation is 
        less than the amount available in the preceding year, each 
        county's previous year allocation shall be reduced in proportion 
        to the reduction in statewide funding, for the purpose of 
        establishing the guaranteed floor.  
           (2) For the period July 1, 1997, to December 31, 1997, the 
        commissioner shall allocate to each county an amount equal to 
        the actual, state approved grants issued to the families for the 
        month of January 1997, multiplied by six.  This six-month 
        allocation shall be combined with the calendar year 1998 
        allocation and be administered as an 18-month allocation.  
           (3) At the commissioner's discretion, funds may be 
        allocated to any nonparticipating county that requests an 
        allocation under this section.  Allocations to newly 
        participating counties are dependent upon the availability of 
        funds, as determined by the actual expenditure amount of the 
        participating counties for the most recently completed calendar 
        year.  
           (4) The commissioner shall regularly review the use of 
        family support fund allocations by county.  The commissioner may 
        reallocate unexpended or unencumbered money at any time to those 
        counties that have a demonstrated need for additional funding.  
           (c) County allocations under this section will be adjusted 
        for transfers that occur according to section 256.476 or when 
        the county of financial responsibility changes according to 
        chapter 256G for eligible recipients. 
           Sec. 16.  Minnesota Statutes 1998, section 256.015, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATE AGENCY HAS LIEN.] When the state 
        agency provides, pays for, or becomes liable for medical care or 
        furnishes subsistence or other payments to a person, the agency 
        shall have a lien for the cost of the care and payments on any 
        and all causes of action or recovery rights under any policy, 
        plan, or contract providing benefits for health care or injury 
        which accrue to the person to whom the care or payments were 
        furnished, or to the person's legal representatives, as a result 
        of the occurrence that necessitated the medical care, 
        subsistence, or other payments.  For purposes of this section, 
        "state agency" includes authorized agents of the state agency 
        prepaid health plans under contract with the commissioner 
        according to sections 256B.69, 256D.03, subdivision 4, paragraph 
        (d), and 256L.12; children's mental health collaboratives under 
        section 245.493; demonstration projects for persons with 
        disabilities under section 256B.77; nursing homes under the 
        alternative payment demonstration project under section 
        256B.434; and county-based purchasing entities under section 
        256B.692. 
           Sec. 17.  Minnesota Statutes 1998, section 256.015, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROSECUTOR.] The attorney general, or the 
        appropriate county attorney acting at the direction of the 
        attorney general, shall represent the state agency commissioner 
        to enforce the lien created under this section or, if no action 
        has been brought, may initiate and prosecute an independent 
        action on behalf of the state agency commissioner against a 
        person, firm, or corporation that may be liable to the person to 
        whom the care or payment was furnished. 
           Any prepaid health plan providing services under sections 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing homes under the alternative payment 
        demonstration project under section 256B.434; or the 
        county-based purchasing entity providing services under section 
        256B.692 may retain legal representation to enforce their lien 
        created under this section or, if no action has been brought, 
        may initiate and prosecute an independent action on their behalf 
        against a person, firm, or corporation that may be liable to the 
        person to whom the care or payment was furnished.  
           Sec. 18.  [256.028] [TAX REBATES.] 
           Any federal or state tax rebate received by a recipient of 
        a public assistance program shall not be counted as income or as 
        an asset for purposes of any of the public assistance programs 
        under this chapter or any other chapter, including, but not 
        limited to, chapter 256B, 256D, 256E, 256I, 256J, or 256L to the 
        extent permitted under federal law. 
           Sec. 19.  Minnesota Statutes 1998, section 256.955, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PRESCRIPTION DRUG COVERAGE.] Coverage under the 
        program is limited to prescription drugs covered under the 
        medical assistance program as described in section 256B.0625, 
        subdivision 13, subject to a maximum deductible of $300 
        annually, except drugs cleared by the FDA shall be available to 
        qualified senior citizens enrolled in the program without 
        restriction when prescribed for medically accepted indication as 
        defined in the federal rebate program under section 1927 of 
        title XIX of the federal Social Security Act.  Coverage under 
        the program shall be limited to those prescription drugs that: 
           (1) are covered under the medical assistance program as 
        described in section 256B.0625, subdivision 13; and 
           (2) are provided by manufacturers that have fully executed 
        senior drug rebate agreements with the commissioner and comply 
        with such agreements. 
           Sec. 20.  Minnesota Statutes 1998, section 256.955, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPLICATION PROCEDURES AND COORDINATION WITH 
        MEDICAL ASSISTANCE.] Applications and information on the program 
        must be made available at county social service agencies, health 
        care provider offices, and agencies and organizations serving 
        senior citizens.  Senior citizens shall submit applications and 
        any information specified by the commissioner as being necessary 
        to verify eligibility directly to the county social service 
        agencies:  
           (1) beginning January 1, 1999, the county social service 
        agency shall determine medical assistance spenddown eligibility 
        of individuals who qualify for the senior citizen drug program 
        of individuals; and 
           (2) program payments will be used to reduce the spenddown 
        obligations of individuals who are determined to be eligible for 
        medical assistance with a spenddown as defined in section 
        256B.056, subdivision 5. 
        Seniors who are eligible for medical assistance with a spenddown 
        shall be financially responsible for the deductible amount up to 
        the satisfaction of the spenddown.  No deductible applies once 
        the spenddown has been met.  Payments to providers for 
        prescription drugs for persons eligible under this subdivision 
        shall be reduced by the deductible.  
           County social service agencies shall determine an 
        applicant's eligibility for the program within 30 days from the 
        date the application is received.  Eligibility begins the month 
        after approval. 
           Sec. 21.  Minnesota Statutes 1998, section 256.955, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COST SHARING.] (a) Enrollees shall pay an annual 
        premium of $120. 
           (b) Program enrollees must satisfy a $300 $420 annual 
        deductible, based upon expenditures for prescription drugs, to 
        be paid as follows: 
           (1) $25 monthly deductible for persons with a monthly 
        spenddown; or 
           (2) $150 biannual deductible for persons with a six-month 
        spenddown in $35 monthly increments. 
           Sec. 22.  Minnesota Statutes 1998, section 256.955, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPORT.] The commissioner shall annually report 
        to the legislature on the senior citizen drug program.  The 
        report must include demographic information on enrollees, 
        per-prescription expenditures, total program expenditures, 
        hospital and nursing home costs avoided by enrollees, any 
        savings to medical assistance and Medicare resulting from the 
        provision of prescription drug coverage under Medicare by health 
        maintenance organizations, other public and private options for 
        drug assistance to the senior population, any hardships caused 
        by the annual premium and deductible, and any recommendations 
        for changes in the senior drug program. 
           Sec. 23.  Minnesota Statutes 1998, section 256.955, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PROGRAM LIMITATION.] The commissioner shall 
        administer the senior drug program so that the costs total no 
        more than funds appropriated plus the drug rebate proceeds.  
        Senior drug program rebate revenues are appropriated to the 
        commissioner and shall be expended to augment funding of the 
        senior drug program.  New enrollment shall cease if the 
        commissioner determines that, given current enrollment, costs of 
        the program will exceed appropriated funds and rebate proceeds.  
        This section shall be repealed upon federal approval of the 
        waiver to allow the commissioner to provide prescription drug 
        coverage for qualified Medicare beneficiaries whose income is 
        less than 150 percent of the federal poverty guidelines. 
           Sec. 24.  Minnesota Statutes 1998, section 256.9685, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [ADMINISTRATIVE RECONSIDERATION.] 
        Notwithstanding sections 256B.04, subdivision 15, and 256D.03, 
        subdivision 7, the commissioner shall establish an 
        administrative reconsideration process for appeals of inpatient 
        hospital services determined to be medically unnecessary.  A 
        physician or hospital may request a reconsideration of the 
        decision that inpatient hospital services are not medically 
        necessary by submitting a written request for review to the 
        commissioner within 30 days after receiving notice of the 
        decision.  The reconsideration process shall take place prior to 
        the procedures of subdivision 1b and shall be conducted by 
        physicians that are independent of the case under 
        reconsideration.  A majority decision by the physicians is 
        necessary to make a determination that the services were not 
        medically necessary.  
           Sec. 25.  Minnesota Statutes 1998, section 256.969, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HOSPITAL COST INDEX.] (a) The hospital 
        cost index shall be the change in the Consumer Price Index-All 
        Items (United States city average) (CPI-U) forecasted by Data 
        Resources, Inc.  The commissioner shall use the indices as 
        forecasted in the third quarter of the calendar year prior to 
        the rate year.  The hospital cost index may be used to adjust 
        the base year operating payment rate through the rate year on an 
        annually compounded basis.  
           (b) For fiscal years beginning on or after July 1, 1993, 
        the commissioner of human services shall not provide automatic 
        annual inflation adjustments for hospital payment rates under 
        medical assistance, nor under general assistance medical care, 
        except that the inflation adjustments under paragraph (a) for 
        medical assistance, excluding general assistance medical care, 
        shall apply through calendar year 1999 2001.  The index for 
        calendar year 2000 shall be reduced 2.5 percentage points to 
        recover overprojections of the index from 1994 to 1996.  The 
        commissioner of finance shall include as a budget change request 
        in each biennial detailed expenditure budget submitted to the 
        legislature under section 16A.11 annual adjustments in hospital 
        payment rates under medical assistance and general assistance 
        medical care, based upon the hospital cost index. 
           Sec. 26.  Minnesota Statutes 1998, section 256B.04, 
        subdivision 16, is amended to read: 
           Subd. 16.  [PERSONAL CARE SERVICES.] (a) Notwithstanding 
        any contrary language in this paragraph, the commissioner of 
        human services and the commissioner of health shall jointly 
        promulgate rules to be applied to the licensure of personal care 
        services provided under the medical assistance program.  The 
        rules shall consider standards for personal care services that 
        are based on the World Institute on Disability's recommendations 
        regarding personal care services.  These rules shall at a 
        minimum consider the standards and requirements adopted by the 
        commissioner of health under section 144A.45, which the 
        commissioner of human services determines are applicable to the 
        provision of personal care services, in addition to other 
        standards or modifications which the commissioner of human 
        services determines are appropriate. 
           The commissioner of human services shall establish an 
        advisory group including personal care consumers and providers 
        to provide advice regarding which standards or modifications 
        should be adopted.  The advisory group membership must include 
        not less than 15 members, of which at least 60 percent must be 
        consumers of personal care services and representatives of 
        recipients with various disabilities and diagnoses and ages.  At 
        least 51 percent of the members of the advisory group must be 
        recipients of personal care. 
           The commissioner of human services may contract with the 
        commissioner of health to enforce the jointly promulgated 
        licensure rules for personal care service providers. 
           Prior to final promulgation of the joint rule the 
        commissioner of human services shall report preliminary findings 
        along with any comments of the advisory group and a plan for 
        monitoring and enforcement by the department of health to the 
        legislature by February 15, 1992. 
           Limits on the extent of personal care services that may be 
        provided to an individual must be based on the 
        cost-effectiveness of the services in relation to the costs of 
        inpatient hospital care, nursing home care, and other available 
        types of care.  The rules must provide, at a minimum:  
           (1) that agencies be selected to contract with or employ 
        and train staff to provide and supervise the provision of 
        personal care services; 
           (2) that agencies employ or contract with a qualified 
        applicant that a qualified recipient proposes to the agency as 
        the recipient's choice of assistant; 
           (3) that agencies bill the medical assistance program for a 
        personal care service by a personal care assistant and 
        supervision by the registered nurse a qualified professional 
        supervising the personal care assistant unless the recipient 
        selects the fiscal agent option under section 256B.0627, 
        subdivision 10; 
           (4) that agencies establish a grievance mechanism; and 
           (5) that agencies have a quality assurance program.  
           (b) The commissioner may waive the requirement for the 
        provision of personal care services through an agency in a 
        particular county, when there are less than two agencies 
        providing services in that county and shall waive the 
        requirement for personal care assistants required to join an 
        agency for the first time during 1993 when personal care 
        services are provided under a relative hardship waiver under 
        section 256B.0627, subdivision 4, paragraph (b), clause (7), and 
        at least two agencies providing personal care services have 
        refused to employ or contract with the independent personal care 
        assistant. 
           Sec. 27.  Minnesota Statutes 1998, section 256B.04, is 
        amended by adding a subdivision to read: 
           Subd. 19.  [PERFORMANCE DATA REPORTING UNIT.] The 
        commissioner of human services shall establish a performance 
        data reporting unit that serves counties and the state.  The 
        department shall support this unit and provide technical 
        assistance and access to the data warehouse.  The performance 
        data reporting unit, which will operate within the department's 
        central office and consist of both county and department staff, 
        shall provide performance data reports to individual counties, 
        share expertise from counties and the department perspective, 
        and participate in joint planning to link with county databases 
        and other county data sources in order to provide information on 
        services provided to public clients from state, federal, and 
        county funding sources.  The performance data reporting unit 
        shall provide counties both individual and group summary level 
        standard or unique reports on health care eligibility and 
        services provided to clients for whom they have financial 
        responsibility. 
           Sec. 28.  Minnesota Statutes 1998, section 256B.042, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LIEN FOR COST OF CARE.] When the state 
        agency provides, pays for, or becomes liable for medical care, 
        it shall have a lien for the cost of the care upon any and all 
        causes of action or recovery rights under any policy, plan, or 
        contract providing benefits for health care or injury, which 
        accrue to the person to whom the care was furnished, or to the 
        person's legal representatives, as a result of the illness or 
        injuries which necessitated the medical care.  For purposes of 
        this section, "state agency" includes prepaid health plans under 
        contract with the commissioner according to sections 256B.69, 
        256D.03, subdivision 4, paragraph (d), and 256L.12; children's 
        mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing facilities under the alternative 
        payment demonstration project under section 256B.434; and 
        county-based purchasing entities under section 256B.692.  
           Sec. 29.  Minnesota Statutes 1998, section 256B.042, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIEN ENFORCEMENT.] (a) The state agency may 
        perfect and enforce its lien by following the procedures set 
        forth in sections 514.69, 514.70 and 514.71, and its verified 
        lien statement shall be filed with the appropriate court 
        administrator in the county of financial responsibility.  The 
        verified lien statement shall contain the following:  the name 
        and address of the person to whom medical care was furnished, 
        the date of injury, the name and address of the vendor or 
        vendors furnishing medical care, the dates of the service, the 
        amount claimed to be due for the care, and, to the best of the 
        state agency's knowledge, the names and addresses of all 
        persons, firms, or corporations claimed to be liable for damages 
        arising from the injuries.  This section shall not affect the 
        priority of any attorney's lien.  
           (b) The state agency is not subject to any limitations 
        period referred to in section 514.69 or 514.71 and has one year 
        from the date notice is first received by it under subdivision 
        4, paragraph (c), even if the notice is untimely, or one year 
        from the date medical bills are first paid by the state agency, 
        whichever is later, to file its verified lien statement.  The 
        state agency may commence an action to enforce the lien within 
        one year of (1) the date the notice required by subdivision 4, 
        paragraph (c), is received or (2) the date the recipient's cause 
        of action is concluded by judgment, award, settlement, or 
        otherwise, whichever is later.  For purposes of this section, 
        "state agency" includes authorized agents of the state agency. 
           (c) If the notice required in subdivision 4 is not provided 
        by any of the parties to the claim at any stage of the claim, 
        the state agency will have one year from the date the state 
        agency learns of the lack of notice to commence an action.  If 
        amounts on the claim or cause of action are paid and the amount 
        required to be paid to the state agency under subdivision 5, is 
        not paid to the state agency, the state agency may commence an 
        action to recover on the lien against any or all of the parties 
        or entities which have either paid or received the payments. 
           Sec. 30.  Minnesota Statutes 1998, section 256B.042, 
        subdivision 3, is amended to read: 
           Subd. 3.  The attorney general, or the appropriate county 
        attorney acting at the direction of the attorney general, shall 
        represent the state agency commissioner to enforce the lien 
        created under this section or, if no action has been brought, 
        may initiate and prosecute an independent action on behalf of 
        the state agency commissioner against a person, firm, or 
        corporation that may be liable to the person to whom the care 
        was furnished. 
           Any prepaid health plan providing services under sections 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing homes under the alternative payment 
        demonstration project under section 256B.434; or the 
        county-based purchasing entity providing services under section 
        256B.692 may retain legal representation to enforce their lien 
        created under this section or, if no action has been brought, 
        may initiate and prosecute an independent action on their behalf 
        against a person, firm, or corporation that may be liable to the 
        person to whom the care or payment was furnished.  
           Sec. 31.  Minnesota Statutes 1998, section 256B.055, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [MFIP-S FAMILIES; FAMILIES ELIGIBLE UNDER PRIOR 
        AFDC RULES.] (a) Beginning January 1, 1998, or on the date that 
        MFIP-S is implemented in counties, medical assistance may be 
        paid for a person receiving public assistance under the MFIP-S 
        program. 
           (b) Beginning January 1, 1998, medical assistance may be 
        paid for a person who would have been eligible for public 
        assistance under the income and resource standards and 
        deprivation requirements, or who would have been eligible but 
        for excess income or assets, under the state's AFDC plan in 
        effect as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193. 
           Sec. 32.  Minnesota Statutes 1998, section 256B.056, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INCOME.] To be eligible for medical assistance, 
        a person eligible under section 256B.055, subdivision 7, not 
        receiving supplemental security income program payments, and 
        families and children may have an income up to 133-1/3 percent 
        of the AFDC income standard in effect under the July 16, 1996, 
        AFDC state plan.  For rate years beginning on or after July 1, 
        1999, the commissioner shall consider increasing Effective July 
        1, 2000, the base AFDC standard in effect on July 16, 1996, by 
        an amount equal to the percent change in the Consumer Price 
        Index for all urban consumers for the previous October compared 
        to one year earlier shall be increased by three percent.  
        Effective January 1, 2000, and each successive January, 
        recipients of supplemental security income may have an income up 
        to the supplemental security income standard in effect on that 
        date.  In computing income to determine eligibility of persons 
        who are not residents of long-term care facilities, the 
        commissioner shall disregard increases in income as required by 
        Public Law Numbers 94-566, section 503; 99-272; and 99-509.  
        Veterans aid and attendance benefits and Veterans Administration 
        unusual medical expense payments are considered income to the 
        recipient. 
           Sec. 33.  Minnesota Statutes 1998, section 256B.057, 
        subdivision 3, is amended to read: 
           Subd. 3.  [QUALIFIED MEDICARE BENEFICIARIES.] A person who 
        is entitled to Part A Medicare benefits, whose income is equal 
        to or less than 85 100 percent of the federal poverty 
        guidelines, and whose assets are no more than twice the asset 
        limit used to determine eligibility for the supplemental 
        security income program, is eligible for medical assistance 
        reimbursement of Part A and Part B premiums, Part A and Part B 
        coinsurance and deductibles, and cost-effective premiums for 
        enrollment with a health maintenance organization or a 
        competitive medical plan under section 1876 of the Social 
        Security Act.  The income limit shall be increased to 90 percent 
        of the federal poverty guidelines on January 1, 1990; and to 100 
        percent on January 1, 1991.  Reimbursement of the Medicare 
        coinsurance and deductibles, when added to the amount paid by 
        Medicare, must not exceed the total rate the provider would have 
        received for the same service or services if the person were a 
        medical assistance recipient with Medicare coverage.  Increases 
        in benefits under Title II of the Social Security Act shall not 
        be counted as income for purposes of this subdivision until the 
        first day of the second full month following publication of the 
        change in the federal poverty guidelines. 
           Sec. 34.  Minnesota Statutes 1998, section 256B.057, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
        assistance may be paid for a person who is employed and who: 
           (1) meets the definition of disabled under the supplemental 
        security income program; 
           (2) meets the asset limits in paragraph (b); and 
           (3) pays a premium, if required, under paragraph (c).  
        Any spousal income or assets shall be disregarded for purposes 
        of eligibility and premium determinations. 
           (b) For purposes of determining eligibility under this 
        subdivision, a person's assets must not exceed $20,000, 
        excluding: 
           (1) all assets excluded under section 256B.056; 
           (2) retirement accounts, including individual accounts, 
        401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
           (3) medical expense accounts set up through the person's 
        employer. 
           (c) A person whose earned and unearned income is greater 
        than 200 percent of federal poverty guidelines for the 
        applicable family size must pay a premium to be eligible for 
        medical assistance.  The premium shall be equal to ten percent 
        of the person's gross earned and unearned income above 200 
        percent of federal poverty guidelines for the applicable family 
        size up to the cost of coverage. 
           (d) A person's eligibility and premium shall be determined 
        by the local county agency.  Premiums must be paid to the 
        commissioner.  All premiums are dedicated to the commissioner. 
           (e) Any required premium shall be determined at application 
        and redetermined annually at recertification or when a change in 
        income of family size occurs. 
           (f) Premium payment is due upon notification from the 
        commissioner of the premium amount required.  Premiums may be 
        paid in installments at the discretion of the commissioner. 
           (g) Nonpayment of the premium shall result in denial or 
        termination of medical assistance unless the person demonstrates 
        good cause for nonpayment.  Good cause exists if the 
        requirements specified in Minnesota Rules, part 9506.0040, 
        subpart 7, items B to D, are met.  Nonpayment shall include 
        payment with a returned, refused, or dishonored instrument.  The 
        commissioner may require a guaranteed form of payment as the 
        only means to replace a returned, refused, or dishonored 
        instrument. 
           Sec. 35.  Minnesota Statutes 1998, section 256B.0575, is 
        amended to read: 
           256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
        PERSONS.] 
           When an institutionalized person is determined eligible for 
        medical assistance, the income that exceeds the deductions in 
        paragraphs (a) and (b) must be applied to the cost of 
        institutional care.  
           (a) The following amounts must be deducted from the 
        institutionalized person's income in the following order: 
           (1) the personal needs allowance under section 256B.35 or, 
        for a veteran who does not have a spouse or child, or a 
        surviving spouse of a veteran having no child, the amount of an 
        improved pension received from the veteran's administration not 
        exceeding $90 per month; 
           (2) the personal allowance for disabled individuals under 
        section 256B.36; 
           (3) if the institutionalized person has a legally appointed 
        guardian or conservator, five percent of the recipient's gross 
        monthly income up to $100 as reimbursement for guardianship or 
        conservatorship services; 
           (4) a monthly income allowance determined under section 
        256B.058, subdivision 2, but only to the extent income of the 
        institutionalized spouse is made available to the community 
        spouse; 
           (5) a monthly allowance for children under age 18 which, 
        together with the net income of the children, would provide 
        income equal to the medical assistance standard for families and 
        children according to section 256B.056, subdivision 4, for a 
        family size that includes only the minor children.  This 
        deduction applies only if the children do not live with the 
        community spouse and only to the extent that the deduction is 
        not included in the personal needs allowance under section 
        256B.35, subdivision 1, as child support garnished under a court 
        order; 
           (6) a monthly family allowance for other family members, 
        equal to one-third of the difference between 122 percent of the 
        federal poverty guidelines and the monthly income for that 
        family member; 
           (7) reparations payments made by the Federal Republic of 
        Germany and reparations payments made by the Netherlands for 
        victims of Nazi persecution between 1940 and 1945; and 
           (8) all other exclusions from income for institutionalized 
        persons as mandated by federal law; and 
           (9) amounts for reasonable expenses incurred for necessary 
        medical or remedial care for the institutionalized spouse that 
        are not medical assistance covered expenses and that are not 
        subject to payment by a third party.  
           For purposes of clause (6), "other family member" means a 
        person who resides with the community spouse and who is a minor 
        or dependent child, dependent parent, or dependent sibling of 
        either spouse.  "Dependent" means a person who could be claimed 
        as a dependent for federal income tax purposes under the 
        Internal Revenue Code. 
           (b) Income shall be allocated to an institutionalized 
        person for a period of up to three calendar months, in an amount 
        equal to the medical assistance standard for a family size of 
        one if:  
           (1) a physician certifies that the person is expected to 
        reside in the long-term care facility for three calendar months 
        or less; 
           (2) if the person has expenses of maintaining a residence 
        in the community; and 
           (3) if one of the following circumstances apply:  
           (i) the person was not living together with a spouse or a 
        family member as defined in paragraph (a) when the person 
        entered a long-term care facility; or 
           (ii) the person and the person's spouse become 
        institutionalized on the same date, in which case the allocation 
        shall be applied to the income of one of the spouses.  
        For purposes of this paragraph, a person is determined to be 
        residing in a licensed nursing home, regional treatment center, 
        or medical institution if the person is expected to remain for a 
        period of one full calendar month or more. 
           Sec. 36.  Minnesota Statutes 1998, section 256B.061, is 
        amended to read: 
           256B.061 [ELIGIBILITY; RETROACTIVE EFFECT; RESTRICTIONS.] 
           (a) If any individual has been determined to be eligible 
        for medical assistance, it will be made available for care and 
        services included under the plan and furnished in or after the 
        third month before the month in which the individual made 
        application for such assistance, if such individual was, or upon 
        application would have been, eligible for medical assistance at 
        the time the care and services were furnished.  The commissioner 
        may limit, restrict, or suspend the eligibility of an individual 
        for up to one year upon that individual's conviction of a 
        criminal offense related to application for or receipt of 
        medical assistance benefits. 
           (b) On the basis of information provided on the completed 
        application, an applicant who meets the following criteria shall 
        be determined eligible beginning in the month of application: 
           (1) whose gross income is less than 90 percent of the 
        applicable income standard; 
           (2) whose total liquid assets are less than 90 percent of 
        the asset limit; 
           (3) does not reside in a long-term care facility; and 
           (4) meets all other eligibility requirements. 
        The applicant must provide all required verifications within 30 
        days' notice of the eligibility determination or eligibility 
        shall be terminated. 
           Sec. 37.  Minnesota Statutes 1998, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [TELEMEDICINE CONSULTATIONS.] (a) Medical 
        assistance covers telemedicine consultations.  Telemedicine 
        consultations must be made via two-way, interactive video or 
        store-and-forward technology.  Store-and-forward technology 
        includes telemedicine consultations that do not occur in real 
        time via synchronous transmissions, and that do not require a 
        face-to-face encounter with the patient for all or any part of 
        any such telemedicine consultation.  The patient record must 
        include a written opinion from the consulting physician 
        providing the telemedicine consultation.  A communication 
        between two physicians that consists solely of a telephone 
        conversation is not a telemedicine consultation.  Coverage is 
        limited to three telemedicine consultations per recipient per 
        calendar week.  Telemedicine consultations shall be paid at the 
        full allowable rate. 
           (b) This subdivision expires July 1, 2001.  
           Sec. 38.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [HOME HEALTH SERVICES.] Home health services are 
        those services specified in Minnesota Rules, part 9505.0290. 
        Medical assistance covers home health services at a recipient's 
        home residence.  Medical assistance does not cover home health 
        services for residents of a hospital, nursing facility, or 
        intermediate care facility, or a health care facility licensed 
        by the commissioner of health, unless the program is funded 
        under a home and community-based services waiver or unless the 
        commissioner of human services has prior authorized skilled 
        nurse visits for less than 90 days for a resident at an 
        intermediate care facility for persons with mental retardation, 
        to prevent an admission to a hospital or nursing facility or 
        unless a resident who is otherwise eligible is on leave from the 
        facility and the facility either pays for the home health 
        services or forgoes the facility per diem for the leave days 
        that home health services are used.  Home health services must 
        be provided by a Medicare certified home health agency.  All 
        nursing and home health aide services must be provided according 
        to section 256B.0627. 
           Sec. 39.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PHYSICAL THERAPY.] Medical assistance covers 
        physical therapy and related services, including specialized 
        maintenance therapy.  Services provided by a physical therapy 
        assistant shall be reimbursed at the same rate as services 
        performed by a physical therapist when the services of the 
        physical therapy assistant are provided under the direction of a 
        physical therapist who is on the premises.  Services provided by 
        a physical therapy assistant that are provided under the 
        direction of a physical therapist who is not on the premises 
        shall be reimbursed at 65 percent of the physical therapist rate.
           Sec. 40.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [OCCUPATIONAL THERAPY.] Medical assistance 
        covers occupational therapy and related services, including 
        specialized maintenance therapy.  Services provided by an 
        occupational therapy assistant shall be reimbursed at the same 
        rate as services performed by an occupational therapist when the 
        services of the occupational therapy assistant are provided 
        under the direction of the occupational therapist who is on the 
        premises.  Services provided by an occupational therapy 
        assistant that are provided under the direction of an 
        occupational therapist who is not on the premises shall be 
        reimbursed at 65 percent of the occupational therapist rate. 
           Sec. 41.  Minnesota Statutes 1998, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 8b.  [SPEECH LANGUAGE PATHOLOGY SERVICES.] Medical 
        assistance covers speech language pathology and related 
        services, including specialized maintenance therapy. 
           Sec. 42.  Minnesota Statutes 1998, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 8c.  [CARE MANAGEMENT; REHABILITATION SERVICES.] (a) 
        Effective July 1, 1999, one-time thresholds shall replace annual 
        thresholds for provision of rehabilitation services described in 
        subdivisions 8, 8a, and 8b.  The one-time thresholds will be the 
        same in amount and description as the thresholds prescribed by 
        the department of human services health care programs provider 
        manual for calendar year 1997, except they will not be renewed 
        annually, and they will include sensory skills and cognitive 
        training skills. 
           (b) A care management approach for authorization of 
        services beyond the threshold shall be instituted in conjunction 
        with the one-time thresholds.  The care management approach 
        shall require the provider and the department rehabilitation 
        reviewer to work together directly through written 
        communication, or telephone communication when appropriate, to 
        establish a medically necessary care management plan. 
        Authorization for rehabilitation services shall include approval 
        for up to 12 months of services at a time without additional 
        documentation from the provider during the extended period, when 
        the rehabilitation services are medically necessary due to an 
        ongoing health condition. 
           (c) The commissioner shall implement an expedited five-day 
        turnaround time to review authorization requests for recipients 
        who need emergency rehabilitation services and who have 
        exhausted their one-time threshold limit for those services. 
           Sec. 43.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
        except for fertility drugs when specifically used to enhance 
        fertility, if prescribed by a licensed practitioner and 
        dispensed by a licensed pharmacist, by a physician enrolled in 
        the medical assistance program as a dispensing physician, or by 
        a physician or a nurse practitioner employed by or under 
        contract with a community health board as defined in section 
        145A.02, subdivision 5, for the purposes of communicable disease 
        control.  The commissioner, after receiving recommendations from 
        professional medical associations and professional pharmacist 
        associations, shall designate a formulary committee to advise 
        the commissioner on the names of drugs for which payment is 
        made, recommend a system for reimbursing providers on a set fee 
        or charge basis rather than the present system, and develop 
        methods encouraging use of generic drugs when they are less 
        expensive and equally effective as trademark drugs.  The 
        formulary committee shall consist of nine members, four of whom 
        shall be physicians who are not employed by the department of 
        human services, and a majority of whose practice is for persons 
        paying privately or through health insurance, three of whom 
        shall be pharmacists who are not employed by the department of 
        human services, and a majority of whose practice is for persons 
        paying privately or through health insurance, a consumer 
        representative, and a nursing home representative.  Committee 
        members shall serve three-year terms and shall serve without 
        compensation.  Members may be reappointed once.  
           (b) The commissioner shall establish a drug formulary.  Its 
        establishment and publication shall not be subject to the 
        requirements of the Administrative Procedure Act, but the 
        formulary committee shall review and comment on the formulary 
        contents.  The formulary committee shall review and recommend 
        drugs which require prior authorization.  The formulary 
        committee may recommend drugs for prior authorization directly 
        to the commissioner, as long as opportunity for public input is 
        provided.  Prior authorization may be requested by the 
        commissioner based on medical and clinical criteria before 
        certain drugs are eligible for payment.  Before a drug may be 
        considered for prior authorization at the request of the 
        commissioner:  
           (1) the drug formulary committee must develop criteria to 
        be used for identifying drugs; the development of these criteria 
        is not subject to the requirements of chapter 14, but the 
        formulary committee shall provide opportunity for public input 
        in developing criteria; 
           (2) the drug formulary committee must hold a public forum 
        and receive public comment for an additional 15 days; and 
           (3) the commissioner must provide information to the 
        formulary committee on the impact that placing the drug on prior 
        authorization will have on the quality of patient care and 
        information regarding whether the drug is subject to clinical 
        abuse or misuse.  Prior authorization may be required by the 
        commissioner before certain formulary drugs are eligible for 
        payment.  The formulary shall not include:  
           (i) drugs or products for which there is no federal 
        funding; 
           (ii) over-the-counter drugs, except for antacids, 
        acetaminophen, family planning products, aspirin, insulin, 
        products for the treatment of lice, vitamins for adults with 
        documented vitamin deficiencies, vitamins for children under the 
        age of seven and pregnant or nursing women, and any other 
        over-the-counter drug identified by the commissioner, in 
        consultation with the drug formulary committee, as necessary, 
        appropriate, and cost-effective for the treatment of certain 
        specified chronic diseases, conditions or disorders, and this 
        determination shall not be subject to the requirements of 
        chapter 14; 
           (iii) anorectics, except that medically necessary 
        anorectics shall be covered for a recipient previously diagnosed 
        as having pickwickian syndrome and currently diagnosed as having 
        diabetes and being morbidly obese; 
           (iv) drugs for which medical value has not been 
        established; and 
           (v) 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 
        and who have not signed an agreement with the state for drugs 
        purchased pursuant to the senior citizen drug program 
        established under section 256.955. 
           The commissioner shall publish conditions for prohibiting 
        payment for specific drugs after considering the formulary 
        committee's recommendations.  
           (c) The basis for determining the amount of payment shall 
        be the lower of the actual acquisition costs of the drugs plus a 
        fixed dispensing fee; the maximum allowable cost set by the 
        federal government or by the commissioner plus the fixed 
        dispensing fee; or the usual and customary price charged to the 
        public.  The pharmacy dispensing fee shall be $3.65.  Actual 
        acquisition cost includes quantity and other special discounts 
        except time and cash discounts.  The actual acquisition cost of 
        a drug shall be estimated by the commissioner, at average 
        wholesale price minus nine percent.  The maximum allowable cost 
        of a multisource drug may be set by the commissioner and it 
        shall be comparable to, but no higher than, the maximum amount 
        paid by other third-party payors in this state who have maximum 
        allowable cost programs.  The commissioner shall set maximum 
        allowable costs for multisource drugs that are not on the 
        federal upper limit list as described in United States Code, 
        title 42, chapter 7, section 1396r-8(e), the Social Security 
        Act, and Code of Federal Regulations, title 42, part 447, 
        section 447.332.  Establishment of the amount of payment for 
        drugs shall not be subject to the requirements of the 
        Administrative Procedure Act.  An additional dispensing fee of 
        $.30 may be added to the dispensing fee paid to pharmacists for 
        legend drug prescriptions dispensed to residents of long-term 
        care facilities when a unit dose blister card system, approved 
        by the department, is used.  Under this type of dispensing 
        system, the pharmacist must dispense a 30-day supply of drug.  
        The National Drug Code (NDC) from the drug container used to 
        fill the blister card must be identified on the claim to the 
        department.  The unit dose blister card containing the drug must 
        meet the packaging standards set forth in Minnesota Rules, part 
        6800.2700, that govern the return of unused drugs to the 
        pharmacy for reuse.  The pharmacy provider will be required to 
        credit the department for the actual acquisition cost of all 
        unused drugs that are eligible for reuse.  Over-the-counter 
        medications must be dispensed in the manufacturer's unopened 
        package.  The commissioner may permit the drug clozapine to be 
        dispensed in a quantity that is less than a 30-day supply.  
        Whenever a generically equivalent product is available, payment 
        shall be on the basis of the actual acquisition cost of the 
        generic drug, unless the prescriber specifically indicates 
        "dispense as written - brand necessary" on the prescription as 
        required by section 151.21, subdivision 2. 
           (d) For purposes of this subdivision, "multisource drugs" 
        means covered outpatient drugs, excluding innovator multisource 
        drugs for which there are two or more drug products, which: 
           (1) are related as therapeutically equivalent under the 
        Food and Drug Administration's most recent publication of 
        "Approved Drug Products with Therapeutic Equivalence 
        Evaluations"; 
           (2) are pharmaceutically equivalent and bioequivalent as 
        determined by the Food and Drug Administration; and 
           (3) are sold or marketed in Minnesota. 
        "Innovator multisource drug" means a multisource drug that was 
        originally marketed under an original new drug application 
        approved by the Food and Drug Administration. 
           Sec. 44.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 19c, is amended to read: 
           Subd. 19c.  [PERSONAL CARE.] Medical assistance covers 
        personal care services provided by an individual who is 
        qualified to provide the services according to subdivision 19a 
        and section 256B.0627, where the services are prescribed by a 
        physician in accordance with a plan of treatment and are 
        supervised by a registered nurse the recipient under the fiscal 
        agent option according to section 256B.0627, subdivision 10, or 
        a qualified professional.  "Qualified professional" means a 
        mental health professional as defined in section 245.462, 
        subdivision 18, or 245.4871, subdivision 26; or a registered 
        nurse as defined in sections 148.171 to 148.285.  As part of the 
        assessment, the county public health nurse will consult with the 
        recipient or responsible party and identify the most appropriate 
        person to provide supervision of the personal care assistant.  
        The qualified professional shall perform the duties described in 
        Minnesota Rules, part 9505.0335, subpart 4.  
           Sec. 45.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 26, is amended to read: 
           Subd. 26.  [SPECIAL EDUCATION SERVICES.] (a) Medical 
        assistance covers medical services identified in a recipient's 
        individualized education plan and covered under the medical 
        assistance state plan.  Covered services include occupational 
        therapy, physical therapy, speech-language therapy, clinical 
        psychological services, nursing services, school psychological 
        services, school social work services, personal care assistants 
        serving as management aides, assistive technology devices, 
        transportation services, and other services covered under the 
        medical assistance state plan.  Mental health services eligible 
        for medical assistance reimbursement must be provided or 
        coordinated through a children's mental health collaborative 
        where a collaborative exists if the child is included in the 
        collaborative operational target population.  The provision or 
        coordination of services does not require that the individual 
        education plan be developed by the collaborative. 
           The services may be provided by a Minnesota school district 
        that is enrolled as a medical assistance provider or its 
        subcontractor, and only if the services meet all the 
        requirements otherwise applicable if the service had been 
        provided by a provider other than a school district, in the 
        following areas:  medical necessity, physician's orders, 
        documentation, personnel qualifications, and prior authorization 
        requirements.  The nonfederal share of costs for services 
        provided under this subdivision is the responsibility of the 
        local school district as provided in section 125A.74.  Services 
        listed in a child's individual education plan are eligible for 
        medical assistance reimbursement only if those services meet 
        criteria for federal financial participation under the Medicaid 
        program.  
           (b) Approval of health-related services for inclusion in 
        the individual education plan does not require prior 
        authorization for purposes of reimbursement under this chapter.  
        The commissioner may require physician review and approval of 
        the plan not more than once annually or upon any modification of 
        the individual education plan that reflects a change in 
        health-related services. 
           (c) Services of a speech-language pathologist provided 
        under this section are covered notwithstanding Minnesota Rules, 
        part 9505.0390, subpart 1, item L, if the person: 
           (1) holds a masters degree in speech-language pathology; 
           (2) is licensed by the Minnesota board of teaching as an 
        educational speech-language pathologist; and 
           (3) either has a certificate of clinical competence from 
        the American Speech and Hearing Association, has completed the 
        equivalent educational requirements and work experience 
        necessary for the certificate or has completed the academic 
        program and is acquiring supervised work experience to qualify 
        for the certificate. 
           (d) Medical assistance coverage for medically necessary 
        services provided under other subdivisions in this section may 
        not be denied solely on the basis that the same or similar 
        services are covered under this subdivision. 
           (e) The commissioner shall develop and implement package 
        rates, bundled rates, or per diem rates for special education 
        services under which separately covered services are grouped 
        together and billed as a unit in order to reduce administrative 
        complexity.  
           (f) The commissioner shall develop a cost-based payment 
        structure for payment of these services.  
           (g) Effective July 1, 2000, medical assistance services 
        provided under an individual education plan or an individual 
        family service plan by local school districts shall not count 
        against medical assistance authorization thresholds for that 
        child. 
           Sec. 46.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 28, is amended to read: 
           Subd. 28.  [CERTIFIED NURSE PRACTITIONER SERVICES.] Medical 
        assistance covers 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 provided on an inpatient basis is not 
        included as part of the cost for inpatient services included in 
        the operating payment rate; 
           (2) the services are service is otherwise covered under 
        this chapter as a physician service,; and if 
           (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. 
           Sec. 47.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 30, is amended to read: 
           Subd. 30.  [OTHER CLINIC SERVICES.] (a) Medical assistance 
        covers rural health clinic services, federally qualified health 
        center services, nonprofit community health clinic services, 
        public health clinic services, and the services of a clinic 
        meeting the criteria established in rule by the commissioner.  
        Rural health clinic services and federally qualified health 
        center services mean services defined in United States Code, 
        title 42, section 1396d(a)(2)(B) and (C).  Payment for rural 
        health clinic and federally qualified health center services 
        shall be made according to applicable federal law and regulation.
           (b) A federally qualified health center that is beginning 
        initial operation shall submit an estimate of budgeted costs and 
        visits for the initial reporting period in the form and detail 
        required by the commissioner.  A federally qualified health 
        center that is already in operation shall submit an initial 
        report using actual costs and visits for the initial reporting 
        period.  Within 90 days of the end of its reporting period, a 
        federally qualified health center shall submit, in the form and 
        detail required by the commissioner, a report of its operations, 
        including allowable costs actually incurred for the period and 
        the actual number of visits for services furnished during the 
        period, and other information required by the commissioner.  
        Federally qualified health centers that file Medicare cost 
        reports shall provide the commissioner with a copy of the most 
        recent Medicare cost report filed with the Medicare program 
        intermediary for the reporting year which support the costs 
        claimed on their cost report to the state. 
           (c) In order to continue cost-based payment under the 
        medical assistance program according to paragraphs (a) and (b), 
        a federally qualified health center or rural health clinic must 
        apply for designation as an essential community provider within 
        six months of final adoption of rules by the department of 
        health according to section 62Q.19, subdivision 7.  For those 
        federally qualified health centers and rural health clinics that 
        have applied for essential community provider status within the 
        six-month time prescribed, medical assistance payments will 
        continue to be made according to paragraphs (a) and (b) for the 
        first three years after application.  For federally qualified 
        health centers and rural health clinics that either do not apply 
        within the time specified above or who have had essential 
        community provider status for three years, medical assistance 
        payments for health services provided by these entities shall be 
        according to the same rates and conditions applicable to the 
        same service provided by health care providers that are not 
        federally qualified health centers or rural health clinics.  
        This paragraph takes effect only if the Minnesota health care 
        reform waiver is approved by the federal government, and remains 
        in effect for as long as the Minnesota health care reform waiver 
        remains in effect.  When the waiver expires, this paragraph 
        expires, and the commissioner of human services shall publish a 
        notice in the State Register and notify the revisor of statutes. 
           (d) Effective July 1, 1999, the provisions of paragraph (c) 
        requiring a federally qualified health center or a rural health 
        clinic to make application for an essential community provider 
        designation in order to have cost-based payments made according 
        to paragraphs (a) and (b) no longer apply. 
           (e) Effective January 1, 2000, payments made according to 
        paragraphs (a) and (b) shall be limited to the cost phase-out 
        schedule of the Balanced Budget Act of 1997. 
           Sec. 48.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 32, is amended to read: 
           Subd. 32.  [NUTRITIONAL PRODUCTS.] (a) Medical assistance 
        covers nutritional products needed for nutritional 
        supplementation because solid food or nutrients thereof cannot 
        be properly absorbed by the body or needed for treatment of 
        phenylketonuria, hyperlysinemia, maple syrup urine disease, a 
        combined allergy to human milk, cow's milk, and soy formula, or 
        any other childhood or adult diseases, conditions, or disorders 
        identified by the commissioner as requiring a similarly 
        necessary nutritional product.  Nutritional products needed for 
        the treatment of a combined allergy to human milk, cow's milk, 
        and soy formula require prior authorization.  Separate payment 
        shall not be made for nutritional products for residents of 
        long-term care facilities.  Payment for dietary requirements is 
        a component of the per diem rate paid to these facilities. 
           (b) The commissioner shall designate a nutritional 
        supplementation products advisory committee to advise the 
        commissioner on nutritional supplementation products for which 
        payment is made.  The committee shall consist of nine members, 
        one of whom shall be a physician, one of whom shall be a 
        pharmacist, two of whom shall be registered dietitians, one of 
        whom shall be a public health nurse, one of whom shall be a 
        representative of a home health care agency, one of whom shall 
        be a provider of long-term care services, and two of whom shall 
        be consumers of nutritional supplementation products.  Committee 
        members shall serve two-year terms and shall serve without 
        compensation. 
           (c) The advisory committee shall review and recommend 
        nutritional supplementation products which require prior 
        authorization.  The commissioner shall develop procedures for 
        the operation of the advisory committee so that the advisory 
        committee operates in a manner parallel to the drug formulary 
        committee. 
           Sec. 49.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 35, is amended to read: 
           Subd. 35.  [FAMILY COMMUNITY SUPPORT SERVICES.] Medical 
        assistance covers family community support services as defined 
        in section 245.4871, subdivision 17.  In addition to the 
        provisions of section 245.4871, and to the extent authorized by 
        rules promulgated by the state agency, medical assistance covers 
        the following services as family community support services: 
           (1) services identified in an individual treatment plan 
        when provided by a trained mental health behavioral aide under 
        the direction of a mental health practitioner or mental health 
        professional; 
           (2) mental health crisis intervention and crisis 
        stabilization services provided outside of hospital inpatient 
        settings; and 
           (3) the therapeutic components of preschool and therapeutic 
        camp programs. 
           Sec. 50.  Minnesota Statutes 1998, section 256B.0627, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] (a) "Assessment" means a 
        review and evaluation of a recipient's need for home care 
        services conducted in person.  Assessments for private duty 
        nursing shall be conducted by a registered private duty nurse.  
        Assessments for home health agency services shall be conducted 
        by a home health agency nurse.  Assessments for personal 
        care assistant services shall be conducted by the county public 
        health nurse or a certified public health nurse under contract 
        with the county.  An initial assessment for personal care 
        services is conducted on individuals who are requesting personal 
        care services or for those consumers who have never had a public 
        health nurse assessment.  The initial A face-to-face assessment 
        must include:  a face-to-face health status assessment and 
        determination of baseline need, evaluation of service outcomes, 
        collection of initial case data, identification of appropriate 
        services and service plan development or modification, 
        coordination of initial services, referrals and follow-up to 
        appropriate payers and community resources, completion of 
        required reports, obtaining service authorization, and consumer 
        education.  A reassessment visit face-to-face assessment for 
        personal care 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 consumer the recipient's 
        condition and or when there is a change in the need for personal 
        care assistant services.  The reassessment visit A service 
        update may substitute for the annual face-to-face assessment 
        when there is not a significant change in recipient condition or 
        a change in the need for personal care assistant service.  A 
        service update or review for temporary increase includes a 
        review of initial baseline data, evaluation of service outcomes, 
        redetermination of service need, modification of service plan 
        and appropriate referrals, update of initial forms, obtaining 
        service authorization, and on going consumer education.  
        Assessments for medical assistance home care services for mental 
        retardation or related conditions and alternative care services 
        for developmentally disabled home and community-based waivered 
        recipients may be conducted by the county public health nurse to 
        ensure coordination and avoid duplication.  Assessments must be 
        completed on forms provided by the commissioner within 30 days 
        of a request for home care services by a recipient or 
        responsible party. 
           (b) "Care plan" means a written description of personal 
        care assistant services developed by the agency nurse qualified 
        professional with the recipient or responsible party to be used 
        by the personal care assistant with a copy provided to the 
        recipient or responsible party. 
           (c) "Home care services" means a health service, determined 
        by the commissioner as medically necessary, that is ordered by a 
        physician and documented in a service plan that is reviewed by 
        the physician at least once every 60 62 days for the provision 
        of home health services, or private duty nursing, or at least 
        once every 365 days for personal care.  Home care services are 
        provided to the recipient at the recipient's residence that is a 
        place other than a hospital or long-term care facility or as 
        specified in section 256B.0625.  
           (d) "Medically necessary" has the meaning given in 
        Minnesota Rules, parts 9505.0170 to 9505.0475.  
           (e) "Personal care assistant" means a person who:  (1) is 
        at least 18 years old, except for persons 16 to 18 years of age 
        who participated in a related school-based job training program 
        or have completed a certified home health aide competency 
        evaluation; (2) is able to effectively communicate with the 
        recipient and personal care provider organization; (3) effective 
        July 1, 1996, has completed one of the training requirements as 
        specified in Minnesota Rules, part 9505.0335, subpart 3, items A 
        to D; (4) has the ability to, and provides covered personal care 
        services according to the recipient's care plan, responds 
        appropriately to recipient needs, and reports changes in the 
        recipient's condition to the supervising registered nurse 
        qualified professional; (5) is not a consumer of personal care 
        services; and (6) is subject to criminal background checks and 
        procedures specified in section 245A.04.  An individual who has 
        been convicted of a crime specified in Minnesota Rules, part 
        4668.0020, subpart 14, or a comparable crime in another 
        jurisdiction is disqualified from being a personal care 
        assistant, unless the individual meets the rehabilitation 
        criteria specified in Minnesota Rules, part 4668.0020, subpart 
        15. 
           (f) "Personal care provider organization" means an 
        organization enrolled to provide personal care services under 
        the medical assistance program that complies with the 
        following:  (1) owners who have a five percent interest or more, 
        and managerial officials are subject to a background study as 
        provided in section 245A.04.  This applies to currently enrolled 
        personal care provider organizations and those agencies seeking 
        enrollment as a personal care provider organization.  An 
        organization will be barred from enrollment if an owner or 
        managerial official of the organization has been convicted of a 
        crime specified in section 245A.04, or a comparable crime in 
        another jurisdiction, unless the owner or managerial official 
        meets the reconsideration criteria specified in section 245A.04; 
        (2) the organization must maintain a surety bond and liability 
        insurance throughout the duration of enrollment and provides 
        proof thereof.  The insurer must notify the department of human 
        services of the cancellation or lapse of policy; and (3) the 
        organization must maintain documentation of services as 
        specified in Minnesota Rules, part 9505.2175, subpart 7, as well 
        as evidence of compliance with personal care assistant training 
        requirements. 
           (g) "Responsible party" means an individual residing with a 
        recipient of personal care services who is capable of providing 
        the supportive care necessary to assist the recipient to live in 
        the community, is at least 18 years old, and is not a personal 
        care assistant.  Responsible parties who are parents of minors 
        or guardians of minors or incapacitated persons may delegate the 
        responsibility to another adult during a temporary absence of at 
        least 24 hours but not more than six months.  The person 
        delegated as a responsible party must be able to meet the 
        definition of responsible party, except that the delegated 
        responsible party is required to reside with the recipient only 
        while serving as the responsible party.  Foster care license 
        holders may be designated the responsible party for residents of 
        the foster care home if case management is provided as required 
        in section 256B.0625, subdivision 19a.  For persons who, as of 
        April 1, 1992, are sharing personal care services in order to 
        obtain the availability of 24-hour coverage, an employee of the 
        personal care provider organization may be designated as the 
        responsible party if case management is provided as required in 
        section 256B.0625, subdivision 19a. 
           (h) "Service plan" means a written description of the 
        services needed based on the assessment developed by the nurse 
        who conducts the assessment together with the recipient or 
        responsible party.  The service plan shall include a description 
        of the covered home care services, frequency and duration of 
        services, and expected outcomes and goals.  The recipient and 
        the provider chosen by the recipient or responsible party must 
        be given a copy of the completed service plan within 30 calendar 
        days of the request for home care services by the recipient or 
        responsible party. 
           (i) "Skilled nurse visits" are provided in a recipient's 
        residence under a plan of care or service plan that specifies a 
        level of care which the nurse is qualified to provide.  These 
        services are: 
           (1) nursing services according to the written plan of care 
        or service plan and accepted standards of medical and nursing 
        practice in accordance with chapter 148; 
           (2) services which due to the recipient's medical condition 
        may only be safely and effectively provided by a registered 
        nurse or a licensed practical nurse; 
           (3) assessments performed only by a registered nurse; and 
           (4) teaching and training the recipient, the recipient's 
        family, or other caregivers requiring the skills of a registered 
        nurse or licensed practical nurse.  
           Sec. 51.  Minnesota Statutes 1998, section 256B.0627, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SERVICES COVERED.] Home care services covered 
        under this section include:  
           (1) nursing services under section 256B.0625, subdivision 
        6a; 
           (2) private duty nursing services under section 256B.0625, 
        subdivision 7; 
           (3) home health aide services under section 256B.0625, 
        subdivision 6a; 
           (4) personal care services under section 256B.0625, 
        subdivision 19a; 
           (5) nursing supervision of personal care assistant services 
        provided by a qualified professional under section 256B.0625, 
        subdivision 19a; and 
           (6) consulting professional of personal care assistant 
        services under the fiscal agent option as specified in 
        subdivision 10; 
           (7) face-to-face assessments by county public health nurses 
        for services under section 256B.0625, subdivision 19a; and 
           (8) service updates and review of temporary increases for 
        personal care assistant services by the county public health 
        nurse for services under section 256B.0625, subdivision 19a. 
           Sec. 52.  Minnesota Statutes 1998, section 256B.0627, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PERSONAL CARE SERVICES.] (a) The personal care 
        services that are eligible for payment are the following:  
           (1) bowel and bladder care; 
           (2) skin care to maintain the health of the skin; 
           (3) repetitive maintenance range of motion, muscle 
        strengthening exercises, and other tasks specific to maintaining 
        a recipient's optimal level of function; 
           (4) respiratory assistance; 
           (5) transfers and ambulation; 
           (6) bathing, grooming, and hairwashing necessary for 
        personal hygiene; 
           (7) turning and positioning; 
           (8) assistance with furnishing medication that is 
        self-administered; 
           (9) application and maintenance of prosthetics and 
        orthotics; 
           (10) cleaning medical equipment; 
           (11) dressing or undressing; 
           (12) assistance with eating and meal preparation and 
        necessary grocery shopping; 
           (13) accompanying a recipient to obtain medical diagnosis 
        or treatment; 
           (14) assisting, monitoring, or prompting the recipient to 
        complete the services in clauses (1) to (13); 
           (15) redirection, monitoring, and observation that are 
        medically necessary and an integral part of completing the 
        personal care services described in clauses (1) to (14); 
           (16) redirection and intervention for behavior, including 
        observation and monitoring; 
           (17) interventions for seizure disorders, including 
        monitoring and observation if the recipient has had a seizure 
        that requires intervention within the past three months; 
           (18) tracheostomy suctioning using a clean procedure if the 
        procedure is properly delegated by a registered nurse.  Before 
        this procedure can be delegated to a personal care assistant, a 
        registered nurse must determine that the tracheostomy suctioning 
        can be accomplished utilizing a clean rather than a sterile 
        procedure and must ensure that the personal care assistant has 
        been taught the proper procedure; and 
           (19) incidental household services that are an integral 
        part of a personal care service described in clauses (1) to (18).
        For purposes of this subdivision, monitoring and observation 
        means watching for outward visible signs that are likely to 
        occur and for which there is a covered personal care service or 
        an appropriate personal care intervention.  For purposes of this 
        subdivision, a clean procedure refers to a procedure that 
        reduces the numbers of microorganisms or prevents or reduces the 
        transmission of microorganisms from one person or place to 
        another.  A clean procedure may be used beginning 14 days after 
        insertion. 
           (b) The personal care services that are not eligible for 
        payment are the following:  
           (1) services not ordered by the physician; 
           (2) assessments by personal care provider organizations or 
        by independently enrolled registered nurses; 
           (3) services that are not in the service plan; 
           (4) services provided by the recipient's spouse, legal 
        guardian for an adult or child recipient, or parent of a 
        recipient under age 18; 
           (5) services provided by a foster care provider of a 
        recipient who cannot direct the recipient's own care, unless 
        monitored by a county or state case manager under section 
        256B.0625, subdivision 19a; 
           (6) services provided by the residential or program license 
        holder in a residence for more than four persons; 
           (7) services that are the responsibility of a residential 
        or program license holder under the terms of a service agreement 
        and administrative rules; 
           (8) sterile procedures; 
           (9) injections of fluids into veins, muscles, or skin; 
           (10) services provided by parents of adult recipients, 
        adult children, or adult siblings of the recipient, unless these 
        relatives meet one of the following hardship criteria and the 
        commissioner waives this requirement: 
           (i) the relative resigns from a part-time or full-time job 
        to provide personal care for the recipient; 
           (ii) the relative goes from a full-time to a part-time job 
        with less compensation to provide personal care for the 
        recipient; 
           (iii) the relative takes a leave of absence without pay to 
        provide personal care for the recipient; 
           (iv) the relative incurs substantial expenses by providing 
        personal care for the recipient; or 
           (v) because of labor conditions, special language needs, or 
        intermittent hours of care needed, the relative is needed in 
        order to provide an adequate number of qualified personal care 
        assistants to meet the medical needs of the recipient; 
           (11) homemaker services that are not an integral part of a 
        personal care services; 
           (12) home maintenance, or chore services; 
           (13) services not specified under paragraph (a); and 
           (14) services not authorized by the commissioner or the 
        commissioner's designee. 
           Sec. 53.  Minnesota Statutes 1998, section 256B.0627, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
        payments for home care services shall be limited according to 
        this subdivision.  
           (a)  [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A 
        recipient may receive the following home care services during a 
        calendar year: 
           (1) any initial assessment up to two face-to-face 
        assessments to determine a recipient's need for personal care 
        assistant services; 
           (2) up to two reassessments per year one service update 
        done to determine a recipient's need for personal care services; 
        and 
           (3) up to five skilled nurse visits.  
           (b)  [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care 
        services above the limits in paragraph (a) must receive the 
        commissioner's prior authorization, except when: 
           (1) the home care services were required to treat an 
        emergency medical condition that if not immediately treated 
        could cause a recipient serious physical or mental disability, 
        continuation of severe pain, or death.  The provider must 
        request retroactive authorization no later than five working 
        days after giving the initial service.  The provider must be 
        able to substantiate the emergency by documentation such as 
        reports, notes, and admission or discharge histories; 
           (2) the home care services were provided on or after the 
        date on which the recipient's eligibility began, but before the 
        date on which the recipient was notified that the case was 
        opened.  Authorization will be considered if the request is 
        submitted by the provider within 20 working days of the date the 
        recipient was notified that the case was opened; 
           (3) a third-party payor for home care services has denied 
        or adjusted a payment.  Authorization requests must be submitted 
        by the provider within 20 working days of the notice of denial 
        or adjustment.  A copy of the notice must be included with the 
        request; 
           (4) the commissioner has determined that a county or state 
        human services agency has made an error; or 
           (5) the professional nurse determines an immediate need for 
        up to 40 skilled nursing or home health aide visits per calendar 
        year and submits a request for authorization within 20 working 
        days of the initial service date, and medical assistance is 
        determined to be the appropriate payer. 
           (c)  [RETROACTIVE AUTHORIZATION.] A request for retroactive 
        authorization will be evaluated according to the same criteria 
        applied to prior authorization requests.  
           (d)  [ASSESSMENT AND SERVICE PLAN.] Assessments under 
        section 256B.0627, subdivision 1, paragraph (a), shall be 
        conducted initially, and at least annually thereafter, in person 
        with the recipient and result in a completed service plan using 
        forms specified by the commissioner.  Within 30 days of 
        recipient or responsible party request for home care services, 
        the assessment, the service plan, and other information 
        necessary to determine medical necessity such as diagnostic or 
        testing information, social or medical histories, and hospital 
        or facility discharge summaries shall be submitted to the 
        commissioner.  For personal care services: 
           (1) The amount and type of service authorized based upon 
        the assessment and service plan will follow the recipient if the 
        recipient chooses to change providers.  
           (2) If the recipient's medical need changes, the 
        recipient's provider may assess the need for a change in service 
        authorization and request the change from the county public 
        health nurse.  Within 30 days of the request, the public health 
        nurse will determine whether to request the change in services 
        based upon the provider assessment, or conduct a home visit to 
        assess the need and determine whether the change is appropriate. 
           (3) To continue to receive personal care services 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 subdivision 1.  The service update 
        may substitute for the annual reassessment described in 
        subdivision 1. 
           (e)  [PRIOR AUTHORIZATION.] The commissioner, or the 
        commissioner's designee, shall review the assessment, the 
        service update, request for temporary services, service plan, 
        and any additional information that is submitted.  The 
        commissioner shall, within 30 days after receiving a complete 
        request, assessment, and service plan, authorize home care 
        services as follows:  
           (1)  [HOME HEALTH SERVICES.] All home health services 
        provided by a licensed nurse or a home health aide must be prior 
        authorized by the commissioner or the commissioner's designee.  
        Prior authorization must be based on medical necessity and 
        cost-effectiveness when compared with other care options.  When 
        home health services are used in combination with personal care 
        and private duty nursing, the cost of all home care services 
        shall be considered for cost-effectiveness.  The commissioner 
        shall limit nurse and home health aide visits to no more than 
        one visit each per day. 
           (2)  [PERSONAL CARE SERVICES.] (i) All personal care 
        services and registered nurse supervision by a qualified 
        professional must be prior authorized by the commissioner or the 
        commissioner's designee except for the assessments established 
        in paragraph (a).  The amount of personal care services 
        authorized must be based on the recipient's home care rating.  A 
        child may not be found to be dependent in an activity of daily 
        living if because of the child's age an adult would either 
        perform the activity for the child or assist the child with the 
        activity and the amount of assistance needed is similar to the 
        assistance appropriate for a typical child of the same age.  
        Based on medical necessity, the commissioner may authorize: 
           (A) up to two times the average number of direct care hours 
        provided in nursing facilities for the recipient's comparable 
        case mix level; or 
           (B) up to three times the average number of direct care 
        hours provided in nursing facilities for recipients who have 
        complex medical needs or are dependent in at least seven 
        activities of daily living and need physical assistance with 
        eating or have a neurological diagnosis; or 
           (C) up to 60 percent of the average reimbursement rate, as 
        of July 1, 1991, for care provided in a regional treatment 
        center for recipients who have Level I behavior, plus any 
        inflation adjustment as provided by the legislature for personal 
        care service; or 
           (D) up to the amount the commissioner would pay, as of July 
        1, 1991, plus any inflation adjustment provided for home care 
        services, for care provided in a regional treatment center for 
        recipients referred to the commissioner by a regional treatment 
        center preadmission evaluation team.  For purposes of this 
        clause, home care services means all services provided in the 
        home or community that would be included in the payment to a 
        regional treatment center; or 
           (E) up to the amount medical assistance would reimburse for 
        facility care for recipients referred to the commissioner by a 
        preadmission screening team established under section 256B.0911 
        or 256B.092; and 
           (F) a reasonable amount of time for the provision of 
        nursing supervision by a qualified professional of personal care 
        services.  
           (ii) The number of direct care hours shall be determined 
        according to the annual cost report submitted to the department 
        by nursing facilities.  The average number of direct care hours, 
        as established by May 1, 1992, shall be calculated and 
        incorporated into the home care limits on July 1, 1992.  These 
        limits shall be calculated to the nearest quarter hour. 
           (iii) The home care rating shall be determined by the 
        commissioner or the commissioner's designee based on information 
        submitted to the commissioner by the county public health nurse 
        on forms specified by the commissioner.  The home care rating 
        shall be a combination of current assessment tools developed 
        under sections 256B.0911 and 256B.501 with an addition for 
        seizure activity that will assess the frequency and severity of 
        seizure activity and with adjustments, additions, and 
        clarifications that are necessary to reflect the needs and 
        conditions of recipients who need home care including children 
        and adults under 65 years of age.  The commissioner shall 
        establish these forms and protocols under this section and shall 
        use an advisory group, including representatives of recipients, 
        providers, and counties, for consultation in establishing and 
        revising the forms and protocols. 
           (iv) A recipient shall qualify as having complex medical 
        needs if the care required is difficult to perform and because 
        of recipient's medical condition requires more time than 
        community-based standards allow or requires more skill than 
        would ordinarily be required and the recipient needs or has one 
        or more of the following: 
           (A) daily tube feedings; 
           (B) daily parenteral therapy; 
           (C) wound or decubiti care; 
           (D) postural drainage, percussion, nebulizer treatments, 
        suctioning, tracheotomy care, oxygen, mechanical ventilation; 
           (E) catheterization; 
           (F) ostomy care; 
           (G) quadriplegia; or 
           (H) other comparable medical conditions or treatments the 
        commissioner determines would otherwise require institutional 
        care.  
           (v) A recipient shall qualify as having Level I behavior if 
        there is reasonable supporting evidence that the recipient 
        exhibits, or that without supervision, observation, or 
        redirection would exhibit, one or more of the following 
        behaviors that cause, or have the potential to cause: 
           (A) injury to the recipient's own body; 
           (B) physical injury to other people; or 
           (C) destruction of property. 
           (vi) Time authorized for personal care relating to Level I 
        behavior in subclause (v), items (A) to (C), shall be based on 
        the predictability, frequency, and amount of intervention 
        required. 
           (vii) A recipient shall qualify as having Level II behavior 
        if the recipient exhibits on a daily basis one or more of the 
        following behaviors that interfere with the completion of 
        personal care services under subdivision 4, paragraph (a): 
           (A) unusual or repetitive habits; 
           (B) withdrawn behavior; or 
           (C) offensive behavior. 
           (viii) A recipient with a home care rating of Level II 
        behavior in subclause (vii), items (A) to (C), shall be rated as 
        comparable to a recipient with complex medical needs under 
        subclause (iv).  If a recipient has both complex medical needs 
        and Level II behavior, the home care rating shall be the next 
        complex category up to the maximum rating under subclause (i), 
        item (B). 
           (3)  [PRIVATE DUTY NURSING SERVICES.] All private duty 
        nursing services shall be prior authorized by the commissioner 
        or the commissioner's designee.  Prior authorization for private 
        duty nursing services shall be based on medical necessity and 
        cost-effectiveness when compared with alternative care options.  
        The commissioner may authorize medically necessary private duty 
        nursing services in quarter-hour units when: 
           (i) the recipient requires more individual and continuous 
        care than can be provided during a nurse visit; or 
           (ii) the cares are outside of the scope of services that 
        can be provided by a home health aide or personal care assistant.
           The commissioner may authorize: 
           (A) up to two times the average amount of direct care hours 
        provided in nursing facilities statewide for case mix 
        classification "K" as established by the annual cost report 
        submitted to the department by nursing facilities in May 1992; 
           (B) private duty nursing in combination with other home 
        care services up to the total cost allowed under clause (2); 
           (C) up to 16 hours per day if the recipient requires more 
        nursing than the maximum number of direct care hours as 
        established in item (A) and the recipient meets the hospital 
        admission criteria established under Minnesota Rules, parts 
        9505.0500 to 9505.0540.  
           The commissioner may authorize up to 16 hours per day of 
        medically necessary private duty nursing services or up to 24 
        hours per day of medically necessary private duty nursing 
        services until such time as the commissioner is able to make a 
        determination of eligibility for recipients who are 
        cooperatively applying for home care services under the 
        community alternative care program developed under section 
        256B.49, or until it is determined by the appropriate regulatory 
        agency that a health benefit plan is or is not required to pay 
        for appropriate medically necessary health care services.  
        Recipients or their representatives must cooperatively assist 
        the commissioner in obtaining this determination.  Recipients 
        who are eligible for the community alternative care program may 
        not receive more hours of nursing under this section than would 
        otherwise be authorized under section 256B.49. 
           (4)  [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is 
        ventilator-dependent, the monthly medical assistance 
        authorization for home care services shall not exceed what the 
        commissioner would pay for care at the highest cost hospital 
        designated as a long-term hospital under the Medicare program.  
        For purposes of this clause, home care services means all 
        services provided in the home that would be included in the 
        payment for care at the long-term hospital.  
        "Ventilator-dependent" means an individual who receives 
        mechanical ventilation for life support at least six hours per 
        day and is expected to be or has been dependent for at least 30 
        consecutive days.  
           (f)  [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner 
        or the commissioner's designee shall determine the time period 
        for which a prior authorization shall be effective.  If the 
        recipient continues to require home care services beyond the 
        duration of the prior authorization, the home care provider must 
        request a new prior authorization.  Under no circumstances, 
        other than the exceptions in paragraph (b), shall a prior 
        authorization be valid prior to the date the commissioner 
        receives the request or for more than 12 months.  A recipient 
        who appeals a reduction in previously authorized home care 
        services may continue previously authorized services, other than 
        temporary services under paragraph (h), pending an appeal under 
        section 256.045.  The commissioner must provide a detailed 
        explanation of why the authorized services are reduced in amount 
        from those requested by the home care provider.  
           (g)  [APPROVAL OF HOME CARE SERVICES.] The commissioner or 
        the commissioner's designee shall determine the medical 
        necessity of home care services, the level of caregiver 
        according to subdivision 2, and the institutional comparison 
        according to this subdivision, the cost-effectiveness of 
        services, and the amount, scope, and duration of home care 
        services reimbursable by medical assistance, based on the 
        assessment, primary payer coverage determination information as 
        required, the service plan, the recipient's age, the cost of 
        services, the recipient's medical condition, and diagnosis or 
        disability.  The commissioner may publish additional criteria 
        for determining medical necessity according to section 256B.04. 
           (h)  [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] 
        The agency nurse, the independently enrolled private duty nurse, 
        or county public health nurse may request a temporary 
        authorization for home care services by telephone.  The 
        commissioner may approve a temporary level of home care services 
        based on the assessment, and service or care plan information, 
        and primary payer coverage determination information as required.
        Authorization for a temporary level of home care services 
        including nurse supervision is limited to the time specified by 
        the commissioner, but shall not exceed 45 days, unless extended 
        because the county public health nurse has not completed the 
        required assessment and service plan, or the commissioner's 
        determination has not been made.  The level of services 
        authorized under this provision shall have no bearing on a 
        future prior authorization. 
           (i)  [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] 
        Home care services provided in an adult or child foster care 
        setting must receive prior authorization by the department 
        according to the limits established in paragraph (a). 
           The commissioner may not authorize: 
           (1) home care services that are the responsibility of the 
        foster care provider under the terms of the foster care 
        placement agreement and administrative rules.  Requests for home 
        care services for recipients residing in a foster care setting 
        must include the foster care placement agreement and 
        determination of difficulty of care; 
           (2) personal care services when the foster care license 
        holder is also the personal care provider or personal care 
        assistant unless the recipient can direct the recipient's own 
        care, or case management is provided as required in section 
        256B.0625, subdivision 19a; 
           (3) personal care services when the responsible party is an 
        employee of, or under contract with, or has any direct or 
        indirect financial relationship with the personal care provider 
        or personal care assistant, unless case management is provided 
        as required in section 256B.0625, subdivision 19a; 
           (4) home care services when the number of foster care 
        residents is greater than four unless the county responsible for 
        the recipient's foster placement made the placement prior to 
        April 1, 1992, requests that home care services be provided, and 
        case management is provided as required in section 256B.0625, 
        subdivision 19a; or 
           (5) home care services when combined with foster care 
        payments, other than room and board payments that exceed the 
        total amount that public funds would pay for the recipient's 
        care in a medical institution. 
           Sec. 54.  Minnesota Statutes 1998, section 256B.0627, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SHARED PERSONAL CARE ASSISTANT SERVICES; SHARED 
        CARE.] (a) Medical assistance payments for shared personal care 
        assistance shared care services shall be limited according to 
        this subdivision. 
           (b) Recipients of personal care assistant services may 
        share staff and the commissioner shall provide a rate system for 
        shared personal care assistant services.  For two persons 
        sharing care services, the rate paid to a provider shall not 
        exceed 1-1/2 times the rate paid for serving a single 
        individual, and for three persons sharing care services, the 
        rate paid to a provider shall not exceed twice the rate paid for 
        serving a single individual.  These rates apply only to 
        situations in which all recipients were present and received 
        shared care services on the date for which the service is 
        billed.  No more than three persons may receive shared care 
        services from a personal care assistant in a single setting. 
           (c) Shared care service is the provision of personal care 
        services by a personal care assistant to two or three recipients 
        at the same time and in the same setting.  For the purposes of 
        this subdivision, "setting" means: 
           (1) the home or foster care home of one of the individual 
        recipients; or 
           (2) a child care program in which all recipients served by 
        one personal care assistant are participating, which is licensed 
        under chapter 245A or operated by a local school district or 
        private school.  
           The provisions of this subdivision do not apply when a 
        personal care assistant is caring for multiple recipients in 
        more than one setting. 
           (d) The recipient or the recipient's responsible party, in 
        conjunction with the county public health nurse, shall determine:
           (1) whether shared care personal care assistant services is 
        an appropriate option based on the individual needs and 
        preferences of the recipient; and 
           (2) the amount of shared care services allocated as part of 
        the overall authorization of personal care services. 
           The recipient or the responsible party, in conjunction with 
        the supervising registered nurse qualified professional, shall 
        approve arrange the setting, and grouping, and arrangement of 
        shared care services based on the individual needs and 
        preferences of the recipients.  Decisions on the selection of 
        recipients to share care services must be based on the ages of 
        the recipients, compatibility, and coordination of their care 
        needs. 
           (e) The following items must be considered by the recipient 
        or the responsible party and the supervising nurse qualified 
        professional, and documented in the recipient's care plan health 
        service record: 
           (1) the additional qualifications needed by the personal 
        care assistant to provide care to several recipients in the same 
        setting; 
           (2) the additional training and supervision needed by the 
        personal care assistant to ensure that the needs of the 
        recipient are met appropriately and safely.  The provider must 
        provide on-site supervision by a registered nurse qualified 
        professional within the first 14 days of shared care services, 
        and monthly thereafter; 
           (3) the setting in which the shared care services will be 
        provided; 
           (4) the ongoing monitoring and evaluation of the 
        effectiveness and appropriateness of the service and process 
        used to make changes in service or setting; and 
           (5) a contingency plan which accounts for absence of the 
        recipient in a shared care services setting due to illness or 
        other circumstances and staffing contingencies. 
           (f) The provider must offer the recipient or the 
        responsible party the option of shared or individual one-on-one 
        personal care assistant care services.  The recipient or the 
        responsible party can withdraw from participating in a shared 
        care services arrangement at any time. 
           (g) In addition to documentation requirements under 
        Minnesota Rules, part 9505.2175, a personal care provider must 
        meet documentation requirements for shared personal 
        care assistant services and must document the following in the 
        health service record for each individual recipient sharing care 
        services: 
           (1) authorization permission by the recipient or the 
        recipient's responsible party, if any, for the maximum number of 
        shared care services hours per week chosen by the recipient; 
           (2) authorization permission by the recipient or the 
        recipient's responsible party, if any, for personal 
        care assistant services provided outside the recipient's 
        residence; 
           (3) authorization permission by the recipient or the 
        recipient's responsible party, if any, for others to receive 
        shared care services in the recipient's residence; 
           (4) revocation by the recipient or the recipient's 
        responsible party, if any, of the shared care service 
        authorization, or the shared care service to be provided to 
        others in the recipient's residence, or the shared care service 
        to be provided outside the recipient's residence; 
           (5) supervision of the shared care personal care assistant 
        services by the supervisory nurse qualified professional, 
        including the date, time of day, number of hours spent 
        supervising the provision of shared care services, whether the 
        supervision was face-to-face or another method of supervision, 
        changes in the recipient's condition, shared care services 
        scheduling issues and recommendations; 
           (6) documentation by the personal care assistant qualified 
        professional of telephone calls or other discussions with 
        the supervisory nurse personal care assistant regarding services 
        being provided to the recipient; and 
           (7) daily documentation of the shared care services 
        provided by each identified personal care assistant including: 
           (i) the names of each recipient receiving shared care 
        services together; 
           (ii) the setting for the day's care shared services, 
        including the starting and ending times that the recipient 
        received shared care services; and 
           (iii) notes by the personal care assistant regarding 
        changes in the recipient's condition, problems that may arise 
        from the sharing of care services, scheduling issues, care 
        issues, and other notes as required by the supervising nurse 
        qualified professional. 
           (h) Unless otherwise provided in this subdivision, all 
        other statutory and regulatory provisions relating to personal 
        care services apply to shared care services. 
           Nothing in this subdivision shall be construed to reduce 
        the total number of hours authorized for an individual recipient.
           Sec. 55.  Minnesota Statutes 1998, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [FLEXIBLE USE OF PERSONAL CARE ASSISTANT 
        HOURS.] (a) The commissioner may allow for the flexible use of 
        personal care assistant hours.  "Flexible use" means the 
        scheduled use of authorized hours of personal care assistant 
        services, which vary within the length of the service 
        authorization in order to more effectively meet the needs and 
        schedule of the recipient.  Recipients may use their approved 
        hours flexibly within the service authorization period for 
        medically necessary covered services specified in the assessment 
        required in subdivision 1.  The flexible use of authorized hours 
        does not increase the total amount of authorized hours available 
        to a recipient as determined under subdivision 5.  The 
        commissioner shall not authorize additional personal care 
        assistant services to supplement a service authorization that is 
        exhausted before the end date under a flexible service use plan, 
        unless the county public health nurse determines a change in 
        condition and a need for increased services is established. 
           (b) The recipient or responsible party, together with the 
        county public health nurse, shall determine whether flexible use 
        is an appropriate option based on the needs and preferences of 
        the recipient or responsible party, and, if appropriate, must 
        ensure that the allocation of hours covers the ongoing needs of 
        the recipient over the entire service authorization period.  As 
        part of the assessment and service planning process, the 
        recipient or responsible party must work with the county public 
        health nurse to develop a written month-to-month plan of the 
        projected use of personal care assistant services that is part 
        of the service plan and ensures that the: 
           (1) health and safety needs of the recipient will be met; 
           (2) total annual authorization will not exceed before the 
        end date; and 
           (3) how actual use of hours will be monitored.  
           (c) If the actual use of personal care assistant service 
        varies significantly from the use projected in the plan, the 
        written plan must be promptly updated by the recipient or 
        responsible party and the county public health nurse. 
           (d) The recipient or responsible party, together with the 
        provider, must work to monitor and document the use of 
        authorized hours and ensure that a recipient is able to manage 
        services effectively throughout the authorized period.  The 
        provider must ensure that the month-to-month plan is 
        incorporated into the care plan.  Upon request of the recipient 
        or responsible party, the provider must furnish regular updates 
        to the recipient or responsible party on the amount of personal 
        care assistant services used.  
           (e) The recipient or responsible party may revoke the 
        authorization for flexible use of hours by notifying the 
        provider and county public health nurse in writing. 
           (f) If the requirements in paragraphs (a) to (e) have not 
        substantially been met, the commissioner shall deny, revoke, or 
        suspend the authorization to use authorized hours flexibly.  The 
        recipient or responsible party may appeal the commissioner's 
        action according to section 256.045.  The denial, revocation, or 
        suspension to use the flexible hours option shall not affect the 
        recipient's authorized level of personal care assistant services 
        as determined under subdivision 5. 
           Sec. 56.  Minnesota Statutes 1998, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [FISCAL AGENT OPTION AVAILABLE FOR PERSONAL CARE 
        ASSISTANT SERVICES.] (a) "Fiscal agent option" is an option that 
        allows the recipient to: 
           (1) use a fiscal agent instead of a personal care provider 
        organization; 
           (2) supervise the personal care assistant; and 
           (3) use a consulting professional. 
           The commissioner may allow a recipient of personal care 
        assistant services to use a fiscal agent to assist the recipient 
        in paying and accounting for medically necessary covered 
        personal care assistant services authorized in subdivision 4 and 
        within the payment parameters of subdivision 5.  Unless 
        otherwise provided in this subdivision, all other statutory and 
        regulatory provisions relating to personal care services apply 
        to a recipient using the fiscal agent option. 
           (b) The recipient or responsible party shall: 
           (1) hire, and terminate the personal care assistant and 
        consulting professional, with the fiscal agent; 
           (2) recruit the personal care assistant and consulting 
        professional and orient and train the personal care assistant in 
        areas that do not require professional delegation as determined 
        by the county public health nurse; 
           (3) supervise and evaluate the personal care assistant in 
        areas that do not require professional delegation as determined 
        in the assessment; 
           (4) cooperate with a consulting professional and implement 
        recommendations pertaining to the health and safety of the 
        recipient; 
           (5) hire a qualified professional to train and supervise 
        the performance of delegated tasks done by the personal care 
        assistant; 
           (6) monitor services and verify in writing the hours worked 
        by the personal care assistant and the consulting professional; 
           (7) develop and revise a care plan with assistance from a 
        consulting professional; 
           (8) verify and document the credentials of the consulting 
        professional; and 
           (9) enter into a written agreement, as specified in 
        paragraph (f). 
           (c) The duties of the fiscal agent shall be to: 
           (1) bill the medical assistance program for personal care 
        assistant and consulting professional services; 
           (2) request and secure background checks on personal care 
        assistants and consulting professionals according to section 
        245A.04; 
           (3) pay the personal care assistant and consulting 
        professional based on actual hours of services provided; 
           (4) withhold and pay all applicable federal and state 
        taxes; 
           (5) verify and document hours worked by the personal care 
        assistant and consulting professional; 
           (6) make the arrangements and pay unemployment insurance, 
        taxes, workers' compensation, liability insurance, and other 
        benefits, if any; 
           (7) enroll in the medical assistance program as a fiscal 
        agent; and 
           (8) enter into a written agreement as specified in 
        paragraph (f) before services are provided. 
           (d) The fiscal agent: 
           (1) may not be related to the recipient, consulting 
        professional, or the personal care assistant; 
           (2) must ensure arm's length transactions with the 
        recipient and personal care assistant; and 
           (3) shall be considered a joint employer of the personal 
        care assistant and consulting professional to the extent 
        specified in this section. 
           The fiscal agent or owners of the entity that provides 
        fiscal agent services under this subdivision must pass a 
        criminal background check as required in section 256B.0627, 
        subdivision 1, paragraph (e). 
           (e) The consulting professional providing assistance to the 
        recipient shall meet the qualifications specified in section 
        256B.0625, subdivision 19c.  The consulting professional shall 
        assist the recipient in developing and revising a plan to meet 
        the recipient's assessed needs, and supervise the performance of 
        delegated tasks, as determined by the public health nurse.  In 
        performing this function, the consulting professional must visit 
        the recipient in the recipient's home at least once annually.  
        The consulting professional must report to the local county 
        public health nurse concerns relating to the health and safety 
        of the recipient, and any suspected abuse, neglect, or financial 
        exploitation of the recipient to the appropriate authorities.  
           (f) The fiscal agent, recipient or responsible party, 
        personal care assistant, and consulting professional shall enter 
        into a written agreement before services are started.  The 
        agreement shall include: 
           (1) the duties of the recipient, professional, personal 
        care assistant, and fiscal agent based on paragraphs (a) to (e); 
           (2) the salary and benefits for the personal care assistant 
        and those providing professional consultation; 
           (3) the administrative fee of the fiscal agent and services 
        paid for with that fee, including background check fees; 
           (4) procedures to respond to billing or payment complaints; 
        and 
           (5) procedures for hiring and terminating the personal care 
        assistant and those providing professional consultation. 
           (g) The rates paid for personal care services, professional 
        assistance, and fiscal agency services under this subdivision 
        shall be the same rates paid for personal care services and 
        qualified professional services under subdivision 2 
        respectively.  Except for the administrative fee of the fiscal 
        agent specified in paragraph (f), the remainder of the rates 
        paid to the fiscal agent must be used to pay for the salary and 
        benefits for the personal care assistant or those providing 
        professional consultation. 
           (h) As part of the assessment defined in subdivision 1, the 
        following conditions must be met to use or continue use of a 
        fiscal agent: 
           (1) the recipient must be able to direct the recipient's 
        own care, or the responsible party for the recipient must be 
        readily available to direct the care of the personal care 
        assistant; 
           (2) the recipient or responsible party must be 
        knowledgeable of the health care needs of the recipient and be 
        able to effectively communicate those needs; 
           (3) a face-to-face assessment must be conducted by the 
        local county public health nurse at least annually, or when 
        there is a significant change in the recipient's condition or 
        change in the need for personal care assistant services.  The 
        county public health nurse shall determine the services that 
        require professional delegation, if any, and the amount and 
        frequency of related supervision; 
           (4) the recipient cannot select the shared services option 
        as specified in subdivision 8; and 
           (5) parties must be in compliance with the written 
        agreement specified in paragraph (f). 
           (i) The commissioner shall deny, revoke, or suspend the 
        authorization to use the fiscal agent option if: 
           (1) it has been determined by the consulting professional 
        or local county public health nurse that the use of this option 
        jeopardizes the recipient's health and safety; 
           (2) the parties have failed to comply with the written 
        agreement specified in paragraph (f); or 
           (3) the use of the option has led to abusive or fraudulent 
        billing for personal care assistant services.  
           The recipient or responsible party may appeal the 
        commissioner's action according to section 256.045.  The denial, 
        revocation, or suspension to use the fiscal agent option shall 
        not affect the recipient's authorized level of personal care 
        assistant services as determined in subdivision 5.  
           Sec. 57.  Minnesota Statutes 1998, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [SHARED PRIVATE DUTY NURSING CARE OPTION.] (a) 
        Medical assistance payments for shared private duty nursing 
        services by a private duty nurse shall be limited according to 
        this subdivision.  For the purposes of this section, "private 
        duty nursing agency" means an agency licensed under chapter 144A 
        to provide private duty nursing services. 
           (b) Recipients of private duty nursing services may share 
        nursing staff and the commissioner shall provide a rate 
        methodology for shared private duty nursing.  For two persons 
        sharing nursing care, the rate paid to a provider shall not 
        exceed 1.5 times the nonwaivered private duty nursing rates paid 
        for serving a single individual who is not ventilator dependent, 
        by a registered nurse or licensed practical nurse.  These rates 
        apply only to situations in which both recipients are present 
        and receive shared private duty nursing care on the date for 
        which the service is billed.  No more than two persons may 
        receive shared private duty nursing services from a private duty 
        nurse in a single setting. 
           (c) Shared private duty nursing care is the provision of 
        nursing services by a private duty nurse to two recipients at 
        the same time and in the same setting.  For the purposes of this 
        subdivision, "setting" means: 
           (1) the home or foster care home of one of the individual 
        recipients; or 
           (2) a child care program licensed under chapter 245A or 
        operated by a local school district or private school; or 
           (3) an adult day care service licensed under chapter 245A. 
           This subdivision does not apply when a private duty nurse 
        is caring for multiple recipients in more than one setting. 
           (d) The recipient or the recipient's legal representative, 
        and the recipient's physician, in conjunction with the home 
        health care agency, shall determine: 
           (1) whether shared private duty nursing care is an 
        appropriate option based on the individual needs and preferences 
        of the recipient; and 
           (2) the amount of shared private duty nursing services 
        authorized as part of the overall authorization of nursing 
        services. 
           (e) The recipient or the recipient's legal representative, 
        in conjunction with the private duty nursing agency, shall 
        approve the setting, grouping, and arrangement of shared private 
        duty nursing care based on the individual needs and preferences 
        of the recipients.  Decisions on the selection of recipients to 
        share services must be based on the ages of the recipients, 
        compatibility, and coordination of their care needs. 
           (f) The following items must be considered by the recipient 
        or the recipient's legal representative and the private duty 
        nursing agency, and documented in the recipient's health service 
        record: 
           (1) the additional training needed by the private duty 
        nurse to provide care to several recipients in the same setting 
        and to ensure that the needs of the recipients are met 
        appropriately and safely; 
           (2) the setting in which the shared private duty nursing 
        care will be provided; 
           (3) the ongoing monitoring and evaluation of the 
        effectiveness and appropriateness of the service and process 
        used to make changes in service or setting; 
           (4) a contingency plan which accounts for absence of the 
        recipient in a shared private duty nursing setting due to 
        illness or other circumstances; 
           (5) staffing backup contingencies in the event of employee 
        illness or absence; and 
           (6) arrangements for additional assistance to respond to 
        urgent or emergency care needs of the recipients. 
           (g) The provider must offer the recipient or responsible 
        party the option of shared or one-on-one private duty nursing 
        services.  The recipient or responsible party can withdraw from 
        participating in a shared service arrangement at any time. 
           (h) The private duty nursing agency must document the 
        following in the health service record for each individual 
        recipient sharing private duty nursing care: 
           (1) permission by the recipient or the recipient's legal 
        representative for the maximum number of shared nursing care 
        hours per week chosen by the recipient; 
           (2) permission by the recipient or the recipient's legal 
        representative for shared private duty nursing services provided 
        outside the recipient's residence; 
           (3) permission by the recipient or the recipient's legal 
        representative for others to receive shared private duty nursing 
        services in the recipient's residence; 
           (4) revocation by the recipient or the recipient's legal 
        representative of the shared private duty nursing care 
        authorization, or the shared care to be provided to others in 
        the recipient's residence, or the shared private duty nursing 
        services to be provided outside the recipient's residence; and 
           (5) daily documentation of the shared private duty nursing 
        services provided by each identified private duty nurse, 
        including: 
           (i) the names of each recipient receiving shared private 
        duty nursing services together; 
           (ii) the setting for the shared services, including the 
        starting and ending times that the recipient received shared 
        private duty nursing care; and 
           (iii) notes by the private duty nurse regarding changes in 
        the recipient's condition, problems that may arise from the 
        sharing of private duty nursing services, and scheduling and 
        care issues. 
           (i) Unless otherwise provided in this subdivision, all 
        other statutory and regulatory provisions relating to private 
        duty nursing services apply to shared private duty nursing 
        services. 
           Nothing in this subdivision shall be construed to reduce 
        the total number of private duty nursing hours authorized for an 
        individual recipient under subdivision 5. 
           Sec. 58.  Minnesota Statutes 1998, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [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. 
           Sec. 59.  Minnesota Statutes 1998, section 256B.0635, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MEDICAL ASSISTANCE FOR MFIP-S PARTICIPANTS WHO 
        OPT TO DISCONTINUE MONTHLY CASH ASSISTANCE.] Upon federal 
        approval, Medical assistance is available to persons who 
        received MFIP-S in at least three of the six months preceding 
        the month in which the person opted opt to discontinue receiving 
        MFIP-S cash assistance under section 256J.31, subdivision 12.  A 
        person who is eligible for medical assistance under this section 
        may receive medical assistance without reapplication as long as 
        the person meets MFIP-S eligibility requirements, unless the 
        assistance unit does not include a dependent child.  Medical 
        assistance may be paid pursuant to subdivisions 1 and 2 for 
        persons who are no longer eligible for MFIP-S due to increased 
        employment or child support.  A person may be eligible for 
        MinnesotaCare due to increased employment or child support, and 
        as such must be informed of the option to transition onto 
        MinnesotaCare. 
           Sec. 60.  [256B.0914] [CONFLICTS OF INTEREST RELATED TO 
        MEDICAID EXPENDITURES.] 
           Subdivision 1.  [DEFINITIONS.] (a) "Contract" means a 
        written, fully executed agreement for the purchase of goods and 
        services involving a substantial expenditure of Medicaid 
        funding.  A contract under a renewal period shall be considered 
        a separate contract. 
           (b) "Contractor bid or proposal information" means cost or 
        pricing data, indirect costs, and proprietary information marked 
        as such by the bidder in accordance with applicable law. 
           (c) "Particular expenditure" means a substantial 
        expenditure as defined below, for a specified term, involving 
        specific parties.  The renewal of an existing contract for the 
        substantial expenditure of Medicaid funds is considered a 
        separate, particular expenditure from the original contract. 
           (d) "Source selection information" means any of the 
        following information prepared for use by the state, county, or 
        independent contractor for the purpose of evaluating a bid or 
        proposal to enter into a Medicaid procurement contract, if that 
        information has not been previously made available to the public 
        or disclosed publicly: 
           (1) bid prices submitted in response to a solicitation for 
        sealed bids, or lists of the bid prices before bid opening; 
           (2) proposed costs or prices submitted in response to a 
        solicitation, or lists of those proposed costs or prices; 
           (3) source selection plans; 
           (4) technical evaluations plans; 
           (5) technical evaluations of proposals; 
           (6) cost or price evaluation of proposals; 
           (7) competitive range determinations that identify 
        proposals that have a reasonable chance of being selected for 
        award of a contract; 
           (8) rankings of bids, proposals, or competitors; 
           (9) the reports and evaluations of source selection panels, 
        boards, or advisory councils; and 
           (10) other information marked as "source selection 
        information" based on a case-by-case determination by the head 
        of the agency, contractor, designees, or the contracting officer 
        that disclosure of the information would jeopardize the 
        integrity or successful completion of the Medicaid procurement 
        to which the information relates. 
           (e) "Substantial expenditure" and "substantial amounts" 
        mean a purchase of goods or services in excess of $10,000,000 in 
        Medicaid funding under this chapter or chapter 256L. 
           Subd. 2.  [APPLICABILITY.] (a) Unless provided otherwise, 
        this section applies to:  
           (1) any state or local officer, employee, or independent 
        contractor who is responsible for the substantial expenditures 
        of medical assistance or MinnesotaCare funding under this 
        chapter or chapter 256L for which federal Medicaid matching 
        funds are available; 
           (2) any individual who formerly was such an officer, 
        employee, or independent contractor; and 
           (3) any partner of such a state or local officer, employee, 
        or independent contractor. 
           (b) This section is intended to meet the requirements of 
        state participation in the Medicaid program at United States 
        Code, title 42, sections 1396a(a)(4) and 1396u-2(d)(3), which 
        require that states have in place restrictions against conflicts 
        of interest in the Medicaid procurement process, that are at 
        least as stringent as those in effect under United States Code, 
        title 41, section 423, and title 18, sections 207 and 208, as 
        they apply to federal employees. 
           Subd. 3.  [DISCLOSURE OF PROCUREMENT INFORMATION.] A person 
        described in subdivision 2 may not knowingly disclose contractor 
        bid or proposal information, or source selection information 
        before the award by the state, county, or independent contractor 
        of a Medicaid procurement contract to which the information 
        relates unless the disclosure is otherwise authorized by law.  
        No person, other than as provided by law, shall knowingly obtain 
        contractor bid or proposal information or source selection 
        information before the award of a Medicaid procurement contract 
        to which the information relates. 
           Subd. 4.  [OFFERS OF EMPLOYMENT.] When a person described 
        in subdivision 2, paragraph (a), is participating personally and 
        substantially in a Medicaid procurement for a contract contacts 
        or is contacted by a person who is a bidder or offeror in the 
        same procurement regarding possible employment outside of the 
        entity by which the person is currently employed, the person 
        must:  
           (1) report the contact in writing to the person's 
        supervisor and employer's ethics officer; and 
           (2) either: 
           (i) reject the possibility of employment with the bidder or 
        offeror; or 
           (ii) be disqualified from further participation in the 
        procurement until the bidder or offeror is no longer involved in 
        that procurement, or all discussions with the bidder or offeror 
        regarding possible employment have terminated without an 
        arrangement for employment.  A bidder or offeror may not engage 
        in employment discussions with an official who is subject to 
        this subdivision, until the bidder or offeror is no longer 
        involved in that procurement. 
           Subd. 5.  [ACCEPTANCE OF COMPENSATION BY A FORMER 
        OFFICIAL.] (a) A former official of the state or county, or a 
        former independent contractor, described in subdivision 2 may 
        not accept compensation from a Medicaid contractor of a 
        substantial expenditure as an employee, officer, director, or 
        consultant of the contractor within one year after the former 
        official or independent contractor: 
           (1) served as the procuring contracting officer, the source 
        selection authority, a member of the source selection evaluation 
        board, or the chief of a financial or technical evaluation team 
        in a procurement in which the contractor was selected for award; 
           (2) served as the program manager, deputy program manager, 
        or administrative contracting officer for a contract awarded to 
        the contractor; or 
           (3) personally made decisions for the state, county, or 
        independent contractor to: 
           (i) award a contract, subcontract, modification of a 
        contract or subcontract, or a task order or delivery order to 
        the contractor; 
           (ii) establish overhead or other rates applicable to a 
        contract or contracts with the contractor; 
           (iii) approve issuance of a contract payment or payments to 
        the contractor; or 
           (iv) pay or settle a claim with the contractor. 
           (b) Paragraph (a) does not prohibit a former official of 
        the state, county, or independent contractor from accepting 
        compensation from any division or affiliate of a contractor not 
        involved in the same or similar products or services as the 
        division or affiliate of the contractor that is responsible for 
        the contract referred to in paragraph (a), clause (1), (2), or 
        (3). 
           (c) A contractor shall not provide compensation to a former 
        official knowing that the former official is accepting that 
        compensation in violation of this subdivision. 
           Subd. 6.  [PERMANENT RESTRICTIONS ON REPRESENTATION AND 
        COMMUNICATION.] (a) A person described in subdivision 2, after 
        termination of his or her service with state, county, or 
        independent contractor, is permanently restricted from knowingly 
        making, with the intent to influence, any communication to or 
        appearance before an officer or employee of a department, 
        agency, or court of the United States, the state of Minnesota 
        and its counties in connection with a particular expenditure: 
           (1) in which the United States, the state of Minnesota, or 
        a Minnesota county is a party or has a direct and substantial 
        interest; 
           (2) in which the person participated personally and 
        substantially as an officer, employee, or independent 
        contractor; and 
           (3) which involved a specific party or parties at the time 
        of participation. 
           (b) For purposes of this subdivision and subdivisions 7 and 
        9, "participated" means an action taken through decision, 
        approval, disapproval, recommendation, the rendering of advice, 
        investigation, or other such action. 
           Subd. 7.  [TWO-YEAR RESTRICTIONS ON REPRESENTATION AND 
        COMMUNICATION.] No person described in subdivision 2, within two 
        years after termination of service with the state, county, or 
        independent contractor, shall knowingly make, with the intent to 
        influence, any communication to or appearance before any officer 
        or employee of any government department, agency, or court in 
        connection with a particular expenditure: 
           (1) in which the United States, the state of Minnesota, or 
        a Minnesota county is a party or has a direct and substantial 
        interest; 
           (2) which the person knows or reasonably should know was 
        actually pending under the official's responsibility as an 
        officer, employee, or independent contractor within one year 
        before the termination of the official's service with the state, 
        county, or independent contractor; and 
           (3) which involved a specific party or parties at the time 
        the expenditure was pending. 
           Subd. 8.  [EXCEPTIONS TO PERMANENT AND TWO-YEAR 
        RESTRICTIONS ON REPRESENTATION AND COMMUNICATION.] Subdivisions 
        6 and 7 do not apply to: 
           (1) communications or representations made in carrying out 
        official duties on behalf of the United States, the state of 
        Minnesota or local government, or as an elected official of the 
        state or local government; 
           (2) communications made solely for the purpose of 
        furnishing scientific or technological information; or 
           (3) giving testimony under oath.  A person subject to 
        subdivisions 6 and 7 may serve as an expert witness in that 
        matter, without restriction, for the state, county, or 
        independent contractor.  Under court order, a person subject to 
        subdivisions 6 and 7 may serve as an expert witness for others.  
        Otherwise, the person may not serve as an expert witness in that 
        matter. 
           Subd. 9.  [WAIVER.] The commissioner of human services, or 
        the governor in the case of the commissioner, may grant a waiver 
        of a restriction in subdivisions 6 and 7 if he or she determines 
        that a waiver is in the public interest and that the services of 
        the officer or employee are critically needed for the benefit of 
        the state or county government. 
           Subd. 10.  [ACTS AFFECTING A PERSONAL FINANCIAL 
        INTEREST.] A person described in subdivision 2, paragraph (a), 
        clause (1), who participates in a particular expenditure in 
        which the person has knowledge or has a financial interest, is 
        subject to the penalties in subdivision 12.  For purposes of 
        this subdivision, "financial interest" also includes the 
        financial interest of a spouse, minor child, general partner, 
        organization in which the officer or employee is serving as an 
        officer, director, trustee, general partner, or employee, or any 
        person or organization with whom the individual is negotiating 
        or has any arrangement concerning prospective employment. 
           Subd. 11.  [EXCEPTIONS TO PROHIBITIONS REGARDING FINANCIAL 
        INTEREST.] Subdivision 10 does not apply if: 
           (1) the person first advises the person's supervisor and 
        the employer's ethics officer regarding the nature and 
        circumstances of the particular expenditure and makes full 
        disclosure of the financial interest and receives in advance a 
        written determination made by the commissioner of human 
        services, or the governor in the case of the commissioner, that 
        the interest is not so substantial as to likely affect the 
        integrity of the services which the government may expect from 
        the officer, employee, or independent contractor; 
           (2) the financial interest is listed as an exemption at 
        Code of Federal Regulations, title 5, sections 2640.201 to 
        2640.203, as too remote or inconsequential to affect the 
        integrity of the services of the office, employee, or 
        independent contractor to which the requirement applies. 
           Subd. 12.  [CRIMINAL PENALTIES.] (a) A person who violates 
        subdivisions 3 to 5 for the purpose of either exchanging the 
        information covered by this section for anything of value, or 
        for obtaining or giving anyone a competitive advantage in the 
        award of a Medicaid contract, may be sentenced to imprisonment 
        for not more than five years or payment of a fine of not more 
        than $50,000 for each violation, or the amount of compensation 
        which the person received or offered for the prohibited conduct, 
        whichever is greater, or both. 
           (b) A person who violates a provision of subdivisions 6 to 
        11 may be sentenced to imprisonment for not more than one year 
        or payment of a fine of not more than $50,000 for each violation 
        or the amount of compensation which the person received or 
        offered for the prohibited conduct, whichever amount is greater, 
        or both.  A person who willfully engages in conduct in violation 
        of subdivisions 6 to 11 may be sentenced to imprisonment for not 
        more than five years or to payment of fine of not more than 
        $50,000 for each violation or the amount of compensation which 
        the person received or offered for the prohibited conduct, 
        whichever amount is greater, or both. 
           (c) Nothing in this section precludes prosecution under 
        other laws such as section 609.43. 
           Subd. 13.  [CIVIL PENALTIES AND INJUNCTIVE RELIEF.] (a) The 
        Minnesota attorney general may bring a civil action in Ramsey 
        county district court against a person who violates this section.
        Upon proof of such conduct by a preponderance of evidence, the 
        person is subject to a civil penalty.  An individual who 
        violates this section is subject to a civil penalty of not more 
        than $50,000 for each violation plus twice the amount of 
        compensation which the individual received or offered for the 
        prohibited conduct.  An organization that violates this section 
        is subject to a civil penalty of not more than $500,000 for each 
        violation plus twice the amount of compensation which the 
        organization received or offered for the prohibited conduct. 
           (b) If the Minnesota attorney general has reason to believe 
        that a person is engaging in conduct in violation of this 
        section, the attorney general may petition the Ramsey county 
        district court for an order prohibiting that person from 
        engaging in such conduct.  The court may issue an order 
        prohibiting that person from engaging in such conduct if the 
        court finds that the conduct constitutes such a violation.  The 
        filing of a petition under this subdivision does not preclude 
        any other remedy which is available by law. 
           Subd. 14.  [ADMINISTRATIVE ACTIONS.] (a) If a state agency, 
        local agency, or independent contractor receives information 
        that a contractor or a person has violated this section, the 
        state agency, local agency, or independent contractor may: 
           (1) cancel the procurement if a contract has not already 
        been awarded; 
           (2) rescind the contract; or 
           (3) initiate suspension or debarment proceedings according 
        to applicable state or federal law. 
           (b) If the contract is rescinded, the state agency, local 
        agency, or independent contractor is entitled to recover, in 
        addition to any penalty prescribed by law, the amount expended 
        under the contract. 
           (c) This section does not: 
           (1) restrict the disclosure of information to or from any 
        person or class of persons authorized to receive that 
        information; 
           (2) restrict a contractor from disclosing the contractor's 
        bid or proposal information or the recipient from receiving that 
        information; 
           (3) restrict the disclosure or receipt of information 
        relating to a Medicaid procurement after it has been canceled by 
        the state agency, county agency, or independent contractor 
        before the contract award unless the agency or independent 
        contractor plans to resume the procurement; or 
           (4) limit the applicability of any requirements, sanctions, 
        contract penalties, and remedies established under any other law 
        or regulation. 
           (d) No person may file a protest against the award or 
        proposed award of a Medicaid contract alleging a violation of 
        this section unless that person reported the information the 
        person believes constitutes evidence of the offense to the 
        applicable state agency, local agency, or independent contractor 
        responsible for the procurement.  The report must be made no 
        later than 14 days after the person first discovered the 
        possible violation. 
           Sec. 61.  Minnesota Statutes 1998, section 256B.0916, is 
        amended to read: 
           256B.0916 [EXPANSION OF HOME AND COMMUNITY-BASED SERVICES; 
        MANAGEMENT AND ALLOCATION RESPONSIBILITIES.] 
           (a) The commissioner shall expand availability of home and 
        community-based services for persons with mental retardation and 
        related conditions to the extent allowed by federal law and 
        regulation and shall assist counties in transferring persons 
        from semi-independent living services to home and 
        community-based services.  The commissioner may transfer funds 
        from the state semi-independent living services account 
        available under section 252.275, subdivision 8, and state 
        community social services aids available under section 256E.15 
        to the medical assistance account to pay for the nonfederal 
        share of nonresidential and residential home and community-based 
        services authorized under section 256B.092 for persons 
        transferring from semi-independent living services. 
           (b) Upon federal approval, county boards are not 
        responsible for funding semi-independent living services as a 
        social service for those persons who have transferred to the 
        home and community-based waiver program as a result of the 
        expansion under this subdivision.  The county responsibility for 
        those persons transferred shall be assumed under section 
        256B.092.  Notwithstanding the provisions of section 252.275, 
        the commissioner shall continue to allocate funds under that 
        section for semi-independent living services and county boards 
        shall continue to fund services under sections 256E.06 and 
        256E.14 for those persons who cannot access home and 
        community-based services under section 256B.092. 
           (c) Eighty percent of the state funds made available to the 
        commissioner under section 252.275 as a result of persons 
        transferring from the semi-independent living services program 
        to the home and community-based services program shall be used 
        to fund additional persons in the semi-independent living 
        services program. 
           (d) Beginning August 1, 1998, the commissioner shall issue 
        an annual report on the home and community-based waiver for 
        persons with mental retardation or related conditions, that 
        includes a list of the counties in which less than 95 percent of 
        the allocation provided, excluding the county waivered services 
        reserve, has been committed for two or more quarters during the 
        previous state fiscal year.  For each listed county, the report 
        shall include the amount of funds allocated but not used, the 
        number and ages of individuals screened and waiting for 
        services, the services needed, a description of the technical 
        assistance provided by the commissioner to assist the counties 
        in jointly planning with other counties in order to serve more 
        persons, and additional actions which will be taken to serve 
        those screened and waiting for services. 
           Subdivision 1.  [REDUCTION OF WAITING LIST.] (a) The 
        legislature recognizes that as of January 1, 1999, 3,300 persons 
        with mental retardation or related conditions have been screened 
        and determined eligible for the home and community-based waiver 
        services program for persons with mental retardation or related 
        conditions.  Many wait for several years before receiving 
        service. 
           (b) The waiting list for this program shall be reduced or 
        eliminated by June 30, 2003.  In order to reduce the number of 
        eligible persons waiting for identified services provided 
        through the home and community-based waiver for persons with 
        mental retardation or related conditions, funding shall be 
        increased to add 100 additional eligible persons each year 
        beyond the February 1999 medical assistance forecast. 
           (c) The commissioner shall allocate resources in such a 
        manner as to use all resources budgeted for the home and 
        community-based waiver for persons with mental retardation or 
        related conditions according to the priorities listed in 
        subdivision 2, paragraph (b), and then to serve other persons on 
        the waiting list.  Resources allocated for a fiscal year to 
        serve persons affected by public and private sector ICF/MR 
        closures, but not expected to be expended for that purpose, must 
        be reallocated within that fiscal year to serve other persons on 
        the waiting list, and the number of waiver diversion slots shall 
        be adjusted accordingly. 
           (d) For fiscal year 2001, at least one-half of the increase 
        in funding over the previous year provided in the February 1999 
        medical assistance forecast for the home and community-based 
        waiver for persons with mental retardation and related 
        conditions, including changes made by the 1999 legislature, must 
        be used to serve persons who are not affected by public and 
        private sector ICF/MR closures. 
           Subd. 2.  [DISTRIBUTION OF FUNDS; PARTNERSHIPS.] (a) 
        Beginning with fiscal year 2000, the commissioner shall 
        distribute all funding available for home and community-based 
        waiver services for persons with mental retardation or related 
        conditions to individual counties or to groups of counties that 
        form partnerships to jointly plan, administer, and authorize 
        funding for eligible individuals.  The commissioner shall 
        encourage counties to form partnerships that have a sufficient 
        number of recipients and funding to adequately manage the risk 
        and maximize use of available resources.  
           (b) Counties must submit a request for funds and a plan for 
        administering the program as required by the commissioner.  The 
        plan must identify the number of clients to be served, their 
        ages, and their priority listing based on: 
           (1) requirements in Minnesota Rules, part 9525.1880; 
           (2) unstable living situations due to the age or incapacity 
        of the primary caregiver; 
           (3) the need for services to avoid out-of-home placement of 
        children; and 
           (4) the need to serve persons affected by private sector 
        ICF/MR closures. 
        The plan must also identify changes made to improve services to 
        eligible persons and to improve program management. 
           (c) In allocating resources to counties, priority must be 
        given to groups of counties that form partnerships to jointly 
        plan, administer, and authorize funding for eligible individuals 
        and to counties determined by the commissioner to have 
        sufficient waiver capacity to maximize resource use. 
           (d) Within 30 days after receiving the county request for 
        funds and plans, the commissioner shall provide a written 
        response to the plan that includes the level of resources 
        available to serve additional persons. 
           (e) Counties are eligible to receive medical assistance 
        administrative reimbursement for administrative costs under 
        criteria established by the commissioner.  
           Subd. 3.  [FAILURE TO DEVELOP PARTNERSHIPS OR SUBMIT A 
        PLAN.] (a) By October 1 of each year the commissioner shall 
        notify the county board if any county determined by the 
        commissioner to have insufficient capacity to maximize use of 
        available resources fails to develop a partnership with other 
        counties or fails to submit a plan as required in subdivision 
        2.  The commissioner shall provide needed technical assistance 
        to a county or group of counties that fails to form a 
        partnership or submit a plan.  If a county has not joined a 
        county partnership or submitted a plan within 30 days following 
        the notice by the commissioner of its failure, the commissioner 
        shall require and assist that county to develop a plan or 
        contract with another county or group of counties to plan and 
        administer the waiver services program in that county. 
           (b) Counties may request technical assistance, management 
        information, and administrative support from the commissioner at 
        any time.  The commissioner shall respond to county requests 
        within 30 days.  Priority shall be given to activities that 
        support the administrative needs of newly formed county 
        partnerships. 
           Subd. 4.  [ALLOWED RESERVE.] Counties or groups of counties 
        participating in partnerships that have submitted a plan under 
        this section may develop an allowed reserve amount to meet 
        crises and other unmet needs of current home and community-based 
        waiver recipients.  The amount of the allowed reserve shall be a 
        county specific amount based upon documented past experience and 
        projected need for the coming year described in an allowed 
        reserve plan submitted for approval to the commissioner with the 
        allocation request for the fiscal year. 
           Subd. 5.  [PRIORITIES FOR REASSIGNMENT OF RESOURCES AND 
        APPROVAL OF INCREASED CAPACITY.] In order to maximize the number 
        of persons served with waiver funds, the commissioner shall 
        monitor county utilization of allocated resources and, as 
        appropriate, reassign resources not utilized and approve 
        increased capacity within available county allocations.  
        Priority consideration for reassignment of resources and 
        approval of increased capacity shall be given to counties with 
        sufficient capacity and counties that form partnerships.  In 
        addition to the priorities listed in Minnesota Rules, part 
        9525.1880, the commissioner shall also give priority 
        consideration to persons whose living situations are unstable 
        due to the age or incapacity of the primary caregiver and to 
        children to avoid out-of-home placement. 
           Subd. 6.  [WAIVER REQUEST.] (a) The commissioner shall 
        submit to the federal Health Care Financing Administration by 
        September 1, 1999, a request for a waiver to include an option 
        that would allow waiver service recipients to directly receive 
        95 percent of the funds that would be allocated to individuals 
        based on written county criteria and procedures approved by the 
        commissioner for the purchase of services to meet their 
        long-term care needs.  The waiver request must include a 
        provision requiring recipients who receive funds directly to 
        provide to the commissioner annually, a description of the type 
        of services used, the amount paid for the services purchased, 
        and the amount of unspent funds. 
           (b) The commissioner, in cooperation with county 
        representatives, waiver service providers, recipients, 
        recipients' families, legal guardians, and advocacy groups, 
        shall develop criteria for: 
           (1) eligibility to receive funding directly; 
           (2) determination of the amount of funds made available to 
        each eligible person based on need; and 
           (3) the accountability required of persons directly 
        receiving funds. 
           (c) If this waiver is approved and implemented, any unspent 
        money from the waiver services allocation, including the five 
        percent not directly allocated to recipients and any unspent 
        portion of the money that is directly allocated, shall be used 
        to meet the needs of other eligible persons waiting for services 
        funded through the waiver. 
           (d) The commissioner, in consultation with county social 
        services agencies, waiver services providers, recipients, 
        recipients' families, legal guardians, and advocacy groups shall 
        evaluate the effectiveness of this option within two years of 
        its implementation. 
           Subd. 7.  [ANNUAL REPORT BY COMMISSIONER.] Beginning 
        October 1, 1999, and each October 1 thereafter, the commissioner 
        shall issue an annual report on county and state use of 
        available resources for the home and community-based waiver for 
        persons with mental retardation or related conditions.  For each 
        county or county partnership, the report shall include: 
           (1) the amount of funds allocated but not used; 
           (2) the county specific allowed reserve amount approved and 
        used; 
           (3) the number, ages and living situations of individuals 
        screened and waiting for services; 
           (4) the urgency of need for services to begin within one, 
        two, or more than two years for each individual; 
           (5) the services needed; 
           (6) the number of additional persons served by approval of 
        increased capacity within existing allocations; 
           (7) results of action by the commissioner to streamline 
        administrative requirements and improve county resource 
        management; and 
           (8) additional action that would decrease the number of 
        those eligible and waiting for waivered services. 
        The commissioner shall specify intended outcomes for the program 
        and the degree to which these specified outcomes are attained. 
           (e) Subd. 8.  [FINANCIAL INFORMATION BY COUNTY.] The 
        commissioner shall make available to interested parties, upon 
        request, financial information by county including the amount of 
        resources allocated for the home and community-based waiver for 
        persons with mental retardation and related conditions, the 
        resources committed, the number of persons screened and waiting 
        for services, the type of services requested by those waiting, 
        and the amount of allocated resources not committed. 
           Subd. 9.  [LEGAL REPRESENTATIVE PARTICIPATION 
        EXCEPTION.] The commissioner, in cooperation with 
        representatives of counties, service providers, service 
        recipients, family members, legal representatives and advocates, 
        shall develop criteria to allow legal representatives to be 
        reimbursed for providing specific support services to meet the 
        person's needs when a plan which assures health and safety has 
        been agreed upon and carried out by the legal representative, 
        the person, and the county.  Legal representatives providing 
        support under consumer-directed community support services 
        pursuant to section 256B.092, subdivision 4, or the consumer 
        support grant program pursuant to section 256B.092, subdivision 
        7, shall not be considered to have a direct or indirect service 
        provider interest under section 256B.092, subdivision 7, if a 
        health and safety plan which meets the criteria established has 
        been agreed upon and implemented.  By October 1, 1999, the 
        commissioner shall submit, for federal approval, amendments to 
        allow legal representatives to provide supports and receive 
        reimbursement under the consumer-directed community support 
        services section of the home and community-based waiver plan. 
           Sec. 62.  Minnesota Statutes 1998, section 256B.0917, 
        subdivision 8, is amended to read: 
           Subd. 8.  [LIVING-AT-HOME/BLOCK NURSE PROGRAM GRANT.] (a) 
        The organization awarded the contract under subdivision 7, shall 
        develop and administer a grant program to establish or expand up 
        to 27 33 community-based organizations that will implement 
        living-at-home/block nurse programs that are designed to enable 
        senior citizens to live as independently as possible in their 
        homes and in their communities.  At least one-half of the 
        programs must be in counties outside the seven-county 
        metropolitan area.  Nonprofit organizations and units of local 
        government are eligible to apply for grants to establish the 
        community organizations that will implement living-at-home/block 
        nurse programs.  In awarding grants, the organization awarded 
        the contract under subdivision 7 shall give preference to 
        nonprofit organizations and units of local government from 
        communities that: 
           (1) have high nursing home occupancy rates; 
           (2) have a shortage of health care professionals; 
           (3) are located in counties adjacent to, or are located in, 
        counties with existing living-at-home/block nurse programs; and 
           (4) meet other criteria established by LAH/BN, Inc., in 
        consultation with the commissioner. 
           (b) Grant applicants must also meet the following criteria: 
           (1) the local community demonstrates a readiness to 
        establish a community model of care, including the formation of 
        a board of directors, advisory committee, or similar group, of 
        which at least two-thirds is comprised of community citizens 
        interested in community-based care for older persons; 
           (2) the program has sponsorship by a credible, 
        representative organization within the community; 
           (3) the program has defined specific geographic boundaries 
        and defined its organization, staffing and coordination/delivery 
        of services; 
           (4) the program demonstrates a team approach to 
        coordination and care, ensuring that the older adult 
        participants, their families, the formal and informal providers 
        are all part of the effort to plan and provide services; and 
           (5) the program provides assurances that all community 
        resources and funding will be coordinated and that other funding 
        sources will be maximized, including a person's own resources. 
           (c) Grant applicants must provide a minimum of five percent 
        of total estimated development costs from local community 
        funding.  Grants shall be awarded for four-year periods, and the 
        base amount shall not exceed $80,000 per applicant for the grant 
        period.  The organization under contract may increase the grant 
        amount for applicants from communities that have socioeconomic 
        characteristics that indicate a higher level of need for 
        assistance.  Subject to the availability of funding, grants and 
        grant renewals awarded or entered into on or after July 1, 1997, 
        shall be renewed by LAH/BN, Inc. every four years, unless 
        LAH/BN, Inc. determines that the grant recipient has not 
        satisfactorily operated the living-at-home/block nurse program 
        in compliance with the requirements of paragraphs (b) and (d).  
        Grants provided to living-at-home/block nurse programs under 
        this paragraph may be used for both program development and the 
        delivery of services. 
           (d) Each living-at-home/block nurse program shall be 
        designed by representatives of the communities being served to 
        ensure that the program addresses the specific needs of the 
        community residents.  The programs must be designed to: 
           (1) incorporate the basic community, organizational, and 
        service delivery principles of the living-at-home/block nurse 
        program model; 
           (2) provide senior citizens with registered nurse directed 
        assessment, provision and coordination of health and personal 
        care services on a sliding fee basis as an alternative to 
        expensive nursing home care; 
           (3) provide information, support services, homemaking 
        services, counseling, and training for the client and family 
        caregivers; 
           (4) encourage the development and use of respite care, 
        caregiver support, and in-home support programs, such as adult 
        foster care and in-home adult day care; 
           (5) encourage neighborhood residents and local 
        organizations to collaborate in meeting the needs of senior 
        citizens in their communities; 
           (6) recruit, train, and direct the use of volunteers to 
        provide informal services and other appropriate support to 
        senior citizens and their caregivers; and 
           (7) provide coordination and management of formal and 
        informal services to senior citizens and their families using 
        less expensive alternatives. 
           Sec. 63.  Minnesota Statutes 1998, section 256B.0951, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] The region 10 quality 
        assurance commission is established.  The commission consists of 
        at least 13 14 but not more than 20 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; and at least three but not more 
        than five members representing counties; and the commissioner of 
        human services or the commissioner's designee.  Initial 
        membership of the commission shall be recruited and approved by 
        the region 10 stakeholders group.  Prior to approving the 
        commission's membership, the stakeholders group shall provide to 
        the commissioner a list of the membership in the stakeholders 
        group, as of February 1, 1997, a brief summary of meetings held 
        by the group since July 1, 1996, and copies of any materials 
        prepared by the group for public distribution.  The first 
        commission shall establish membership guidelines for the 
        transition and recruitment of membership for the commission's 
        ongoing existence.  Members of the commission who do not receive 
        a salary or wages from an employer for time spent on commission 
        duties may receive a per diem payment when performing commission 
        duties and functions.  All members may be reimbursed for 
        expenses related to commission activities.  Notwithstanding the 
        provisions of section 15.059, subdivision 5, the commission 
        expires on June 30, 2001. 
           Sec. 64.  Minnesota Statutes 1998, section 256B.0951, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSION DUTIES.] (a) By October 1, 1997, the 
        commission, in cooperation with the commissioners of human 
        services and health, shall do the following:  (1) approve an 
        alternative quality assurance licensing system based on the 
        evaluation of outcomes; (2) approve measurable outcomes in the 
        areas of health and safety, consumer evaluation, education and 
        training, providers, and systems that shall be evaluated during 
        the alternative licensing process; and (3) establish variable 
        licensure periods not to exceed three years based on outcomes 
        achieved.  For purposes of this subdivision, "outcome" means the 
        behavior, action, or status of a person that can be observed or 
        measured and can be reliably and validly determined. 
           (b) By January 15, 1998, the commission shall approve, in 
        cooperation with the commissioner of human services, a training 
        program for members of the quality assurance teams established 
        under section 256B.0952, subdivision 4. 
           (c) The commission and the commissioner shall establish an 
        ongoing review process for the alternative quality assurance 
        licensing system.  The review shall take into account the 
        comprehensive nature of the alternative system, which is 
        designed to evaluate the broad spectrum of licensed and 
        unlicensed entities that provide services to clients, as 
        compared to the current licensing system.  
           (d) The commission shall contract with an independent 
        entity to conduct a financial review of the alternative quality 
        assurance pilot project.  The review shall take into account the 
        comprehensive nature of the alternative system, which is 
        designed to evaluate the broad spectrum of licensed and 
        unlicensed entities that provide services to clients, as 
        compared to the current licensing system.  The review shall 
        include an evaluation of possible budgetary savings within the 
        department of human services as a result of implementation of 
        the alternative quality assurance pilot project.  If a federal 
        waiver is approved under subdivision 7, the financial review 
        shall also evaluate possible savings within the department of 
        health.  This review must be completed by December 15, 2000. 
           (e) The commission shall submit a report to the legislature 
        by January 15, 2001, on the results of the review process for 
        the alternative quality assurance pilot project, a summary of 
        the results of the independent financial review, and a 
        recommendation on whether the pilot project should be extended 
        beyond June 30, 2001. 
           Sec. 65.  Minnesota Statutes 1998, section 256B.0955, is 
        amended to read: 
           256B.0955 [DUTIES OF THE COMMISSIONER OF HUMAN SERVICES.] 
           (a) Effective July 1, 1998, the commissioner of human 
        services shall delegate authority to perform licensing functions 
        and activities, in accordance with section 245A.16, to counties 
        participating in the alternative licensing system.  The 
        commissioner shall not license or reimburse a facility, program, 
        or service for persons with developmental disabilities in a 
        county that participates in the alternative licensing system if 
        the commissioner has received from the appropriate county 
        notification that the facility, program, or service has been 
        reviewed by a quality assurance team and has failed to qualify 
        for licensure. 
           (b) The commissioner may conduct random licensing 
        inspections based on outcomes adopted under section 256B.0951 at 
        facilities, programs, and services governed by the alternative 
        licensing system.  The role of such random inspections shall be 
        to verify that the alternative licensing system protects the 
        safety and well-being of consumers and maintains the 
        availability of high-quality services for persons with 
        developmental disabilities.  
           (c) The commissioner shall provide technical assistance and 
        support or training to the alternative licensing system pilot 
        project. 
           (d) The commissioner and the commission shall establish an 
        ongoing evaluation process for the alternative licensing system. 
           (e) The commissioner shall contract with an independent 
        entity to conduct a financial review of the alternative 
        licensing system, including an evaluation of possible budgetary 
        savings within the department of human services and the 
        department of health as a result of implementation of the 
        alternative quality assurance licensing system.  This review 
        must be completed by December 15, 2000.  
           (f) The commissioner and the commission shall submit a 
        report to the legislature by January 15, 2001, on the results of 
        the evaluation process of the alternative licensing system, a 
        summary of the results of the independent financial review, and 
        a recommendation on whether the pilot project should be extended 
        beyond June 30, 2001. 
           Sec. 66.  Minnesota Statutes 1998, section 256B.37, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CIVIL ACTION FOR RECOVERY.] To recover under 
        this section, the attorney general, or the appropriate county 
        attorney, acting upon direction from the attorney general, may 
        institute or join a civil action to enforce the subrogation 
        rights of the commissioner established under this section.  
           Any prepaid health plan providing services under sections 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing homes under the alternative payment 
        demonstration project under section 256B.434; or the 
        county-based purchasing entity providing services under section 
        256B.692 may retain legal representation to enforce the 
        subrogation rights created under this section or, if no action 
        has been brought, may initiate and prosecute an independent 
        action on their behalf against a person, firm, or corporation 
        that may be liable to the person to whom the care or payment was 
        furnished.  
           Sec. 67.  Minnesota Statutes 1998, section 256B.48, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROHIBITED PRACTICES.] A nursing facility 
        is not eligible to receive medical assistance payments unless it 
        refrains from all of the following: 
           (a) Charging private paying residents rates for similar 
        services which exceed those which are approved by the state 
        agency for medical assistance recipients as determined by the 
        prospective desk audit rate, except under the following 
        circumstances:  the nursing facility may (1) charge private 
        paying residents a higher rate for a private room, and (2) 
        charge for special services which are not included in the daily 
        rate if medical assistance residents are charged separately at 
        the same rate for the same services in addition to the daily 
        rate paid by the commissioner.  Services covered by the payment 
        rate must be the same regardless of payment source.  Special 
        services, if offered, must be available to all residents in all 
        areas of the nursing facility and charged separately at the same 
        rate.  Residents are free to select or decline special 
        services.  Special services must not include services which must 
        be provided by the nursing facility in order to comply with 
        licensure or certification standards and that if not provided 
        would result in a deficiency or violation by the nursing 
        facility.  Services beyond those required to comply with 
        licensure or certification standards must not be charged 
        separately as a special service if they were included in the 
        payment rate for the previous reporting year.  A nursing 
        facility that charges a private paying resident a rate in 
        violation of this clause is subject to an action by the state of 
        Minnesota or any of its subdivisions or agencies for civil 
        damages.  A private paying resident or the resident's legal 
        representative has a cause of action for civil damages against a 
        nursing facility that charges the resident rates in violation of 
        this clause.  The damages awarded shall include three times the 
        payments that result from the violation, together with costs and 
        disbursements, including reasonable attorneys' fees or their 
        equivalent.  A private paying resident or the resident's legal 
        representative, the state, subdivision or agency, or a nursing 
        facility may request a hearing to determine the allowed rate or 
        rates at issue in the cause of action.  Within 15 calendar days 
        after receiving a request for such a hearing, the commissioner 
        shall request assignment of an administrative law judge under 
        sections 14.48 to 14.56 to conduct the hearing as soon as 
        possible or according to agreement by the parties.  The 
        administrative law judge shall issue a report within 15 calendar 
        days following the close of the hearing.  The prohibition set 
        forth in this clause shall not apply to facilities licensed as 
        boarding care facilities which are not certified as skilled or 
        intermediate care facilities level I or II for reimbursement 
        through medical assistance. 
           (b) Requiring an applicant for admission to the facility, 
        or the guardian or conservator of the applicant, as a condition 
        of admission, to pay any fee or deposit in excess of $100, loan 
        any money to the nursing facility, or promise to leave all or 
        part of the applicant's estate to the facility.  
           (c) Requiring any resident of the nursing facility to 
        utilize a vendor of health care services chosen by the nursing 
        facility.  A nursing facility may require a resident to use 
        pharmacies that utilize unit dose packing systems approved by 
        the Minnesota board of pharmacy, and may require a resident to 
        use pharmacies that are able to meet the federal regulations for 
        safe and timely administration of medications such as systems 
        with specific number of doses, prompt delivery of medications, 
        or access to medications on a 24-hour basis.  Notwithstanding 
        the provisions of this paragraph, nursing facilities shall not 
        restrict a resident's choice of pharmacy because the pharmacy 
        utilizes a specific system of unit dose drug packing. 
           (d) Providing differential treatment on the basis of status 
        with regard to public assistance.  
           (e) Discriminating in admissions, services offered, or room 
        assignment on the basis of status with regard to public 
        assistance or refusal to purchase special services.  Admissions 
        discrimination shall include, but is not limited to:  
           (1) basing admissions decisions upon assurance by the 
        applicant to the nursing facility, or the applicant's guardian 
        or conservator, that the applicant is neither eligible for nor 
        will seek public assistance for payment of nursing facility care 
        costs; and 
           (2) engaging in preferential selection from waiting lists 
        based on an applicant's ability to pay privately or an 
        applicant's refusal to pay for a special service. 
           The collection and use by a nursing facility of financial 
        information of any applicant pursuant to a preadmission 
        screening program established by law shall not raise an 
        inference that the nursing facility is utilizing that 
        information for any purpose prohibited by this paragraph.  
           (f) Requiring any vendor of medical care as defined by 
        section 256B.02, subdivision 7, who is reimbursed by medical 
        assistance under a separate fee schedule, to pay any amount 
        based on utilization or service levels or any portion of the 
        vendor's fee to the nursing facility except as payment for 
        renting or leasing space or equipment or purchasing support 
        services from the nursing facility as limited by section 
        256B.433.  All agreements must be disclosed to the commissioner 
        upon request of the commissioner.  Nursing facilities and 
        vendors of ancillary services that are found to be in violation 
        of this provision shall each be subject to an action by the 
        state of Minnesota or any of its subdivisions or agencies for 
        treble civil damages on the portion of the fee in excess of that 
        allowed by this provision and section 256B.433.  Damages awarded 
        must include three times the excess payments together with costs 
        and disbursements including reasonable attorney's fees or their 
        equivalent.  
           (g) Refusing, for more than 24 hours, to accept a resident 
        returning to the same bed or a bed certified for the same level 
        of care, in accordance with a physician's order authorizing 
        transfer, after receiving inpatient hospital services. 
           The prohibitions set forth in clause (b) shall not apply to 
        a retirement facility with more than 325 beds including at least 
        150 licensed nursing facility beds and which:  
           (1) is owned and operated by an organization tax-exempt 
        under section 290.05, subdivision 1, clause (i); and 
           (2) accounts for all of the applicant's assets which are 
        required to be assigned to the facility so that only expenses 
        for the cost of care of the applicant may be charged against the 
        account; and 
           (3) agrees in writing at the time of admission to the 
        facility to permit the applicant, or the applicant's guardian, 
        or conservator, to examine the records relating to the 
        applicant's account upon request, and to receive an audited 
        statement of the expenditures charged against the applicant's 
        individual account upon request; and 
           (4) agrees in writing at the time of admission to the 
        facility to permit the applicant to withdraw from the facility 
        at any time and to receive, upon withdrawal, the balance of the 
        applicant's individual account. 
           For a period not to exceed 180 days, the commissioner may 
        continue to make medical assistance payments to a nursing 
        facility or boarding care home which is in violation of this 
        section if extreme hardship to the residents would result.  In 
        these cases the commissioner shall issue an order requiring the 
        nursing facility to correct the violation.  The nursing facility 
        shall have 20 days from its receipt of the order to correct the 
        violation.  If the violation is not corrected within the 20-day 
        period the commissioner may reduce the payment rate to the 
        nursing facility by up to 20 percent.  The amount of the payment 
        rate reduction shall be related to the severity of the violation 
        and shall remain in effect until the violation is corrected.  
        The nursing facility or boarding care home may appeal the 
        commissioner's action pursuant to the provisions of chapter 14 
        pertaining to contested cases.  An appeal shall be considered 
        timely if written notice of appeal is received by the 
        commissioner within 20 days of notice of the commissioner's 
        proposed action.  
           In the event that the commissioner determines that a 
        nursing facility is not eligible for reimbursement for a 
        resident who is eligible for medical assistance, the 
        commissioner may authorize the nursing facility to receive 
        reimbursement on a temporary basis until the resident can be 
        relocated to a participating nursing facility.  
           Certified beds in facilities which do not allow medical 
        assistance intake on July 1, 1984, or after shall be deemed to 
        be decertified for purposes of section 144A.071 only. 
           Sec. 68.  Minnesota Statutes 1998, section 256B.37, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CIVIL ACTION FOR RECOVERY.] To recover under 
        this section, the attorney general, or the appropriate county 
        attorney, acting upon direction from the attorney general, may 
        institute or join a civil action to enforce the subrogation 
        rights of the commissioner established under this section.  
           Any prepaid health plan providing services under sections 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing homes under the alternative payment 
        demonstration project under section 256B.434; or the 
        county-based purchasing entity providing services under section 
        256B.692 may retain legal representation to enforce the 
        subrogation rights created under this section or, if no action 
        has been brought, may initiate and prosecute an independent 
        action on their behalf against a person, firm, or corporation 
        that may be liable to the person to whom the care or payment was 
        furnished.  
           Sec. 69.  Minnesota Statutes 1998, section 256B.501, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [PAYMENT FOR PERSONS WITH SPECIAL NEEDS FOR 
        CRISIS INTERVENTION SERVICES.] State-operated, Community-based 
        crisis services provided in accordance with section 252.50, 
        subdivision 7, to authorized by the commissioner or the 
        commissioner's designee for a resident of an intermediate care 
        facility for persons with mental retardation (ICF/MR) reimbursed 
        under this section shall be paid by medical assistance in 
        accordance with the paragraphs (a) to (h) (g). 
           (a) "Crisis services" means the specialized services listed 
        in clauses (1) to (3) provided to prevent the recipient from 
        requiring placement in a more restrictive institutional setting 
        such as an inpatient hospital or regional treatment center and 
        to maintain the recipient in the present community setting. 
           (1) The crisis services provider shall assess the 
        recipient's behavior and environment to identify factors 
        contributing to the crisis. 
           (2) The crisis services provider shall develop a 
        recipient-specific intervention plan in coordination with the 
        service planning team and provide recommendations for revisions 
        to the individual service plan if necessary to prevent or 
        minimize the likelihood of future crisis situations.  The 
        intervention plan shall include a transition plan to aid the 
        recipient in returning to the community-based ICF/MR if the 
        recipient is receiving residential crisis services.  
           (3) The crisis services provider shall consult with and 
        provide training and ongoing technical assistance to the 
        recipient's service providers to aid in the implementation of 
        the intervention plan and revisions to the individual service 
        plan. 
           (b) "Residential crisis services" means crisis services 
        that are provided to a recipient admitted to the crisis services 
        foster care setting an alternative, state-licensed site approved 
        by the commissioner, because the ICF/MR receiving reimbursement 
        under this section is not able, as determined by the 
        commissioner, to provide the intervention and protection of the 
        recipient and others living with the recipient that is necessary 
        to prevent the recipient from requiring placement in a more 
        restrictive institutional setting. 
           (c) Residential crisis services providers must be licensed 
        by maintain a license from the commissioner under section 
        245A.03 to provide foster care, must exclusively provide for the 
        residence when providing crisis services for short-term crisis 
        intervention, and must not be located in a private residence. 
           (d) Payment rates are determined annually for each crisis 
        services provider based on cost of care for each provider as 
        defined in section 246.50.  Interim payment rates are calculated 
        on a per diem basis by dividing the projected cost of providing 
        care by the projected number of contact days for the fiscal 
        year, as estimated by the commissioner.  Final payment rates are 
        calculated by dividing the actual cost of providing care by the 
        actual number of contact days in the applicable fiscal 
        year shall be established consistent with county negotiated 
        crisis intervention services.  
           (e) Payment shall be made for each contact day.  "Contact 
        day" means any day in which the crisis services provider has 
        face-to-face contact with the recipient or any of the 
        recipient's medical assistance service providers for the purpose 
        of providing crisis services as defined in paragraph (c). 
           (f) Payment for residential crisis services is limited to 
        21 days, unless an additional period is authorized by the 
        commissioner or part of an approved regional plan.  The 
        additional period may not exceed 21 days. 
           (g) (f) Payment for crisis services shall be made only for 
        services provided while the ICF/MR receiving reimbursement under 
        this section: 
           (1) has a shared services agreement with the crisis 
        services provider in effect in accordance with under section 
        246.57; and 
           (2) has reassigned payment for the provision of the crisis 
        services under this subdivision to the commissioner in 
        accordance with Code of Federal Regulations, title 42, section 
        447.10(e); and 
           (3) has executed a cooperative agreement with the crisis 
        services provider to implement the intervention plan and 
        revisions to the individual service plan as necessary to prevent 
        or minimize the likelihood of future crisis situations, to 
        maintain the recipient in the present community setting, and to 
        prevent the recipient from requiring a more restrictive 
        institutional setting. 
           (h) (g) Payment to the ICF/MR receiving reimbursement under 
        this section shall be made for up to 18 therapeutic leave days 
        during which the recipient is receiving residential crisis 
        services, if the ICF/MR is otherwise eligible to receive payment 
        for a therapeutic leave day under Minnesota Rules, part 
        9505.0415.  Payment under this paragraph shall be terminated if 
        the commissioner determines that the ICF/MR is not meeting the 
        terms of the cooperative shared service agreement under 
        paragraph (g) (f) or that the recipient will not return to the 
        ICF/MR. 
           Sec. 70.  Minnesota Statutes 1998, section 256B.69, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
        implementing the general assistance medical care, or medical 
        assistance prepayment program within a county, must include the 
        county board in the process of development, approval, and 
        issuance of the request for proposals to provide services to 
        eligible individuals within the proposed county.  County boards 
        must be given reasonable opportunity to make recommendations 
        regarding the development, issuance, review of responses, and 
        changes needed in the request for proposals.  The commissioner 
        must provide county boards the opportunity to review each 
        proposal based on the identification of community needs under 
        chapters 145A and 256E and county advocacy activities.  If a 
        county board finds that a proposal does not address certain 
        community needs, the county board and commissioner shall 
        continue efforts for improving the proposal and network prior to 
        the approval of the contract.  The county board shall make 
        recommendations regarding the approval of local networks and 
        their operations to ensure adequate availability and access to 
        covered services.  The provider or health plan must respond 
        directly to county advocates and the state prepaid medical 
        assistance ombudsperson regarding service delivery and must be 
        accountable to the state regarding contracts with medical 
        assistance and general assistance medical care funds.  The 
        county board may recommend a maximum number of participating 
        health plans after considering the size of the enrolling 
        population; ensuring adequate access and capacity; considering 
        the client and county administrative complexity; and considering 
        the need to promote the viability of locally developed health 
        plans.  The county board or a single entity representing a group 
        of county boards and the commissioner shall mutually select 
        health plans for participation at the time of initial 
        implementation of the prepaid medical assistance program in that 
        county or group of counties and at the time of contract renewal. 
        The commissioner shall also seek input for contract requirements 
        from the county or single entity representing a group of county 
        boards at each contract renewal and incorporate those 
        recommendations into the contract negotiation process.  The 
        commissioner, in conjunction with the county board, shall 
        actively seek to develop a mutually agreeable timetable prior to 
        the development of the request for proposal, but counties must 
        agree to initial enrollment beginning on or before January 1, 
        1999, in either the prepaid medical assistance and general 
        assistance medical care programs or county-based purchasing 
        under section 256B.692.  At least 90 days before enrollment in 
        the medical assistance and general assistance medical care 
        prepaid programs begins in a county in which the prepaid 
        programs have not been established, the commissioner shall 
        provide a report to the chairs of senate and house committees 
        having jurisdiction over state health care programs which 
        verifies that the commissioner complied with the requirements 
        for county involvement that are specified in this subdivision. 
           (b) The commissioner shall seek a federal waiver to allow a 
        fee-for-service plan option to MinnesotaCare enrollees.  The 
        commissioner shall develop an increase of the premium fees 
        required under section 256L.06 up to 20 percent of the premium 
        fees for the enrollees who elect the fee-for-service option.  
        Prior to implementation, the commissioner shall submit this fee 
        schedule to the chair and ranking minority member of the senate 
        health care committee, the senate health care and family 
        services funding division, the house of representatives health 
        and human services committee, and the house of representatives 
        health and human services finance division. 
           (c) At the option of the county board, the board may 
        develop contract requirements related to the achievement of 
        local public health goals to meet the health needs of medical 
        assistance and general assistance medical care enrollees.  These 
        requirements must be reasonably related to the performance of 
        health plan functions and within the scope of the medical 
        assistance and general assistance medical care benefit sets.  If 
        the county board and the commissioner mutually agree to such 
        requirements, the department shall include such requirements in 
        all health plan contracts governing the prepaid medical 
        assistance and general assistance medical care programs in that 
        county at initial implementation of the program in that county 
        and at the time of contract renewal.  The county board may 
        participate in the enforcement of the contract provisions 
        related to local public health goals. 
           (d) For counties in which prepaid medical assistance and 
        general assistance medical care programs have not been 
        established, the commissioner shall not implement those programs 
        if a county board submits acceptable and timely preliminary and 
        final proposals under section 256B.692, until county-based 
        purchasing is no longer operational in that county.  For 
        counties in which prepaid medical assistance and general 
        assistance medical care programs are in existence on or after 
        September 1, 1997, the commissioner must terminate contracts 
        with health plans according to section 256B.692, subdivision 5, 
        if the county board submits and the commissioner accepts 
        preliminary and final proposals according to that subdivision.  
        The commissioner is not required to terminate contracts that 
        begin on or after September 1, 1997, according to section 
        256B.692 until two years have elapsed from the date of initial 
        enrollment. 
           (e) In the event that a county board or a single entity 
        representing a group of county boards and the commissioner 
        cannot reach agreement regarding:  (i) the selection of 
        participating health plans in that county; (ii) contract 
        requirements; or (iii) implementation and enforcement of county 
        requirements including provisions regarding local public health 
        goals, the commissioner shall resolve all disputes after taking 
        into account the recommendations of a three-person mediation 
        panel.  The panel shall be composed of one designee of the 
        president of the association of Minnesota counties, one designee 
        of the commissioner of human services, and one designee of the 
        commissioner of health. 
           (f) If a county which elects to implement county-based 
        purchasing ceases to implement county-based purchasing, it is 
        prohibited from assuming the responsibility of county-based 
        purchasing for a period of five years from the date it 
        discontinues purchasing. 
           (g) Notwithstanding the requirement in this subdivision 
        that a county must agree to initial enrollment on or before 
        January 1, 1999, the commissioner shall grant a delay of up to 
        nine months in the implementation of the county-based purchasing 
        authorized in section 256B.692 until federal waiver authority 
        and approval has been granted, if the county or group of 
        counties has submitted a preliminary proposal for county-based 
        purchasing by September 1, 1997, has not already implemented the 
        prepaid medical assistance program before January 1, 1998, and 
        has submitted a written request for the delay to the 
        commissioner by July 1, 1998.  In order for the delay to be 
        continued, the county or group of counties must also submit to 
        the commissioner the following information by December 1, 1998.  
        The information must: 
           (1) identify the proposed date of implementation, not later 
        than October 1, 1999 as determined under section 256B.692, 
        subdivision 5; 
           (2) include copies of the county board resolutions which 
        demonstrate the continued commitment to the implementation of 
        county-based purchasing by the proposed date.  County board 
        authorization may remain contingent on the submission of a final 
        proposal which meets the requirements of section 256B.692, 
        subdivision 5, paragraph (b); 
           (3) demonstrate actions taken for the establishment of a 
        governance structure between the participating counties and 
        describe how the fiduciary responsibilities of county-based 
        purchasing will be allocated between the counties, if more than 
        one county is involved in the proposal; 
           (4) describe how the risk of a deficit will be managed in 
        the event expenditures are greater than total capitation 
        payments.  This description must identify how any of the 
        following strategies will be used: 
           (i) risk contracts with licensed health plans; 
           (ii) risk arrangements with providers who are not licensed 
        health plans; 
           (iii) risk arrangements with other licensed insurance 
        entities; and 
           (iv) funding from other county resources; 
           (5) include, if county-based purchasing will not contract 
        with licensed health plans or provider networks, letters of 
        interest from local providers in at least the categories of 
        hospital, physician, mental health, and pharmacy which express 
        interest in contracting for services.  These letters must 
        recognize any risk transfer identified in clause (4), item (ii); 
        and 
           (6) describe the options being considered to obtain the 
        administrative services required in section 256B.692, 
        subdivision 3, clauses (3) and (5). 
           (h) For counties which receive a delay under this 
        subdivision, the final proposals required under section 
        256B.692, subdivision 5, paragraph (b), must be submitted at 
        least six months prior to the requested implementation date.  
        Authority to implement county-based purchasing remains 
        contingent on approval of the final proposal as required under 
        section 256B.692. 
           (i) If the commissioner is unable to provide 
        county-specific, individual-level fee-for-service claims to 
        counties by June 4, 1998, the commissioner shall grant a delay 
        under paragraph (g) of up to 12 months in the implementation of 
        county-based purchasing, and shall require implementation not 
        later than January 1, 2000.  In order to receive an extension of 
        the proposed date of implementation under this paragraph, a 
        county or group of counties must submit a written request for 
        the extension to the commissioner by August 1, 1998, must submit 
        the information required under paragraph (g) by December 1, 
        1998, and must submit a final proposal as provided under 
        paragraph (h). 
           (j) Notwithstanding other requirements of this subdivision, 
        the commissioner shall not require the implementation of the 
        county-based purchasing authorized in section 256B.692 until six 
        months after federal waiver approval has been obtained for 
        county-based purchasing, if the county or counties have 
        submitted the final plan as required in section 256B.692, 
        subdivision 5.  The commissioner shall allow the county or 
        counties which submitted information under section 256B.692, 
        subdivision 5, to submit supplemental or additional information 
        which was not possible to submit by April 1, 1999.  A county or 
        counties shall continue to submit the required information and 
        substantive detail necessary to obtain a prompt response and 
        waiver approval.  If amendments to the final plan are necessary 
        due to the terms and conditions of the waiver approval, the 
        commissioner shall allow the county or group of counties 60 days 
        to make the necessary amendments to the final plan and shall not 
        require implementation of the county-based purchasing until six 
        months after the revised final plan has been submitted. 
           Sec. 71.  Minnesota Statutes 1998, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [PROVISION OF DATA TO COUNTY BOARDS.] The 
        commissioner, in consultation with representatives of county 
        boards of commissioners shall identify program information and 
        data necessary on an ongoing basis for county boards to:  (1) 
        make recommendations to the commissioner related to state 
        purchasing under the prepaid medical assistance program; and (2) 
        effectively administer county-based purchasing.  This 
        information and data must include, but is not limited to, 
        county-specific, individual-level fee-for-service and prepaid 
        health plan claims information. 
           Sec. 72.  Minnesota Statutes 1998, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [INDIVIDUAL EDUCATION PLAN AND INDIVIDUALIZED 
        FAMILY SERVICE PLAN SERVICES.] The commissioner shall amend the 
        federal waiver allowing the state to separate out individual 
        education plan and individualized family service plan services 
        for children enrolled in the prepaid medical assistance program 
        and the MinnesotaCare program.  Effective July 1, 1999, or upon 
        federal approval, medical assistance coverage of eligible 
        individual education plan and individualized family service plan 
        services shall not be included in the capitated services for 
        children enrolled in health plans through the prepaid medical 
        assistance program and the MinnesotaCare program.  Upon federal 
        approval, local school districts shall bill the commissioner for 
        these services, and claims shall be paid on a fee-for-service 
        basis. 
           Sec. 73.  Minnesota Statutes 1998, section 256B.69, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [MANAGED CARE CONTRACTS.] Managed care contracts 
        under this section, sections 256.9363, and 256D.03, shall be 
        entered into or renewed on a calendar year basis beginning 
        January 1, 1996.  Managed care contracts which were in effect on 
        June 30, 1995, and set to renew on July 1, 1995, shall be 
        renewed for the period July 1, 1995 through December 31, 1995 at 
        the same terms that were in effect on June 30, 1995. 
           A prepaid health plan providing covered health services for 
        eligible persons pursuant to chapters 256B, 256D, and 256L, is 
        responsible for complying with the terms of its contract with 
        the commissioner.  Requirements applicable to managed care 
        programs under chapters 256B, 256D, and 256L, established after 
        the effective date of a contract with the commissioner take 
        effect when the contract is next issued or renewed. 
           Sec. 74.  Minnesota Statutes 1998, section 256B.69, 
        subdivision 5b, is amended to read: 
           Subd. 5b.  [PROSPECTIVE REIMBURSEMENT RATES.] (a) For 
        prepaid medical assistance and general assistance medical care 
        program contract rates set by the commissioner under subdivision 
        5 and effective on or after January 1, 1998, capitation rates 
        for nonmetropolitan counties shall on a weighted average be no 
        less than 88 percent of the capitation rates for metropolitan 
        counties, excluding Hennepin county.  The commissioner shall 
        make a pro rata adjustment in capitation rates paid to counties 
        other than nonmetropolitan counties in order to make this 
        provision budget neutral.  
           (b) For prepaid medical assistance program contract rates 
        set by the commissioner under subdivision 5 and effective on or 
        after January 1, 2001, capitation rates for nonmetropolitan 
        counties shall, on a weighted average, be no less than 89 
        percent of the capitation rates for metropolitan counties, 
        excluding Hennepin county. 
           Sec. 75.  Minnesota Statutes 1998, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 5e.  [MEDICAL EDUCATION AND RESEARCH PAYMENTS.] For 
        the calendar years 1999, 2000, and 2001, a hospital that 
        participates in funding the federal share of the medical 
        education and research trust fund payment under Laws 1998, 
        chapter 407, article 1, section 3, shall not be held liable for 
        any amounts attributable to this payment above the charge limit 
        of section 256.969, subdivision 3a.  The commissioner of human 
        services shall assume liability for any corresponding federal 
        share of the payments above the charge limit. 
           Sec. 76.  Minnesota Statutes 1998, section 256B.692, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] (a) 
        Notwithstanding chapters 62D and 62N, a county that elects to 
        purchase medical assistance and general assistance medical care 
        in return for a fixed sum without regard to the frequency or 
        extent of services furnished to any particular enrollee is not 
        required to obtain a certificate of authority under chapter 62D 
        or 62N.  The county board of commissioners is the governing body 
        of a county-based purchasing program.  In a multicounty 
        arrangement, the governing body is a joint powers board 
        established under section 471.59.  
           (b) A county that elects to purchase medical assistance and 
        general assistance medical care services under this section must 
        satisfy the commissioner of health that the requirements for 
        assurance of consumer protection, provider protection, and 
        fiscal solvency of chapter 62D, applicable to health maintenance 
        organizations, or chapter 62N, applicable to community 
        integrated service networks, will be met.  
           (c) A county must also assure the commissioner of health 
        that the requirements of sections 62J.041; 62J.48; 62J.71 to 
        62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 
        62Q, including sections 62Q.07; 62Q.075; 62Q.105; 62Q.1055; 
        62Q.106; 62Q.11; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 
        62Q.23, paragraph (c); 62Q.30; 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 
        62Q.56; 62Q.58; 62Q.64; and 72A.201 will be met.  
           (d) All enforcement and rulemaking powers available under 
        chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
        commissioner of health with respect to counties that purchase 
        medical assistance and general assistance medical care services 
        under this section.  
           (e) The commissioner, in consultation with county 
        government, shall develop administrative and financial reporting 
        requirements for county-based purchasing programs relating to 
        sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
        62N.31, and other sections as necessary, that are specific to 
        county administrative, accounting, and reporting systems and 
        consistent with other statutory requirements of counties.  
           Sec. 77.  Minnesota Statutes 1998, section 256B.75, is 
        amended to read: 
           256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
           (a) For outpatient hospital facility fee payments for 
        services rendered on or after October 1, 1992, the commissioner 
        of human services shall pay the lower of (1) submitted charge, 
        or (2) 32 percent above the rate in effect on June 30, 1992, 
        except for those services for which there is a federal maximum 
        allowable payment.  Effective for services rendered on or after 
        January 1, 2000, payment rates for nonsurgical outpatient 
        hospital facility fees and emergency room facility fees shall be 
        increased by eight percent over the rates in effect on December 
        31, 1999, except for those services for which there is a federal 
        maximum allowable payment.  Services for which there is a 
        federal maximum allowable payment shall be paid at the lower of 
        (1) submitted charge, or (2) the federal maximum allowable 
        payment.  Total aggregate payment for outpatient hospital 
        facility fee services shall not exceed the Medicare upper 
        limit.  If it is determined that a provision of this section 
        conflicts with existing or future requirements of the United 
        States government with respect to federal financial 
        participation in medical assistance, the federal requirements 
        prevail.  The commissioner may, in the aggregate, prospectively 
        reduce payment rates to avoid reduced federal financial 
        participation resulting from rates that are in excess of the 
        Medicare upper limitations. 
           (b) Notwithstanding paragraph (a), payment for outpatient, 
        emergency, and ambulatory surgery hospital facility fee services 
        for critical access hospitals designated under section 144.1483, 
        clause (11), shall be paid on a cost-based payment system that 
        is based on the cost-finding methods and allowable costs of the 
        Medicare program. 
           Sec. 78.  Minnesota Statutes 1998, section 256B.76, is 
        amended to read: 
           256B.76 [PHYSICIAN AND DENTAL REIMBURSEMENT.] 
           (a) The physician reimbursement increase provided in 
        section 256B.74, subdivision 2, shall not be implemented.  
        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 Health Care Finance 
        Administration's common procedural coding system (HCPCS) codes 
        titled "office and other outpatient services," "preventive 
        medicine new and established patient," "delivery, antepartum, 
        and postpartum care," "critical care," Caesarean delivery and 
        pharmacologic management provided to psychiatric patients, and 
        HCPCS 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; and 
           (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) The dental reimbursement increase provided in section 
        256B.74, subdivision 5, shall not be implemented.  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; and 
           (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; and 
           (6) the increases listed in clauses (3) and (5) shall be 
        implemented January 1, 2000, for managed care. 
           (c) An entity that operates both a Medicare certified 
        comprehensive outpatient rehabilitation facility and a facility 
        which was certified prior to January 1, 1993, that is licensed 
        under Minnesota Rules, parts 9570.2000 to 9570.3600, and for 
        whom at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year are medical assistance 
        recipients, shall be reimbursed by the commissioner for 
        rehabilitation services at rates that are 38 percent greater 
        than the maximum reimbursement rate allowed under paragraph (a), 
        clause (2), when those services are (1) provided within the 
        comprehensive outpatient rehabilitation facility and (2) 
        provided to residents of nursing facilities owned by the entity. 
           Sec. 79.  [256B.765] [PROVIDER RATE INCREASES.] 
           (a) Effective July 1, 2001, within the limits of 
        appropriations specifically for this purpose, the commissioner 
        shall provide an annual inflation adjustment for the providers 
        listed in paragraph (c).  The index for the inflation adjustment 
        must be based on the change in the Employment Cost Index for 
        Private Industry Workers - Total Compensation forecasted by Data 
        Resources, Inc., as forecasted in the fourth quarter of the 
        calendar year preceding the fiscal year.  The commissioner shall 
        increase reimbursement or allocation rates by the percentage of 
        this adjustment, and county boards shall adjust provider 
        contracts as needed. 
           (b) The commissioner of finance shall include an annual 
        inflationary adjustment in reimbursement rates for the providers 
        listed in paragraph (c) using the inflation factor specified in 
        paragraph (a) as a budget change request in each biennial 
        detailed expenditure budget submitted to the legislature under 
        section 16A.11. 
           (c) The annual adjustment under paragraph (a) shall be 
        provided for home and community-based waiver services for 
        persons with mental retardation or related conditions under 
        section 256B.501; home and community-based waiver services for 
        the elderly under section 256B.0915; waivered services under 
        community alternatives for disabled individuals under section 
        256B.49; community alternative care waivered services under 
        section 256B.49; traumatic brain injury waivered services under 
        section 256B.49; nursing services and home health services under 
        section 256B.0625, subdivision 6a; personal care services and 
        nursing supervision of personal care services under section 
        256B.0625, subdivision 19a; private duty nursing services under 
        section 256B.0625, subdivision 7; day training and habilitation 
        services for adults with mental retardation or related 
        conditions under sections 252.40 to 252.46; physical therapy 
        services under sections 256B.0625, subdivision 8, and 256D.03, 
        subdivision 4; occupational therapy services under sections 
        256B.0625, subdivision 8a, and 256D.03, subdivision 4; 
        speech-language therapy services under section 256D.03, 
        subdivision 4, and Minnesota Rules, part 9505.0390; respiratory 
        therapy services under section 256D.03, subdivision 4, and 
        Minnesota Rules, part 9505.0295; alternative care services under 
        section 256B.0913; adult residential program grants under 
        Minnesota Rules, parts 9535.2000 to 9535.3000; adult and family 
        community support grants under Minnesota Rules, parts 9535.1700 
        to 9535.1760; semi-independent living services under section 
        252.275 including SILS funding under county social services 
        grants formerly funded under chapter 256I; and community support 
        services for deaf and hard-of-hearing adults with mental illness 
        who use or wish to use sign language as their primary means of 
        communication. 
           Sec. 80.  Minnesota Statutes 1998, section 256B.77, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [ELIGIBLE INDIVIDUALS.] (a) Persons are eligible 
        for the demonstration project as provided in this subdivision. 
           (b) "Eligible individuals" means those persons living in 
        the demonstration site who are eligible for medical assistance 
        and are disabled based on a disability determination under 
        section 256B.055, subdivisions 7 and 12, or who are eligible for 
        medical assistance and have been diagnosed as having: 
           (1) serious and persistent mental illness as defined in 
        section 245.462, subdivision 20; 
           (2) severe emotional disturbance as defined in section 
        245.487 245.4871, subdivision 6; or 
           (3) mental retardation, or being a mentally retarded person 
        as defined in section 252A.02, or a related condition as defined 
        in section 252.27, subdivision 1a. 
        Other individuals may be included at the option of the county 
        authority based on agreement with the commissioner. 
           (c) Eligible individuals residing on a federally recognized 
        Indian reservation may be excluded from participation in the 
        demonstration project at the discretion of the tribal government 
        based on agreement with the commissioner, in consultation with 
        the county authority. 
           (d) Eligible individuals include individuals in excluded 
        time status, as defined in chapter 256G.  Enrollees in excluded 
        time at the time of enrollment shall remain in excluded time 
        status as long as they live in the demonstration site and shall 
        be eligible for 90 days after placement outside the 
        demonstration site if they move to excluded time status in a 
        county within Minnesota other than their county of financial 
        responsibility. 
           (e) (d) A person who is a sexual psychopathic personality 
        as defined in section 253B.02, subdivision 18a, or a sexually 
        dangerous person as defined in section 253B.02, subdivision 18b, 
        is excluded from enrollment in the demonstration project. 
           Sec. 81.  Minnesota Statutes 1998, section 256B.77, is 
        amended by adding a subdivision to read: 
           Subd. 7b.  [AMERICAN INDIAN RECIPIENTS.] (a) Beginning on 
        or after July 1, 1999, for American Indian recipients of medical 
        assistance who are required to enroll with a county 
        administrative entity or service delivery organization under 
        subdivision 7, medical assistance shall cover health care 
        services provided at American Indian health services facilities 
        and facilities operated by a tribe or tribal organization under 
        funding authorized by United States Code, title 25, sections 
        450f to 450n, or title III of the Indian Self-Determination and 
        Education Assistance Act, Public Law Number 93-638, if those 
        services would otherwise be covered under section 256B.0625.  
        Payments for services provided under this subdivision shall be 
        made on a fee-for-service basis, and may, at the option of the 
        tribe or tribal organization, be made according to rates 
        authorized under sections 256.969, subdivision 16, and 
        256B.0625, subdivision 34.  Implementation of this purchasing 
        model is contingent on federal approval. 
           (b) The commissioner of human services, in consultation 
        with tribal governments, shall develop a plan for tribes to 
        assist in the enrollment process for American Indian recipients 
        enrolled in the demonstration project for people with 
        disabilities under this section.  This plan also shall address 
        how tribes will be included in ensuring the coordination of care 
        for American Indian recipients between Indian health service or 
        tribal providers and other providers. 
           (c) For purposes of this subdivision, "American Indian" has 
        the meaning given to persons to whom services will be provided 
        for in Code of Federal Regulations, title 42, section 36.12. 
           Sec. 82.  Minnesota Statutes 1998, section 256B.77, 
        subdivision 8, is amended to read: 
           Subd. 8.  [RESPONSIBILITIES OF THE COUNTY ADMINISTRATIVE 
        ENTITY.] (a) The county administrative entity shall meet the 
        requirements of this subdivision, unless the county authority or 
        the commissioner, with written approval of the county authority, 
        enters into a service delivery contract with a service delivery 
        organization for any or all of the requirements contained in 
        this subdivision. 
           (b) The county administrative entity shall enroll eligible 
        individuals regardless of health or disability status. 
           (c) The county administrative entity shall provide all 
        enrollees timely access to the medical assistance benefit set.  
        Alternative services and additional services are available to 
        enrollees at the option of the county administrative entity and 
        may be provided if specified in the personal support plan.  
        County authorities are not required to seek prior authorization 
        from the department as required by the laws and rules governing 
        medical assistance. 
           (d) The county administrative entity shall cover necessary 
        services as a result of an emergency without prior 
        authorization, even if the services were rendered outside of the 
        provider network. 
           (e) The county administrative entity shall authorize 
        necessary and appropriate services when needed and requested by 
        the enrollee or the enrollee's legal representative in response 
        to an urgent situation.  Enrollees shall have 24-hour access to 
        urgent care services coordinated by experienced disability 
        providers who have information about enrollees' needs and 
        conditions. 
           (f) The county administrative entity shall accept the 
        capitation payment from the commissioner in return for the 
        provision of services for enrollees. 
           (g) The county administrative entity shall maintain 
        internal grievance and complaint procedures, including an 
        expedited informal complaint process in which the county 
        administrative entity must respond to verbal complaints within 
        ten calendar days, and a formal grievance process, in which the 
        county administrative entity must respond to written complaints 
        within 30 calendar days. 
           (h) The county administrative entity shall provide a 
        certificate of coverage, upon enrollment, to each enrollee and 
        the enrollee's legal representative, if any, which describes the 
        benefits covered by the county administrative entity, any 
        limitations on those benefits, and information about providers 
        and the service delivery network.  This information must also be 
        made available to prospective enrollees.  This certificate must 
        be approved by the commissioner. 
           (i) The county administrative entity shall present evidence 
        of an expedited process to approve exceptions to benefits, 
        provider network restrictions, and other plan limitations under 
        appropriate circumstances. 
           (j) The county administrative entity shall provide 
        enrollees or their legal representatives with written notice of 
        their appeal rights under subdivision 16, and of ombudsman and 
        advocacy programs under subdivisions 13 and 14, at the following 
        times:  upon enrollment, upon submission of a written complaint, 
        when a service is reduced, denied, or terminated, or when 
        renewal of authorization for ongoing service is refused. 
           (k) The county administrative entity shall determine 
        immediate needs, including services, support, and assessments, 
        within 30 calendar days of after enrollment, or within a shorter 
        time frame if specified in the intergovernmental contract. 
           (l) The county administrative entity shall assess the need 
        for services of new enrollees within 60 calendar days of after 
        enrollment, or within a shorter time frame if specified in the 
        intergovernmental contract, and periodically reassess the need 
        for services for all enrollees. 
           (m) The county administrative entity shall ensure the 
        development of a personal support plan for each person within 60 
        calendar days of enrollment, or within a shorter time frame if 
        specified in the intergovernmental contract, unless otherwise 
        agreed to by the enrollee and the enrollee's legal 
        representative, if any.  Until a personal support plan is 
        developed and agreed to by the enrollee, enrollees must have 
        access to the same amount, type, setting, duration, and 
        frequency of covered services that they had at the time of 
        enrollment unless other covered services are needed.  For an 
        enrollee who is not receiving covered services at the time of 
        enrollment and for enrollees whose personal support plan is 
        being revised, access to the medical assistance benefit set must 
        be assured until a personal support plan is developed or 
        revised.  If an enrollee chooses not to develop a personal 
        support plan, the enrollee will be subject to the network and 
        prior authorization requirements of the county administrative 
        entity or service delivery organization 60 days after 
        enrollment.  An enrollee can choose to have a personal support 
        plan developed at any time.  The personal support plan must be 
        based on choices, preferences, and assessed needs and strengths 
        of the enrollee.  The service coordinator shall develop the 
        personal support plan, in consultation with the enrollee or the 
        enrollee's legal representative and other individuals requested 
        by the enrollee.  The personal support plan must be updated as 
        needed or as requested by the enrollee.  Enrollees may choose 
        not to have a personal support plan. 
           (n) The county administrative entity shall ensure timely 
        authorization, arrangement, and continuity of needed and covered 
        supports and services. 
           (o) The county administrative entity shall offer service 
        coordination that fulfills the responsibilities under 
        subdivision 12 and is appropriate to the enrollee's needs, 
        choices, and preferences, including a choice of service 
        coordinator. 
           (p) The county administrative entity shall contract with 
        schools and other agencies as appropriate to provide otherwise 
        covered medically necessary medical assistance services as 
        described in an enrollee's individual family support plan, as 
        described in sections 125A.26 to 125A.48, or individual 
        education plan, as described in chapter 125A. 
           (q) The county administrative entity shall develop and 
        implement strategies, based on consultation with affected 
        groups, to respect diversity and ensure culturally competent 
        service delivery in a manner that promotes the physical, social, 
        psychological, and spiritual well-being of enrollees and 
        preserves the dignity of individuals, families, and their 
        communities. 
           (r) When an enrollee changes county authorities, county 
        administrative entities shall ensure coordination with the 
        entity that is assuming responsibility for administering the 
        medical assistance benefit set to ensure continuity of supports 
        and services for the enrollee. 
           (s) The county administrative entity shall comply with 
        additional requirements as specified in the intergovernmental 
        contract.  
           (t) To the extent that alternatives are approved under 
        subdivision 17, county administrative entities must provide for 
        the health and safety of enrollees and protect the rights to 
        privacy and to provide informed consent. 
           Sec. 83.  Minnesota Statutes 1998, section 256B.77, 
        subdivision 10, is amended to read: 
           Subd. 10.  [CAPITATION PAYMENT.] (a) The commissioner shall 
        pay a capitation payment to the county authority and, when 
        applicable under subdivision 6, paragraph (a), to the service 
        delivery organization for each medical assistance eligible 
        enrollee.  The commissioner shall develop capitation payment 
        rates for the initial contract period for each demonstration 
        site in consultation with an independent actuary, to ensure that 
        the cost of services under the demonstration project does not 
        exceed the estimated cost for medical assistance services for 
        the covered population under the fee-for-service system for the 
        demonstration period.  For each year of the demonstration 
        project, the capitation payment rate shall be based on 96 
        percent of the projected per person costs that would otherwise 
        have been paid under medical assistance fee-for-service during 
        each of those years.  Rates shall be adjusted within the limits 
        of the available risk adjustment technology, as mandated by 
        section 62Q.03.  In addition, the commissioner shall implement 
        appropriate risk and savings sharing provisions with county 
        administrative entities and, when applicable under subdivision 
        6, paragraph (a), service delivery organizations within the 
        projected budget limits.  Capitation rates shall be adjusted, at 
        least annually, to include any rate increases and payments for 
        expanded or newly covered services for eligible individuals.  
        The initial demonstration project rate shall include an amount 
        in addition to the fee-for-service payments to adjust for 
        underutilization of dental services.  Any savings beyond those 
        allowed for the county authority, county administrative entity, 
        or service delivery organization shall be first used to meet the 
        unmet needs of eligible individuals.  Payments to providers 
        participating in the project are exempt from the requirements of 
        sections 256.966 and 256B.03, subdivision 2. 
           (b) The commissioner shall monitor and evaluate annually 
        the effect of the discount on consumers, the county authority, 
        and providers of disability services.  Findings shall be 
        reported and recommendations made, as appropriate, to ensure 
        that the discount effect does not adversely affect the ability 
        of the county administrative entity or providers of services to 
        provide appropriate services to eligible individuals, and does 
        not result in cost shifting of eligible individuals to the 
        county authority. 
           (c) For risk-sharing to occur under this subdivision, the 
        aggregate fee-for-service cost of covered services provided by 
        the county administrative entity under this section must exceed 
        the aggregate sum of capitation payments made to the county 
        administrative entity under this section.  The county authority 
        is required to maintain its current level of nonmedical 
        assistance spending on enrollees.  If the county authority 
        spends less in nonmedical assistance dollars on enrollees than 
        it spent the year prior to the contract year, the amount of 
        underspending shall be deducted from the aggregate 
        fee-for-service cost of covered services.  The commissioner 
        shall then compare the fee-for-service costs and capitation 
        payments related to the services provided for the term of this 
        contract.  The commissioner shall base its calculation of the 
        fee-for-service costs on application of the medical assistance 
        fee schedule to services identified on the county administrative 
        entity's encounter claims submitted to the commissioner.  The 
        aggregate fee-for-service cost shall not include any third-party 
        recoveries or cost-avoided amounts. 
           If the commissioner finds that the aggregate 
        fee-for-service cost is greater than the sum of the capitation 
        payments, the commissioner shall settle according to the 
        following schedule: 
           (1) For the first contract year for each project, the 
        commissioner shall pay the county administrative entity 50 
        percent of the difference between the sum of the capitation 
        payments and 100 percent of projected fee-for-service costs.  
        For aggregate fee-for-service costs in excess of 100 percent of 
        projected fee-for-service costs, the commissioner shall pay 250 
        percent of the difference between the aggregate fee-for-service 
        cost and the projected fee-for-service cost, up to 104 percent 
        of the projected fee-for-service costs.  The county 
        administrative entity shall be responsible for all costs in 
        excess of 104 percent of projected fee-for-service costs. 
           (2) For the second contract year for each project, the 
        commissioner shall pay the county administrative entity 37.5 
        percent of the difference between the sum of the capitation 
        payments and 100 percent of projected fee-for-service costs.  
        The county administrative entity shall be responsible for all 
        costs in excess of 100 percent of projected fee-for-service 
        costs. 
           (3) For the third contract year for each project, the 
        commissioner shall pay the county administrative entity 25 
        percent of the difference between the sum of the capitation 
        payments and 100 percent of projected fee-for-service costs.  
        The county administrative entity shall be responsible for all 
        costs in excess of 100 percent of projected fee-for-service 
        costs. 
           (4) For the fourth and subsequent contract years for each 
        project, the county administrative entity shall be responsible 
        for all costs in excess of the capitation payments. 
           (d) In addition to other payments under this subdivision, 
        the commissioner may increase payments by up to 0.25 percent of 
        the projected per person costs that would otherwise have been 
        paid under medical assistance fee-for-service.  The commissioner 
        may make the increased payments to: 
           (1) offset rate increases for regional treatment services 
        under subdivision 22 which are higher than was expected by the 
        commissioner when the capitation was set at 96 percent; and 
           (2) implement incentives to encourage appropriate, high 
        quality, efficient services. 
           Sec. 84.  Minnesota Statutes 1998, section 256B.77, 
        subdivision 14, is amended to read: 
           Subd. 14.  [EXTERNAL ADVOCACY.] In addition to ombudsman 
        services, enrollees shall have access to advocacy services on a 
        local or regional basis.  The purpose of external advocacy 
        includes providing individual advocacy services for enrollees 
        who have complaints or grievances with the county administrative 
        entity, service delivery organization, or a service provider; 
        assisting enrollees to understand the service delivery system 
        and select providers and, if applicable, a service delivery 
        organization; and understand and exercise their rights as an 
        enrollee.  External advocacy contractors must demonstrate that 
        they have the expertise to advocate on behalf of all categories 
        of eligible individuals and are independent of the commissioner, 
        county authority, county administrative entity, service delivery 
        organization, or any service provider within the demonstration 
        project.  
           These advocacy services shall be provided through the 
        ombudsman for mental health and mental retardation directly, or 
        under contract with private, nonprofit organizations, with 
        funding provided through the demonstration project.  The funding 
        shall be provided annually to the ombudsman's office based on 
        0.1 percent of the projected per person costs that would 
        otherwise have been paid under medical assistance 
        fee-for-service during those years.  Funding for external 
        advocacy shall be provided for each year of the demonstration 
        period through general fund appropriations.  This funding is in 
        addition to the capitation payment available under subdivision 
        10. 
           Sec. 85.  Minnesota Statutes 1998, section 256B.77, is 
        amended by adding a subdivision to read: 
           Subd. 27.  [SERVICE COORDINATION TRANSITION.] Demonstration 
        sites designated under subdivision 5, with the permission of an 
        eligible individual, may implement the provisions of subdivision 
        12 beginning 60 calendar days prior to an individual's 
        enrollment.  This implementation may occur prior to the 
        enrollment of eligible individuals, but is restricted to 
        eligible individuals. 
           Sec. 86.  Minnesota Statutes 1998, 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-statewide (MFIP-S), who is 
        having a payment made on the person's behalf under sections 
        256I.01 to 256I.06, or who resides in group residential housing 
        as defined in chapter 256I and can meet a spenddown using the 
        cost of remedial services received through group residential 
        housing; or 
           (2)(i) who is a resident of Minnesota; and whose equity in 
        assets is not in excess of $1,000 per assistance unit.  Exempt 
        assets, the reduction of excess assets, and the waiver of excess 
        assets must conform to the medical assistance program in chapter 
        256B, with the following exception:  the maximum amount of 
        undistributed funds in a trust that could be distributed to or 
        on behalf of the beneficiary by the trustee, assuming the full 
        exercise of the trustee's discretion under the terms of the 
        trust, must be applied toward the asset maximum; and 
           (ii) who has countable income not in excess of the 
        assistance standards established in section 256B.056, 
        subdivision 4, or whose excess income is spent down according to 
        section 256B.056, subdivision 5, using a six-month budget 
        period.  The method for calculating earned income disregards and 
        deductions for a person who resides with a dependent child under 
        age 21 shall follow section 256B.056, subdivision 1a.  However, 
        if a disregard of $30 and one-third of the remainder has been 
        applied to the wage earner's income, the disregard shall not be 
        applied again until the wage earner's income has not been 
        considered in an eligibility determination for general 
        assistance, general assistance medical care, medical assistance, 
        or MFIP-S for 12 consecutive months.  The earned income and work 
        expense deductions for a person who does not reside with a 
        dependent child under age 21 shall be the same as the method 
        used to determine eligibility for a person under section 
        256D.06, subdivision 1, except the disregard of the first $50 of 
        earned income is not allowed; 
           (3) who would be eligible for medical assistance except 
        that the person resides in a facility that is determined by the 
        commissioner or the federal Health Care Financing Administration 
        to be an institution for mental diseases; or 
           (4) who is ineligible for medical assistance under chapter 
        256B or general assistance medical care under any other 
        provision of this section, and is receiving care and 
        rehabilitation services from a nonprofit center established to 
        serve victims of torture.  These individuals are eligible for 
        general assistance medical care only for the period during which 
        they are receiving services from the center.  During this period 
        of eligibility, individuals eligible under this clause shall not 
        be required to participate in prepaid general assistance medical 
        care.  
           (b) Beginning January 1, 2000, applicants or recipients who 
        meet all eligibility requirements of MinnesotaCare as defined in 
        sections 256L.01 to 256L.16, and are: 
           (i) adults with dependent children under 21 whose gross 
        family income is equal to or less than 275 percent of the 
        federal poverty guidelines; or 
           (ii) adults without children with earned income and whose 
        family gross income is between 75 percent of the federal poverty 
        guidelines and the amount set by section 256L.04, subdivision 7, 
        shall be terminated from general assistance medical care upon 
        enrollment in MinnesotaCare. 
           (c) For services rendered on or after July 1, 1997, 
        eligibility is limited to one month prior to application if the 
        person is determined eligible in the prior month.  A 
        redetermination of eligibility must occur every 12 months.  
        Beginning January 1, 2000, Minnesota health care program 
        applications completed by recipients and applicants who are 
        persons described in paragraph (b), may be returned to the 
        county agency to be forwarded to the department of human 
        services or sent directly to the department of human services 
        for enrollment in MinnesotaCare.  If all other eligibility 
        requirements of this subdivision are met, eligibility for 
        general assistance medical care shall be available in any month 
        during which a MinnesotaCare eligibility determination and 
        enrollment are pending.  Upon notification of eligibility for 
        MinnesotaCare, notice of termination for eligibility for general 
        assistance medical care shall be sent to an applicant or 
        recipient.  If all other eligibility requirements of this 
        subdivision are met, eligibility for general assistance medical 
        care shall be available until enrollment in MinnesotaCare 
        subject to the provisions of paragraph (e). 
           (d) The date of an initial Minnesota health care program 
        application necessary to begin a determination of eligibility 
        shall be the date the applicant has provided a name, address, 
        and social security number, signed and dated, to the county 
        agency or the department of human services.  If the applicant is 
        unable to provide an initial application when health care is 
        delivered due to a medical condition or disability, a health 
        care provider may act on the person's behalf to complete the 
        initial application.  The applicant must complete the remainder 
        of the application and provide necessary verification before 
        eligibility can be determined.  The county agency must assist 
        the applicant in obtaining verification if necessary.  On the 
        basis of information provided on the completed application, an 
        applicant who meets the following criteria shall be determined 
        eligible beginning in the month of application: 
           (1) has gross income less than 90 percent of the applicable 
        income standard; 
           (2) has liquid assets that total within $300 of the asset 
        standard; 
           (3) does not reside in a long-term care facility; and 
           (4) meets all other eligibility requirements. 
        The applicant must provide all required verifications within 30 
        days' notice of the eligibility determination or eligibility 
        shall be terminated. 
           (e) County agencies are authorized to use all automated 
        databases containing information regarding recipients' or 
        applicants' income in order to determine eligibility for general 
        assistance medical care or MinnesotaCare.  Such use shall be 
        considered sufficient in order to determine eligibility and 
        premium payments by the county agency. 
           (f) General assistance medical care is not available for a 
        person in a correctional facility unless the person is detained 
        by law for less than one year in a county correctional or 
        detention facility as a person accused or convicted of a crime, 
        or admitted as an inpatient to a hospital on a criminal hold 
        order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (g) General assistance medical care is not available for 
        applicants or recipients who do not cooperate with the county 
        agency to meet the requirements of medical assistance.  General 
        assistance medical care is limited to payment of emergency 
        services only for applicants or recipients as described in 
        paragraph (b), whose MinnesotaCare coverage is denied or 
        terminated for nonpayment of premiums as required by sections 
        256L.06 and 256L.07.  
           (h) In determining the amount of assets of an individual, 
        there shall be included any asset or interest in an asset, 
        including an asset excluded under paragraph (a), that was given 
        away, sold, or disposed of for less than fair market value 
        within the 60 months preceding application for general 
        assistance medical care or during the period of eligibility.  
        Any transfer described in this paragraph shall be presumed to 
        have been for the purpose of establishing eligibility for 
        general assistance medical care, unless the individual furnishes 
        convincing evidence to establish that the transaction was 
        exclusively for another purpose.  For purposes of this 
        paragraph, the value of the asset or interest shall be the fair 
        market value at the time it was given away, sold, or disposed 
        of, less the amount of compensation received.  For any 
        uncompensated transfer, the number of months of ineligibility, 
        including partial months, shall be calculated by dividing the 
        uncompensated transfer amount by the average monthly per person 
        payment made by the medical assistance program to skilled 
        nursing facilities for the previous calendar year.  The 
        individual shall remain ineligible until this fixed period has 
        expired.  The period of ineligibility may exceed 30 months, and 
        a reapplication for benefits after 30 months from the date of 
        the transfer shall not result in eligibility unless and until 
        the period of ineligibility has expired.  The period of 
        ineligibility begins in the month the transfer was reported to 
        the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (i) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        Number 104-193, sections 421 and 422, and subsequently set out 
        in federal rules. 
           (j)(1) An undocumented noncitizen or a nonimmigrant is 
        ineligible for general assistance medical care other than 
        emergency services.  For purposes of this subdivision, a 
        nonimmigrant is an individual in one or more of the classes 
        listed in United States Code, title 8, section 1101(a)(15), and 
        an undocumented noncitizen is an individual who resides in the 
        United States without the approval or acquiescence of the 
        Immigration and Naturalization Service. 
           (2) This paragraph does not apply to a child under age 18, 
        to a Cuban or Haitian entrant as defined in Public Law Number 
        96-422, section 501(e)(1) or (2)(a), or to a noncitizen who is 
        aged, blind, or disabled as defined in Code of Federal 
        Regulations, title 42, sections 435.520, 435.530, 435.531, 
        435.540, and 435.541, or effective October 1, 1998, to an 
        individual eligible for general assistance medical care under 
        paragraph (a), clause (4), who cooperates with the Immigration 
        and Naturalization Service to pursue any applicable immigration 
        status, including citizenship, that would qualify the individual 
        for medical assistance with federal financial participation. 
           (3) For purposes of this paragraph, "emergency services" 
        has the meaning given in Code of Federal Regulations, title 42, 
        section 440.255(b)(1), except that it also means services 
        rendered because of suspected or actual pesticide poisoning. 
           (k) 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. 
           Sec. 87.  Minnesota Statutes 1998, section 256D.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
        For a person who is eligible under subdivision 3, paragraph (a), 
        clause (3), 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; 
           (12) chiropractic services as covered under the medical 
        assistance program; 
           (13) podiatric services; 
           (14) dental services; 
           (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 services are service is otherwise covered 
        under this chapter as a physician service, (2) a service 
        provided on an inpatient basis is not included as part of the 
        cost for inpatient services included in the operating payment 
        rate, and if (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; and 
           (21) services of a certified public health nurse or a 
        registered nurse practicing in a public health nursing clinic 
        that is a department of, or that operates under the direct 
        authority of, a unit of government, if the service is within the 
        scope of practice of the public health nurse's license as a 
        registered nurse, as defined in section 148.171; and 
           (22) telemedicine consultations, to the extent they are 
        covered under section 256B.0625, subdivision 3b.  
           (b) Except as provided in paragraph (c), for a recipient 
        who is eligible under subdivision 3, paragraph (a), clause (1) 
        or (2), general assistance medical care covers the services 
        listed in paragraph (a) with the exception of special 
        transportation services. 
           (c) Gender reassignment surgery and related services are 
        not covered services under this subdivision unless the 
        individual began receiving gender reassignment services prior to 
        July 1, 1995.  
           (d) In order to contain costs, the commissioner of human 
        services shall select vendors of medical care who can provide 
        the most economical care consistent with high medical standards 
        and shall where possible contract with organizations on a 
        prepaid capitation basis to provide these services.  The 
        commissioner shall consider proposals by counties and vendors 
        for prepaid health plans, competitive bidding programs, block 
        grants, or other vendor payment mechanisms designed to provide 
        services in an economical manner or to control utilization, with 
        safeguards to ensure that necessary services are provided.  
        Before implementing prepaid programs in counties with a county 
        operated or affiliated public teaching hospital or a hospital or 
        clinic operated by the University of Minnesota, the commissioner 
        shall consider the risks the prepaid program creates for the 
        hospital and allow the county or hospital the opportunity to 
        participate in the program in a manner that reflects the risk of 
        adverse selection and the nature of the patients served by the 
        hospital, provided the terms of participation in the program are 
        competitive with the terms of other participants considering the 
        nature of the population served.  Payment for services provided 
        pursuant to this subdivision shall be as provided to medical 
        assistance vendors of these services under sections 256B.02, 
        subdivision 8, and 256B.0625.  For payments made during fiscal 
        year 1990 and later years, the commissioner shall consult with 
        an independent actuary in establishing prepayment rates, but 
        shall retain final control over the rate methodology.  
        Notwithstanding the provisions of subdivision 3, an individual 
        who becomes ineligible for general assistance medical care 
        because of failure to submit income reports or recertification 
        forms in a timely manner, shall remain enrolled in the prepaid 
        health plan and shall remain eligible for general assistance 
        medical care coverage through the last day of the month in which 
        the enrollee became ineligible for general assistance medical 
        care. 
           (e) The commissioner of human services may reduce payments 
        provided under sections 256D.01 to 256D.21 and 261.23 in order 
        to remain within the amount appropriated for general assistance 
        medical care, within the following restrictions: 
           (i) For the period July 1, 1985 to December 31, 1985, 
        reductions below the cost per service unit allowable under 
        section 256.966, are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 30 percent; payments for all other 
        inpatient hospital care may be reduced no more than 20 percent.  
        Reductions below the payments allowable under general assistance 
        medical care for the remaining general assistance medical care 
        services allowable under this subdivision may be reduced no more 
        than ten percent. 
           (ii) For the period January 1, 1986 to December 31, 1986, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 20 percent; payments for all other 
        inpatient hospital care may be reduced no more than 15 percent.  
        Reductions below the payments allowable under general assistance 
        medical care for the remaining general assistance medical care 
        services allowable under this subdivision may be reduced no more 
        than five percent. 
           (iii) For the period January 1, 1987 to June 30, 1987, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 15 percent; payments for all other 
        inpatient hospital care may be reduced no more than ten 
        percent.  Reductions below the payments allowable under medical 
        assistance for the remaining general assistance medical care 
        services allowable under this subdivision may be reduced no more 
        than five percent.  
           (iv) For the period July 1, 1987 to June 30, 1988, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 15 percent; payments for all other 
        inpatient hospital care may be reduced no more than five percent.
        Reductions below the payments allowable under medical assistance 
        for the remaining general assistance medical care services 
        allowable under this subdivision may be reduced no more than 
        five percent. 
           (v) For the period July 1, 1988 to June 30, 1989, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 15 percent; payments for all other 
        inpatient hospital care may not be reduced.  Reductions below 
        the payments allowable under medical assistance for the 
        remaining general assistance medical care services allowable 
        under this subdivision may be reduced no more than five percent. 
           (f) There shall be no copayment required of any recipient 
        of benefits for any services provided under this subdivision.  A 
        hospital receiving a reduced payment as a result of this section 
        may apply the unpaid balance toward satisfaction of the 
        hospital's bad debts. 
           (g) Any county may, from its own resources, provide medical 
        payments for which state payments are not made. 
           (h) Chemical dependency services that are reimbursed under 
        chapter 254B must not be reimbursed under general assistance 
        medical care. 
           (i) The maximum payment for new vendors enrolled in the 
        general assistance medical care program after the base year 
        shall be determined from the average usual and customary charge 
        of the same vendor type enrolled in the base year. 
           (j) The conditions of payment for services under this 
        subdivision are the same as the conditions specified in rules 
        adopted under chapter 256B governing the medical assistance 
        program, unless otherwise provided by statute or rule. 
           Sec. 88.  Minnesota Statutes 1998, section 256D.03, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PRIVATE INSURANCE POLICIES.] (a) Private 
        accident and health care coverage for medical services is 
        primary coverage and must be exhausted before general assistance 
        medical care is paid.  When a person who is otherwise eligible 
        for general assistance medical care has private accident or 
        health care coverage, including a prepaid health plan, the 
        private health care benefits available to the person must be 
        used first and to the fullest extent.  General assistance 
        medical care payment will not be made when either covered 
        charges are paid in full by a third party or the provider has an 
        agreement to accept payment for less than charges as payment in 
        full.  Payment for patients that are simultaneously covered by 
        general assistance medical care and a liable third party other 
        than Medicare will be determined as the lesser of clauses (1) to 
        (3): 
           (1) the patient liability according to the provider/insurer 
        agreement; 
           (2) covered charges minus the third party payment amount; 
        or 
           (3) the general assistance medical care rate minus the 
        third party payment amount. 
        A negative difference will not be implemented. 
           (b) When a parent or a person with an obligation of support 
        has enrolled in a prepaid health care plan under section 
        518.171, subdivision 1, the commissioner of human services shall 
        limit the recipient of general assistance medical care to the 
        benefits payable under that prepaid health care plan to the 
        extent that services available under general assistance medical 
        care are also available under the prepaid health care plan.  
           (c) Upon furnishing general assistance medical care or 
        general assistance to any person having private accident or 
        health care coverage, or having a cause of action arising out of 
        an occurrence that necessitated the payment of assistance, the 
        state agency shall be subrogated, to the extent of the cost of 
        medical care, subsistence, or other payments furnished, to any 
        rights the person may have under the terms of the coverage or 
        under the cause of action.  For purposes of this subdivision, 
        "state agency" includes prepaid health plans under contract with 
        the commissioner according to sections 256B.69, 256D.03, 
        subdivision 4, paragraph (d), and 256L.12; children's mental 
        health collaboratives under section 245.493; demonstration 
        projects for persons with disabilities under section 256B.77; 
        nursing homes under the alternative payment demonstration 
        project under section 256B.434; and county-based purchasing 
        entities under section 256B.692. 
           This right of subrogation includes all portions of the 
        cause of action, notwithstanding any settlement allocation or 
        apportionment that purports to dispose of portions of the cause 
        of action not subject to subrogation.  
           (d) To recover under this section, the attorney general or 
        the appropriate county attorney, acting upon direction from the 
        attorney general, may institute or join a civil action to 
        enforce the subrogation rights the commissioner established 
        under this section.  
           Any prepaid health plan providing services under sections 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing homes under the alternative payment 
        demonstration project under section 256B.434; or the 
        county-based purchasing entity providing services under section 
        256B.692 may retain legal representation to enforce the 
        subrogation rights created under this section or, if no action 
        has been brought, may initiate and prosecute an independent 
        action on their behalf against a person, firm, or corporation 
        that may be liable to the person to whom the care or payment was 
        furnished. 
           (e) The state agency must be given notice of monetary 
        claims against a person, firm, or corporation that may be liable 
        in damages, or otherwise obligated to pay part or all of the 
        costs related to an injury when the state agency has paid or 
        become liable for the cost of care or payments related to the 
        injury.  Notice must be given as follows:  
           (i) Applicants for general assistance or general assistance 
        medical care shall notify the state or county agency of any 
        possible claims when they submit the application.  Recipients of 
        general assistance or general assistance medical care shall 
        notify the state or county agency of any possible claims when 
        those claims arise.  
           (ii) A person providing medical care services to a 
        recipient of general assistance medical care shall notify the 
        state agency when the person has reason to believe that a third 
        party may be liable for payment of the cost of medical care.  
           (iii) A person who is party to a claim upon which the state 
        agency may be entitled to subrogation under this section shall 
        notify the state agency of its potential subrogation claim 
        before filing a claim, commencing an action, or negotiating a 
        settlement.  A person who is a party to a claim includes the 
        plaintiff, the defendants, and any other party to the cause of 
        action. 
           Notice given to the county agency is not sufficient to meet 
        the requirements of paragraphs (b) and (c).  
           (f) Upon any judgment, award, or settlement of a cause of 
        action, or any part of it, upon which the state agency has a 
        subrogation right, including compensation for liquidated, 
        unliquidated, or other damages, reasonable costs of collection, 
        including attorney fees, must be deducted first.  The full 
        amount of general assistance or general assistance medical care 
        paid to or on behalf of the person as a result of the injury 
        must be deducted next and paid to the state agency.  The rest 
        must be paid to the public assistance recipient or other 
        plaintiff.  The plaintiff, however, must receive at least 
        one-third of the net recovery after attorney fees and collection 
        costs. 
           Sec. 89.  Minnesota Statutes 1998, section 256L.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COPAYMENTS AND COINSURANCE.] (a) The 
        MinnesotaCare benefit plan shall include the following 
        copayments and coinsurance requirements for all enrollees except 
        parents and relative caretakers of children under the age of 21 
        in households with income at or below 175 percent of the federal 
        poverty guidelines and pregnant women and children under the age 
        of 21:  
           (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; and 
           (4) effective July 1, 1998, 50 percent of the 
        fee-for-service rate for adult dental care services other than 
        preventive care services for persons eligible under section 
        256L.04, subdivisions 1 to 7, with income equal to or less than 
        175 percent of the federal poverty guidelines. 
           The exceptions described in this paragraph shall only be 
        implemented if required to obtain federal Medicaid funding for 
        these individuals and shall expire July 1, 2000. 
           (b) Effective July 1, 1997, 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 and amounts which exceed 
        the $10,000 inpatient hospital benefit limit. 
           (c) 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. 90.  Minnesota Statutes 1998, section 256L.03, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LIEN.] When the state agency provides, pays for, 
        or becomes liable for covered health services, the agency shall 
        have a lien for the cost of the covered health services upon any 
        and all causes of action accruing to the enrollee, or to the 
        enrollee's legal representatives, as a result of the occurrence 
        that necessitated the payment for the covered health services.  
        All liens under this section shall be subject to the provisions 
        of section 256.015.  For purposes of this subdivision, "state 
        agency" includes authorized agents of the state agency prepaid 
        health plans under contract with the commissioner according to 
        sections 256B.69, 256D.03, subdivision 4, paragraph (d), and 
        256L.12; and county-based purchasing entities under section 
        256B.692. 
           Sec. 91.  Minnesota Statutes 1998, section 256L.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COOPERATION IN ESTABLISHING THIRD-PARTY 
        LIABILITY, PATERNITY, AND OTHER MEDICAL SUPPORT.] (a) To be 
        eligible for MinnesotaCare, individuals and families must 
        cooperate with the state agency to identify potentially liable 
        third-party payers and assist the state in obtaining third-party 
        payments.  "Cooperation" includes, but is not limited to, 
        identifying any third party who may be liable for care and 
        services provided under MinnesotaCare to the enrollee, providing 
        relevant information to assist the state in pursuing a 
        potentially liable third party, and completing forms necessary 
        to recover third-party payments. 
           (b) A parent, guardian, relative caretaker, or child 
        enrolled in the MinnesotaCare program must cooperate with the 
        department of human services and the local agency in 
        establishing the paternity of an enrolled child and in obtaining 
        medical care support and payments for the child and any other 
        person for whom the person can legally assign rights, in 
        accordance with applicable laws and rules governing the medical 
        assistance program.  A child shall not be ineligible for or 
        disenrolled from the MinnesotaCare program solely because the 
        child's parent, relative caretaker, or guardian fails to 
        cooperate in establishing paternity or obtaining medical support.
           Sec. 92.  Minnesota Statutes 1998, section 256L.04, 
        subdivision 8, is amended to read: 
           Subd. 8.  [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL 
        ASSISTANCE.] (a) Individuals who receive supplemental security 
        income or retirement, survivors, or disability benefits due to a 
        disability, or other disability-based pension, who qualify under 
        subdivision 7, but who are potentially eligible for medical 
        assistance without a spenddown shall be allowed to enroll in 
        MinnesotaCare for a period of 60 days, so long as the applicant 
        meets all other conditions of eligibility.  The commissioner 
        shall identify and refer the applications of such individuals to 
        their county social service agency.  The county and the 
        commissioner shall cooperate to ensure that the individuals 
        obtain medical assistance coverage for any months for which they 
        are eligible. 
           (b) The enrollee must cooperate with the county social 
        service agency in determining medical assistance eligibility 
        within the 60-day enrollment period.  Enrollees who do not 
        cooperate with medical assistance within the 60-day enrollment 
        period shall be disenrolled from the plan within one calendar 
        month.  Persons disenrolled for nonapplication for medical 
        assistance may not reenroll until they have obtained a medical 
        assistance eligibility determination.  Persons disenrolled for 
        noncooperation with medical assistance may not reenroll until 
        they have cooperated with the county agency and have obtained a 
        medical assistance eligibility determination. 
           (c) Beginning January 1, 2000, counties that choose to 
        become MinnesotaCare enrollment sites shall consider 
        MinnesotaCare applications of individuals described in paragraph 
        (a) to also be applications for medical assistance and shall 
        first determine whether medical assistance eligibility exists.  
        Adults with children with family income under 175 percent of the 
        federal poverty guidelines for the applicable family size, 
        pregnant women, and children who qualify under subdivision 1 
        Applicants who are potentially eligible for medical assistance 
        without a spenddown, except for those described in paragraph 
        (a), may choose to enroll in either MinnesotaCare or medical 
        assistance. 
           (d) The commissioner shall redetermine provider payments 
        made under MinnesotaCare to the appropriate medical assistance 
        payments for those enrollees who subsequently become eligible 
        for medical assistance. 
           Sec. 93.  Minnesota Statutes 1998, section 256L.04, 
        subdivision 11, is amended to read: 
           Subd. 11.  [MINNESOTACARE OUTREACH.] (a) The commissioner 
        shall award grants to public or private organizations to provide 
        information on the importance of maintaining insurance coverage 
        and on how to obtain coverage through the MinnesotaCare program 
        in areas of the state with high uninsured populations.  
           (b) In awarding the grants, the commissioner shall consider 
        the following: 
           (1) geographic areas and populations with high uninsured 
        rates; 
           (2) the ability to raise matching funds; and 
           (3) the ability to contact or serve eligible populations. 
           The commissioner shall monitor the grants and may terminate 
        a grant if the outreach effort does not increase the 
        MinnesotaCare program enrollment in medical assistance, general 
        assistance medical care, or the MinnesotaCare program. 
           Sec. 94.  Minnesota Statutes 1998, section 256L.04, 
        subdivision 13, is amended to read: 
           Subd. 13.  [FAMILIES WITH GRANDPARENTS, RELATIVE 
        CARETAKERS, FOSTER PARENTS, OR LEGAL GUARDIANS.] Beginning 
        January 1, 1999, in families that include a grandparent, 
        relative caretaker as defined in the medical assistance program, 
        foster parent, or legal guardian, the grandparent, relative 
        caretaker, foster parent, or legal guardian may apply as a 
        family or may apply separately for the children.  If the 
        caretaker applies separately for the children, only the 
        children's income is counted and the provisions of subdivision 
        1, paragraph (b), do not apply.  If the grandparent, relative 
        caretaker, foster parent, or legal guardian applies with the 
        children, their income is included in the gross family income 
        for determining eligibility and premium amount. 
           Sec. 95.  Minnesota Statutes 1998, section 256L.05, is 
        amended by adding a subdivision to read: 
           Subd. 3c.  [RETROACTIVE COVERAGE.] Notwithstanding 
        subdivision 3, the effective date of coverage shall be the first 
        day of the month following termination from medical assistance 
        or general assistance medical care for families and individuals 
        who are eligible for MinnesotaCare and who submitted a written 
        request for retroactive MinnesotaCare coverage with a completed 
        application within 30 days of the mailing of notification of 
        termination from medical assistance or general assistance 
        medical care.  The applicant must provide all required 
        verifications within 30 days of the written request for 
        verification.  For retroactive coverage, premiums must be paid 
        in full for any retroactive month, current month, and next month 
        within 30 days of the premium billing. 
           Sec. 96.  Minnesota Statutes 1998, section 256L.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPLICATION PROCESSING.] The commissioner of 
        human services shall determine an applicant's eligibility for 
        MinnesotaCare no more than 30 days from the date that the 
        application is received by the department of human services.  
        Beginning January 1, 2000, this requirement also applies to 
        local county human services agencies that determine eligibility 
        for MinnesotaCare.  Once annually at application or 
        reenrollment, to prevent processing delays, applicants or 
        enrollees who, from the information provided on the application, 
        appear to meet eligibility requirements shall be enrolled upon 
        timely payment of premiums.  The enrollee must provide all 
        required verifications within 30 days of enrollment notification 
        of the eligibility determination or coverage from the program 
        shall be terminated.  Enrollees who are determined to be 
        ineligible when verifications are provided shall be disenrolled 
        from the program. 
           Sec. 97.  Minnesota Statutes 1998, section 256L.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 
        Premiums are dedicated to the commissioner for MinnesotaCare. 
           (b) The commissioner shall develop and implement procedures 
        to:  (1) require enrollees to report changes in income; (2) 
        adjust sliding scale premium payments, based upon changes in 
        enrollee income; and (3) disenroll enrollees from MinnesotaCare 
        for failure to pay required premiums.  Beginning July 1, 1998, 
        Failure to pay includes payment with a dishonored check and, a 
        returned automatic bank withdrawal, or a refused credit card or 
        debit card payment.  The commissioner may demand a guaranteed 
        form of payment, including a cashier's check or a money order, 
        as the only means to replace a dishonored check, returned, or 
        refused payment. 
           (c) Premiums are calculated on a calendar month basis and 
        may be paid on a monthly, quarterly, or annual basis, with the 
        first payment due upon notice from the commissioner of the 
        premium amount required.  The commissioner shall inform 
        applicants and enrollees of these premium payment options. 
        Premium payment is required before enrollment is complete and to 
        maintain eligibility in MinnesotaCare.  
           (d) Nonpayment of the premium will result in disenrollment 
        from the plan within one calendar month after the due date.  
        Persons disenrolled for nonpayment or who voluntarily terminate 
        coverage from the program may not reenroll until four calendar 
        months have elapsed.  Persons disenrolled for nonpayment who pay 
        all past due premiums as well as current premiums due, including 
        premiums due for the period of disenrollment, within 20 days of 
        disenrollment, shall be reenrolled retroactively to the first 
        day of disenrollment.  Persons disenrolled for nonpayment or who 
        voluntarily terminate coverage from the program may not reenroll 
        for four calendar months unless the person demonstrates good 
        cause for nonpayment.  Good cause does not exist if a person 
        chooses to pay other family expenses instead of the premium.  
        The commissioner shall define good cause in rule. 
           Sec. 98.  Minnesota Statutes 1998, section 256L.07, is 
        amended to read: 
           256L.07 [ELIGIBILITY FOR SUBSIDIZED PREMIUMS BASED ON 
        SLIDING SCALE MINNESOTACARE.] 
           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 for subsidized premium 
        payments without meeting the requirements of subdivision 2, 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.  
        Individuals enrolled in MinnesotaCare under section 256L.04, 
        subdivision 7, whose income increases above 175 percent of the 
        federal poverty guidelines are no longer eligible for the 
        program and shall be disenrolled by the commissioner.  For 
        persons disenrolled under this subdivision, MinnesotaCare 
        coverage terminates the last day of the calendar month following 
        the month in which the commissioner determines that the income 
        of a family or individual, determined over a four-month period 
        as required by section 256L.15, subdivision 2, exceeds program 
        income limits.  
           (c) Notwithstanding paragraph (b), individuals and families 
        may remain enrolled in MinnesotaCare if ten percent of their 
        annual income is less than the annual premium for a policy with 
        a $500 deductible available through the Minnesota comprehensive 
        health association.  Individuals and families who are no longer 
        eligible for MinnesotaCare under this subdivision shall be given 
        an 18-month notice period from the date that ineligibility is 
        determined before disenrollment.  
           Subd. 2.  [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED 
        COVERAGE.] (a) To be eligible for subsidized premium payments 
        based on a sliding scale, a family or individual must not have 
        access to subsidized health coverage through an employer and 
        must not have had access to employer-subsidized coverage through 
        a current employer for 18 months prior to application or 
        reapplication.  A family or individual whose employer-subsidized 
        coverage is lost due to an employer terminating health care 
        coverage as an employee benefit during the previous 18 months is 
        not eligible.  
           (b) For purposes of this requirement, subsidized health 
        coverage means health coverage for which the employer pays at 
        least 50 percent of the cost of coverage for the employee or 
        dependent, or a higher percentage as specified by the 
        commissioner.  Children are eligible for employer-subsidized 
        coverage through either parent, including the noncustodial 
        parent.  The commissioner must treat employer contributions to 
        Internal Revenue Code Section 125 plans and any other employer 
        benefits intended to pay health care costs as qualified employer 
        subsidies toward the cost of health coverage for employees for 
        purposes of this subdivision. 
           Subd. 3.  [OTHER HEALTH COVERAGE.] (a) Families and 
        individuals enrolled in the MinnesotaCare program must have no 
        health coverage while enrolled or for at least four months prior 
        to application and renewal.  Children enrolled in the original 
        children's health plan and children in families with income 
        equal to or less than 150 percent of the federal poverty 
        guidelines, who have other health insurance, are eligible if the 
        other health coverage meets the requirements of Minnesota Rules, 
        part 9506.0020, subpart 3, item B. coverage: 
           (1) lacks two or more of the following: 
           (i) basic hospital insurance; 
           (ii) medical-surgical insurance; 
           (iii) prescription drug coverage; 
           (iv) dental coverage; or 
           (v) vision coverage; 
           (2) requires a deductible of $100 or more per person per 
        year; or 
           (3) lacks coverage because the child has exceeded the 
        maximum coverage for a particular diagnosis or the policy 
        excludes a particular diagnosis. 
           The commissioner may change this eligibility criterion for 
        sliding scale premiums in order to remain within the limits of 
        available appropriations.  The requirement of no health coverage 
        does not apply to newborns. 
           (b) For purposes of this section, Medical assistance, 
        general assistance medical care, and civilian health and medical 
        program of the uniformed service, CHAMPUS, are not considered 
        insurance or health coverage for purposes of the four-month 
        requirement described in this subdivision. 
           (c) For purposes of this section subdivision, Medicare Part 
        A or B coverage under title XVIII of the Social Security Act, 
        United States Code, title 42, sections 1395c to 1395w-4, is 
        considered health coverage.  An applicant or enrollee may not 
        refuse Medicare coverage to establish eligibility for 
        MinnesotaCare. 
           (d) Applicants who were recipients of medical assistance or 
        general assistance medical care within one month of application 
        must meet the provisions of this subdivision and subdivision 2. 
           Subd. 4.  [FAMILIES WITH CHILDREN IN NEED OF CHEMICAL 
        DEPENDENCY TREATMENT.] Premiums for families with children when 
        a parent has been determined to be in need of chemical 
        dependency treatment pursuant to an assessment conducted by the 
        county under section 626.556, subdivision 10, or a case plan 
        under section 257.071 or 260.191, subdivision 1e, who are 
        eligible for MinnesotaCare under section 256L.04, subdivision 1, 
        may be paid by the county of residence of the person in need of 
        treatment for one year from the date the family is determined to 
        be eligible or if the family is currently enrolled in 
        MinnesotaCare from the date the person is determined to be in 
        need of chemical dependency treatment.  Upon renewal, the family 
        is responsible for any premiums owed under section 256L.15.  If 
        the family is not currently enrolled in MinnesotaCare, the local 
        county human services agency shall determine whether the family 
        appears to meet the eligibility requirements and shall assist 
        the family in applying for the MinnesotaCare program. 
           Sec. 99.  Minnesota Statutes 1998, section 256L.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREMIUM DETERMINATION.] Families with 
        children and individuals shall pay a premium determined 
        according to a sliding fee based on the cost of coverage as a 
        percentage of the family's gross family income.  Pregnant women 
        and children under age two are exempt from the provisions of 
        section 256L.06, subdivision 3, paragraph (b), clause (3), 
        requiring disenrollment for failure to pay premiums.  For 
        pregnant women, this exemption continues until the first day of 
        the month following the 60th day postpartum.  Women who remain 
        enrolled during pregnancy or the postpartum period, despite 
        nonpayment of premiums, shall be disenrolled on the first of the 
        month following the 60th day postpartum for the penalty period 
        that otherwise applies under section 256L.06, unless they begin 
        paying premiums. 
           Sec. 100.  Minnesota Statutes 1998, section 256L.15, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [PAYMENTS NONREFUNDABLE.] Only MinnesotaCare 
        premiums are not refundable paid for future months of coverage 
        for which a health plan capitation fee has not been paid may be 
        refunded. 
           Sec. 101.  Minnesota Statutes 1998, section 256L.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SLIDING FEE SCALE TO DETERMINE PERCENTAGE OF 
        GROSS INDIVIDUAL OR FAMILY INCOME.] (a) The commissioner shall 
        establish a sliding fee scale to determine the percentage of 
        gross individual or family income that households at different 
        income levels must pay to obtain coverage through the 
        MinnesotaCare program.  The sliding fee scale must be based on 
        the enrollee's gross individual or family income during the 
        previous four months.  The sliding fee scale must contain 
        separate tables based on enrollment of one, two, or three or 
        more persons.  The sliding fee scale begins with a premium of 
        1.5 percent of gross individual or family income for individuals 
        or families with incomes below the limits for the medical 
        assistance program for families and children in effect on 
        January 1, 1999, and proceeds through the following evenly 
        spaced steps:  1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 
        percent.  These percentages are matched to evenly spaced income 
        steps ranging from the medical assistance income limit for 
        families and children in effect on January 1, 1999, to 275 
        percent of the federal poverty guidelines for the applicable 
        family size, up to a family size of five.  The sliding fee scale 
        for a family of five must be used for families of more than 
        five.  The sliding fee scale and percentages are not subject to 
        the provisions of chapter 14.  If a family or individual reports 
        increased income after enrollment, premiums shall not be 
        adjusted until eligibility renewal. 
           (b) Enrolled individuals and families whose gross annual 
        income increases above 275 percent of the federal poverty 
        guideline 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. 
           Sec. 102.  Minnesota Statutes 1998, section 626.556, 
        subdivision 10i, is amended to read: 
           Subd. 10i.  [ADMINISTRATIVE RECONSIDERATION OF FINAL 
        DETERMINATION OF MALTREATMENT.] (a) An individual or facility 
        that the commissioner or a local social service agency 
        determines has maltreated a child, or the child's designee, 
        regardless of the determination, who contests the investigating 
        agency's final determination regarding maltreatment, may request 
        the investigating agency to reconsider its final determination 
        regarding maltreatment.  The request for reconsideration must be 
        submitted in writing to the investigating agency within 15 
        calendar days after receipt of notice of the final determination 
        regarding maltreatment.  
           (b) If the investigating agency denies the request or fails 
        to act upon the request within 15 calendar days after receiving 
        the request for reconsideration, the person or facility entitled 
        to a fair hearing under section 256.045 may submit to the 
        commissioner of human services a written request for a hearing 
        under that section. 
           (c) If, as a result of the reconsideration, the 
        investigating agency changes the final determination of 
        maltreatment, that agency shall notify the parties specified in 
        subdivisions 10b, 10d, and 10f. 
           (d) If an individual or facility contests the investigating 
        agency's final determination regarding maltreatment by 
        requesting a fair hearing under section 256.045, the 
        commissioner of human services shall assure that the hearing is 
        conducted and a decision is reached within 90 days of receipt of 
        the request for a hearing.  The time for action on the decision 
        may be extended for as many days as the hearing is postponed or 
        the record is held open for the benefit of either party. 
           Sec. 103.  Laws 1995, chapter 178, article 2, section 46, 
        subdivision 10, is amended to read: 
           Subd. 10.  [ADDITIONAL WAIVER REQUEST FOR EMPLOYED DISABLED 
        PERSONS.] The commissioner shall seek a federal waiver in order 
        to implement a work incentive for disabled persons eligible for 
        medical assistance who are not residents of long-term care 
        facilities when determining their eligibility for medical 
        assistance.  The waiver shall request authorization to establish 
        a medical assistance earned income disregard for employed 
        disabled persons who, but for earned income, are eligible for 
        SSDI and who receive require personal care assistance under the 
        Medical Assistance Program.  The disregard shall be equivalent 
        to the threshold amount applied to persons who qualify under 
        section 1619(b) of the Social Security Act, except that when a 
        disabled person's earned income reaches the maximum income 
        permitted at the threshold under section 1619(b), the person 
        shall retain medical assistance eligibility and must contribute 
        to the costs of medical care on a sliding fee basis. 
           Sec. 104.  Laws 1997, chapter 225, article 4, section 4, is 
        amended to read: 
           Sec. 4.  [SENIOR DRUG PROGRAM.] 
           The commissioner shall administer the senior drug program 
        so that the costs to the state total no more than $4,000,000 
        plus the amount of the rebate.  The commissioner is authorized 
        to discontinue enrollment in order to meet this level of funding.
           The commissioner shall report to the legislature the 
        estimated costs of the senior drug program without funding 
        caps.  The report shall be included as part of the November and 
        February forecasts. 
           The commissioner of finance shall annually reimburse the 
        general fund with health care access funds for the estimated 
        increased costs in the QMB/SLMB program directly associated with 
        the senior drug program.  This reimbursement shall sunset June 
        30, 2001. 
           Sec. 105.  [CHARITY CARE DATA COLLECTION.] 
           The commissioner of health shall determine a definition for 
        charity care and bad debt that distinguishes these two terms for 
        inpatient and ambulatory care.  The commissioner shall use these 
        definitions as a basis for collecting data on uncompensated care 
        in hospitals, surgical centers, and health care clinics located 
        in Minnesota.  
           Sec. 106.  [MINNESOTACARE APPLICATION SIMPLIFICATION.] 
           The commissioner of human services shall develop a one page 
        preapplication form for the MinnesotaCare program and may 
        develop a pilot project that involves using this form in 
        community health clinics, community health offices, and 
        disproportionate share hospitals to determine the feasibility of 
        using a one page application form for MinnesotaCare.  As part of 
        this pilot project, the commissioner shall track the number of 
        individuals determined to be eligible from the preapplication 
        form, the number determined to be eligible upon the completion 
        of the full application, and for families with children the cost 
        of providing the care to those found eligible. 
           Sec. 107.  [EXPANSION OF SPECIAL EDUCATION SERVICES.] 
           The commissioner of human services shall examine 
        opportunities to expand the scope of providers eligible for 
        reimbursement for medical assistance services listed in a 
        child's individual education plan based on state and federal 
        requirements for provider qualifications.  The commissioner 
        shall complete these activities, in consultation with the 
        commissioner of children, families, and learning, by December 
        1999 and seek necessary federal approval. 
           Sec. 108.  [HOME-BASED MENTAL HEALTH SERVICES.] 
           By January 1, 2000, the commissioner of human services 
        shall amend Minnesota Rules under the expedited process of 
        Minnesota Statutes, section 14.389, to effect the following 
        changes: 
           (1) amend Minnesota Rules, part 9505.0324, subpart 2, to 
        permit a county board to contract with any agency qualified 
        under Minnesota Rules, part 9505.0324, subparts 4 and 5, as an 
        eligible provider of home-based mental health services; 
           (2) amend Minnesota Rules, part 9505.0324, subpart 2, to 
        permit children's mental health collaboratives approved by the 
        children's cabinet under Minnesota Statutes, section 245.493, to 
        provide or to contract with any agency qualified under Minnesota 
        Rules, part 9505.0324, subparts 4 and 5, as an eligible provider 
        of home-based mental health services. 
           Sec. 109.  [MEDICARE SUPPLEMENTAL COVERAGE FOR LOW-INCOME 
        SENIORS.] 
           The commissioner of health, in consultation with the 
        commissioners of human services and commerce, shall study the 
        extent and type of Medicare supplemental coverage for low-income 
        seniors.  The commissioner shall also study the qualified 
        Medicare beneficiaries eligible under Minnesota Statutes, 
        section 256B.057, subdivision 3, in terms of developing a 
        comprehensive set of services to supplement Medicare that these 
        individuals may need to ensure independence and control of their 
        lives.  The commissioner shall make recommendations on the 
        cost-effectiveness of expanding the benefits offered to 
        qualified Medicare beneficiaries including the feasibility of 
        the state providing health care coverage options to low-income 
        seniors that would provide a comprehensive set of services and 
        would build on existing or new Medicare products.  The 
        commissioner shall also study the fiscal impact of mandating 
        coverage for Medicare supplemental products to include long-term 
        care services, including home health services, homemaker 
        services, and nursing facilities services and the fiscal 
        implications of the state paying the premiums for this coverage 
        for low-income seniors, including potential savings to the 
        medical assistance program.  The commissioner shall report to 
        the legislature on the findings of the study with any 
        recommendations by January 15, 2000. 
           Sec. 110.  [PROGRAMS FOR SENIOR CITIZENS.] 
           The commissioner of human services shall study the 
        eligibility criteria of and benefits provided to persons age 65 
        and over through the array of cash assistance and health care 
        programs administered by the department, and the extent to which 
        these programs can be combined, simplified, or coordinated to 
        reduce administrative costs and improve access.  The 
        commissioner shall also study potential barriers to enrollment 
        for low-income seniors who would otherwise deplete resources 
        necessary to maintain independent community living.  At a 
        minimum, the study must include an evaluation of asset 
        requirements and enrollment sites.  The commissioner shall 
        report study findings and recommendations to the legislature by 
        June 30, 2001. 
           Sec. 111.  [AMENDING MEDICAL ASSISTANCE RULES.] 
           By January 1, 2001, the commissioner of human services 
        shall amend Minnesota Rules, parts 9505.0323; 9505.0324; 
        9505.0326; and 9505.0327, as necessary to implement the changes 
        outlined in Minnesota Statutes, section 256B.0625, subdivision 
        35. 
           Sec. 112.  [REQUEST FOR WAIVER.] 
           By October 1, 1999, the commissioner of human services or 
        health shall request a waiver from the federal Department of 
        Health and Human Services to implement Minnesota Statutes, 
        256B.0951, subdivision 7. 
           Sec. 113.  [DENTAL ACCESS STUDY.] 
           The commissioner of human services, in consultation with 
        the commissioner of health, dental care providers, 
        representatives of community clinics, client advocacy groups, 
        and counties, shall review the dental access problem, evaluate 
        the effects of the dental access initiatives adopted by the 1999 
        legislature, and make recommendations on other actions that 
        could improve dental access for public program recipients.  The 
        commissioner shall present a progress report to the legislature 
        by January 15, 2000, and shall present a final report to the 
        legislature by January 15, 2001. 
           Sec. 114.  [REPORT ON RATE SETTING AND RISK ADJUSTMENT.] 
           The commissioner of human services shall report to the 
        legislature, by January 15, 2000, on the current rate setting 
        process for state prepaid health care programs, rate setting and 
        risk adjustment methods in other states, and the results of the 
        application of risk adjustment on a trial basis in Minnesota for 
        calendar year 1999.  The report must also present an analysis of 
        the feasibility of requiring prepaid health plans to report 
        vendor costs rather than charges, an analysis of capitation rate 
        equalization for MinnesotaCare and the prepaid medical 
        assistance program, an analysis of the fiscal impact on state 
        and county government of repealing Minnesota Statutes 1998, 
        section 256B.69, subdivision 5d, and recommendations for 
        providing actuarial and market analyses related to setting 
        prepaid health plan rates to the legislature on a timely basis 
        that would allow this information to be used in the 
        appropriations process. 
           Sec. 115.  [REPORT ON PREPAID MEDICAL ASSISTANCE PROGRAM.] 
           The commissioner of human services shall present 
        recommendations to the legislature, by December 15, 1999, on 
        methods for implementing county board authority under the 
        prepaid medical assistance program.  
           Sec. 116.  [PHYSICIAN AND PROFESSIONAL SERVICES PAYMENT 
        METHODOLOGY CONVERSION.] 
           The commissioner of human services shall submit a proposal 
        to the legislature by January 15, 2000, detailing the medical 
        assistance physician and professional services payment 
        methodology conversion to resource based relative value scale. 
           Sec. 117.  [RECOMMENDATIONS FOR DEFINITION OF SPECIALIZED 
        MAINTENANCE THERAPY.] 
           The commissioner of human services shall develop 
        recommendations for definitions of specialized maintenance 
        therapy for each type of covered therapy, in consultation with 
        representatives of professional therapy associations, providers 
        who work with patients who need long-term specialized 
        maintenance therapy, and patient advocates.  The commissioner 
        shall provide the recommended definitions to the chairs of the 
        house health and human services finance committee and the senate 
        health and family security budget division, by November 15, 1999.
           Sec. 118.  [DENTAL HYGIENIST DEMONSTRATION PROJECT.] 
           (a) The commissioner of human services may develop 
        demonstration projects utilizing dental hygienists outside a 
        traditional dental office to provide dental hygiene services to 
        limited access patients.  Notwithstanding Minnesota Statutes, 
        section 150A.10, subdivision 1, a licensed dental hygienist may 
        provide screening services, education, prophylaxis, and 
        application of topical fluorides under general supervision as 
        defined in Minnesota Rules, part 3100.0100, subpart 21, without 
        the patient being first examined by a licensed dentist.  
        Services under this section must be authorized by a licensed 
        dentist and must be performed by a licensed dental hygienist and 
        may be performed at a location other than the usual place of 
        practice of the dentist or dental hygienist.  For purposes of 
        this section, "limited access patient" means a patient who the 
        commissioner determines is unable to receive regular dental 
        services in a dental office due to age, disability, or 
        geographic location.  
           (b) The commissioner shall report to the legislature by 
        January 15, 2001, on whether this demonstration project has been 
        effective in improving access to dental services for limited 
        access patients. 
           Sec. 119.  [REPORTS ON ALTERNATIVE RESOURCE ALLOCATION 
        METHODS AND PARENTS OF MINORS.] 
           (a) The commissioner of human services shall consider and 
        evaluate administrative methods other than the current resource 
        allocation system for the home and community-based waiver for 
        persons with mental retardation and related conditions.  In 
        developing the alternatives, the commissioner shall consult with 
        county commissioners from large and small counties, county 
        agencies, consumers, advocates, and providers.  The commissioner 
        shall report to the chairs of the senate health and family 
        security budget division and house health and human services 
        finance committee by January 15, 2000. 
           (b) By January 15, 2000, the commissioner of human services 
        shall present recommendations to the legislature on the 
        conditions under which parents of minors may be reimbursed for 
        services, consistent with federal requirements, health and 
        safety, the child's needs, and not supplanting typical parental 
        responsibilities. 
           Sec. 120.  [REPEALER.] 
           Minnesota Statutes 1998, sections 256B.74, subdivisions 2 
        and 5; and 462A.208, are repealed. 
           Sec. 121.  [EFFECTIVE DATE.] 
           (a) Sections 3, 5, 45, and 97 are effective July 1, 2000. 
           (b) Section 56 is effective upon federal approval. 
                                   ARTICLE 5 
                            STATE-OPERATED SERVICES;
              CHEMICAL DEPENDENCY; MENTAL HEALTH; LAND CONVEYANCES
           Section 1.  Minnesota Statutes 1998, section 16C.10, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIFIC PURCHASES.] The solicitation process 
        described in this chapter is not required for acquisition of the 
        following: 
           (1) merchandise for resale purchased under policies 
        determined by the commissioner; 
           (2) farm and garden products which, as determined by the 
        commissioner, may be purchased at the prevailing market price on 
        the date of sale; 
           (3) goods and services from the Minnesota correctional 
        facilities; 
           (4) goods and services from rehabilitation facilities and 
        sheltered workshops that are certified by the commissioner of 
        economic security; 
           (5) goods and services for use by a community-based 
        residential facility operated by the commissioner of human 
        services; 
           (6) goods purchased at auction or when submitting a sealed 
        bid at auction provided that before authorizing such an action, 
        the commissioner consult with the requesting agency to determine 
        a fair and reasonable value for the goods considering factors 
        including, but not limited to, costs associated with submitting 
        a bid, travel, transportation, and storage.  This fair and 
        reasonable value must represent the limit of the state's bid; 
        and 
           (7) utility services where no competition exists or where 
        rates are fixed by law or ordinance. 
           Sec. 2.  Minnesota Statutes 1998, section 245.462, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CASE MANAGER MANAGEMENT SERVICE PROVIDER.] (a) 
        "Case manager management service provider" means an individual a 
        case manager or case manager associate employed by the county or 
        other entity authorized by the county board to provide case 
        management services specified in section 245.4711.  
           A case manager must have a bachelor's degree in one of the 
        behavioral sciences or related fields including, but not limited 
        to, social work, psychology, or nursing from an accredited 
        college or university and.  A case manager must have at least 
        2,000 hours of supervised experience in the delivery of services 
        to adults with mental illness, must be skilled in the process of 
        identifying and assessing a wide range of client needs, and must 
        be knowledgeable about local community resources and how to use 
        those resources for the benefit of the client.  The case manager 
        shall meet in person with a mental health professional at least 
        once each month to obtain clinical supervision of the case 
        manager's activities.  Case managers with a bachelor's degree 
        but without 2,000 hours of supervised experience in the delivery 
        of services to adults with mental illness must complete 40 hours 
        of training approved by the commissioner of human services in 
        case management skills and in the characteristics and needs of 
        adults with serious and persistent mental illness and must 
        receive clinical supervision regarding individual service 
        delivery from a mental health professional at least once each 
        week until the requirement of 2,000 hours of supervised 
        experience is met.  
           (b) Supervision for a case manager during the first year of 
        service providing case management services shall be one hour per 
        week of clinical supervision from a case management supervisor.  
        After the first year, the case manager shall receive regular 
        ongoing supervision totaling 38 hours per year, of which at 
        least one hour per month must be clinical supervision regarding 
        individual service delivery with a case management supervisor.  
        The remainder may be provided by a case manager with two years 
        of experience.  Group supervision may not constitute more than 
        one-half of the required supervision hours.  Clinical 
        supervision must be documented in the client record. 
           (c) A case manager with a bachelor's degree who is not 
        licensed, registered, or certified by a health-related licensing 
        board must receive 30 hours of continuing education and training 
        in mental illness and mental health services annually.  
           (d) A case manager with a bachelor's degree but without 
        2,000 hours of supervised experience described in paragraph (a), 
        must complete 40 hours of training approved by the commissioner 
        covering case management skills and the characteristics and 
        needs of adults with serious and persistent mental illness.  
           (e) Case managers without a bachelor's degree must meet one 
        of the requirements in clauses (1) to (3):  
           (1) have three or four years of experience as a case 
        manager associate; 
           (2) be a registered nurse without a bachelor's degree and 
        have a combination of specialized training in psychiatry and 
        work experience consisting of community interaction and 
        involvement or community discharge planning in a mental health 
        setting totaling three years; or 
           (3) be a person who qualified as a case manager under the 
        1998 department of human service federal waiver provision and 
        meet the continuing education and mentoring requirements in this 
        section.  
           (f) A case manager associate (CMA) must work under the 
        direction of a case manager or case management supervisor and 
        must be at least 21 years of age.  A case manager associate must 
        also have a high school diploma or its equivalent and meet one 
        of the following criteria: 
           (1) have an associate of arts degree in one of the 
        behavioral sciences or human services; 
           (2) be a registered nurse without a bachelor's degree; 
           (3) within the previous ten years, have three years of life 
        experience with serious and persistent mental illness as defined 
        in section 245.462, subdivision 20; or as a child had severe 
        emotional disturbance as defined in section 245.4871, 
        subdivision 6; or have three years life experience as a primary 
        caregiver to an adult with serious and persistent mental illness 
        within the previous ten years; 
           (4) have 6,000 hours work experience as a nondegreed state 
        hospital technician; or 
           (5) be a mental health practitioner as defined in section 
        245.462, subdivision 17, clause (2). 
           Individuals meeting one of the criteria in clauses (1) to 
        (4) may qualify as a case manager after four years of supervised 
        work experience as a case manager associate.  Individuals 
        meeting the criteria in clause (5) may qualify as a case manager 
        after three years of supervised experience as a case manager 
        associate. 
           Case management associates must have 40 hours preservice 
        training under paragraph (d) and receive at least 40 hours of 
        continuing education in mental illness and mental health 
        services annually.  Case manager associates shall receive at 
        least five hours of mentoring per week from a case management 
        mentor.  A "case management mentor" means a qualified, 
        practicing case manager or case management supervisor who 
        teaches or advises and provides intensive training and clinical 
        supervision to one or more case manager associates.  Mentoring 
        may occur while providing direct services to consumers in the 
        office or in the field and may be provided to individuals or 
        groups of case manager associates.  At least two mentoring hours 
        per week must be individual and face-to-face. 
           (g) A case management supervisor must meet the criteria for 
        mental health professionals, as specified in section 245.462, 
        subdivision 18. 
           (h) Until June 30, 1999, An immigrant who does not have the 
        qualifications specified in this subdivision may provide case 
        management services to adult immigrants with serious and 
        persistent mental illness who are members of the same ethnic 
        group as the case manager if the person:  (1) is currently 
        enrolled in and is actively pursuing credits toward the 
        completion of a bachelor's degree in one of the behavioral 
        sciences or a related field including, but not limited to, 
        social work, psychology, or nursing from an accredited college 
        or university; (2) completes 40 hours of training as specified 
        in this subdivision; and (3) receives clinical supervision at 
        least once a week until the requirements of this subdivision are 
        met. 
           (b) The commissioner may approve waivers submitted by 
        counties to allow case managers without a bachelor's degree but 
        with 6,000 hours of supervised experience in the delivery of 
        services to adults with mental illness if the person: 
           (1) meets the qualifications for a mental health 
        practitioner in subdivision 26; 
           (2) has completed 40 hours of training approved by the 
        commissioner in case management skills and in the 
        characteristics and needs of adults with serious and persistent 
        mental illness; and 
           (3) demonstrates that the 6,000 hours of supervised 
        experience are in identifying functional needs of persons with 
        mental illness, coordinating assessment information and making 
        referrals to appropriate service providers, coordinating a 
        variety of services to support and treat persons with mental 
        illness, and monitoring to ensure appropriate provision of 
        services.  The county board is responsible to verify that all 
        qualifications, including content of supervised experience, have 
        been met. 
           Sec. 3.  Minnesota Statutes 1998, section 245.462, 
        subdivision 17, is amended to read: 
           Subd. 17.  [MENTAL HEALTH PRACTITIONER.] "Mental health 
        practitioner" means a person providing services to persons with 
        mental illness who is qualified in at least one of the following 
        ways:  
           (1) holds a bachelor's degree in one of the behavioral 
        sciences or related fields from an accredited college or 
        university and: 
           (i) has at least 2,000 hours of supervised experience in 
        the delivery of services to persons with mental illness; or 
           (ii) is fluent in the non-English language of the ethnic 
        group to which at least 50 percent of the practitioner's clients 
        belong, completes 40 hours of training in the delivery of 
        services to persons with mental illness, and receives clinical 
        supervision from a mental health professional at least once a 
        week until the requirement of 2,000 hours of supervised 
        experience is met; 
           (2) has at least 6,000 hours of supervised experience in 
        the delivery of services to persons with mental illness; 
           (3) is a graduate student in one of the behavioral sciences 
        or related fields and is formally assigned by an accredited 
        college or university to an agency or facility for clinical 
        training; or 
           (4) holds a master's or other graduate degree in one of the 
        behavioral sciences or related fields from an accredited college 
        or university and has less than 4,000 hours post-master's 
        experience in the treatment of mental illness. 
           Sec. 4.  Minnesota Statutes 1998, section 245.4711, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT SERVICES.] 
        (a) By January 1, 1989, the county board shall provide case 
        management services for all adults with serious and persistent 
        mental illness who are residents of the county and who request 
        or consent to the services and to each adult for whom the court 
        appoints a case manager.  Staffing ratios must be sufficient to 
        serve the needs of the clients.  The case manager must meet the 
        requirements in section 245.462, subdivision 4.  
           (b) Case management services provided to adults with 
        serious and persistent mental illness eligible for medical 
        assistance must be billed to the medical assistance program 
        under sections 256B.02, subdivision 8, and 256B.0625. 
           (c) Case management services are eligible for reimbursement 
        under the medical assistance program.  Costs associated with 
        mentoring, supervision, and continuing education may be included 
        in the reimbursement rate methodology used for case management 
        services under the medical assistance program. 
           Sec. 5.  Minnesota Statutes 1998, section 245.4712, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DAY TREATMENT SERVICES PROVIDED.] (a) Day 
        treatment services must be developed as a part of the community 
        support services available to adults with serious and persistent 
        mental illness residing in the county.  Adults may be required 
        to pay a fee according to section 245.481.  Day treatment 
        services must be designed to:  
           (1) provide a structured environment for treatment; 
           (2) provide support for residing in the community; 
           (3) prevent placement in settings that are more intensive, 
        costly, or restrictive than necessary and appropriate to meet 
        client need; 
           (4) coordinate with or be offered in conjunction with a 
        local education agency's special education program; and 
           (5) operate on a continuous basis throughout the year.  
           (b) For purposes of complying with medical assistance 
        requirements, an adult day treatment program may choose among 
        the methods of clinical supervision specified in: 
           (1) Minnesota Rules, part 9505.0323, subpart 1, item F; 
           (2) Minnesota Rules, part 9505.0324, subpart 6, item F; or 
           (3) Minnesota Rules, part 9520.0800, subparts 2 to 6. 
           A day treatment program may demonstrate compliance with 
        these clinical supervision requirements by obtaining 
        certification from the commissioner under Minnesota Rules, parts 
        9520.0750 to 9520.0870, or by documenting in its own records 
        that it complies with one of the above methods. 
           (c) County boards may request a waiver from including day 
        treatment services if they can document that:  
           (1) an alternative plan of care exists through the county's 
        community support services for clients who would otherwise need 
        day treatment services; 
           (2) day treatment, if included, would be duplicative of 
        other components of the community support services; and 
           (3) county demographics and geography make the provision of 
        day treatment services cost ineffective and infeasible.  
           Sec. 6.  Minnesota Statutes 1998, section 245.4871, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CASE MANAGER MANAGEMENT SERVICE PROVIDER.] (a) 
        "Case manager management service provider" means an individual a 
        case manager or case manager associate employed by the county or 
        other entity authorized by the county board to provide case 
        management services specified in subdivision 3 for the child 
        with severe emotional disturbance and the child's family.  A 
        case manager must have experience and training in working with 
        children. 
           (b) A case manager must: 
           (1) have at least a bachelor's degree in one of the 
        behavioral sciences or a related field including, but not 
        limited to, social work, psychology, or nursing from an 
        accredited college or university; 
           (2) have at least 2,000 hours of supervised experience in 
        the delivery of mental health services to children; 
           (3) have experience and training in identifying and 
        assessing a wide range of children's needs; and 
           (4) be knowledgeable about local community resources and 
        how to use those resources for the benefit of children and their 
        families. 
           (c) The case manager may be a member of any professional 
        discipline that is part of the local system of care for children 
        established by the county board. 
           (d) The case manager must meet in person with a mental 
        health professional at least once each month to obtain clinical 
        supervision shall receive regular ongoing supervision totaling 
        38 hours per year, of which at least one hour per month must be 
        clinical supervision regarding individual service delivery with 
        a case management supervisor.  The remainder may be provided by 
        a case manager with two years of experience.  Group supervision 
        may not constitute more than one-half of the required 
        supervision hours. 
           (e) Case managers with a bachelor's degree but without 
        2,000 hours of supervised experience in the delivery of mental 
        health services to children with emotional disturbance must: 
           (1) begin 40 hours of training approved by the commissioner 
        of human services in case management skills and in the 
        characteristics and needs of children with severe emotional 
        disturbance before beginning to provide case management 
        services; and 
           (2) receive clinical supervision regarding individual 
        service delivery from a mental health professional at least once 
        one hour each week until the requirement of 2,000 hours of 
        experience is met. 
           (f) Clinical supervision must be documented in the child's 
        record.  When the case manager is not a mental health 
        professional, the county board must provide or contract for 
        needed clinical supervision. 
           (g) The county board must ensure that the case manager has 
        the freedom to access and coordinate the services within the 
        local system of care that are needed by the child. 
           (h) Case managers who have a bachelor's degree but are not 
        licensed, registered, or certified by a health-related licensing 
        board must receive 30 hours of continuing education and training 
        in severe emotional disturbance and mental health services 
        annually. 
           (i) Case managers without a bachelor's degree must meet one 
        of the requirements in clauses (1) to (3): 
           (1) have three or four years of experience as a case 
        manager associate; 
           (2) be a registered nurse without a bachelor's degree who 
        has a combination of specialized training in psychiatry and work 
        experience consisting of community interaction and involvement 
        or community discharge planning in a mental health setting 
        totaling three years; or 
           (3) be a person who qualified as a case manager under the 
        1998 department of human service federal waiver provision and 
        meets the continuing education and mentoring requirements in 
        this section. 
           (j) A case manager associate (CMA) must work under the 
        direction of a case manager or case management supervisor and 
        must be at least 21 years of age.  A case manager associate must 
        also have a high school diploma or its equivalent and meet one 
        of the following criteria: 
           (1) have an associate of arts degree in one of the 
        behavioral sciences or human services; 
           (2) be a registered nurse without a bachelor's degree; 
           (3) have three years of life experience as a primary 
        caregiver to a child with serious emotional disturbance as 
        defined in section 245.4871, subdivision 6, within the previous 
        ten years; 
           (4) have 6,000 hours work experience as a nondegreed state 
        hospital technician; or 
           (5) be a mental health practitioner as defined in section 
        245.462, subdivision 17, clause (2). 
           Individuals meeting one of the criteria in clauses (1) to 
        (4) may qualify as a case manager after four years of supervised 
        work experience as a case manager associate.  Individuals 
        meeting the criteria in clause (5) may qualify as a case manager 
        after three years of supervised experience as a case manager 
        associate. 
           Case manager associates must have 40 hours of preservice 
        training under paragraph (e), clause (1), and receive at least 
        40 hours of continuing education in severe emotional disturbance 
        and mental health service annually.  Case manager associates 
        shall receive at least five hours of mentoring per week from a 
        case management mentor.  A "case management mentor" means a 
        qualified, practicing case manager or case management supervisor 
        who teaches or advises and provides intensive training and 
        clinical supervision to one or more case manager associates.  
        Mentoring may occur while providing direct services to consumers 
        in the office or in the field and may be provided to individuals 
        or groups of case manager associates.  At least two mentoring 
        hours per week must be individual and face-to-face. 
           (k) A case management supervisor must meet the criteria for 
        a mental health professional as specified in section 245.4871, 
        subdivision 27. 
           (l) Until June 30, 1999, An immigrant who does not have the 
        qualifications specified in this subdivision may provide case 
        management services to child immigrants with severe emotional 
        disturbance of the same ethnic group as the immigrant if the 
        person:  
           (1) is currently enrolled in and is actively pursuing 
        credits toward the completion of a bachelor's degree in one of 
        the behavioral sciences or related fields at an accredited 
        college or university; 
           (2) completes 40 hours of training as specified in this 
        subdivision; and 
           (3) receives clinical supervision at least once a week 
        until the requirements of obtaining a bachelor's degree and 
        2,000 hours of supervised experience are met. 
           (i) The commissioner may approve waivers submitted by 
        counties to allow case managers without a bachelor's degree but 
        with 6,000 hours of supervised experience in the delivery of 
        services to children with severe emotional disturbance if the 
        person: 
           (1) meets the qualifications for a mental health 
        practitioner in subdivision 26; 
           (2) has completed 40 hours of training approved by the 
        commissioner in case management skills and in the 
        characteristics and needs of children with severe emotional 
        disturbance; and 
           (3) demonstrates that the 6,000 hours of supervised 
        experience are in identifying functional needs of children with 
        severe emotional disturbance, coordinating assessment 
        information and making referrals to appropriate service 
        providers, coordinating a variety of services to support and 
        treat children with severe emotional disturbance, and monitoring 
        to ensure appropriate provision of services.  The county board 
        is responsible to verify that all qualifications, including 
        content of supervised experience, have been met. 
           Sec. 7.  Minnesota Statutes 1998, section 245.4871, 
        subdivision 26, is amended to read: 
           Subd. 26.  [MENTAL HEALTH PRACTITIONER.] "Mental health 
        practitioner" means a person providing services to children with 
        emotional disturbances.  A mental health practitioner must have 
        training and experience in working with children.  A mental 
        health practitioner must be qualified in at least one of the 
        following ways:  
           (1) holds a bachelor's degree in one of the behavioral 
        sciences or related fields from an accredited college or 
        university and:  
           (i) has at least 2,000 hours of supervised experience in 
        the delivery of mental health services to children with 
        emotional disturbances; or 
           (ii) is fluent in the non-English language of the ethnic 
        group to which at least 50 percent of the practitioner's clients 
        belong, completes 40 hours of training in the delivery of 
        services to children with emotional disturbances, and receives 
        clinical supervision from a mental health professional at least 
        once a week until the requirement of 2,000 hours of supervised 
        experience is met; 
           (2) has at least 6,000 hours of supervised experience in 
        the delivery of mental health services to children with 
        emotional disturbances; 
           (3) is a graduate student in one of the behavioral sciences 
        or related fields and is formally assigned by an accredited 
        college or university to an agency or facility for clinical 
        training; or 
           (4) holds a master's or other graduate degree in one of the 
        behavioral sciences or related fields from an accredited college 
        or university and has less than 4,000 hours post-master's 
        experience in the treatment of emotional disturbance. 
           Sec. 8.  Minnesota Statutes 1998, section 245.4881, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT SERVICES.] 
        (a) By April 1, 1992, the county board shall provide case 
        management services for each child with severe emotional 
        disturbance who is a resident of the county and the child's 
        family who request or consent to the services.  Staffing ratios 
        must be sufficient to serve the needs of the clients.  The case 
        manager must meet the requirements in section 245.4871, 
        subdivision 4.  
           (b) Except as permitted by law and the commissioner under 
        demonstration projects, case management services provided to 
        children with severe emotional disturbance eligible for medical 
        assistance must be billed to the medical assistance program 
        under sections 256B.02, subdivision 8, and 256B.0625. 
           (c) Case management services are eligible for reimbursement 
        under the medical assistance program.  Costs of mentoring, 
        supervision, and continuing education may be included in the 
        reimbursement rate methodology used for case management services 
        under the the medical assistance program. 
           Sec. 9.  [246.0136] [PLANNING FOR TRANSITION OF REGIONAL 
        TREATMENT CENTERS AND OTHER STATE-OPERATED SERVICES TO 
        ENTERPRISE ACTIVITIES.] 
           Subdivision 1.  [PLANNING FOR ENTERPRISE ACTIVITIES.] The 
        commissioner of human services is directed to study and make 
        recommendations to the legislature on establishing enterprise 
        activities within state-operated services.  Before implementing 
        an enterprise activity, the commissioner must obtain statutory 
        authorization for its implementation, except that the 
        commissioner has authority to implement enterprise activities 
        for adolescent services and to establish a public group practice 
        without statutory authorization.  Enterprise activities are 
        defined as the range of services, which are delivered by state 
        employees, needed by people with disabilities and are fully 
        funded by public or private third-party health insurance or 
        other revenue sources available to clients that provide 
        reimbursement for the services provided. Enterprise activities 
        within state-operated services shall specialize in caring for 
        vulnerable people for whom no other providers are available or 
        for whom state-operated services may be the provider selected by 
        the payer.  In subsequent biennia after an enterprise activity 
        is established within a state-operated service, the base state 
        appropriation for that state-operated service shall be reduced 
        proportionate to the size of the enterprise activity. 
           Subd. 2.  [REQUIRED COMPONENTS OF ANY PROPOSAL; 
        CONSIDERATIONS.] In any proposal for an enterprise activity 
        brought to the legislature by the commissioner, the commissioner 
        must demonstrate that there is public or private third-party 
        health insurance or other revenue available to the people 
        served, that the anticipated revenues to be collected will fully 
        fund the services, that there will be sufficient funds for cash 
        flow purposes, and that access to services by vulnerable 
        populations served by state-operated services will not be 
        limited by implementation of an enterprise activity.  In 
        studying the feasibility of establishing an enterprise activity, 
        the commissioner must consider: 
           (1) creating public or private partnerships to facilitate 
        client access to needed services; 
           (2) administrative simplification and efficiencies 
        throughout the state-operated services system; 
           (3) converting or disposing of buildings not utilized and 
        surplus lands; and 
           (4) exploring the efficiencies and benefits of establishing 
        state-operated services as an independent state agency. 
           Sec. 10.  Minnesota Statutes 1998, section 246.18, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COLLECTIONS DEDICATED.] Except for 
        state-operated programs and services funded through a direct 
        appropriation from the legislature, money received within the 
        regional treatment center system for the following 
        state-operated services is dedicated to the commissioner for the 
        provision of those services: 
           (1) community-based residential and day training and 
        habilitation services for mentally retarded persons; 
           (2) community health clinic services; 
           (3) accredited hospital outpatient department services; 
           (4) certified rehabilitation agency and rehabilitation 
        hospital services; or 
           (5) community-based transitional support services for 
        adults with serious and persistent mental illness.  Except for 
        state-operated programs funded through a direct appropriation 
        from the legislature, any state-operated program or service 
        established and operated as an enterprise activity, shall retain 
        the revenues earned in an interest-bearing account. 
           When the commissioner determines the intent to transition 
        from a direct appropriation to enterprise activity for which the 
        commissioner has authority, all collections for the targeted 
        state-operated service shall be retained and deposited into an 
        interest-bearing account.  At the end of the fiscal year, prior 
        to establishing the enterprise activity, collections up to the 
        amount of the appropriation for the targeted service shall be 
        deposited to the general fund.  All funds in excess of the 
        amount of the appropriation will be retained and used by the 
        enterprise activity for cash flow purposes. 
           These funds must be deposited in the state treasury in a 
        revolving account and funds in the revolving account are 
        appropriated to the commissioner to operate the services 
        authorized, and any unexpended balances do not cancel but are 
        available until spent. 
           Sec. 11.  Minnesota Statutes 1998, section 252.46, 
        subdivision 6, is amended to read: 
           Subd. 6.  [VARIANCES.] (a) A variance from the minimum or 
        maximum payment rates in subdivisions 2 and 3 may be granted by 
        the commissioner when the vendor requests and the county board 
        submits to the commissioner a written variance request on forms 
        supplied by the commissioner with the recommended payment rates. 
           (b) A variance to the rate maximum may be utilized for 
        costs associated with compliance with state administrative 
        rules, compliance with court orders, capital costs required for 
        continued licensure, increased insurance costs, start-up and 
        conversion costs for supported employment, direct service staff 
        salaries and benefits, transportation, and other program related 
        costs when any one of the criteria criterion in clauses (1) to 
        (4) is also met: 
           (1) change is necessary to comply with licensing citations; 
           (2) a licensed vendor currently serving fewer than 70 
        persons with payment rates of 80 percent or less of the 
        statewide average rates and with clients meeting the behavioral 
        or medical criteria under clause (3) approved by the 
        commissioner as a significant program change under section 
        252.28; 
           (3) (1) A determination of need under section 252.28 is 
        approved for a significant program change is approved by the 
        commissioner under section 252.28 that is necessary for a vendor 
        to provide authorized services to a new client or clients with 
        very severe self-injurious or assaultive behavior, or medical 
        conditions requiring delivery of physician-prescribed medical 
        interventions requiring one-to-one staffing for at least 15 
        minutes each time they are performed, or to a new client or 
        clients directly discharged to the vendor's program from a 
        regional treatment center; or 
           (4) there is a need to maintain required staffing levels in 
        order to provide authorized services approved by the 
        commissioner under section 252.28, that is necessitated by a 
        significant and permanent decrease in licensed capacity or 
        clientele. 
           The county shall review the adequacy of services provided 
        by vendors whose payment rates are 80 percent or more of the 
        statewide average rates and 50 percent or more of the vendor's 
        clients meet the behavioral or medical criteria in clause (3). 
           A variance under this paragraph may be approved only if the 
        costs to the medical assistance program do not exceed the 
        medical assistance costs for all clients served by the 
        alternatives and all clients remaining in the existing services. 
        one or more clients who meet one or more of the following 
        criteria: 
           (a) the client is a new client and: 
           (i) exhibits severe behavior as indicated on the screening 
        document; 
           (ii) periodically requires one-to-one staff time for at 
        least 15 minutes at a time to deliver physician prescribed 
        medical interventions; or 
           (iii) has been discharged directly to the vendor's program 
        from a regional treatment center or the Minnesota extended 
        treatment option. 
           (b) the client is an existing client who has developed one 
        of the following changed circumstances which increases costs 
        that are not covered by the vendor's current rate, and for whom 
        a significant program change is necessary to ensure the 
        continued provision of authorized services to that client: 
           (i) severe behavior as indicated on the screening document; 
           (ii) a medical condition periodically requiring one-to-one 
        staff time for at least 15 minutes at a time to deliver 
        physician prescribed medical interventions; or 
           (iii) a permanent decrease in skill functioning, as 
        verified by medical reports or assessments; 
           (2) A licensing determination requires a program change 
        that the vendor cannot comply with due to funding restraints; 
           (3) A determination of need under section 252.28 is 
        approved for a significant and permanent decrease in licensed 
        capacity and the vendor demonstrates the need to retain certain 
        staffing levels to serve the remaining clients; or 
           (4) In cases where conditions in clauses (1) to (3) do not 
        apply, but a determination of need under section 252.28 is 
        approved for an unusual circumstance which exists that 
        significantly impacts the type or amount of services delivered, 
        as evidenced by documentation presented by the vendor and with 
        the concurrence of the commissioner.  
           (b) (c) A variance to the rate minimum may be granted when: 
           (1) the county board contracts for increased services from 
        a vendor and for some or all individuals receiving services from 
        the vendor lower per unit fixed costs result; or 
           (2) when the actual costs of delivering authorized service 
        over a 12-month contract period have decreased. 
           (c) (d) The written variance request under this subdivision 
        must include documentation that all the following criteria have 
        been met: 
           (1) The commissioner and the county board have both 
        conducted a review and have identified a need for a change in 
        the payment rates and recommended an effective date for the 
        change in the rate. 
           (2) The vendor documents efforts to reallocate current 
        staff and any additional staffing needs cannot be met by using 
        temporary special needs rate exceptions under Minnesota Rules, 
        parts 9510.1020 to 9510.1140. 
           (3) The vendor documents that financial resources have been 
        reallocated before applying for a variance.  No variance may be 
        granted for equipment, supplies, or other capital expenditures 
        when depreciation expense for repair and replacement of such 
        items is part of the current rate. 
           (4) For variances related to loss of clientele, the vendor 
        documents the other program and administrative expenses, if any, 
        that have been reduced. 
           (5) The county board submits verification of the conditions 
        for which the variance is requested, a description of the nature 
        and cost of the proposed changes, and how the county will 
        monitor the use of money by the vendor to make necessary changes 
        in services.  
           (6) The county board's recommended payment rates do not 
        exceed 95 percent of the greater of 125 percent of the current 
        statewide median or 125 percent of the regional average payment 
        rates, whichever is higher, for each of the regional commission 
        districts under sections 462.381 to 462.396 in which the vendor 
        is located except for the following:  when a variance is 
        recommended to allow authorized service delivery to new clients 
        with severe self-injurious or assaultive behaviors or with 
        medical conditions requiring delivery of physician prescribed 
        medical interventions, or to persons being directly discharged 
        from a regional treatment center or Minnesota extended treatment 
        options to the vendor's program, those persons must be assigned 
        a payment rate of 200 percent of the current statewide average 
        rates.  All other clients receiving services from the vendor 
        must be assigned a payment rate equal to the vendor's current 
        rate unless the vendor's current rate exceeds 95 percent of 125 
        percent of the statewide median or 125 percent of the regional 
        average payment rates, whichever is higher.  When the vendor's 
        rates exceed 95 percent of 125 percent of the statewide median 
        or 125 percent of the regional average rates, the maximum rates 
        assigned to all other clients must be equal to the greater of 95 
        percent of 125 percent of the statewide median or 125 percent of 
        the regional average rates.  The maximum payment rate that may 
        be recommended for the vendor under these conditions is 
        determined by multiplying the number of clients at each limit by 
        the rate corresponding to that limit and then dividing the sum 
        by the total number of clients. 
           (d) (e) The commissioner shall have 60 calendar days from 
        the date of the receipt of the complete request to accept or 
        reject it, or the request shall be deemed to have been granted.  
        If the commissioner rejects the request, the commissioner shall 
        state in writing the specific objections to the request and the 
        reasons for its rejection. 
           Sec. 12.  Minnesota Statutes 1998, section 253B.045, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [HEALTH PLAN COMPANY; DEFINITION.] For purposes 
        of this section, "health plan company" has the meaning given it 
        in section 62Q.01, subdivision 4, and also includes a 
        demonstration provider as defined in section 256B.69, 
        subdivision 2, paragraph (b), a county or group of counties 
        participating in county-based purchasing according to section 
        256B.692, and a children's mental health collaborative under 
        contract to provide medical assistance for individuals enrolled 
        in the prepaid medical assistance and MinnesotaCare programs 
        according to sections 245.493 to 245.496. 
           Sec. 13.  Minnesota Statutes 1998, section 253B.045, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [COVERAGE.] A health plan company must provide 
        coverage, according to the terms of the policy, contract, or 
        certificate of coverage, for all medically necessary covered 
        services as determined by section 62Q.53 provided to an enrollee 
        that are ordered by the court under this chapter. 
           Sec. 14.  Minnesota Statutes 1998, section 253B.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREPETITION SCREENING.] (a) Prior to 
        filing a petition for commitment of or early intervention for a 
        proposed patient, an interested person shall apply to the 
        designated agency in the county of the proposed patient's 
        residence or presence for conduct of a preliminary 
        investigation, except when the proposed patient has been 
        acquitted of a crime under section 611.026 and the county 
        attorney is required to file a petition for commitment.  The 
        designated agency shall appoint a screening team to conduct an 
        investigation which shall include:  
           (i) a personal interview with the proposed patient and 
        other individuals who appear to have knowledge of the condition 
        of the proposed patient.  If the proposed patient is not 
        interviewed, reasons must be documented; 
           (ii) identification and investigation of specific alleged 
        conduct which is the basis for application; 
           (iii) identification, exploration, and listing of the 
        reasons for rejecting or recommending alternatives to 
        involuntary placement; and 
           (iv) in the case of a commitment based on mental illness, 
        the following information, if it is known or available:  
        information that may be relevant to the administration of 
        neuroleptic medications, if necessary, including the existence 
        of a declaration under section 253B.03, subdivision 6d, or a 
        health care directive under chapter 145C or a guardian, 
        conservator, proxy, or agent with authority to make health care 
        decisions for the proposed patient; information regarding the 
        capacity of the proposed patient to make decisions regarding 
        administration of neuroleptic medication; and whether the 
        proposed patient is likely to consent or refuse consent to 
        administration of the medication; and 
           (v) seeking input from the proposed patient's health plan 
        company to provide the court with information about services the 
        enrollee needs and the least restrictive alternatives. 
           (b) In conducting the investigation required by this 
        subdivision, the screening team shall have access to all 
        relevant medical records of proposed patients currently in 
        treatment facilities.  Data collected pursuant to this clause 
        shall be considered private data on individuals.  The 
        prepetition screening report is not admissible in any court 
        proceedings unrelated to the commitment proceedings. 
           (c) When the prepetition screening team recommends 
        commitment, a written report shall be sent to the county 
        attorney for the county in which the petition is to be filed. 
           (d) The prepetition screening team shall refuse to support 
        a petition if the investigation does not disclose evidence 
        sufficient to support commitment.  Notice of the prepetition 
        screening team's decision shall be provided to the prospective 
        petitioner.  
           (e) If the interested person wishes to proceed with a 
        petition contrary to the recommendation of the prepetition 
        screening team, application may be made directly to the county 
        attorney, who may determine whether or not to proceed with the 
        petition.  Notice of the county attorney's determination shall 
        be provided to the interested party.  
           (f) If the proposed patient has been acquitted of a crime 
        under section 611.026, the county attorney shall apply to the 
        designated county agency in the county in which the acquittal 
        took place for a preliminary investigation unless substantially 
        the same information relevant to the proposed patient's current 
        mental condition, as could be obtained by a preliminary 
        investigation, is part of the court record in the criminal 
        proceeding or is contained in the report of a mental examination 
        conducted in connection with the criminal proceeding.  If a 
        court petitions for commitment pursuant to the rules of criminal 
        or juvenile procedure or a county attorney petitions pursuant to 
        acquittal of a criminal charge under section 611.026, the 
        prepetition investigation, if required by this section, shall be 
        completed within seven days after the filing of the petition.  
           Sec. 15.  Minnesota Statutes 1998, section 253B.185, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [AFTERCARE AND CASE MANAGEMENT.] The state, in 
        collaboration with the designated agency, is responsible for 
        arranging and funding the aftercare and case management services 
        for persons under commitment as sexual psychopathic 
        personalities and sexually dangerous persons discharged after 
        July 1, 1999. 
           Sec. 16.  Minnesota Statutes 1998, section 254B.01, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [ROOM AND BOARD RATE.] "Room and board rate" 
        means a rate set for shelter, fuel, food, utilities, household 
        supplies, and other costs necessary to provide room and board 
        for a person in need of chemical dependency services. 
           Sec. 17.  Minnesota Statutes 1998, section 254B.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHEMICAL DEPENDENCY SERVICES FUND PAYMENT.] (a) 
        Payment from the chemical dependency fund is limited to payments 
        for services other than detoxification that, if located outside 
        of federally recognized tribal lands, would be required to be 
        licensed by the commissioner as a chemical dependency treatment 
        or rehabilitation program under sections 245A.01 to 245A.16, and 
        services other than detoxification provided in another state 
        that would be required to be licensed as a chemical dependency 
        program if the program were in the state.  Out of state vendors 
        must also provide the commissioner with assurances that the 
        program complies substantially with state licensing requirements 
        and possesses all licenses and certifications required by the 
        host state to provide chemical dependency treatment.  Hospitals 
        may apply for and receive licenses to be eligible vendors, 
        notwithstanding the provisions of section 245A.03.  Except for 
        chemical dependency transitional rehabilitation programs, 
        vendors receiving payments from the chemical dependency fund 
        must not require copayment from a recipient of benefits for 
        services provided under this subdivision.  Payment from the 
        chemical dependency fund shall be made for necessary room and 
        board costs provided by vendors certified according to section 
        254B.05, or in a community hospital licensed by the commissioner 
        of health according to sections 144.50 to 144.56 to a client who 
        is: 
           (1) determined to meet the criteria for placement in a 
        residential chemical dependency treatment program according to 
        rules adopted under section 254A.03, subdivision 3; and 
           (2) concurrently receiving a chemical dependency treatment 
        service in a program licensed by the commissioner and reimbursed 
        by the chemical dependency fund. 
           (b) A county may, from its own resources, provide chemical 
        dependency services for which state payments are not made.  A 
        county may elect to use the same invoice procedures and obtain 
        the same state payment services as are used for chemical 
        dependency services for which state payments are made under this 
        section if county payments are made to the state in advance of 
        state payments to vendors.  When a county uses the state system 
        for payment, the commissioner shall make monthly billings to the 
        county using the most recent available information to determine 
        the anticipated services for which payments will be made in the 
        coming month.  Adjustment of any overestimate or underestimate 
        based on actual expenditures shall be made by the state agency 
        by adjusting the estimate for any succeeding month. 
           (c) The commissioner shall coordinate chemical dependency 
        services and determine whether there is a need for any proposed 
        expansion of chemical dependency treatment services.  The 
        commissioner shall deny vendor certification to any provider 
        that has not received prior approval from the commissioner for 
        the creation of new programs or the expansion of existing 
        program capacity.  The commissioner shall consider the 
        provider's capacity to obtain clients from outside the state 
        based on plans, agreements, and previous utilization history, 
        when determining the need for new treatment services. 
           Sec. 18.  Minnesota Statutes 1998, section 254B.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSURE REQUIRED.] Programs licensed by 
        the commissioner are eligible vendors.  Hospitals may apply for 
        and receive licenses to be eligible vendors, notwithstanding the 
        provisions of section 245A.03.  American Indian programs located 
        on federally recognized tribal lands that provide chemical 
        dependency primary treatment, extended care, transitional 
        residence, or outpatient treatment services, and are licensed by 
        tribal government are eligible vendors.  Detoxification programs 
        are not eligible vendors.  Programs that are not licensed as a 
        chemical dependency residential or nonresidential treatment 
        program by the commissioner or by tribal government are not 
        eligible vendors.  To be eligible for payment under the 
        Consolidated Chemical Dependency Treatment Fund, a vendor of a 
        chemical dependency service must participate in the Drug and 
        Alcohol Abuse Normative Evaluation System and the treatment 
        accountability plan. 
           Effective January 1, 2000, vendors of room and board are 
        eligible for chemical dependency fund payment if the vendor:  
           (1) is certified by the county or tribal governing body as 
        having rules prohibiting residents bringing chemicals into the 
        facility or using chemicals while residing in the facility and 
        provide consequences for infractions of those rules; 
           (2) has a current contract with a county or tribal 
        governing body; 
           (3) is determined to meet applicable health and safety 
        requirements; 
           (4) is not a jail or prison; and 
           (5) is not concurrently receiving funds under chapter 256I 
        for the recipient. 
           Sec. 19.  Minnesota Statutes 1998, section 256.01, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ADVISORY TASK FORCES.] The commissioner may 
        appoint advisory task forces to provide consultation on any of 
        the programs under the commissioner's administration and 
        supervision.  A task force shall expire and the compensation, 
        terms of office and removal of members shall be as provided in 
        section 15.059.  Notwithstanding section 15.059, the 
        commissioner may pay a per diem of $35 to consumers and family 
        members whose participation is needed in legislatively 
        authorized state-level task forces, and whose participation on 
        the task force is not as a paid representative of any agency, 
        organization, or association. 
           Sec. 20.  Minnesota Statutes 1998, section 256B.0625, 
        subdivision 20, is amended to read: 
           Subd. 20.  [MENTAL HEALTH CASE MANAGEMENT.] (a) To the 
        extent authorized by rule of the state agency, medical 
        assistance covers case management services to persons with 
        serious and persistent mental illness and children with severe 
        emotional disturbance.  Services provided under this section 
        must meet the relevant standards in sections 245.461 to 
        245.4888, the Comprehensive Adult and Children's Mental Health 
        Acts, Minnesota Rules, parts 9520.0900 to 9520.0926, and 
        9505.0322, excluding subpart 10. 
           (b) Entities meeting program standards set out in rules 
        governing family community support services as defined in 
        section 245.4871, subdivision 17, are eligible for medical 
        assistance reimbursement for case management services for 
        children with severe emotional disturbance when these services 
        meet the program standards in Minnesota Rules, parts 9520.0900 
        to 9520.0926 and 9505.0322, excluding subparts 6 and 10. 
           (c) Medical assistance and MinnesotaCare payment for mental 
        health case management shall be made on a monthly basis.  In 
        order to receive payment for an eligible child, the provider 
        must document at least a face-to-face contact with the child, 
        the child's parents, or the child's legal representative.  To 
        receive payment for an eligible adult, the provider must 
        document: 
           (1) at least a face-to-face contact with the adult or the 
        adult's legal representative; or 
           (2) at least a telephone contact with the adult or the 
        adult's legal representative and document a face-to-face contact 
        with the adult or the adult's legal representative within the 
        preceding two months. 
           (d) Payment for mental health case management provided by 
        county or state staff shall be based on the monthly rate 
        methodology under section 256B.094, subdivision 6, paragraph 
        (b), with separate rates calculated for child welfare and mental 
        health, and within mental health, separate rates for children 
        and adults. 
           (e) Payment for mental health case management provided by 
        county-contracted vendors shall be based on a monthly rate 
        negotiated by the host county.  The negotiated rate must not 
        exceed the rate charged by the vendor for the same service to 
        other payers.  If the service is provided by a team of 
        contracted vendors, the county may negotiate a team rate with a 
        vendor who is a member of the team.  The team shall determine 
        how to distribute the rate among its members.  No reimbursement 
        received by contracted vendors shall be returned to the county, 
        except to reimburse the county for advance funding provided by 
        the county to the vendor. 
           (f) If the service is provided by a team which includes 
        contracted vendors and county or state staff, the costs for 
        county or state staff participation in the team shall be 
        included in the rate for county-provided services.  In this 
        case, the contracted vendor and the county may each receive 
        separate payment for services provided by each entity in the 
        same month.  In order to prevent duplication of services, the 
        county must document, in the recipient's file, the need for team 
        case management and a description of the roles of the team 
        members. 
           (g) The commissioner shall calculate the nonfederal share 
        of actual medical assistance and general assistance medical care 
        payments for each county, based on the higher of calendar year 
        1995 or 1996, by service date, project that amount forward to 
        1999, and transfer one-half of the result from medical 
        assistance and general assistance medical care to each county's 
        mental health grants under sections 245.4886 and 256E.12 for 
        calendar year 1999.  The annualized minimum amount added to each 
        county's mental health grant shall be $3,000 per year for 
        children and $5,000 per year for adults.  The commissioner may 
        reduce the statewide growth factor in order to fund these 
        minimums.  The annualized total amount transferred shall become 
        part of the base for future mental health grants for each county.
           (h) Any net increase in revenue to the county as a result 
        of the change in this section must be used to provide expanded 
        mental health services as defined in sections 245.461 to 
        245.4888, the Comprehensive Adult and Children's Mental Health 
        Acts, excluding inpatient and residential treatment.  For 
        adults, increased revenue may also be used for services and 
        consumer supports which are part of adult mental health projects 
        approved under Laws 1997, chapter 203, article 7, section 25.  
        For children, increased revenue may also be used for respite 
        care and nonresidential individualized rehabilitation services 
        as defined in section 245.492, subdivisions 17 and 23.  
        "Increased revenue" has the meaning given in Minnesota Rules, 
        part 9520.0903, subpart 3.  
           (i) Notwithstanding section 256B.19, subdivision 1, the 
        nonfederal share of costs for mental health case management 
        shall be provided by the recipient's county of responsibility, 
        as defined in sections 256G.01 to 256G.12, from sources other 
        than federal funds or funds used to match other federal funds.  
           (j) The commissioner may suspend, reduce, or terminate the 
        reimbursement to a provider that does not meet the reporting or 
        other requirements of this section.  The county of 
        responsibility, as defined in sections 256G.01 to 256G.12, is 
        responsible for any federal disallowances.  The county may share 
        this responsibility with its contracted vendors.  
           (k) The commissioner shall set aside a portion of the 
        federal funds earned under this section to repay the special 
        revenue maximization account under section 256.01, subdivision 
        2, clause (15).  The repayment is limited to: 
           (1) the costs of developing and implementing this section; 
        and 
           (2) programming the information systems. 
           (l) Notwithstanding section 256.025, subdivision 2, 
        payments to counties for case management expenditures under this 
        section shall only be made from federal earnings from services 
        provided under this section.  Payments to contracted vendors 
        shall include both the federal earnings and the county share. 
           (m) Notwithstanding section 256B.041, county payments for 
        the cost of mental health case management services provided by 
        county or state staff shall not be made to the state treasurer.  
        For the purposes of mental health case management services 
        provided by county or state staff under this section, the 
        centralized disbursement of payments to counties under section 
        256B.041 consists only of federal earnings from services 
        provided under this section. 
           (n) Case management services under this subdivision do not 
        include therapy, treatment, legal, or outreach services. 
           (o) If the recipient is a resident of a nursing facility, 
        intermediate care facility, or hospital, and the recipient's 
        institutional care is paid by medical assistance, payment for 
        case management services under this subdivision is limited to 
        the last 30 days of the recipient's residency in that facility 
        and may not exceed more than two months in a calendar year. 
           (p) Payment for case management services under this 
        subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           (q) By July 1, 2000, the commissioner shall evaluate the 
        effectiveness of the changes required by this section, including 
        changes in number of persons receiving mental health case 
        management, changes in hours of service per person, and changes 
        in caseload size. 
           (r) For each calendar year beginning with the calendar year 
        2001, the annualized amount of state funds for each county 
        determined under paragraph (g) shall be adjusted by the county's 
        percentage change in the average number of clients per month who 
        received case management under this section during the fiscal 
        year that ended six months prior to the calendar year in 
        question, in comparison to the prior fiscal year. 
           (s) For counties receiving the minimum allocation of $3,000 
        or $5,000 described in paragraph (g), the adjustment in 
        paragraph (r) shall be determined so that the county receives 
        the higher of the following amounts: 
           (1) a continuation of the minimum allocation in paragraph 
        (g); or 
           (2) an amount based on that county's average number of 
        clients per month who received case management under this 
        section during the fiscal year that ended six months prior to 
        the calendar year in question, in comparison to the prior fiscal 
        year, times the average statewide grant per person per month for 
        counties not receiving the minimum allocation. 
           (t) The adjustments in paragraphs (r) and (s) shall be 
        calculated separately for children and adults. 
           Sec. 21.  Laws 1995, chapter 207, article 8, section 41, as 
        amended by Laws 1997, chapter 203, article 7, section 25, is 
        amended to read: 
           Sec. 41.  [245.4661] [PILOT PROJECTS TO TEST PROVIDE 
        ALTERNATIVES TO DELIVERY OF ADULT MENTAL HEALTH SERVICES.] 
           Subdivision 1.  [AUTHORIZATION FOR PILOT PROJECTS.] The 
        commissioner of human services may approve pilot projects to 
        test provide alternatives to or the enhanced enhance 
        coordination of the delivery of mental health services required 
        under the Minnesota Comprehensive Adult Mental Health Act, 
        Minnesota Statutes, sections 245.461 to 245.486. 
           Subd. 2.  [PROGRAM DESIGN AND IMPLEMENTATION.] (a) The 
        pilot projects shall be established to design, plan, and improve 
        the mental health service delivery system for adults with 
        serious and persistent mental illness that would: 
           (1) provide an expanded array of services from which 
        clients can choose services appropriate to their needs; 
           (2) be based on purchasing strategies that improve access 
        and coordinate services without cost shifting; 
           (3) incorporate existing state facilities and resources 
        into the community mental health infrastructure through creative 
        partnerships with local vendors; and 
           (4) utilize existing categorical funding streams and 
        reimbursement sources in combined and creative ways, except 
        appropriations to regional treatment centers and all funds that 
        are attributable to the operation of state-operated services are 
        excluded unless appropriated specifically by the legislature for 
        a purpose consistent with this section. 
           (b) All projects funded by January 1, 1997, must complete 
        the planning phase and be operational by June 30, 1997; all 
        projects funded by January 1, 1998, must be operational by June 
        30, 1998.  
           Subd. 3.  [PROGRAM EVALUATION.] Evaluation of each project 
        will be based on outcome evaluation criteria negotiated with 
        each project prior to implementation. 
           Subd. 4.  [NOTICE OF PROJECT DISCONTINUATION.] Each project 
        may be discontinued for any reason by the project's managing 
        entity or the commissioner of human services, after 90 days' 
        written notice to the other party. 
           Subd. 5.  [PLANNING FOR PILOT PROJECTS.] Each local plan 
        for a pilot project must be developed under the direction of the 
        county board, or multiple county boards acting jointly, as the 
        local mental health authority.  The planning process for each 
        pilot shall include, but not be limited to, mental health 
        consumers, families, advocates, local mental health advisory 
        councils, local and state providers, representatives of state 
        and local public employee bargaining units, and the department 
        of human services.  As part of the planning process, the county 
        board or boards shall designate a managing entity responsible 
        for receipt of funds and management of the pilot project. 
           Subd. 6.  [DUTIES OF COMMISSIONER.] (a) For purposes of the 
        pilot projects, the commissioner shall facilitate integration of 
        funds or other resources as needed and requested by each 
        project.  These resources may include: 
           (1) residential services funds administered under Minnesota 
        Rules, parts 9535.2000 to 9535.3000, in an amount to be 
        determined by mutual agreement between the project's managing 
        entity and the commissioner of human services after an 
        examination of the county's historical utilization of facilities 
        located both within and outside of the county and licensed under 
        Minnesota Rules, parts 9520.0500 to 9520.0690; 
           (2) community support services funds administered under 
        Minnesota Rules, parts 9535.1700 to 9535.1760; 
           (3) other mental health special project funds; 
           (4) medical assistance, general assistance medical care, 
        MinnesotaCare and group residential housing if requested by the 
        project's managing entity, and if the commissioner determines 
        this would be consistent with the state's overall health care 
        reform efforts; and 
           (5) regional treatment center nonfiscal resources to the 
        extent agreed to by the project's managing entity and the 
        regional treatment center. 
           (b) The commissioner shall consider the following criteria 
        in awarding start-up and implementation grants for the pilot 
        projects: 
           (1) the ability of the proposed projects to accomplish the 
        objectives described in subdivision 2; 
           (2) the size of the target population to be served; and 
           (3) geographical distribution. 
           (c) The commissioner shall review overall status of the 
        projects initiatives at least every two years and recommend any 
        legislative changes needed by January 15 of each odd-numbered 
        year. 
           (d) The commissioner may waive administrative rule 
        requirements which are incompatible with the implementation of 
        the pilot project. 
           (e) The commissioner may exempt the participating counties 
        from fiscal sanctions for noncompliance with requirements in 
        laws and rules which are incompatible with the implementation of 
        the pilot project. 
           (f) The commissioner may award grants to an entity 
        designated by a county board or group of county boards to pay 
        for start-up and implementation costs of the pilot project. 
           Subd. 7.  [DUTIES OF COUNTY BOARD.] The county board, or 
        other entity which is approved to administer a pilot project, 
        shall: 
           (1) administer the project in a manner which is consistent 
        with the objectives described in subdivision 2 and the planning 
        process described in subdivision 5; 
           (2) assure that no one is denied services for which they 
        would otherwise be eligible; and 
           (3) provide the commissioner of human services with timely 
        and pertinent information through the following methods: 
           (i) submission of community social services act plans and 
        plan amendments; 
           (ii) submission of social services expenditure and grant 
        reconciliation reports, based on a coding format to be 
        determined by mutual agreement between the project's managing 
        entity and the commissioner; and 
           (iii) submission of data and participation in an evaluation 
        of the pilot projects, to be designed cooperatively by the 
        commissioner and the projects. 
           Sec. 22.  Laws 1997, chapter 203, article 9, section 19, is 
        amended to read: 
           Sec. 19.  [TRANSITION FOR THE COMPULSIVE GAMBLING TREATMENT 
        PROGRAM.] 
           The commissioner of human services shall conduct a 
        transition of treatment programs for compulsive gambling from 
        the treatment center model to a model in which reimbursement for 
        treatment of an individual compulsive gambler from an approved 
        provider is on a fee-for-service basis on the following schedule:
           (1) one-third of compulsive gamblers treated through the 
        program must receive services paid for from the individual 
        treatment reimbursement model beginning October 1, 1997; 
           (2) two-thirds of compulsive gamblers treated through the 
        program must receive services paid for from the individual 
        treatment reimbursement model beginning July 1, 1998; and 
           (3) 100 percent of compulsive gamblers treated through the 
        program must receive treatment paid for from the individual 
        treatment reimbursement model beginning July 1, 1999 2000. 
           Sec. 23.  Laws 1998, chapter 407, article 7, section 2, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LAND DESCRIPTION.] That part of the Northeast 
        Quarter (NE l/4) of Section 30 29, Township 45 North, Range 30 
        West, Crow Wing county, Minnesota, described as follows: 
           Commencing at the southeast corner of said Northeast 
           quarter; thence North 00 degrees 46 minutes 05 seconds 
           West, bearing based on the Crow Wing county Coordinate 
           Database NAD 83/94, 1520.06 feet along the east line of 
           said Northeast quarter to the point of beginning; thence 
           continue North 00 degrees 46 minutes 05 seconds West 634.14 
           feet along said east line of the Northeast quarter; thence 
           South 89 degrees 13 minutes 20 seconds West 550.00 feet; 
           thence South 18 degrees 57 minutes 23 seconds East 115.59 
           feet; thence South 42 degrees 44 minutes 39 seconds East 
           692.37 feet; thence South 62 degrees 46 minutes 19 seconds 
           East 20.24 feet; thence North 89 degrees 13 minutes 55 
           seconds East 33.00 feet to the point of beginning.  
           Containing 4.69 acres, more or less.  Subject to the 
           right-of-way of the Township road along the east side 
           thereof, subject to other easements, reservations, and 
           restrictions of record, if any. 
           Sec. 24.  [ESTABLISHMENT AND PURPOSE OF THE SUPPORTIVE 
        HOUSING AND MANAGED CARE PILOT PROJECT.] 
           Subdivision 1.  [ESTABLISHMENT AND PURPOSE.] If funding is 
        available, the commissioner of human services may establish a 
        supportive housing and managed care pilot project to determine 
        whether integrating the delivery of housing, supportive 
        services, and health care into a single, flexible program will 
        reduce public expenditures on homeless individuals, increase 
        their employment rates, and provide a new alternative to 
        providing services to a hard-to-serve population. 
           The commissioner of human services may create a block grant 
        program for counties for the purpose of providing rent subsidies 
        and supportive services to eligible individuals.  Minimum 
        project and application requirements may be developed by the 
        commissioner in cooperation with counties and their nonprofit 
        partners with the goal to provide the maximum flexibility in 
        program design.  If any funds are available, the funds must be 
        coordinated with health care services for eligible individuals. 
           Subd. 2.  [COUNTY ELIGIBILITY.] If the commissioner 
        establishes the pilot project under subdivision 1, a county may 
        request funding for the purposes of the pilot project if the 
        county: 
           (1) agrees to develop, in cooperation with nonprofit 
        partners, a supportive housing and managed care pilot project 
        that integrates the delivery of housing, support services, and 
        health care for eligible individuals or agrees to contract with 
        an existing integrated program; and 
           (2) develops a method for evaluating the quality of the 
        integrated services provided and the amount of any resulting 
        cost savings to the county and state. 
           Subd. 3.  [PARTICIPANT ELIGIBILITY.] In order to be 
        eligible for the pilot project, a county must determine that an 
        individual: 
           (1) meets the eligibility requirements of the group 
        residential housing program under Minnesota Statutes, section 
        256I.04, subdivision 1; 
           (2) is a homeless person or a person at risk of 
        homelessness.  For purposes of this pilot project, "homeless 
        person" means a person who is living, or at imminent risk of 
        living, on the street, in a shelter, or is evicted from a 
        dwelling or discharged from a regional human services center, 
        community hospital, or residential treatment program, and has no 
        appropriate housing available and lacks the resources necessary 
        to access permanent housing as determined by the county 
        requesting funding under the pilot project; and 
           (3) is a person with mental illness, a history of substance 
        abuse, or a person with HIV. 
           Subd. 4.  [FUNDING.] If the commissioner establishes the 
        pilot project under subdivision 1, a county may request funding 
        from the commissioner for a specified number of eligible 
        participants for the pilot project.  The commissioner shall 
        review the request for compliance with subdivisions 1 to 3 and 
        may approve or disapprove the request.  The commissioner shall 
        transfer funding to be allocated to participating counties as a 
        block grant and paid on a monthly basis. 
           Subd. 5.  [REPORT.] If the commissioner establishes the 
        pilot project under subdivision 1, participating counties and 
        the commissioner of human services shall collaborate to prepare 
        and issue an annual report beginning December 1, 2001, to the 
        appropriate committee chairs in the senate and house on the use 
        of state resources, including other funds leveraged for this 
        initiative, the status of individuals being served in the pilot 
        project, and the cost-effectiveness of the pilot project.  The 
        commissioner shall provide data that may be needed to evaluate 
        the pilot project to counties that request the data. 
           Subd. 6.  [SUNSET.] The pilot project shall sunset June 30, 
        2005. 
           Sec. 25.  [CONVEYANCE OF STATE LANDS TO COUNTY OF ISANTI.] 
           (a) Notwithstanding Minnesota Statutes, sections 94.09 to 
        94.16, the commissioner of human services, through the 
        commissioner of administration, may transfer to the county of 
        Isanti the lands described in paragraph (c), for no 
        consideration.  The commissioner of human services and the 
        county may attach to the transfer conditions that they agree are 
        appropriate, including conditions that relate to water and sewer 
        service.  The deed to convey the property must contain a clause 
        that the property shall revert to the state if the property 
        ceases to be used for a public purpose. 
           (b) The conveyance must be in a form approved by the 
        attorney general. 
           (c) The land that may be transferred consists of 21.9 
        acres, more or less, and is described as follows: 
           That part of the Southwest Quarter of the Southeast Quarter 
           and that part of Government Lot 4, both in Section 32, 
           Township 36, Range 23, Isanti County, Minnesota, described 
           jointly as follows:  Commencing at the southwest corner of 
           the Southwest Quarter of the Southeast Quarter of Section 
           32; thence North 89 degrees 45 minutes 12 seconds East, 
           assumed bearing, along the south line of said SW 1/4 of SE 
           1/4, a distance of 609.48 feet; thence North 1 degree 30 
           minutes 30 seconds West, a distance of 149.17 feet to the 
           point of beginning of the parcel to be herein described; 
           thence continuing North 1 degrees 30 minutes 30 seconds 
           West, a distance of 1113.59 feet; thence South 89 degrees 
           59 minutes 36 seconds West, a distance of 496.41 feet; 
           thence southwesterly along a tangential curve concave to 
           the southeast, radius 318.10 feet, central angle 90 degrees 
           16 minutes 37 seconds, for an arc length of 501.21 feet; 
           thence South 0 degrees 17 minutes 01 seconds East, tangent 
           to said curve, for a distance of 86.59 feet; thence 
           southerly along a tangential curve concave to the west, 
           radius 398.10 feet, central angle 29 degrees 47 minutes 02 
           seconds, for an arc length of 206.94 feet; thence south 29 
           degrees 30 minutes 01 seconds West, tangent to said curve, 
           for a distance of 34.23 feet; thence southerly along a 
           tangential curve concave to the east, radius 318.10 feet, 
           central angle 29 degrees 49 minutes 32 seconds, for an arc 
           length of 165.59 feet; thence South 0 degrees 19 minutes 31 
           seconds East, tangent to said curve for a distance of 
           320.65 feet to the point of intersection with a line that 
           bears West (North 90 degrees 00 minutes West) from the 
           point of beginning; thence East (North 90 degrees 00 
           minutes East), a distance of 951.22 feet to the point of 
           beginning. 
           Subject to the existing city of Cambridge water main 
           easement. 
           (d) The county of Isanti may use the land for economic 
        development.  Economic development is a public purpose within 
        the meaning of the term as used in Laws 1990, chapter 610, 
        article 1, section 12, subdivision 5, and sales or conveyances 
        to private parties shall be considered economic development.  
        Property conveyed by the state under this section shall not 
        revert to the state if it is conveyed or otherwise encumbered by 
        the county as part of the county economic development activity. 
           Sec. 26.  [CONVEYANCE OF STATE LAND TO CITY OF CAMBRIDGE.] 
           (a) Notwithstanding Minnesota Statutes, sections 94.09 to 
        94.16, the commissioner of human services, through the 
        commissioner of administration, may transfer to the city of 
        Cambridge the lands described in paragraph (c), for no 
        consideration.  The commissioner of human services and the city 
        may attach to the transfer conditions that they agree are 
        appropriate, including conditions that relate to water and sewer 
        service.  The deed to convey the property must contain a clause 
        that the property shall revert to the state if the property 
        ceases to be used for a public purpose. 
           (b) The conveyance must be in a form approved by the 
        attorney general. 
           (c) Subject to the right-of-way for state trunk highway No. 
        293 and south Dellwood street and subject to other easements, 
        reservations, road or street right-of-ways, and restrictions of 
        record, if any, the land to be conveyed may include all or part 
        of any of the parcels described as follows: 
           (1) that part of the Northeast Quarter of the Northeast 
           Quarter of Section 5, Township 35, Range 23, Isanti County, 
           Minnesota, lying north of a line drawn parallel with and 50 
           feet north of the center line of State Highway No. 293, as 
           laid out and constructed and lying westerly of the 
           following described line: 
           Commencing at a point where the West line of the 
           right-of-way of the Great Northern Railway Company 
           (presently the Burlington Northern and Santa Fe Railway) 
           intersects the North line of said Section 5, said point now 
           being the intersection of the North line of said Section 5 
           with the center line of State Trunk Highway No. 65 as now 
           laid out and constructed (presently known as South Main 
           Street); thence on a bearing of West and along the North 
           line of said Section 5 a distance of 539.5 feet to the 
           point of beginning of the line to be herein described; 
           thence on a bearing of South, a distance of 451.75 feet to 
           the point of intersection with a line drawn parallel with 
           and distant 50 feet north of the center line of State 
           Highway No. 293, as laid out and constructed and there 
           terminating.  Containing 1/4 acre, more or less. 
           (2) that part of the Northwest Quarter of the Southeast 
           Quarter and that part of Governments Lots 3 and 4, all in 
           Section 32, Township 36, Range 23, Isanti County, 
           Minnesota, described jointly as follows: 
           Commencing at the East quarter corner of Section 32, 
           Township 36, Range 23, Isanti County, Minnesota; thence 
           South 89 degrees 44 minutes 35 seconds West, assumed 
           bearing, along the east-west quarter line of said Section 
           32, a distance of 2251.43 feet; thence South 1 degree 48 
           minutes 40 seconds East, a distance of 344.47 feet to the 
           south line of Lot 30 of Auditor's Subdivision No. 9; thence 
           South 89 degrees 35 minutes 5 seconds West, along said 
           south line and the westerly projection thereof, a distance 
           of 740.00 feet to the point of beginning of the parcel to 
           be herein described; thence North 89 degrees 35 minutes, 05 
           seconds East, retracing the last described course, a 
           distance of 534.66 feet to the northwest corner of the 
           recorded plat of RIVERWOOD VILLAGE; thence South 2 degrees 
           40 minutes 50 seconds East, a distance of 338.38 feet, 
           along the westerly line of said RIVERWOOD VILLAGE to the 
           southwest corner of said RIVERWOOD VILLAGE; thence North 89 
           degrees 44 minutes 50 seconds East, along the south line of 
           said RIVERWOOD VILLAGE, a distance of 1074.56 feet; thence 
           South 3 degrees 35 minutes 15 seconds East, a distance of 
           258.66 feet; thence southwesterly along a tangential curve 
           concave to the northwest, radius 318.10 feet, central angle 
           93 degrees 34 minutes 51 seconds for an arc length of 
           519.56 feet; thence South 89 degrees 59 minutes 37 seconds 
           West tangent to said curve for a distance of 825.86 feet; 
           thence southwesterly along a tangential curve concave to 
           the southeast, radius 398.10 feet, central angle 70 degrees 
           55 minutes 13 seconds, for an arc length of 492.76 feet; 
           thence South 89 degrees 51 minutes 30 seconds West, not 
           tangent to the last described curve for a distance of 
           523.31 feet; thence South 1 degree 57 minutes 33 seconds 
           West, a distance of 29.59 feet; thence South 89 degrees 57 
           minutes 55 seconds West, a distance of 1020 feet, more or 
           less, to the easterly shoreline of the Rum River; thence 
           northerly along said easterly shoreline to the point of 
           intersection with a line that bears North 45 degrees 24 
           minutes 55 seconds West from the point of beginning; thence 
           South 45 degrees 24 minutes 55 seconds East, along said 
           line, a distance of 180 feet, more or less, to the point of 
           beginning.  Containing 48 acres, more or less. 
           (3) that part of the Northwest Quarter of the Northeast 
           Quarter and that part of the Northeast Quarter of the 
           Northwest Quarter, both in Section 5, Township 35, Range 
           23, Isanti County, Minnesota, described jointly as follows: 
           Beginning at the northwest corner of the NW 1/4 of NE 1/4 
           of Section 5; thence North 89 degrees 45 minutes 12 seconds 
           East, assumed bearing, along the north line of said NW 1/4 
           of NE 1/4, a distance of 1321.82 feet to the northeast 
           corner of said NW 1/4 of NE 1/4 thence South 4 degrees 04 
           minutes 02 seconds West, along the east line of said NW 1/4 
           of NE 1/4, a distance of 452.83 feet; thence South 89 
           degrees 45 minutes 02 seconds West, a distance of 1393.6 
           feet; thence northwesterly, along a nontangential curve 
           concave to the northeast, radius 318.17 feet, central angle 
           75 degrees 28 minutes 03 seconds, for an arc length of 
           419.08 feet (the chord of said curve bears North 38 degrees 
           03 minutes 32 seconds West and has a length of 389.44 
           feet); thence North 0 degrees 19 minutes 31 seconds West, 
           tangent to said curve, for a distance of 142.65 feet to the 
           north line of the NE 1/4 of NW 1/4 of said Section 5; 
           thence North 89 degrees 32 minutes 15 seconds East, along 
           said north line, a distance of 344.81 feet to the point of 
           beginning.  Containing 16 acres, more or less.  
           (4) that part of the Southwest Quarter of the Southeast 
           Quarter, that part of the Northwest Quarter of the 
           Southeast Quarter and that part of Government Lot 4, all in 
           Section 32, Township 36, Range 23, Isanti County, 
           Minnesota, described jointly as follows: 
           Beginning at the southwest corner of the SW 1/4 of SE 1/4 
           of Section 32; thence North 89 degrees 45 minutes 12 
           seconds East, assumed bearing, along the south line of said 
           SW 1/4 of SE 1/4, a distance of 1321.82 feet to the 
           southeast corner of said SW 1/4 of SE 1/4 thence North 2 
           degrees 40 minutes 49 seconds West, along the east line of 
           said SW 1/4 of SE 1/4 and along the east line of the NW 1/4 
           of SE 1/4, a distance of 1465.32 feet; thence southwesterly 
           along a nontangential curve concave to the northwest, 
           radius 398.10 feet, central angle 60 degrees 52 minutes 54 
           seconds, for an arc length of 423.02 feet (said curve has a 
           chord that bears South 59 degrees 33 minutes 09 seconds 
           West and a chord length of 403.40 feet); thence South 89 
           degrees 59 minutes 37 seconds West, tangent to said curve, 
           for a distance of 825.68 feet; thence southwesterly along a 
           tangential curve concave to the southeast, radius 318.10 
           feet, central angle 90 degrees 16 minutes 37 seconds, for 
           an arc length of 501.21 feet; thence South 0 degrees 17 
           minutes 01 seconds East, tangent to said curve, for a 
           distance of 86.59 feet; thence southerly along a tangential 
           curve concave to the West, radius 398.10 feet, central 
           angle 29 degrees 47 minutes 02 seconds, for an arc length 
           of 206.94 feet; thence South 29 degrees 30 minutes 01 
           seconds West tangent to said curve, for a distance of 34.23 
           feet; thence southerly along a tangential curve concave to 
           the east, radius 318.20 feet, central angle 29 degrees 49 
           minutes 32 seconds for an arc length of 165.59 feet; thence 
           South 0 degrees 19 minutes 31 seconds East, tangent to said 
           curve, for a distance of 475.17 feet to the south line of 
           Government Lot 4, Section 32; thence North 89 degrees 32 
           minutes 15 seconds East, along said south line, a distance 
           of 344.81 feet to the point of beginning.  Containing 44.9 
           acres, more or less. 
           EXCEPTING THEREFROM that parcel described on Quit Claim 
           Deed from the State of Minnesota to Wilfred R. and June E. 
           Norman, filed in Book 92 of Deeds, page 647, in the office 
           of the County Recorder, Isanti County, Minnesota.  
           ALSO EXCEPTING THEREFROM that parcel described on Quit 
           Claim Deed from the State of Minnesota to Frank C. Brody 
           and Lorraine D.S. Brody, filed in Book 102 of Deeds, page 
           232, in the office of the County Recorder, Isanti County, 
           Minnesota. 
           (d) The city of Cambridge may use the land for economic 
        development.  Economic development is a public purpose within 
        the meaning of the term as used in Laws 1990, chapter 610, 
        article 1, section 12, subdivision 5, and sales or conveyances 
        to private parties shall be considered economic development.  
        Property conveyed by the state under this section shall not 
        revert to the state if it is conveyed or otherwise encumbered by 
        the city as a part of the city economic development activity. 
           Sec. 27.  [CONVEYANCE OF CITY LAND TO STATE OF MINNESOTA.] 
           (a) The commissioner of administration may accept all, or 
        any part of, the land described in paragraph (d) from the city 
        of Cambridge, after the city council passes a resolution which 
        declares the property is surplus to its needs. 
           (b) The conveyance shall be in a form approved by the 
        attorney general. 
           (c) The conveyance may be subject to a scenic easement, as 
        defined in Minnesota Statutes, section 103F.311, subdivision 6.  
        The easement shall be under the custodial control of the 
        commissioner of natural resources and only required on the 
        portion of conveyed land that is designated for inclusion in the 
        wild and scenic river system under Minnesota Statutes, section 
        103F.325.  The scenic easement shall allow for continued use of 
        any existing structures located within the easement and for 
        development of walking paths or trails within the easement. 
           (d) Subject to the right-of-way for state trunk highway No. 
        293, and subject to other easements, reservations, street 
        right-of-ways, and restrictions of record, if any, the land to 
        be conveyed may include all, or part of, the parcel described as 
        follows: 
           That part of Government Lot 4 and that part of the 
           Northeast Quarter of the Northwest Quarter, all in Section 
           5, Township 35, Range 23, Isanti County, Minnesota, 
           described jointly as follows:  Commencing at the Northeast 
           corner of the Northwest Quarter of Section 5, thence South 
           89 degrees 47 minutes 10 seconds West, assumed bearing 
           along the north line of the Northwest Quarter of Section 5, 
           a distance of 656.00 feet to the point of beginning of the 
           parcel to be herein described, thence South 00 degrees 03 
           minutes 35 seconds East, a distance of 350.00 feet, thence 
           South 89 degrees 47 minutes 10 seconds West, parallel with 
           the north line of said Northwest Quarter of Section 5 to 
           the easterly shoreline of the Rum River, thence 
           northeasterly along said easterly shoreline to the north 
           line of the Northwest Quarter of Section 5, thence North 89 
           degrees 47 minutes 10 seconds East, along said north line 
           to the point of beginning. 
           Sec. 28.  [REPORT TO LEGISLATURE ON ESTABLISHING ENTERPRISE 
        ACTIVITIES WITHIN STATE-OPERATED SERVICES.] 
           The commissioner of human services shall report and make 
        recommendations to the legislature, by December 15, 1999, on 
        establishing enterprise activities within state-operated 
        services, under Minnesota Statutes, section 246.0136, and their 
        status. 
           Sec. 29.  [REPEALER.] 
           Minnesota Statutes 1998, section 254A.145, is repealed. 
                                   ARTICLE 6 
                              ASSISTANCE PROGRAMS 
           Section 1.  Minnesota Statutes 1998, section 256D.051, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [DUTIES OF COMMISSIONER.] In addition to any 
        other duties imposed by law, the commissioner shall: 
           (1) based on this section and section 256D.052 and Code of 
        Federal Regulations, title 7, section 273.7, supervise the 
        administration of food stamp employment and training services to 
        county agencies; 
           (2) disburse money appropriated for food stamp employment 
        and training services to county agencies based upon the county's 
        costs as specified in section 256D.06 256D.051, subdivision 6c; 
           (3) accept and supervise the disbursement of any funds that 
        may be provided by the federal government or from other sources 
        for use in this state for food stamp employment and training 
        services; 
           (4) cooperate with other agencies including any agency of 
        the United States or of another state in all matters concerning 
        the powers and duties of the commissioner under this section and 
        section 256D.052; and 
           (5) in cooperation with the commissioner of economic 
        security, ensure that each component of an employment and 
        training program carried out under this section is delivered 
        through a statewide workforce development system, unless the 
        component is not available locally through such a system. 
           Sec. 2.  Minnesota Statutes 1998, section 256D.051, is 
        amended by adding a subdivision to read: 
           Subd. 6c.  [PROGRAM FUNDING.] Within the limits of 
        available resources, the commissioner shall reimburse the actual 
        costs of county agencies and their employment and training 
        service providers for the provision of food stamp employment and 
        training services, including participant support services, 
        direct program services, and program administrative activities.  
        The cost of services for each county's food stamp employment and 
        training program shall not exceed an average of $400 per 
        participant.  No more than 15 percent of program funds may be 
        used for administrative activities.  The county agency may 
        expend county funds in excess of the limits of this subdivision 
        without state reimbursement. 
           Program funds shall be allocated based on the county's 
        average number of food stamp cases as compared to the statewide 
        total number of such cases.  The average number of cases shall 
        be based on counts of cases as of March 31, June 30, September 
        30, and December 31 of the previous calendar year.  The 
        commissioner may reallocate unexpended money appropriated under 
        this section to those county agencies that demonstrate a need 
        for additional funds. 
           Sec. 3.  Minnesota Statutes 1998, section 256D.053, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM ESTABLISHED.] For the period of 
        July 1, 1998, to June 30, 1999, The Minnesota food assistance 
        program is established to provide food assistance to legal 
        noncitizens residing in this state who are ineligible to 
        participate in the federal Food Stamp Program solely due to the 
        provisions of section 402 or 403 of Public Law Number 104-193, 
        as authorized by Title VII of the 1997 Emergency Supplemental 
        Appropriations Act, Public Law Number 105-18, and as amended by 
        Public Law Number 105-185. 
           Beginning July 1, 2000, the Minnesota food assistance 
        program is limited to those noncitizens described in this 
        subdivision who are 50 years of age or older. 
           Sec. 4.  Minnesota Statutes 1998, section 256D.06, 
        subdivision 5, is amended to read: 
           Subd. 5.  Any applicant, otherwise eligible for general 
        assistance and possibly eligible for maintenance benefits from 
        any other source shall (a) make application for those benefits 
        within 30 days of the general assistance application; and (b) 
        execute an interim assistance authorization agreement on a form 
        as directed by the commissioner.  The commissioner shall review 
        a denial of an application for other maintenance benefits and 
        may require a recipient of general assistance to file an appeal 
        of the denial if appropriate.  If found eligible for benefits 
        from other sources, and a payment received from another source 
        relates to the period during which general assistance was also 
        being received, the recipient shall be required to reimburse the 
        county agency for the interim assistance paid.  Reimbursement 
        shall not exceed the amount of general assistance paid during 
        the time period to which the other maintenance benefits apply 
        and shall not exceed the state standard applicable to that time 
        period.  The commissioner shall adopt rules authorizing county 
        agencies or other client representatives to retain from the 
        amount recovered under an interim assistance agreement 25 
        percent plus actual reasonable fees, costs, and disbursements of 
        appeals and litigation, of providing special assistance to the 
        recipient in processing the recipient's claim for maintenance 
        benefits from another source.  The money retained under this 
        section shall be from the state share of the recovery.  The 
        commissioner or the county agency may contract with qualified 
        persons to provide the special assistance.  The rules adopted by 
        the commissioner shall include the methods by which county 
        agencies shall identify, refer, and assist recipients who may be 
        eligible for benefits under federal programs for the disabled.  
        This subdivision does not require repayment of per diem payments 
        made to shelters for battered women pursuant to section 256D.05, 
        subdivision 3. 
           Sec. 5.  Minnesota Statutes 1998, section 256J.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USE OF MONEY.] State money appropriated for 
        purposes of this section and TANF block grant money must be used 
        for: 
           (1) financial assistance to or on behalf of any minor child 
        who is a resident of this state under section 256J.12; 
           (2) employment and training services under this chapter or 
        chapter 256K; 
           (3) emergency financial assistance and services under 
        section 256J.48; 
           (4) diversionary assistance under section 256J.47; and 
           (5) the health care and human services training and 
        retention program under chapter 116L, for costs associated with 
        families with children with incomes below 200 percent of the 
        federal poverty guidelines; 
           (6) the pathways program under section 116L.04, subdivision 
        1a; 
           (7) welfare-to-work extended employment services for MFIP 
        participants with severe impairment to employment as defined in 
        section 268A.15, subdivision 1a; 
           (8) the family homeless prevention and assistance program 
        under section 462A.204; 
           (9) the rent assistance for family stabilization 
        demonstration project under section 462A.205; and 
           (10) program administration under this chapter. 
           Sec. 6.  Minnesota Statutes 1998, section 256J.08, 
        subdivision 11, is amended to read: 
           Subd. 11.  [CAREGIVER.] "Caregiver" means a minor child's 
        natural or adoptive parent or parents and stepparent who live in 
        the home with the minor child.  For purposes of determining 
        eligibility for this program, caregiver also means any of the 
        following individuals, if adults, who live with and provide care 
        and support to a minor child when the minor child's natural or 
        adoptive parent or parents or stepparents do not reside in the 
        same home:  legal custodian or guardian, grandfather, 
        grandmother, brother, sister, half-brother, half-sister, 
        stepbrother, stepsister, uncle, aunt, first cousin or first 
        cousin once removed, nephew, niece, person of preceding 
        generation as denoted by prefixes of "great," "great-great," or 
        "great-great-great," or a spouse of any person named in the 
        above groups even after the marriage ends by death or divorce. 
           Sec. 7.  Minnesota Statutes 1998, section 256J.08, 
        subdivision 24, is amended to read: 
           Subd. 24.  [DISREGARD.] "Disregard" means earned income 
        that is not counted when determining initial eligibility or 
        ongoing eligibility and calculating the amount of the assistance 
        payment for participants.  The commissioner shall determine the 
        amount of the disregard according to section 256J.24, 
        subdivision 10. 
           Sec. 8.  Minnesota Statutes 1998, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 28a.  [ENCUMBRANCE.] "Encumbrance" means a legal 
        claim against real or personal property that is payable upon the 
        sale of that property. 
           Sec. 9.  Minnesota Statutes 1998, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 55a.  [MFIP STANDARD OF NEED.] "MFIP standard of need"
        means the appropriate standard used to determine MFIP benefit 
        payments for the MFIP unit and applies to: 
           (1) the transitional standard, sections 256J.08, 
        subdivision 85, and 256J.24, subdivision 5; 
           (2) the shared household standard, section 256J.24, 
        subdivision 9; and 
           (3) the interstate transition standard, section 256J.43. 
           Sec. 10.  Minnesota Statutes 1998, section 256J.08, 
        subdivision 65, is amended to read: 
           Subd. 65.  [PARTICIPANT.] "Participant" means a person who 
        is currently receiving cash assistance and or the food portion 
        available through MFIP-S MFIP as funded by TANF and the food 
        stamp program.  A person who fails to withdraw or access 
        electronically any portion of the person's cash and food 
        assistance payment by the end of the payment month, who makes a 
        written request for closure before the first of a payment month 
        and repays cash and food assistance electronically issued for 
        that payment month within that payment month, or who returns any 
        uncashed assistance check and food coupons and withdraws from 
        the program is not a participant.  A person who withdraws a cash 
        or food assistance payment by electronic transfer or receives 
        and cashes a cash an MFIP assistance check or food coupons and 
        is subsequently determined to be ineligible for assistance for 
        that period of time is a participant, regardless whether that 
        assistance is repaid.  The term "participant" includes the 
        caregiver relative and the minor child whose needs are included 
        in the assistance payment.  A person in an assistance unit who 
        does not receive a cash and food assistance payment because the 
        person has been suspended from MFIP-S or because the person's 
        need falls below the $10 minimum payment level MFIP is a 
        participant. 
           Sec. 11.  Minnesota Statutes 1998, section 256J.08, 
        subdivision 82, is amended to read: 
           Subd. 82.  [SANCTION.] "Sanction" means the reduction of a 
        family's assistance payment by a specified percentage of 
        the applicable transitional MFIP standard of need because:  a 
        nonexempt participant fails to comply with the requirements of 
        sections 256J.52 to 256J.55; a parental caregiver fails without 
        good cause to cooperate with the child support enforcement 
        requirements; or a participant fails to comply with the 
        insurance, tort liability, or other requirements of this chapter.
           Sec. 12.  Minnesota Statutes 1998, section 256J.08, 
        subdivision 83, is amended to read: 
           Subd. 83.  [SIGNIFICANT CHANGE.] "Significant change" means 
        a decline in gross income of 36 percent the amount of the 
        disregard as defined in subdivision 24 or more from the income 
        used to determine the grant for the current month. 
           Sec. 13.  Minnesota Statutes 1998, section 256J.08, 
        subdivision 86a, is amended to read: 
           Subd. 86a.  [UNRELATED MEMBER.] "Unrelated member" means an 
        individual in the household who does not meet the definition of 
        an eligible caregiver, but does not include an individual who 
        provides child care to a child in the assistance unit. 
           Sec. 14.  Minnesota Statutes 1998, section 256J.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NONCITIZENS; FOOD PORTION.] (a) For the period 
        September 1, 1997, to October 31, 1997, noncitizens who do not 
        meet one of the exemptions in section 412 of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        but were residing in this state as of July 1, 1997, are eligible 
        for the 6/10 of the average value of food stamps for the same 
        family size and composition until MFIP-S is operative in the 
        noncitizen's county of financial responsibility and thereafter, 
        the 6/10 of the food portion of MFIP-S.  However, federal food 
        stamp dollars cannot be used to fund the food portion of MFIP-S 
        benefits for an individual under this subdivision. 
           (b) For the period November 1, 1997, to June 30, 1999, 
        noncitizens who do not meet one of the exemptions in section 412 
        of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, and are receiving cash assistance 
        under the AFDC, family general assistance, MFIP or MFIP-S 
        programs are eligible for the average value of food stamps for 
        the same family size and composition until MFIP-S is operative 
        in the noncitizen's county of financial responsibility and 
        thereafter, the food portion of MFIP-S.  However, federal food 
        stamp dollars cannot be used to fund the food portion of MFIP-S 
        benefits for an individual under this subdivision State dollars 
        shall fund the food portion of a noncitizen's MFIP benefits when 
        federal food stamp dollars cannot be used to fund those 
        benefits.  The assistance provided under this subdivision, which 
        is designated as a supplement to replace lost benefits under the 
        federal food stamp program, must be disregarded as income in all 
        programs that do not count food stamps as income where the 
        commissioner has the authority to make the income disregard 
        determination for the program. 
           (c) The commissioner shall submit a state plan to the 
        secretary of agriculture to allow the commissioner to purchase 
        federal Food Stamp Program benefits in an amount equal to the 
        MFIP-S food portion for each legal noncitizen receiving MFIP-S 
        assistance who is ineligible to participate in the federal Food 
        Stamp Program solely due to the provisions of section 402 or 403 
        of Public Law Number 104-193, as authorized by Title VII of the 
        1997 Emergency Supplemental Appropriations Act, Public Law 
        Number 105-18.  The commissioner shall enter into a contract as 
        necessary with the secretary to use the existing federal Food 
        Stamp Program benefits delivery system for the purposes of 
        administering the food portion of MFIP-S under this subdivision. 
           Sec. 15.  Minnesota Statutes 1998, section 256J.11, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BENEFITS FUNDED WITH STATE MONEY.] Legal adult 
        noncitizens who have resided in the country for four years or 
        more as a lawful permanent resident, whose benefits are funded 
        entirely with state money, and who are under 70 years of age, 
        must, as a condition of eligibility: 
           (1) be enrolled in a literacy class, English as a second 
        language class, or a citizen class; 
           (2) be applying for admission to a literacy class, English 
        as a second language class, and is on a waiting list; 
           (3) be in the process of applying for a waiver from the 
        Immigration and Naturalization Service of the English language 
        or civics requirements of the citizenship test; 
           (4) have submitted an application for citizenship to the 
        Immigration and Naturalization Service and is waiting for a 
        testing date or a subsequent swearing in ceremony; or 
           (5) have been denied citizenship due to a failure to pass 
        the test after two attempts or because of an inability to 
        understand the rights and responsibilities of becoming a United 
        States citizen, as documented by the Immigration and 
        Naturalization Service or the county. 
           If the county social service agency determines that a legal 
        noncitizen subject to the requirements of this subdivision will 
        require more than one year of English language training, then 
        the requirements of clause (1) or (2) shall be imposed after the 
        legal noncitizen has resided in the country for three years.  
        Individuals who reside in a facility licensed under chapter 
        144A, 144D, 245A, or 256I are exempt from the requirements of 
        this subdivision. 
           Sec. 16.  Minnesota Statutes 1998, section 256J.12, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [30-DAY RESIDENCY REQUIREMENT.] An assistance 
        unit is considered to have established residency in this state 
        only when a child or caregiver has resided in this state for at 
        least 30 consecutive days with the intention of making the 
        person's home here and not for any temporary purpose.  The birth 
        of a child in Minnesota to a member of the assistance unit does 
        not automatically establish the residency in this state under 
        this subdivision of the other members of the assistance unit.  
        Time spent in a shelter for battered women shall count toward 
        satisfying the 30-day residency requirement. 
           Sec. 17.  Minnesota Statutes 1998, section 256J.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXCEPTIONS.] (a) A county shall waive the 30-day 
        residency requirement where unusual hardship would result from 
        denial of assistance. 
           (b) For purposes of this section, unusual hardship means an 
        assistance unit: 
           (1) is without alternative shelter; or 
           (2) is without available resources for food. 
           (c) For purposes of this subdivision, the following 
        definitions apply (1) "metropolitan statistical area" is as 
        defined by the U.S. Census Bureau; (2) "alternative shelter" 
        includes any shelter that is located within the metropolitan 
        statistical area containing the county and for which the family 
        is eligible, provided the assistance unit does not have to 
        travel more than 20 miles to reach the shelter and has access to 
        transportation to the shelter.  Clause (2) does not apply to 
        counties in the Minneapolis-St. Paul metropolitan statistical 
        area. 
           (d) Applicants are considered to meet the residency 
        requirement under subdivision 1a if they once resided in 
        Minnesota and: 
           (1) joined the United States armed services, returned to 
        Minnesota within 30 days of leaving the armed services, and 
        intend to remain in Minnesota; or 
           (2) left to attend school in another state, paid 
        nonresident tuition or Minnesota tuition rates under a 
        reciprocity agreement, and returned to Minnesota within 30 days 
        of graduation with the intent to remain in Minnesota. 
           (e) The 30-day residence requirement is met when: 
           (1) a minor child or a minor caregiver moves from another 
        state to the residence of a relative caregiver; and 
           (2) the minor caregiver applies for and receives family 
        cash assistance; 
           (3) the relative caregiver chooses not to be part of the 
        MFIP-S assistance unit; and 
           (4) the relative caregiver has resided in Minnesota for at 
        least 30 days prior to the date the assistance unit applies for 
        cash assistance.  
           (f) Ineligible mandatory unit members who have resided in 
        Minnesota for 12 months immediately before the unit's date of 
        application establish the other assistance unit members' 
        eligibility for the MFIP-S transitional standard. 
           (2) the relative caregiver has resided in Minnesota for at 
        least 30 consecutive days and:  
           (i) the minor caregiver applies for and receives MFIP; or 
           (ii) the relative caregiver applies for assistance for the 
        minor child but does not choose to be a member of the MFIP 
        assistance unit. 
           Sec. 18.  Minnesota Statutes 1998, section 256J.14, is 
        amended to read: 
           256J.14 [ELIGIBILITY FOR PARENTING OR PREGNANT MINORS.] 
           (a) The definitions in this paragraph only apply to this 
        subdivision. 
           (1) "Household of a parent, legal guardian, or other adult 
        relative" means the place of residence of: 
           (i) a natural or adoptive parent; 
           (ii) a legal guardian according to appointment or 
        acceptance under section 260.242, 525.615, or 525.6165, and 
        related laws; 
           (iii) a caregiver as defined in section 256J.08, 
        subdivision 11; or 
           (iv) an appropriate adult relative designated by a county 
        agency. 
           (2) "Adult-supervised supportive living arrangement" means 
        a private family setting which assumes responsibility for the 
        care and control of the minor parent and minor child, or other 
        living arrangement, not including a public institution, licensed 
        by the commissioner of human services which ensures that the 
        minor parent receives adult supervision and supportive services, 
        such as counseling, guidance, independent living skills 
        training, or supervision. 
           (b) A minor parent and the minor child who is in the care 
        of the minor parent must reside in the household of a parent, 
        legal guardian, other adult relative, or in an adult-supervised 
        supportive living arrangement in order to receive MFIP-S MFIP 
        unless: 
           (1) the minor parent has no living parent, other adult 
        relative, or legal guardian whose whereabouts is known; 
           (2) no living parent, other adult relative, or legal 
        guardian of the minor parent allows the minor parent to live in 
        the parent's, other adult relative's, or legal guardian's home; 
           (3) the minor parent lived apart from the minor parent's 
        own parent or legal guardian for a period of at least one year 
        before either the birth of the minor child or the minor parent's 
        application for MFIP-S MFIP; 
           (4) the physical or emotional health or safety of the minor 
        parent or minor child would be jeopardized if the minor parent 
        and the minor child resided in the same residence with the minor 
        parent's parent, other adult relative, or legal guardian; or 
           (5) an adult supervised supportive living arrangement is 
        not available for the minor parent and child in the county in 
        which the minor parent and child currently reside.  If an adult 
        supervised supportive living arrangement becomes available 
        within the county, the minor parent and child must reside in 
        that arrangement. 
           (c) The county agency shall inform minor applicants must be 
        informed both orally and in writing about the eligibility 
        requirements and, their rights and obligations under the MFIP-S 
        MFIP program, and any other applicable orientation information.  
        The county must advise the minor of the possible exemptions and 
        specifically ask whether one or more of these exemptions is 
        applicable.  If the minor alleges one or more of these 
        exemptions, then the county must assist the minor in obtaining 
        the necessary verifications to determine whether or not these 
        exemptions apply. 
           (d) If the county worker has reason to suspect that the 
        physical or emotional health or safety of the minor parent or 
        minor child would be jeopardized if they resided with the minor 
        parent's parent, other adult relative, or legal guardian, then 
        the county worker must make a referral to child protective 
        services to determine if paragraph (b), clause (4), applies.  A 
        new determination by the county worker is not necessary if one 
        has been made within the last six months, unless there has been 
        a significant change in circumstances which justifies a new 
        referral and determination. 
           (e) If a minor parent is not living with a parent, legal 
        guardian, or other adult relative due to paragraph (b), clause 
        (1), (2), or (4), the minor parent must reside, when possible, 
        in a living arrangement that meets the standards of paragraph 
        (a), clause (2). 
           (f) When a minor parent and minor child live with a parent, 
        other adult relative, legal guardian, or in an adult-supervised 
        supportive Regardless of living arrangement, MFIP-S MFIP must be 
        paid, when possible, in the form of a protective payment on 
        behalf of the minor parent and minor child according to section 
        256J.39, subdivisions 2 to 4. 
           Sec. 19.  Minnesota Statutes 1998, section 256J.20, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OTHER PROPERTY LIMITATIONS.] To be eligible for 
        MFIP-S 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 (20) must be excluded when 
        determining the equity value of real and personal property: 
           (1) a licensed vehicle up to a loan value of less than or 
        equal to $7,500.  The county agency shall apply any excess loan 
        value as if it were equity value to the asset limit described in 
        this section.  If the assistance unit owns more than one 
        licensed vehicle, the county agency shall determine the vehicle 
        with the highest loan value and count only the loan value over 
        $7,500, excluding:  (i) the value of one vehicle per physically 
        disabled person when the vehicle is needed to transport the 
        disabled unit member; this exclusion does not apply to mentally 
        disabled people; (ii) the value of special equipment for a 
        handicapped member of the assistance unit; and (iii) any vehicle 
        used for long-distance travel, other than daily commuting, for 
        the employment of a unit member. 
           The county agency shall count the loan value of all other 
        vehicles and apply this amount as if it were equity value to the 
        asset limit described in this section.  The value of special 
        equipment for a handicapped member of the assistance unit is 
        excluded.  To establish the loan value of vehicles, a county 
        agency must use the N.A.D.A. Official Used Car Guide, Midwest 
        Edition, for newer model cars.  When a vehicle is not listed in 
        the guidebook, or when the applicant or participant disputes the 
        loan value listed in the guidebook as unreasonable given the 
        condition of the particular vehicle, the county agency may 
        require the applicant or participant document the loan value by 
        securing a written statement from a motor vehicle dealer 
        licensed under section 168.27, stating the amount that the 
        dealer would pay to purchase the vehicle.  The county agency 
        shall reimburse the applicant or participant for the cost of a 
        written statement that documents a lower loan value; 
           (2) the value of life insurance policies for members of the 
        assistance unit; 
           (3) one burial plot per member of an assistance unit; 
           (4) the value of personal property needed to produce earned 
        income, including tools, implements, farm animals, inventory, 
        business loans, business checking and savings accounts used at 
        least annually and used exclusively for the operation of a 
        self-employment business, and any motor vehicles if at least 50 
        percent of the vehicle's use is to produce income and if the 
        vehicles are essential for the self-employment business; 
           (5) the value of personal property not otherwise specified 
        which is commonly used by household members in day-to-day living 
        such as clothing, necessary household furniture, equipment, and 
        other basic maintenance items essential for daily living; 
           (6) the value of real and personal property owned by a 
        recipient of Supplemental Security Income or Minnesota 
        supplemental aid; 
           (7) the value of corrective payments, but only for the 
        month in which the payment is received and for the following 
        month; 
           (8) a mobile home or other vehicle used by an applicant or 
        participant as the applicant's or participant's home; 
           (9) money in a separate escrow account that is needed to 
        pay real estate taxes or insurance and that is used for this 
        purpose; 
           (10) money held in escrow to cover employee FICA, employee 
        tax withholding, sales tax withholding, employee worker 
        compensation, business insurance, property rental, property 
        taxes, and other costs that are paid at least annually, but less 
        often than monthly; 
           (11) monthly assistance, emergency assistance, and 
        diversionary payments for the current month's needs; 
           (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 under Laws 1997, chapter 231, article 1, section 16, 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) money received by a participant of the corps to career 
        program under section 84.0887, subdivision 2, paragraph (b), as 
        a postservice benefit under the federal Americorps Act; 
           (19) the assets of children ineligible to receive MFIP-S 
        MFIP benefits because foster care or adoption assistance 
        payments are made on their behalf; and 
           (20) the assets of persons whose income is excluded under 
        section 256J.21, subdivision 2, clause (43). 
           Sec. 20.  Minnesota Statutes 1998, section 256J.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INCOME EXCLUSIONS.] (a) The following must be 
        excluded in determining a family's available income: 
           (1) payments for basic care, difficulty of care, and 
        clothing allowances received for providing family foster care to 
        children or adults under Minnesota Rules, parts 9545.0010 to 
        9545.0260 and 9555.5050 to 9555.6265, and payments received and 
        used for care and maintenance of a third-party beneficiary who 
        is not a household member; 
           (2) reimbursements for employment training received through 
        the Job Training Partnership Act, United States Code, title 29, 
        chapter 19, sections 1501 to 1792b; 
           (3) reimbursement for out-of-pocket expenses incurred while 
        performing volunteer services, jury duty, or 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) property tax rebates under Laws 1997, chapter 231, 
        article 1, section 16; and 
           (v) other federal or state tax rebates; 
           (9) funds received for reimbursement, replacement, or 
        rebate of personal or real property when these payments are made 
        by public agencies, awarded by a court, solicited through public 
        appeal, or made as a grant by a federal agency, state or local 
        government, or disaster assistance organizations, subsequent to 
        a presidential declaration of disaster; 
           (10) the portion of an insurance settlement that is used to 
        pay medical, funeral, and burial expenses, or to repair or 
        replace insured property; 
           (11) reimbursements for medical expenses that cannot be 
        paid by medical assistance; 
           (12) payments by a vocational rehabilitation program 
        administered by the state under chapter 268A, except those 
        payments that are for current living expenses; 
           (13) in-kind income, including any payments directly made 
        by a third party to a provider of goods and services; 
           (14) assistance payments to correct underpayments, but only 
        for the month in which the payment is received; 
           (15) emergency assistance payments; 
           (16) funeral and cemetery payments as provided by section 
        256.935; 
           (17) nonrecurring cash gifts of $30 or less, not exceeding 
        $30 per participant in a calendar month; 
           (18) any form of energy assistance payment made through 
        Public Law Number 97-35, Low-Income Home Energy Assistance Act 
        of 1981, payments made directly to energy providers by other 
        public and private agencies, and any form of credit or rebate 
        payment issued by energy providers; 
           (19) Supplemental Security Income, including retroactive 
        payments; 
           (20) Minnesota supplemental aid, including retroactive 
        payments; 
           (21) proceeds from the sale of real or personal property; 
           (22) adoption assistance payments under section 259.67; 
           (23) state-funded family subsidy program payments made 
        under section 252.32 to help families care for children with 
        mental retardation or related conditions; 
           (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 or, 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-S MFIP child care payments under section 119B.05; 
           (29) all other payments made through MFIP-S MFIP to support 
        a caregiver's pursuit of greater self-support; 
           (30) income a participant receives related to shared living 
        expenses; 
           (31) reverse mortgages; 
           (32) benefits provided by the Child Nutrition Act of 1966, 
        United States Code, title 42, chapter 13A, sections 1771 to 
        1790; 
           (33) benefits provided by the women, infants, and children 
        (WIC) nutrition program, United States Code, title 42, chapter 
        13A, section 1786; 
           (34) benefits from the National School Lunch Act, United 
        States Code, title 42, chapter 13, sections 1751 to 1769e; 
           (35) relocation assistance for displaced persons under the 
        Uniform Relocation Assistance and Real Property Acquisition 
        Policies Act of 1970, United States Code, title 42, chapter 61, 
        subchapter II, section 4636, or the National Housing Act, United 
        States Code, title 12, chapter 13, sections 1701 to 1750jj; 
           (36) benefits from the Trade Act of 1974, United States 
        Code, title 19, chapter 12, part 2, sections 2271 to 2322; 
           (37) war reparations payments to Japanese Americans and 
        Aleuts under United States Code, title 50, sections 1989 to 
        1989d; 
           (38) payments to veterans or their dependents as a result 
        of legal settlements regarding Agent Orange or other chemical 
        exposure under Public Law Number 101-239, section 10405, 
        paragraph (a)(2)(E); 
           (39) income that is otherwise specifically excluded from 
        the MFIP-S program MFIP consideration in federal law, state law, 
        or federal regulation; 
           (40) security and utility deposit refunds; 
           (41) American Indian tribal land settlements excluded under 
        Public Law Numbers 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 parent parents and 
        stepparent stepparents when determining the grant for the minor 
        parent in households that include a minor parent living with a 
        parent parents or stepparent stepparents on MFIP-S MFIP with 
        other children; and 
           (43) income of the minor parent's parent parents and 
        stepparent 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 a parent parents or stepparent 
        stepparents not on MFIP-S MFIP when determining the grant for 
        the minor parent.  The remainder of income is deemed as 
        specified in section 256J.37, subdivision 1b; 
           (44) payments made to children eligible for relative 
        custody assistance under section 257.85; 
           (45) vendor payments for goods and services made on behalf 
        of a client unless the client has the option of receiving the 
        payment in cash; and 
           (46) the principal portion of a contract for deed payment. 
           Sec. 21.  Minnesota Statutes 1998, section 256J.21, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INITIAL INCOME TEST.] The county agency shall 
        determine initial eligibility by considering all earned and 
        unearned income that is not excluded under subdivision 2.  To be 
        eligible for MFIP-S MFIP, the assistance unit's countable income 
        minus the disregards in paragraphs (a) and (b) must be below the 
        transitional standard of assistance according to section 256J.24 
        for that size assistance unit. 
           (a) The initial eligibility determination must disregard 
        the following items: 
           (1) the employment disregard is 18 percent of the gross 
        earned income whether or not the member is working full time or 
        part time; 
           (2) dependent care costs must be deducted from gross earned 
        income for the actual amount paid for dependent care up to a 
        maximum of $200 per month for each child less than two years of 
        age, and $175 per month for each child two years of age and 
        older under this chapter and chapter 119B; 
           (3) all payments made according to a court order for 
        spousal support or the support of children not living in the 
        assistance unit's household shall be disregarded from the income 
        of the person with the legal obligation to pay support, provided 
        that, if there has been a change in the financial circumstances 
        of the person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the support 
        order; and 
           (4) an allocation for the unmet need of an ineligible 
        spouse or an ineligible child under the age of 21 for whom the 
        caregiver is financially responsible and who lives with the 
        caregiver according to section 256J.36. 
           (b) Notwithstanding paragraph (a), when determining initial 
        eligibility for applicant units when at least one member has 
        received AFDC, family general assistance, MFIP, MFIP-R, work 
        first, or MFIP-S MFIP in this state within four months of the 
        most recent application for MFIP-S MFIP, apply the employment 
        disregard as defined in section 256J.08, subdivision 24, for all 
        unit members is 36 percent of the gross earned income. 
           After initial eligibility is established, the assistance 
        payment calculation is based on the monthly income test. 
           Sec. 22.  Minnesota Statutes 1998, section 256J.21, 
        subdivision 4, is amended to read: 
           Subd. 4.  [MONTHLY INCOME TEST AND DETERMINATION OF 
        ASSISTANCE PAYMENT.] The county agency shall determine ongoing 
        eligibility and the assistance payment amount according to the 
        monthly income test.  To be eligible for MFIP-S MFIP, the result 
        of the computations in paragraphs (a) to (e) must be at least $1.
           (a) Apply a 36 percent an income disregard as defined in 
        section 256J.08, subdivision 24, to gross earnings and subtract 
        this amount from the family wage level.  If the difference is 
        equal to or greater than the transitional MFIP standard of need, 
        the assistance payment is equal to the transitional MFIP 
        standard of need.  If the difference is less than 
        the transitional MFIP standard of need, the assistance payment 
        is equal to the difference.  The employment disregard in this 
        paragraph must be deducted every month there is earned income. 
           (b) All payments made according to a court order for 
        spousal support or the support of children not living in the 
        assistance unit's household must be disregarded from the income 
        of the person with the legal obligation to pay support, provided 
        that, if there has been a change in the financial circumstances 
        of the person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the court 
        order. 
           (c) An allocation for the unmet need of an ineligible 
        spouse or an ineligible child under the age of 21 for whom the 
        caregiver is financially responsible and who lives with the 
        caregiver must be made according to section 256J.36. 
           (d) Subtract unearned income dollar for dollar from 
        the transitional MFIP standard of need to determine the 
        assistance payment amount. 
           (e) When income is both earned and unearned, the amount of 
        the assistance payment must be determined by first treating 
        gross earned income as specified in paragraph (a).  After 
        determining the amount of the assistance payment under paragraph 
        (a), unearned income must be subtracted from that amount dollar 
        for dollar to determine the assistance payment amount. 
           (f) When the monthly income is greater than the 
        transitional or family wage level MFIP standard of need after 
        applicable deductions and the income will only exceed the 
        standard for one month, the county agency must suspend the 
        assistance payment for the payment month. 
           Sec. 23.  Minnesota Statutes 1998, section 256J.24, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MANDATORY ASSISTANCE UNIT COMPOSITION.] Except 
        for minor caregivers and their children who must be in a 
        separate assistance unit from the other persons in the 
        household, when the following individuals live together, they 
        must be included in the assistance unit: 
           (1) a minor child, including a pregnant minor; 
           (2) the minor child's minor siblings, minor half-siblings, 
        and minor step-siblings; 
           (3) the minor child's natural parents, adoptive parents, 
        and stepparents; and 
           (4) the spouse of a pregnant woman.  
           Sec. 24.  Minnesota Statutes 1998, section 256J.24, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INDIVIDUALS WHO MUST BE EXCLUDED FROM AN 
        ASSISTANCE UNIT.] (a) The following individuals who are part of 
        the assistance unit determined under subdivision 2 are 
        ineligible to receive MFIP-S MFIP: 
           (1) individuals receiving Supplemental Security Income or 
        Minnesota supplemental aid; 
           (2) individuals living at home while performing 
        court-imposed, unpaid community service work due to a criminal 
        conviction; 
           (3) individuals disqualified from the food stamp program or 
        MFIP-S MFIP, until the disqualification ends; 
           (4) (3) children on whose behalf federal, state or local 
        foster care payments are made, except as provided in sections 
        256J.13, subdivision 2, and 256J.74, subdivision 2; and 
           (5) (4) children receiving ongoing monthly adoption 
        assistance payments under section 259.67.  
           (b) The exclusion of a person under this subdivision does 
        not alter the mandatory assistance unit composition. 
           Sec. 25.  Minnesota Statutes 1998, section 256J.24, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FAMILY WAGE LEVEL STANDARD.] The family wage 
        level standard is 110 percent of the transitional standard under 
        subdivision 5 and is the standard used when there is earned 
        income in the assistance unit.  As specified in section 256J.21, 
        earned income is subtracted from the family wage level to 
        determine the amount of the assistance payment.  Not including 
        the family wage level standard, assistance payments may not 
        exceed the shared household standard or the transitional MFIP 
        standard of need for the assistance unit, whichever is less. 
           Sec. 26.  Minnesota Statutes 1998, section 256J.24, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ASSISTANCE PAID TO ELIGIBLE ASSISTANCE UNITS.] 
        Except for assistance units where a nonparental caregiver is not 
        included in the grant, payments for shelter up to the amount of 
        the cash portion of MFIP-S MFIP benefits for which the 
        assistance unit is eligible shall be vendor paid for as many 
        months as the assistance unit is eligible or six months, 
        whichever comes first.  The residual amount of the grant after 
        vendor payment, if any, must be paid to the MFIP-S MFIP 
        caregiver. 
           Sec. 27.  Minnesota Statutes 1998, section 256J.24, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SHARED HOUSEHOLD STANDARD; MFIP-S MFIP.] (a) 
        Except as prohibited in paragraph (b), the county agency must 
        use the shared household standard when the household includes 
        one or more unrelated members, as that term is defined in 
        section 256J.08, subdivision 86a.  The county agency must use 
        the shared household standard, unless a member of the assistance 
        unit is a victim of domestic violence and has an approved safety 
        plan, regardless of the number of unrelated members in the 
        household. 
           (b) The county agency must not use the shared household 
        standard when all unrelated members are one of the following: 
           (1) a recipient of public assistance benefits, including 
        food stamps, Supplemental Security Income, adoption assistance, 
        relative custody assistance, or foster care payments; 
           (2) a roomer or boarder, or a person to whom the assistance 
        unit is paying room or board; 
           (3) a minor child under the age of 18; 
           (4) a minor caregiver living with the minor caregiver's 
        parents or in an approved supervised living arrangement; or 
           (5) a caregiver who is not the parent of the minor child in 
        the assistance unit; or 
           (6) an individual who provides child care to a child in the 
        MFIP assistance unit. 
           (c) The shared household standard must be discontinued if 
        it is not approved by the United States Department of 
        Agriculture under the MFIP-S MFIP waiver. 
           Sec. 28.  Minnesota Statutes 1998, section 256J.24, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [MFIP EXIT LEVEL.] (a) In state fiscal years 
        2000 and 2001, the commissioner shall adjust the MFIP earned 
        income disregard to ensure that most participants do not lose 
        eligibility for MFIP until their income reaches at least 120 
        percent of the federal poverty guidelines in effect in October 
        of each fiscal year.  The adjustment to the disregard shall be 
        based on a household size of three, and the resulting earned 
        income disregard percentage must be applied to all household 
        sizes.  The adjustment under this subdivision must be 
        implemented at the same time as the October food stamp 
        cost-of-living adjustment is reflected in the food portion of 
        MFIP transitional standard as required under subdivision 5a. 
           (b) In state fiscal year 2002 and thereafter, the earned 
        income disregard percentage must be the same as the percentage 
        implemented in October 2000. 
           Sec. 29.  Minnesota Statutes 1998, section 256J.26, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PERSON CONVICTED OF DRUG OFFENSES.] (a) 
        Applicants or participants who have been convicted of a drug 
        offense committed after July 1, 1997, may, if otherwise 
        eligible, receive AFDC or MFIP-S MFIP benefits subject to the 
        following conditions: 
           (1) Benefits for the entire assistance unit must be paid in 
        vendor form for shelter and utilities during any time the 
        applicant is part of the assistance unit. 
           (2) The convicted applicant or participant shall be subject 
        to random drug testing as a condition of continued eligibility 
        and following any positive test for an illegal controlled 
        substance is subject to the following sanctions: 
           (i) for failing a drug test the first time, the 
        participant's grant shall be reduced by ten percent of the 
        MFIP-S transitional MFIP standard of need, the shared household 
        standard, or the interstate transitional standard, whichever is 
        applicable prior to making vendor payments for shelter and 
        utility costs; or 
           (ii) for failing a drug test two or more times, the 
        residual amount of the participant's grant after making vendor 
        payments for shelter and utility costs, if any, must be reduced 
        by an amount equal to 30 percent of the MFIP-S transitional 
        standard, the shared household standard, or the interstate 
        transitional standard, whichever is applicable MFIP standard of 
        need. 
           (3) A participant who fails an initial drug test and is 
        under a sanction due to other MFIP program requirements is 
        subject to the sanction in clause (2)(ii). 
           (b) Applicants requesting only food stamps or participants 
        receiving only food stamps, who have been convicted of a drug 
        offense that occurred after July 1, 1997, may, if otherwise 
        eligible, receive food stamps if the convicted applicant or 
        participant is subject to random drug testing as a condition of 
        continued eligibility.  Following a positive test for an illegal 
        controlled substance, the applicant is subject to the following 
        sanctions: 
           (1) for failing a drug test the first time, food stamps 
        shall be reduced by ten percent of the applicable food stamp 
        allotment; and 
           (2) for failing a drug test two or more times, food stamps 
        shall be reduced by an amount equal to 30 percent of the 
        applicable food stamp allotment.  
           (c) For the purposes of this subdivision, "drug offense" 
        means a conviction an offense that occurred after July 1, 1997, 
        of sections 152.021 to 152.025, 152.0261, or 152.096.  Drug 
        offense also means a conviction in another jurisdiction of the 
        possession, use, or distribution of a controlled substance, or 
        conspiracy to commit any of these offenses, if the offense 
        occurred after July 1, 1997, and the conviction is a felony 
        offense in that jurisdiction, or in the case of New Jersey, a 
        high misdemeanor. 
           Sec. 30.  Minnesota Statutes 1998, section 256J.30, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUIREMENT TO APPLY FOR OTHER BENEFITS.] An 
        applicant or participant must apply for, accept if eligible, and 
        follow through with appealing any denials of eligibility for 
        benefits from other programs for which the applicant or 
        participant is potentially eligible and which would, if 
        received, offset assistance payments.  An applicant's or 
        participant's failure to complete application for these benefits 
        without good cause results in denial or termination of 
        assistance.  Good cause for failure to apply for these benefits 
        is allowed when circumstances beyond the control of the 
        applicant or participant prevent the applicant or participant 
        from making an application. 
           Sec. 31.  Minnesota Statutes 1998, section 256J.30, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DUE DATE OF MFIP-S MFIP HOUSEHOLD REPORT FORM.] 
        An MFIP-S MFIP household report form must be received by the 
        county agency by the eighth calendar day of the month following 
        the reporting period covered by the form.  When the eighth 
        calendar day of the month falls on a weekend or holiday, 
        the MFIP-S MFIP household report form must be received by the 
        county agency the first working day that follows the eighth 
        calendar day.  The county agency must send a notice of 
        termination because of a late or incomplete MFIP-S household 
        report form. 
           Sec. 32.  Minnesota Statutes 1998, section 256J.30, 
        subdivision 8, is amended to read: 
           Subd. 8.  [LATE MFIP-S MFIP HOUSEHOLD REPORT FORMS.] 
        Paragraphs (a) to (d) apply to the reporting requirements in 
        subdivision 7. 
           (a) When a caregiver submits the county agency receives an 
        incomplete MFIP-S MFIP household report form before the last 
        working day of the month on which a ten-day notice of 
        termination can be issued, the county agency must immediately 
        return the incomplete form on or before the ten-day notice 
        deadline or any previously sent ten-day notice of termination is 
        invalid and clearly state what the caregiver must do for the 
        form to be complete. 
           (b) When a complete MFIP-S household report form is not 
        received by a county agency before the last ten days of the 
        month in which the form is due, the county agency must send The 
        automated eligibility system must send a notice of proposed 
        termination of assistance to the assistance unit if a complete 
        MFIP household report form is not received by a county agency.  
        The automated notice must be mailed to the caregiver by 
        approximately the 16th of the month.  When a caregiver submits 
        an incomplete form on or after the date a notice of proposed 
        termination has been sent, the termination is valid unless the 
        caregiver submits a complete form before the end of the month. 
           (c) An assistance unit required to submit an MFIP-S MFIP 
        household report form is considered to have continued its 
        application for assistance if a complete MFIP-S MFIP household 
        report form is received within a calendar month after the month 
        in which assistance was received the form was due and assistance 
        shall be paid for the period beginning with the first day of the 
        month in which the report was due that calendar month. 
           (d) A county agency must allow good cause exemptions from 
        the reporting requirements under subdivisions 5 and 6 when any 
        of the following factors cause a caregiver to fail to provide 
        the county agency with a completed MFIP-S MFIP household report 
        form before the end of the month in which the form is due: 
           (1) an employer delays completion of employment 
        verification; 
           (2) a county agency does not help a caregiver complete the 
        MFIP-S MFIP household report form when the caregiver asks for 
        help; 
           (3) a caregiver does not receive an MFIP-S MFIP household 
        report form due to mistake on the part of the department or the 
        county agency or due to a reported change in address; 
           (4) a caregiver is ill, or physically or mentally 
        incapacitated; or 
           (5) some other circumstance occurs that a caregiver could 
        not avoid with reasonable care which prevents the caregiver from 
        providing a completed MFIP-S MFIP household report form before 
        the end of the month in which the form is due. 
           Sec. 33.  Minnesota Statutes 1998, section 256J.30, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CHANGES THAT MUST BE REPORTED.] A caregiver must 
        report the changes or anticipated changes specified in clauses 
        (1) to (16) (17) within ten days of the date they occur, within 
        ten days of the date the caregiver learns that the change will 
        occur, at the time of the periodic recertification of 
        eligibility under section 256J.32, subdivision 6, or within 
        eight calendar days of a reporting period as in subdivision 5 or 
        6, whichever occurs first.  A caregiver must report other 
        changes at the time of the periodic recertification of 
        eligibility under section 256J.32, subdivision 6, or at the end 
        of a reporting period under subdivision 5 or 6, as applicable.  
        A caregiver must make these reports in writing to the county 
        agency.  When a county agency could have reduced or terminated 
        assistance for one or more payment months if a delay in 
        reporting a change specified under clauses (1) to (16) had not 
        occurred, the county agency must determine whether a timely 
        notice under section 256J.31, subdivision 4, could have been 
        issued on the day that the change occurred.  When a timely 
        notice could have been issued, each month's overpayment 
        subsequent to that notice must be considered a client error 
        overpayment under section 256J.38.  Calculation of overpayments 
        for late reporting under clause (17) is specified in section 
        256J.09, subdivision 9.  Changes in circumstances which must be 
        reported within ten days must also be reported on the MFIP-S 
        MFIP household report form for the reporting period in which 
        those changes occurred.  Within ten days, a caregiver must 
        report: 
           (1) a change in initial employment; 
           (2) a change in initial receipt of unearned income; 
           (3) a recurring change in unearned income; 
           (4) a nonrecurring change of unearned income that exceeds 
        $30; 
           (5) the receipt of a lump sum; 
           (6) an increase in assets that may cause the assistance 
        unit to exceed asset limits; 
           (7) a change in the physical or mental status of an 
        incapacitated member of the assistance unit if the physical or 
        mental status is the basis of exemption from an MFIP-S work and 
        training MFIP employment services program; 
           (8) a change in employment status; 
           (9) a change in household composition, including births, 
        returns to and departures from the home of assistance unit 
        members and financially responsible persons, or a change in the 
        custody of a minor child information affecting an exception 
        under section 256J.24, subdivision 9; 
           (10) a change in health insurance coverage; 
           (11) the marriage or divorce of an assistance unit member; 
           (12) the death of a parent, minor child, or financially 
        responsible person; 
           (13) a change in address or living quarters of the 
        assistance unit; 
           (14) the sale, purchase, or other transfer of property; 
           (15) a change in school attendance of a custodial parent or 
        an employed child; and 
           (16) filing a lawsuit, a workers' compensation claim, or a 
        monetary claim against a third party; and 
           (17) a change in household composition, including births, 
        returns to and departures from the home of assistance unit 
        members and financially responsible persons, or a change in the 
        custody of a minor child. 
           Sec. 34.  Minnesota Statutes 1998, section 256J.31, 
        subdivision 5, is amended to read: 
           Subd. 5.  [MAILING OF NOTICE.] The notice of adverse action 
        shall be issued according to paragraphs (a) to (c) (d). 
           (a) A county agency shall mail a notice of adverse action 
        must be mailed at least ten days before the effective date of 
        the adverse action, except as provided in paragraphs (b) and (c) 
        to (d). 
           (b) A county agency must mail a notice of adverse action at 
        least five days before the effective date of the adverse action 
        when the county agency has factual information that requires an 
        action to reduce, suspend, or terminate assistance based on 
        probable fraud. 
           (c) A county agency shall mail A notice of adverse action 
        before or on the effective date of the adverse action must be 
        mailed no later than four working days before the end of the 
        month when the county agency: 
           (1) receives the caregiver's signed monthly MFIP-S 
        household report form that includes information that requires 
        payment reduction, suspension, or termination; 
           (2) is informed of the death of a participant the only 
        caregiver or the payee in an assistance unit; 
           (3) (2) receives a signed statement from the caregiver that 
        assistance is no longer wanted; 
           (4) receives a signed statement from the caregiver that 
        provides information that requires the termination or reduction 
        of assistance (3) has factual information to reduce, suspend, or 
        terminate assistance based on the failure to timely report 
        changes; 
           (5) verifies that a member of the assistance unit is absent 
        from the home and does not meet temporary absence provisions in 
        section 256J.13; 
           (6) (4) verifies that a member of the assistance unit has 
        entered a regional treatment center or a licensed residential 
        facility for medical or psychological treatment or 
        rehabilitation; 
           (7) (5) verifies that a member of an assistance unit has 
        been removed from the home as a result of a judicial 
        determination or placed in foster care, and the provisions of 
        section 256J.13, subdivision 2, paragraph (c), clause (2), do 
        not apply; 
           (8) verifies that a member of an assistance unit has been 
        approved to receive assistance by another state; or 
           (9) (6) cannot locate a caregiver. 
           (c) A notice of adverse action must be mailed for a payment 
        month when the caregiver makes a written request for closure 
        before the first of that payment month. 
           (d) A notice of adverse action must be mailed before the 
        effective date of the adverse action when the county agency 
        receives the caregiver's signed and completed MFIP household 
        report form or recertification form that includes information 
        that requires payment reduction, suspension, or termination. 
           Sec. 35.  Minnesota Statutes 1998, section 256J.31, 
        subdivision 12, is amended to read: 
           Subd. 12.  [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A 
        participant who is not in vendor payment status may discontinue 
        receipt of the cash assistance portion of MFIP-S the MFIP 
        assistance grant and retain eligibility for child care 
        assistance under section 119B.05 and for medical assistance 
        under sections 256B.055, subdivision 3a, and 256B.0635.  For the 
        months a participant chooses to discontinue the receipt of the 
        cash portion of the MFIP grant, the assistance unit accrues 
        months of eligibility to be applied toward eligibility for child 
        care under section 119B.05 and for medical assistance under 
        sections 256B.055, subdivision 3a, and 256B.0635. 
           Sec. 36.  Minnesota Statutes 1998, section 256J.32, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FACTORS TO BE VERIFIED.] The county agency shall 
        verify the following at application: 
           (1) identity of adults; 
           (2) presence of the minor child in the home, if 
        questionable; 
           (3) relationship of a minor child to caregivers in the 
        assistance unit; 
           (4) age, if necessary to determine MFIP-S MFIP eligibility; 
           (5) immigration status; 
           (6) social security number according to the requirements of 
        section 256J.30, subdivision 12; 
           (7) income; 
           (8) self-employment expenses used as a deduction; 
           (9) source and purpose of deposits and withdrawals from 
        business accounts; 
           (10) spousal support and child support payments made to 
        persons outside the household; 
           (11) real property; 
           (12) vehicles; 
           (13) checking and savings accounts; 
           (14) savings certificates, savings bonds, stocks, and 
        individual retirement accounts; 
           (15) pregnancy, if related to eligibility; 
           (16) inconsistent information, if related to eligibility; 
           (17) medical insurance; 
           (18) anticipated graduation date of an 18-year-old; 
           (19) burial accounts; 
           (20) (19) school attendance, if related to eligibility; 
           (21) (20) residence; 
           (22) (21) a claim of domestic violence if used as a basis 
        for a deferral or exemption from the 60-month time limit in 
        section 256J.42 or employment and training services requirements 
        in section 256J.56; and 
           (23) (22) disability if used as an exemption from 
        employment and training services requirements under section 
        256J.56; and 
           (23) information needed to establish an exception under 
        section 256J.24, subdivision 9. 
           Sec. 37.  Minnesota Statutes 1998, 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; and 
           (4) information to establish an exception under section 
        256J.24, subdivision 9, if questionable; and 
           (5) inconsistent information, if related to eligibility.  
           Sec. 38.  Minnesota Statutes 1998, section 256J.33, is 
        amended to read: 
           256J.33 [PROSPECTIVE AND RETROSPECTIVE DETERMINATION OF 
        MFIP-S MFIP ELIGIBILITY.] 
           Subdivision 1.  [DETERMINATION OF ELIGIBILITY.] A county 
        agency must determine MFIP-S MFIP eligibility prospectively for 
        a payment month based on retrospectively assessing income and 
        the county agency's best estimate of the circumstances that will 
        exist in the payment month. 
           Except as described in section 256J.34, subdivision 1, when 
        prospective eligibility exists, a county agency must calculate 
        the amount of the assistance payment using retrospective 
        budgeting.  To determine MFIP-S MFIP eligibility and the 
        assistance payment amount, a county agency must apply countable 
        income, described in section 256J.37, subdivisions 3 to 10, 
        received by members of an assistance unit or by other persons 
        whose income is counted for the assistance unit, described under 
        sections 256J.21 and 256J.37, subdivisions 1 to 2. 
           This income must be applied to the transitional MFIP 
        standard, shared household standard, of need or family 
        wage standard level subject to this section and sections 256J.34 
        to 256J.36.  Income received in a calendar month and not 
        otherwise excluded under section 256J.21, subdivision 2, must be 
        applied to the needs of an assistance unit. 
           Subd. 2.  [PROSPECTIVE ELIGIBILITY.] A county agency must 
        determine whether the eligibility requirements that pertain to 
        an assistance unit, including those in sections 256J.11 to 
        256J.15 and 256J.20, will be met prospectively for the payment 
        month.  Except for the provisions in section 256J.34, 
        subdivision 1, the income test will be applied retrospectively. 
           Subd. 3.  [RETROSPECTIVE ELIGIBILITY.] After the first two 
        months of MFIP-S MFIP eligibility, a county agency must continue 
        to determine whether an assistance unit is prospectively 
        eligible for the payment month by looking at all factors other 
        than income and then determine whether the assistance unit is 
        retrospectively income eligible by applying the monthly income 
        test to the income from the budget month.  When the monthly 
        income test is not satisfied, the assistance payment must be 
        suspended when ineligibility exists for one month or ended when 
        ineligibility exists for more than one month. 
           Subd. 4.  [MONTHLY INCOME TEST.] A county agency must apply 
        the monthly income test retrospectively for each month of MFIP-S 
        MFIP eligibility.  An assistance unit is not eligible when the 
        countable income equals or exceeds the transitional MFIP 
        standard, the shared household standard, of need or the family 
        wage level for the assistance unit.  The income applied against 
        the monthly income test must include: 
           (1) gross earned income from employment, prior to mandatory 
        payroll deductions, voluntary payroll deductions, wage 
        authorizations, and after the disregards in section 256J.21, 
        subdivision 4, and the allocations in section 256J.36, unless 
        the employment income is specifically excluded under section 
        256J.21, subdivision 2; 
           (2) gross earned income from self-employment less 
        deductions for self-employment expenses in section 256J.37, 
        subdivision 5, but prior to any reductions for personal or 
        business state and federal income taxes, personal FICA, personal 
        health and life insurance, and after the disregards in section 
        256J.21, subdivision 4, and the allocations in section 256J.36; 
           (3) unearned income after deductions for allowable expenses 
        in section 256J.37, subdivision 9, and allocations in section 
        256J.36, unless the income has been specifically excluded in 
        section 256J.21, subdivision 2; 
           (4) gross earned income from employment as determined under 
        clause (1) which is received by a member of an assistance unit 
        who is a minor child or minor caregiver and less than a 
        half-time student; 
           (5) child support and spousal support received or 
        anticipated to be received by an assistance unit; 
           (6) the income of a parent when that parent is not included 
        in the assistance unit; 
           (7) the income of an eligible relative and spouse who seek 
        to be included in the assistance unit; and 
           (8) the unearned income of a minor child included in the 
        assistance unit. 
           Subd. 5.  [WHEN TO TERMINATE ASSISTANCE.] When an 
        assistance unit is ineligible for MFIP-S MFIP assistance for two 
        consecutive months, the county agency must terminate MFIP-S MFIP 
        assistance. 
           Sec. 39.  Minnesota Statutes 1998, section 256J.34, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROSPECTIVE BUDGETING.] A county agency 
        must use prospective budgeting to calculate the assistance 
        payment amount for the first two months for an applicant who has 
        not received assistance in this state for at least one payment 
        month preceding the first month of payment under a current 
        application.  Notwithstanding subdivision 3, paragraph (a), 
        clause (2), a county agency must use prospective budgeting for 
        the first two months for a person who applies to be added to an 
        assistance unit.  Prospective budgeting is not subject to 
        overpayments or underpayments unless fraud is determined under 
        section 256.98. 
           (a) The county agency must apply the income received or 
        anticipated in the first month of MFIP-S MFIP eligibility 
        against the need of the first month.  The county agency must 
        apply the income received or anticipated in the second month 
        against the need of the second month. 
           (b) When the assistance payment for any part of the first 
        two months is based on anticipated income, the county agency 
        must base the initial assistance payment amount on the 
        information available at the time the initial assistance payment 
        is made. 
           (c) The county agency must determine the assistance payment 
        amount for the first two months of MFIP-S MFIP eligibility by 
        budgeting both recurring and nonrecurring income for those two 
        months. 
           (d) The county agency must budget the child support income 
        received or anticipated to be received by an assistance unit to 
        determine the assistance payment amount from the month of 
        application through the date in which MFIP-S MFIP eligibility is 
        determined and assistance is authorized.  Child support income 
        which has been budgeted to determine the assistance payment in 
        the initial two months is considered nonrecurring income.  An 
        assistance unit must forward any payment of child support to the 
        child support enforcement unit of the county agency following 
        the date in which assistance is authorized. 
           Sec. 40.  Minnesota Statutes 1998, section 256J.34, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADDITIONAL USES OF RETROSPECTIVE BUDGETING.] 
        Notwithstanding subdivision 1, the county agency must use 
        retrospective budgeting to calculate the monthly assistance 
        payment amount for the first two months under paragraphs (a) and 
        (b). 
           (a) The county agency must use retrospective budgeting to 
        determine the amount of the assistance payment in the first two 
        months of MFIP-S MFIP eligibility: 
           (1) when an assistance unit applies for assistance for the 
        same month for which assistance has been interrupted, the 
        interruption in eligibility is less than one payment month, the 
        assistance payment for the preceding month was issued in this 
        state, and the assistance payment for the immediately preceding 
        month was determined retrospectively; or 
           (2) when a person applies in order to be added to an 
        assistance unit, that assistance unit has received assistance in 
        this state for at least the two preceding months, and that 
        person has been living with and has been financially responsible 
        for one or more members of that assistance unit for at least the 
        two preceding months. 
           (b) Except as provided in clauses (1) to (4), the county 
        agency must use retrospective budgeting and apply income 
        received in the budget month by an assistance unit and by a 
        financially responsible household member who is not included in 
        the assistance unit against the appropriate transitional or 
        family wage level MFIP standard of need or family wage level to 
        determine the assistance payment to be issued for the payment 
        month. 
           (1) When a source of income ends prior to the third payment 
        month, that income is not considered in calculating the 
        assistance payment for that month.  When a source of income ends 
        prior to the fourth payment month, that income is not considered 
        when determining the assistance payment for that month. 
           (2) When a member of an assistance unit or a financially 
        responsible household member leaves the household of the 
        assistance unit, the income of that departed household member is 
        not budgeted retrospectively for any full payment month in which 
        that household member does not live with that household and is 
        not included in the assistance unit. 
           (3) When an individual is removed from an assistance unit 
        because the individual is no longer a minor child, the income of 
        that individual is not budgeted retrospectively for payment 
        months in which that individual is not a member of the 
        assistance unit, except that income of an ineligible child in 
        the household must continue to be budgeted retrospectively 
        against the child's needs when the parent or parents of that 
        child request allocation of their income against any unmet needs 
        of that ineligible child. 
           (4) When a person ceases to have financial responsibility 
        for one or more members of an assistance unit, the income of 
        that person is not budgeted retrospectively for the payment 
        months which follow the month in which financial responsibility 
        ends. 
           Sec. 41.  Minnesota Statutes 1998, section 256J.34, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SIGNIFICANT CHANGE IN GROSS INCOME.] The county 
        agency must recalculate the assistance payment when an 
        assistance unit experiences a significant change, as defined in 
        section 256J.08, resulting in a reduction in the gross income 
        received in the payment month from the gross income received in 
        the budget month.  The county agency must issue a supplemental 
        assistance payment based on the county agency's best estimate of 
        the assistance unit's income and circumstances for the payment 
        month.  Budget adjustments Supplemental assistance payments that 
        result from significant changes are limited to two in a 12-month 
        period regardless of the reason for the change.  Budget 
        adjustments Notwithstanding any other statute or rule of law, 
        supplementary assistance payments shall not be made when the 
        significant change in income is the result of receipt of a lump 
        sum, receipt of an extra paycheck, business fluctuation in 
        self-employment income, or an assistance unit member's 
        participation in a strike or other labor action.  Supplementary 
        assistance payments due to a significant change in the amount of 
        direct support received must not be made after the date the 
        assistance unit is required to forward support to the child 
        support enforcement unit under subdivision 1, paragraph (d). 
           Sec. 42.  Minnesota Statutes 1998, section 256J.35, is 
        amended to read: 
           256J.35 [AMOUNT OF ASSISTANCE PAYMENT.] 
           Except as provided in paragraphs (a) to (d) (c), the amount 
        of an assistance payment is equal to the difference between the 
        transitional MFIP standard, shared household standard, of need 
        or the Minnesota family wage level in section 256J.24, whichever 
        is less, and countable income. 
           (a) When MFIP-S MFIP eligibility exists for the month of 
        application, the amount of the assistance payment for the month 
        of application must be prorated from the date of application or 
        the date all other eligibility factors are met for that 
        applicant, whichever is later.  This provision applies when an 
        applicant loses at least one day of MFIP-S MFIP eligibility. 
           (b) MFIP-S MFIP overpayments to an assistance unit must be 
        recouped according to section 256J.38, subdivision 4. 
           (c) An initial assistance payment must not be made to an 
        applicant who is not eligible on the date payment is made. 
           (d) An individual whose needs have been otherwise provided 
        for in another state, in whole or in part by county, state, or 
        federal dollars during a month, is ineligible to receive MFIP-S 
        for the month. 
           Sec. 43.  Minnesota Statutes 1998, section 256J.36, is 
        amended to read: 
           256J.36 [ALLOCATION FOR UNMET NEED OF OTHER HOUSEHOLD 
        MEMBERS.] 
           Except as prohibited in paragraphs (a) and (b), an 
        allocation of income is allowed from the caregiver's income to 
        meet the unmet need of an ineligible spouse or an ineligible 
        child under the age of 21 for whom the caregiver is financially 
        responsible who also lives with the caregiver.  That allocation 
        is allowed in an amount up to the difference between the MFIP-S 
        transitional MFIP standard of need for the assistance unit when 
        that ineligible person is included in the assistance unit and 
        the MFIP-S family allowance MFIP standard of need for the 
        assistance unit when the ineligible person is not included in 
        the assistance unit.  These allocations must be deducted from 
        the caregiver's counted earnings and from unearned income 
        subject to paragraphs (a) and (b). 
           (a) Income of a minor child in the assistance unit must not 
        be allocated to meet the need of an ineligible person, including 
        the child's parent, even when that parent is the payee of the 
        child's income. 
           (b) Income of a caregiver must not be allocated to meet the 
        needs of a disqualified person. 
           Sec. 44.  Minnesota Statutes 1998, section 256J.37, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEEMED INCOME FROM INELIGIBLE HOUSEHOLD 
        MEMBERS.] Unless otherwise provided under subdivision 1a or 1b, 
        the income of ineligible household members must be deemed after 
        allowing the following disregards: 
           (1) the first 18 percent of the ineligible family member's 
        gross earned income; 
           (2) amounts the ineligible person actually paid to 
        individuals not living in the same household but whom the 
        ineligible person claims or could claim as dependents for 
        determining federal personal income tax liability; 
           (3) all payments made by the ineligible person according to 
        a court order for spousal support or the support of children not 
        living in the assistance unit's household, provided that, if 
        there has been a change in the financial circumstances of the 
        ineligible person since the support order was entered, the 
        ineligible person has petitioned for a modification of the 
        support order; and 
           (4) an amount for the needs of the ineligible person and 
        other persons who live in the household but are not included in 
        the assistance unit and are or could be claimed by an ineligible 
        person as dependents for determining federal personal income tax 
        liability.  This amount is equal to the difference between the 
        MFIP-S transitional MFIP standard of need when the ineligible 
        person is included in the assistance unit and the MFIP-S 
        transitional MFIP standard of need when the ineligible person is 
        not included in the assistance unit. 
           Sec. 45.  Minnesota Statutes 1998, section 256J.37, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [DEEMED INCOME FROM DISQUALIFIED MEMBERS.] The 
        income of disqualified members must be deemed after allowing the 
        following disregards: 
           (1) the first 18 percent of the disqualified member's gross 
        earned income; 
           (2) amounts the disqualified member actually paid to 
        individuals not living in the same household but whom the 
        disqualified member claims or could claim as dependents for 
        determining federal personal income tax liability; 
           (3) all payments made by the disqualified member according 
        to a court order for spousal support or the support of children 
        not living in the assistance unit's household, provided that, if 
        there has been a change in the financial circumstances of the 
        disqualified member's legal obligation to pay support since the 
        support order was entered, the disqualified member has 
        petitioned for a modification of the support order; and 
           (4) an amount for the needs of other persons who live in 
        the household but are not included in the assistance unit and 
        are or could be claimed by the disqualified member as dependents 
        for determining federal personal income tax liability.  This 
        amount is equal to the difference between the MFIP-S 
        transitional MFIP standard of need when the ineligible person is 
        included in the assistance unit and the MFIP-S transitional MFIP 
        standard of need when the ineligible person is not included in 
        the assistance unit.  An amount shall not be allowed for the 
        needs of a disqualified member. 
           Sec. 46.  Minnesota Statutes 1998, section 256J.37, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEEMED INCOME AND ASSETS OF SPONSOR OF 
        NONCITIZENS.] If a noncitizen applies for or receives MFIP-S, 
        the county must deem the income and assets of the noncitizen's 
        sponsor and the sponsor's spouse who have signed an affidavit of 
        support for the noncitizen as specified in Public Law Number 
        104-193, title IV, sections 421 and 422, the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996.  
        The income of a sponsor and the sponsor's spouse is considered 
        unearned income of the noncitizen.  The assets of a sponsor and 
        the sponsor's spouse are considered available assets of the 
        noncitizen.  (a) If a noncitizen applies for or receives MFIP, 
        the county must deem the income and assets of the noncitizen's 
        sponsor and the sponsor's spouse as provided in this paragraph 
        and paragraph (b) or (c), whichever is applicable.  The deemed 
        income of a sponsor and the sponsor's spouse is considered 
        unearned income of the noncitizen.  The deemed assets of a 
        sponsor and the sponsor's spouse are considered available assets 
        of the noncitizen. 
           (b) The income and assets of a sponsor who signed an 
        affidavit of support under title IV, sections 421, 422, and 423, 
        of Public Law Number 104-193, the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996, and the income and 
        assets of the sponsor's spouse, must be deemed to the noncitizen 
        to the extent required by those sections of Public Law Number 
        104-193. 
           (c) The income and assets of a sponsor and the sponsor's 
        spouse to whom the provisions of paragraph (b) do not apply must 
        be deemed to the noncitizen to the full extent allowed under 
        title V, section 5505, of Public Law Number 105-33, the Balanced 
        Budget Act of 1997. 
           Sec. 47.  Minnesota Statutes 1998, section 256J.37, 
        subdivision 9, is amended to read: 
           Subd. 9.  [UNEARNED INCOME.] (a) The county agency must 
        apply unearned income to the transitional MFIP standard of 
        need.  When determining the amount of unearned income, the 
        county agency must deduct the costs necessary to secure payments 
        of unearned income.  These costs include legal fees, medical 
        fees, and mandatory deductions such as federal and state income 
        taxes. 
           (b) Effective July 1, 1999 January 1, 2001, the county 
        agency shall count $100 of the value of public and assisted 
        rental subsidies provided through the Department of Housing and 
        Urban Development (HUD) as unearned income.  The full amount of 
        the subsidy must be counted as unearned income when the subsidy 
        is less than $100. 
           (c) The provisions of paragraph (b) shall not apply to MFIP 
        participants who are exempt from the employment and training 
        services component because they are: 
           (i) individuals who are age 60 or older; 
           (ii) individuals who are suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which is expected to continue for more than 30 days and which 
        prevents the person from obtaining or retaining employment; or 
           (iii) caregivers whose presence in the home is required 
        because of the professionally certified illness or incapacity of 
        another member in the assistance unit, a relative in the 
        household, or a foster child in the household. 
           (d) The provisions of paragraph (b) shall not apply to an 
        MFIP assistance unit where the parental caregiver receives 
        supplemental security income. 
           Sec. 48.  Minnesota Statutes 1998, section 256J.37, 
        subdivision 10, is amended to read: 
           Subd. 10.  [TREATMENT OF LUMP SUMS.] (a) The county agency 
        must treat lump-sum payments as earned or unearned income.  If 
        the lump-sum payment is included in the category of income 
        identified in subdivision 9, it must be treated as unearned 
        income.  A lump sum is counted as income in the month received 
        and budgeted either prospectively or retrospectively depending 
        on the budget cycle at the time of receipt.  When an individual 
        receives a lump-sum payment, that lump sum must be combined with 
        all other earned and unearned income received in the same budget 
        month, and it must be applied according to paragraphs (a) to 
        (c). A lump sum may not be carried over into subsequent months.  
        Any funds that remain in the third month after the month of 
        receipt are counted in the asset limit. 
           (b) For a lump sum received by an applicant during the 
        first two months, prospective budgeting is used to determine the 
        payment and the lump sum must be combined with other earned or 
        unearned income received and budgeted in that prospective month. 
           (c) For a lump sum received by a participant after the 
        first two months of MFIP-S MFIP eligibility, the lump sum must 
        be combined with other income received in that budget month, and 
        the combined amount must be applied retrospectively against the 
        applicable payment month. 
           (d) When a lump sum, combined with other income under 
        paragraphs (b) and (c), is less than the transitional MFIP 
        standard of need for the applicable appropriate payment month, 
        the assistance payment must be reduced according to the amount 
        of the countable income.  When the countable income is greater 
        than the transitional MFIP standard or the family wage 
        standard or family wage level, the assistance payment must be 
        suspended for the payment month. 
           Sec. 49.  Minnesota Statutes 1998, section 256J.38, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RECOUPING OVERPAYMENTS FROM PARTICIPANTS.] A 
        participant may voluntarily repay, in part or in full, an 
        overpayment even if assistance is reduced under this 
        subdivision, until the total amount of the overpayment is 
        repaid.  When an overpayment occurs due to fraud, the county 
        agency must recover ten percent of the transitional applicable 
        standard or the amount of the monthly assistance payment, 
        whichever is less.  When a nonfraud overpayment occurs, the 
        county agency must recover three percent of the transitional 
        MFIP standard of need or the amount of the monthly assistance 
        payment, whichever is less.  
           Sec. 50.  Minnesota Statutes 1998, section 256J.42, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TIME LIMIT.] (a) Except for the exemptions 
        in this section and in section 256J.11, subdivision 2, 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, MFIP-S or from a tribal TANF program, MFIP, AFDC, or 
        family general assistance, funded in whole or in part by state 
        appropriations, is ineligible to receive MFIP-S 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-S 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.  The 60-month limit applies to a 
        minor who is the head of a household or who is married to the 
        head of a household except under subdivision 5.  The 60-month 
        time period does not need to be