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1989 Minnesota Session Laws

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                        CHAPTER 282-H.F.No. 1759 
           An act relating to the organization and operation of 
          state government; appropriating money for human 
          services, jobs and training, corrections, health, 
          veterans nursing homes, and other purposes with 
          certain conditions; amending Minnesota Statutes 1988, 
          sections 13.46, subdivision 2; 16B.06, by adding a 
          subdivision; 43A.27, subdivision 2; 62A.045; 62A.046; 
          62D.041, subdivision 1, and by adding a subdivision; 
          62D.042, subdivision 1; 62D.05, subdivision 6; 
          144.122; 144.50, subdivision 6, and by adding a 
          subdivision; 144.562, subdivisions 2 and 3; 144.651, 
          subdivision 2; 144.698, subdivision 1; 144.701; 
          144.702, subdivision 2, and by adding subdivisions; 
          144A.01, subdivision 5, and by adding subdivisions; 
          144A.04, subdivision 7, and by adding subdivisions; 
          144A.071, subdivision 3; 144A.073, subdivision 1; 
          144A.10, by adding subdivisions; 144A.11, subdivision 
          3, and by adding a subdivision; 144A.12, subdivision 
          1; 144A.15, subdivision 1, and by adding subdivisions; 
          144A.45, subdivision 2; 144A.46; 144A.61; 144A.611; 
          145.38, subdivision 1; 145.39, subdivision 1; 145.61, 
          subdivision 5; 145.63; 145.882, subdivisions 1, 3, and 
          7; 145.894; 146.13; 147.02, subdivision 1; 148B.23, 
          subdivision 1; 148B.27, subdivision 2; 148B.32, 
          subdivision 2; 148B.40, subdivision 3; 149.02; 149.06; 
          153A.13, subdivision 4; 153A.15, subdivision 3; 
          153A.16; 157.14; 176.136, subdivisions 1 and 5; 
          214.04, subdivision 3; 214.06, subdivision 1; 237.70, 
          subdivision 7; 237.701, subdivision 1; 245.461; 
          245.462; 245.463, subdivision 2, and by adding 
          subdivisions; 245.464; 245.465; 245.466, subdivisions 
          1, 2, 5, and 6; 245.467, subdivisions 3, 4, and 5; 
          245.468; 245.469; 245.470, subdivision 1; 245.472, 
          subdivision 1, and by adding a subdivision; 245.473, 
          subdivision 1; 245.474; 245.476, subdivisions 1, 3, 
          and by adding subdivisions; 245.477; 245.478, 
          subdivisions 2 and 3; 245.479; 245.48; 245.482; 
          245.483; 245.484; 245.485; 245.486; 245.62, 
          subdivision 3; 245.696, subdivision 2; 245.697, 
          subdivisions 1, 2, and 2a; 245.713, subdivision 2; 
          245.73, subdivisions 1, 2, and 4; 245.771, subdivision 
          3; 245.91, by adding a subdivision; 245.94, 
          subdivision 1, and by adding a subdivision; 245A.02, 
          subdivisions 3, 9, 10, 14, and by adding subdivisions; 
          245A.03, subdivisions 1, 2, and 3; 245A.04, 
          subdivisions 1, 3, 5, 6, 7, and by adding 
          subdivisions; 245A.06, subdivisions 1, 5, and by 
          adding a subdivision; 245A.07, subdivision 2; 245A.08, 
          subdivision 5; 245A.095; 245A.12; 245A.13; 245A.14, 
          subdivision 3, and by adding subdivisions; 245A.16, 
          subdivision 1; 246.18, subdivision 4, and by adding a 
          subdivision; 246.36; 246.50, subdivisions 3, 4, and 5; 
          246.51, by adding a subdivision; 246.54; 246.57, 
          subdivision 1; 251.011, subdivision 4, and by adding a 
          subdivision; 252.025, by adding a subdivision; 252.27, 
          subdivision 1; 252.291, subdivision 2; 252.31; 252.41, 
          subdivision 9; 252.46, subdivisions 1, 2, 3, 4, 6, and 
          12; 252.47; 252.50; 252A.03, by adding a subdivision; 
          253.015; 253B.03, subdivision 6a; 254A.08, subdivision 
          2; 254B.02, subdivision 1; 254B.03, subdivisions 1 and 
          4; 254B.04, by adding a subdivision; 254B.06, 
          subdivision 1; 254B.09, subdivisions 1, 4, and 5; 
          256.01, subdivision 2, and by adding a subdivision; 
          256.014, subdivision 1; 256.018; 256.045, subdivisions 
          1, 3, 4, 4a, 5, 6, 7, 10, and by adding a subdivision; 
          256.12, subdivision 14; 256.73, subdivision 3a; 
          256.736, subdivisions 3, 3b, 4, 10, 11, 14, 16, and by 
          adding subdivisions; 256.737; 256.74, subdivisions 1, 
          1a, and by adding a subdivision; 256.85; 256.87, 
          subdivision 1a; 256.936, subdivisions 1, 2, and 4; 
          256.969; 256.974; 256.9741, subdivisions 3, 5, and by 
          adding a subdivision; 256.9742; 256.9744, subdivision 
          1; 256.975, subdivision 2; 256B.031, subdivision 5; 
          256B.04, subdivision 14, and by adding a subdivision; 
          256B.055, subdivisions 7 and 8; 256B.056, subdivisions 
          3, 4, and 5; 256B.062; 256B.0625, subdivisions 2, 13, 
          17, and by adding subdivisions; 256B.091, subdivision 
          3; 256B.092, subdivisions 7 and 8; 256B.14; 256B.25, 
          by adding a subdivision; 256B.421, subdivision 14; 
          256B.431, subdivisions 2b, 2e, 2i, 3a, 3f, 3g, 4, and 
          by adding subdivisions; 256B.47, subdivision 3; 
          256B.48, subdivisions 1, 6, and 8; 256B.501, 
          subdivisions 3, 3g, and by adding a subdivision; 
          256B.69, subdivisions 4, 5, 11, and by adding a 
          subdivision; 256C.28, subdivision 3, and by adding 
          subdivisions; 256D.01, subdivisions 1, 1a, 1b, and 1c; 
          256D.02, subdivisions 1, 4, and by adding a 
          subdivision; 256D.03, subdivisions 2, 3, and 4; 
          256D.05, subdivision 1, and by adding a subdivision; 
          256D.051, subdivisions 1, 2, 3, 6, 8, 13, and by 
          adding subdivisions; 256D.052, subdivisions 1, 2, 3, 
          and 4; 256D.101; 256D.111, subdivision 5; 256D.35, 
          subdivisions 1, 7, and by adding subdivisions; 
          256D.36, subdivision 1, and by adding a subdivision; 
          256D.37, subdivision 1; 256E.03, subdivision 2; 
          256E.05, subdivision 3; 256E.08, subdivision 5; 
          256E.09, subdivisions 1 and 3; 256F.05, subdivisions 
          2, 3, and 4; 256G.03, subdivision 1; 256H.01, 
          subdivisions 1, 2, 7, 8, 11, and 12; 256H.02; 256H.03; 
          256H.05; 256H.07, subdivision 1; 256H.08; 256H.09; 
          256H.10, subdivision 3, and by adding a subdivision; 
          256H.11; 256H.12; 256H.15; 256H.18; 256H.20, 
          subdivision 3; 257.071, subdivision 7; 257.55, 
          subdivision 1; 257.57, subdivision 1; 257.62, 
          subdivision 5; 259.47, subdivision 5; 259.49, 
          subdivision 2; 260.251, subdivision 1; 268.0111, 
          subdivision 4, and by adding a subdivision; 268.0122, 
          subdivisions 2 and 3; 268.08, subdivision 1; 268.31; 
          268.37, by adding a subdivision; 268.86, subdivision 
          2; 268.871, subdivision 5; 268.88; 287.12; 297.13, 
          subdivision 1; 326.78, subdivision 2; 327C.02, 
          subdivision 2; 357.021, subdivisions 2 and 2a; 517.08, 
          subdivisions 1b and 1c; 518.54, subdivision 6; 
          518.551, subdivision 10, and by adding a subdivision; 
          518.611, subdivision 4; 518.613, subdivisions 1, 2, 4, 
          and by adding subdivisions; 540.08; 609.378; 626.556, 
          subdivisions 2 and 10e; and 626.558; Laws 1984, 
          chapter 654, article 5, section 57, subdivision 1, as 
          amended; Laws 1987, chapter 403, article 3, section 
          98; Laws 1988, chapter 689, article 2, sections 248 
          and 269, subdivision 2; Laws 1988, chapter 719, 
          article 8, section 32; proposing coding for new law in 
          Minnesota Statutes, chapters 144; 144A; 145; 157; 196; 
          245; 246; 251; 252; 253; 254A; 256; 256B; 256D; 256E; 
          256F; 256H; 259; 268; and 626; proposing coding for 
          new law as Minnesota Statutes, chapter 256I; repealing 
          Minnesota Statutes 1988, sections 144A.10, subdivision 
          4a; 144A.61, subdivision 6; 245.462, subdivision 25; 
          245.471; 245.475; 245.64; 245.698; 245.83; 245.84; 
          245.85; 245.871; 245.872; 245.873; 245A.095, 
          subdivision 3; 246.50, subdivisions 3a, 4a, and 9; 
          254B.09, subdivision 3; 254B.10; 256.87, subdivision 
          4; 256.969, subdivisions 2a, 3, 4, 5, and 6; 
          256B.0625, subdivision 21; 256B.17, subdivisions 1, 2, 
          3, 4, 5, 6, 7, and 8; 256B.69, subdivisions 12, 13, 
          14, and 15; 256D.01, subdivision 1c; 256D.051, 
          subdivision 6a; 256D.052, subdivisions 5, 6, and 7; 
          256D.06, subdivisions 3, 4, 6, and 6a; 256D.35, 
          subdivisions 2, 3, 4, and 8; 256D.36, subdivision 2; 
          256D.37, subdivisions 2, 4, 6, 7, 8, 9, 10, 11, 12, 
          13, and 14; 256D.38; 256D.39; 256D.41; 256D.42; 
          256D.43; 256F.05, subdivision 1; 256H.04; 256H.05, 
          subdivision 4; 256H.06; 256H.07, subdivisions 2, 3, 
          and 4; 256H.13; 268.86, subdivision 7; 518.613, 
          subdivision 5; Laws 1987, chapter 403, article 5, 
          section 1; Laws 1988, chapter 689, article 2, section 
          269, subdivision 4; Laws 1988, chapter 719, article 8, 
          section 34. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                             APPROPRIATIONS 
    Section 1.  [HUMAN RESOURCES; 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 act, to be available for the fiscal years 
indicated for each purpose.  The figures "1989," "1990," and 
"1991," where used in this act, mean that the appropriation or 
appropriations listed under them are available for the year 
ending June 30, 1989, June 30, 1990, or June 30, 1991, 
respectively.  

                            SUMMARY BY FUND 
                         1990           1991           TOTAL 
General  
                   $1,306,847,000  $1,361,394,000  $2,668,241,000
Special Revenue
                   $    5,345,000  $     5,391,000 $   10,736,000
Metropolitan
  Landfill
                   $      167,000  $       167,000 $      334,000
Trunk Highway
                   $    1,488,000  $     1,488,000 $    2,976,000
Total
                   $1,313,847,000  $ 1,368,440,000 $2,682,287,000
                                           APPROPRIATIONS
                                       Available for the Year
                                          Ending June 30,
                                          1990        1991
     Sec. 2.  COMMISSIONER OF HUMAN 
SERVICES 
     Subdivision 1.  Appropriation by 
Fund 
General Fund                         1,104,499,000  1,160,516,000
 The amounts that may be spent from this 
appropriation for each program and 
activity are more specifically 
described in the following subdivisions.
 During the biennium ending June 30, 
1991, the commissioner shall notify the 
chairs of the house health and human 
services appropriations committee and 
the senate health and human services 
finance committee whenever 
implementation of legislation by the 
department is likely to result in 
expenditures $1,000,000 or more than 
the amount authorized by the 
legislature. 
 Federal money received in excess of the 
estimates shown in the 1989 department 
of human services budget document 
reduces the state appropriation by the 
amount of the excess receipts, unless 
otherwise directed by the governor, 
after consulting with the legislative 
advisory commission.  
 For the fiscal year ending June 30, 
1989, the appropriations for the 
medical assistance and general 
assistance medical care programs in 
Laws 1988, chapter 689, article 1, 
section 2, subdivision 5, paragraph 
(a), are increased by the amount 
necessary to fully cover the 
expenditure requirements of these 
programs. 
 For the biennium ending June 30, 1991, 
federal receipts as shown in the 
biennial budget document or in working 
papers of the two appropriations 
committees to be used for financing 
activities, programs, and projects 
under the supervision and jurisdiction 
of the commissioner must be accredited 
to and become a part of the 
appropriations provided for in this 
section. 
 Positions and administrative money may 
be transferred within the department of 
human services as the commissioner 
considers necessary, with the advance 
approval of the commissioner of finance.
 Estimates of federal money that will be 
earned by the various accounts of the 
department of human services and 
deposited in the general fund are 
detailed on the worksheets of the 
conferees of the senate and house of 
representatives, a true copy of which 
is on file in the office of the 
commissioner of finance.  If federal 
money anticipated is less than that 
shown on the official worksheets, the 
commissioner of finance shall reduce 
the amount available from the direct 
appropriation a corresponding amount. 
The reductions must be noted in the 
budget document submitted to the 77th 
legislature in addition to an estimate 
of similar federal money anticipated 
for the biennium ending June 30, 1993. 
 The commissioner of human services, 
with the approval of the commissioner 
of finance and by direction of the 
governor after consulting with the 
legislative advisory commission, may 
transfer unencumbered appropriation 
balances among the aid to families with 
dependent children, general assistance, 
general assistance medical care, 
medical assistance, Minnesota 
supplemental aid, and work readiness 
programs and between fiscal years of 
the biennium. 
During the biennium ending June 30, 
1991, the commissioner shall report 
annually to the chair of the house of 
representatives appropriations 
committee and the chair of the senate 
finance committee regarding information 
systems authorized under Minnesota 
Statutes, section 256.014, subdivision 
3, including implementation schedules, 
the nature and amount of systems 
expenditures, projected and actual 
savings, evidence of 
cost-effectiveness, comparison with 
anticipated program goals and 
objectives, impact on affected 
consumers and providers, and future 
development plans. 
 For the biennium ending June 30, 1991, 
information system project 
appropriations for development and 
federal receipts for the alien 
verification entitlement system must be 
deposited in the special systems 
account authorized in Minnesota 
Statutes, section 256.014.  Money 
appropriated for computer projects 
approved by the Information Policy 
Office, funded by the legislature, and 
approved by the commissioner of finance 
may be transferred from one project to 
another and from development to 
operations as the commissioner 
considers necessary.  Any unexpended 
balance in the appropriation for these 
projects does not cancel in the first 
year but is available in the second 
year of the biennium. 
     Subd. 2.  Human Services 
Administration                          12,985,000   11,174,000 
 The state planning agency, the 
department of human services, and the 
department of finance shall conduct a 
study to determine the extent to which 
changes in health care program 
rate-setting rules are increasing state 
expenditures beyond the amount 
appropriated for the programs and 
report to the legislature by February 
1, 1990, regarding possible changes in 
state law to prevent major increases in 
state expenditures through the 
rulemaking process. 
     Subd. 3.  Legal and 
Intergovernmental Programs               4,182,000    4,274,000 
 By January 1, 1990, the commissioner 
shall report to the legislature 
regarding the activities and 
effectiveness of the county community 
service evaluation staff, including 
additional funding necessary to 
continue the function if the report 
indicates the activities have improved 
or have the potential to improve 
delivery of county social services. 
     Subd. 4.  Social Services         120,519,000  124,284,000 
For the biennium ending June 30, 1991, 
this appropriation includes one 
position in fiscal year 1990 and two 
positions in fiscal year 1991 which are 
to be regionally based positions to 
assist in developing privately and 
publicly operated services for persons 
with developmental disabilities who are 
being relocated from regional treatment 
centers.  The four positions authorized 
to improve the quality of regional 
treatment center services must also be 
regionally based. 
By February 15, 1990, the board on 
aging shall submit a report to the 
legislature containing an analysis of 
the need for expanding congregate 
housing services and an evaluation of 
existing congregate housing service 
programs. 
During the biennium ending June 30, 
1991, juvenile detention facilities 
must provide or arrange for a chemical 
use assessment for juveniles who 
request such an assessment and for 
juveniles petitioned or adjudicated for 
alcohol- or drug-related unlawful acts 
in juvenile court. 
 For the biennium ending June 30, 1991, 
any balance remaining in the first year 
for the nonrecurring adoption expense 
reimbursement appropriation does not 
cancel, but is available for the second 
year of the biennium. 
 For the biennium ending June 30, 1991, 
$447,000 each year of the county 
allocation for Title XX community 
social services is for migrant child 
care.  
For the biennium ending June 30, 1991, 
one complement position in the 
department of human services program 
for administration of child care fund 
grants shall be for the purpose of 
coordinating and expediting the review 
of applications and for expediting the 
dispersal of funds to grantees of child 
care service development grants. 
By September 1, 1991, the Higher 
Education Coordinating Board shall 
report to the legislature on the 
percentage of non-AFDC, post-secondary 
funds expended for administrative 
purposes during fiscal year 1990. 
 In the event that money appropriated 
for foster care liability insurance for 
fiscal year 1990 is insufficient to 
cover increased premium costs in that 
year, the commissioner may use funds 
appropriated for fiscal year 1991 to 
cover the costs. 
 By July 1, 1990, each county shall 
report to the commissioner on efforts 
made to implement Minnesota Statutes, 
section 256F.07, subdivision 3a, 
regarding placement prevention and 
family reunification services for 
minority children.  The report must 
include specific information on the 
number of foster and adoptive 
placements involving minority children, 
including information on the number of 
minority families who have become 
foster or adoptive parents and the 
number of minority families who have 
left the foster family system, with 
reasons for their departure from the 
system.  The commissioner shall report 
to the legislature by November 1, 1990, 
with a summary and analysis of the 
county reports and an evaluation of 
county efforts. 
 In the event that the commissioner 
determines that the duties of regional 
services specialists have been assumed 
by county case managers and screening 
teams established under Minnesota 
Statutes, section 256B.092, subdivision 
7, the commissioner may reassign the 
regional services specialists to other 
duties. 
     Subd. 5.  Mental Health            21,555,000   25,572,000
Funding to continue the family-based 
community support pilot project shall 
be included as a base adjustment in the 
fiscal year 1992 and 1993 detailed 
expenditure budget submitted to the 
legislature under Minnesota Statutes, 
section 16A.11.  The funding level 
shall be adjusted to reflect the full 
biennial costs of operating the project.
Of this appropriation, $10,000 is for 
camping activities for people with 
mental illness from the mental health 
special project account. 
Of this appropriation, $53,000 is for 
the depression awareness, recognition, 
and treatment program from the mental 
health special projects account. 
 Of the appropriation for therapeutic 
foster care programs, one grant must be 
awarded to Olmsted county for an 
existing program. 
 The commissioner may, with the written 
approval of the governor after 
consulting with the legislative 
advisory commission, transfer all or 
part of the appropriation for 
alternative placements for persons who 
must be moved out of nursing homes due 
to federal requirements to other 
appropriations if the commissioner 
determines that other funding 
mechanisms will more appropriately meet 
the needs of the persons being moved. 
     Subd. 6.  Family Support 
Programs                               181,169,000  189,755,000 
 The amounts that may be spent from this 
appropriation for each activity are as 
follows:  
(a) Aid to Families with Dependent 
Children, General Assistance, Work 
Readiness, Minnesota Supplemental Aid 
  $154,500,000  $156,236,000 
The commissioner shall set the monthly 
standard of assistance for general 
assistance and work readiness 
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 $100,000 appropriated for literacy 
training for the biennium ending June 
30, 1991, shall be used for pilot 
demonstration projects.  Each grantee 
of funds must report back to the 
commissioner of human services at the 
end of the grant period with a summary 
of expenditures and a detailed analysis 
of persons served, literacy programs 
used, and outcomes achieved.  The 
commissioner shall report back to the 
legislature by January 1, 1992, with an 
evaluation of the program. 
The commissioner of human services 
shall include as a budget change 
request in the fiscal year 1992 and 
1993 detailed expenditure budget 
submitted to the legislature under 
Minnesota Statutes, section 16A.11, an 
annual adjustment in the aid to 
families with dependent children, 
general assistance, and work readiness 
grants as of July 1 of each year, 
beginning July 1, 1991, by a percentage 
amount equal to the percentage 
increase, if any, in the consumer price 
index (CPI-U-U.S.) city average, as 
published by the Bureau of Labor 
Statistics, United States Department of 
Labor, during the preceding calendar 
year for the biennium ending June 30, 
1993. 
 During the biennium ending June 30, 
1991, the commissioner of human 
services shall provide supplementary 
grants not to exceed $816,800 a year 
for aid to families with dependent 
children and include the following 
costs in determining the amount of the 
supplementary grants:  major home 
repairs; repair of major home 
appliances; utility recaps; 
supplementary dietary needs not covered 
by medical assistance; replacement of 
essential household furnishings and 
essential major appliances; and 
employment-related transportation and 
educational expenses.  Of this amount, 
$616,800 is for employment-related 
transportation and educational expenses.
 For the biennium ending June 30, 1991, 
the maximum room and board rate for a 
facility that enters into an initial 
negotiated rate agreement with a county 
on or after June 1, 1989, may not 
exceed 90 percent of the maximum rate 
established under Minnesota Statutes, 
section 256D.37. 
(b) Family Support Programs  
Administration 
  $ 26,669,000  $ 33,519,000 
Federal financial reimbursement 
received during fiscal year 1989 for 
work readiness services expenditures by 
counties must be credited to the work 
readiness account and is appropriated 
to the commissioner of human services 
for work readiness program purposes.  
Amounts not needed to reimburse 
counties must be canceled to the 
general fund. 
 Any balance remaining in the first year 
for the welfare fraud eligibility 
verification program appropriation does 
not cancel but is available in the 
second year of the biennium ending June 
30, 1991. 
 In implementing the requirements of 
Minnesota Statutes, section 256.01, 
subdivision 2, clause (c), the 
commissioner shall develop specific 
program measures to assess county 
compliance with fraud initiatives and 
provide technical assistance to enforce 
fraud program requirements. 
 Any balance remaining at the end of the 
first year in the appropriation for 
social adjustment services for refugees 
and child welfare services for refugees 
does not cancel but is available for 
the second year. 
 Money appropriated in Laws 1988, 
chapter 689, article 1, section 2, 
subdivision 5, for food stamp outreach 
programs does not cancel to the general 
fund but is available in fiscal year 
1990. 
 Federal financial participation 
received during fiscal year 1989 for 
work readiness service expenditures is 
appropriated to the commissioner for 
work readiness program purposes and 
must be used to reimburse counties for 
work readiness expenditures. 
 For the biennium ending June 30, 1991, 
federal food stamp employment and 
training funds received for the work 
readiness program are appropriated to 
the commissioner to reimburse counties 
for work readiness service expenditures.
 During the biennium ending June 30, 
1991, money appropriated from the 
general fund to the department of human 
services for the work incentive program 
shall transfer to the job opportunity 
and basic skills program upon 
acceptance by the federal government of 
Minnesota's welfare reform plan. 
 Any unexpended balance remaining in the 
first year of the appropriation for the 
AFDC self-employment investment 
demonstration project appropriation 
does not cancel but is available for 
the second year of the biennium. 
 For the biennium ending June 30, 1991, 
federal funds received for direct 
employment services provided to 
refugees and immigrants is appropriated 
to the commissioner to provide 
bicultural employment service case 
managers to PATHS eligible refugees and 
immigrants.  The commissioner of human 
services shall review expenditures of 
bilingual case management funds at the 
end of the third quarter of the second 
year of the biennium and may reallocate 
unencumbered funds to those counties 
which can demonstrate a need for 
additional funds.  Funds shall be 
reallocated according to the same 
formula used initially to allocate 
funds to counties. 
 Any unexpended balance up to $2,000,000 
remaining in the first year for the 
PATHS case management and employment 
and training services appropriation 
does not cancel and is available for 
the second year of the biennium ending 
June 30, 1991. 
 In planning for the operation of the 
child support enforcement clearinghouse 
information system, the commissioner 
shall issue a request for a proposal 
for the operation of the system and, in 
consultation with the information 
policy office, review responses to the 
solicitation.  After review of the 
proposals, the commissioner may award a 
service contract for operation of the 
system or continue processing through 
the department of administration.  In 
the event the projected costs for 
systems operation exceed the available 
appropriation, the commissioner shall 
notify the chairs of the house health 
and human services division of 
appropriations and the senate health 
and human services division of finance. 
 For the child support enforcement 
activity, during the biennium ending 
June 30, 1991, money received from the 
counties for providing data processing 
services must be deposited in that 
activity's account.  The money is 
appropriated to the commissioner for 
the purposes of the child support 
enforcement activity. 
 Federal financial participation from 
the United States Department of 
Agriculture for expenditures that are 
eligible for reimbursement through the 
food stamp employment and training 
program for nonpublic assistance 
recipients is appropriated to the 
commissioner to operate the food stamp 
employment and training program for 
nonpublic assistance recipients. 
 For the biennium ending June 30, 1991, 
federal money received for the 
operating costs of the statewide MAXIS 
automated eligibility information 
system is appropriated to the 
commissioner to pay for the development 
and operation of the MAXIS system and 
the counties' share of the operating 
costs.  
     Subd. 7.  Health Care Programs 
General Fund                           553,384,000  593,448,000
 The amounts that may be spent from this 
appropriation for each activity are as 
follows: 
(a) Medical Assistance and General 
Assistance Medical Care      
  $506,808,000  $545,894,000 
 The developmental achievement center 
pilot payment rate system in Minnesota 
Statutes, section 252.46, subdivision 
14, may operate through June 30, 1991. 
 The commissioner of human services 
shall seek federal financial 
participation to reimburse the costs of 
family therapy necessary to the mental 
health of an adoptive child who prior 
to adoption had been under the 
guardianship of the commissioner under 
Minnesota Statutes, section 260.242. 
Notwithstanding any law to the 
contrary, the commissioner shall 
include as budget change requests in 
the fiscal year 1992 and 1993 detailed 
expenditure budget submitted to the 
legislature under Minnesota Statutes, 
section 16A.11, all annual inflationary 
adjustments in the medical assistance, 
general assistance medical care, and 
Minnesota supplemental aid programs. 
 Of this appropriation, $300,000 in 
fiscal year 1991 is for the increased 
costs of exceptions to the moratorium 
on licensure and certification of 
long-term care beds.  The commissioner 
of health may license or certify beds 
through the exception review process, 
provided the projected total annual 
increased state medical assistance 
costs of all licenses or certifications 
granted during the biennium under any 
exception to the moratorium do not 
exceed an annual amount of $300,000. 
The amount appropriated for medical 
assistance is based on projected 
inflationary increases for Minnesota 
nursing homes of 5.1 percent the first 
year and 5.2 percent the second year.  
The inflationary increases are required 
under current law in Minnesota 
Statutes, chapter 256B.  The projected 
increases include increases of 4.8 
percent the first year and 5.1 percent 
the second year for nursing home wages, 
including nursing staff wages.  The 
projected state general fund cost for 
inflationary increases is $11,314,000 
the first year and $19,821,000 the 
second year.  The actual inflationary 
increases will be based on the index 
established under Minnesota Statutes, 
chapter 256B.  The commissioner shall 
annually report, in the manner 
prescribed by the commissioner, on the 
home's use of that portion of the 
inflationary increase that is 
attributable to the wage increase. 
 During the biennium ending June 30, 
1991, the commissioner may determine 
the need for conversion of a home and 
community-based service program to an 
intermediate care facility for people 
with mental retardation if the 
conversion is cost-effective and the 
people receiving home and 
community-based services choose to 
receive services in an intermediate 
care facility for people with mental 
retardation.  After the commissioner 
has determined the need to convert the 
program, the commissioner of health 
shall certify the program as an 
intermediate care facility for people 
with mental retardation if the program 
meets applicable certification 
standards.  Notwithstanding the 
provisions of Minnesota Statutes, 
section 246.18, receipts collected for 
state-operated community services are 
appropriated to the commissioner and 
are dedicated to the operation of 
state-operated community services which 
are converted in this section or which 
were authorized in Laws 1988, chapter 
689, article 1, section 2, subdivision 
5.  Any balance remaining in this 
account at the end of the fiscal year 
does not cancel and is available for 
the second year of the biennium.  The 
commissioner may, after consultation 
with the legislative advisory 
commission and approval of the 
governor, transfer funds from the 
Minnesota supplemental aid program to 
the medical assistance program to fund 
services converted under this section. 
The maximum pharmacy dispensing fee 
under medical assistance and general 
assistance medical care is $4.20. 
Payments to vendors for physician 
services, dental care, vision care, 
podiatric services, chiropractic care, 
physical therapy, occupational therapy, 
speech pathologists, audiologists, 
mental health centers, psychologists, 
public health clinics, and independent 
laboratory and X-ray services in either 
the medical assistance or general 
assistance medical care programs must 
continue to be calculated at the lower 
of (1) the submitted charges, or (2) 
the 50th percentile of prevailing 
charges in 1982. 
 Effective with services rendered on or 
after July 1, 1989, payments to 
dentists for medical assistance 
recipients shall be increased by 7.5 
percent for diagnostic and routine 
preventive services and by five percent 
for all other dental services. 
 Federal money received during the 
biennium for administration of the home 
and community-based services waiver for 
persons with mental retardation is 
appropriated to the commissioner of 
human services for administration of 
the home and community-based services 
program and must be deposited in that 
activity's account. 
(b) Preadmission Screening and 
Alternative Care Grants
  $16,530,000   $16,530,000 
 Any balance remaining in the first year 
of the appropriation for the 
preadmission screening-alternative care 
grants program does not cancel but is 
available for the second year. 
 During the biennium ending June 30, 
1991, the commissioner shall include in 
the forecast of health care entitlement 
program expenditures submitted to the 
commissioner of finance and the 
legislature, an estimate of projected 
expenditures for that portion of the 
preadmission screening and alternative 
care grant funded through the medical 
assistance program. 
(c) Children's Health Plan 
   $ 4,297,000   $ 6,736,000 
 Of this appropriation, $20,000 in 
fiscal year 1990 is for a study of the 
utilization of outpatient mental health 
services by children eligible for 
medical assistance.  The results of the 
study must be used to prepare 
recommendations for the legislature to 
structure an appropriate and 
cost-effective outpatient mental health 
benefit under the children's health 
plan.  $480,000 in fiscal year 1991 is 
appropriated to add an outpatient 
mental health benefit to the children's 
health plan in fiscal year 1991. 
(d) Health Care Programs 
Administration 
  $25,749,000   $24,288,000 
For the biennium ending June 30, 1991, 
$200,000 in fiscal year 1990 and 
$200,000 in fiscal year 1991 is 
appropriated for contracting with 
private or public entities for case 
management services for those medical 
assistance and general assistance 
recipients identified by the 
commissioner as inappropriately using 
health care services.  To implement the 
project, the commissioner shall seek 
appropriate waivers.  The commissioner 
may enter into risk-based contracts and 
contract for a full range of health 
services for medical assistance and 
general assistance medical care 
recipients.  Federal receipts received 
for this purpose shall be dedicated to 
this activity. 
 By February 1, 1990, the commissioner 
may develop a plan to minimize turnover 
of direct care employees in privately 
operated day training and habilitation 
services, intermediate care facilities 
for persons with mental retardation, 
semi-independent living services, and 
waivered services programs.  The plan 
must be provided to the chairs of the 
health and human services divisions of 
the senate finance committee and the 
house of representatives appropriations 
committee.  The plan must specify the 
amount of appropriations required to 
implement the plan and may provide for 
a phase-in period of up to five years.  
The commissioner may develop the plan 
in collaboration with representatives 
of public and private facilities and 
service providers, clients and family 
members, advocacy organizations, 
employees, and other interested persons 
and organizations. 
 During the biennium ending June 30, 
1991, the appropriation in the 
preadmission screening and annual 
resident review account shall be used 
to cover the nonfederal share of costs 
for conducting diagnostic assessments, 
reassessments, and screening which are 
required by Public Law Number 100-203 
and which are federally reimbursable as 
a state medical assistance expense at 
75 percent.  This provision is 
effective July 1, 1989, and does not 
include screening costs covered under 
Minnesota Statutes, section 256B.091.  
Federal receipts for this activity are 
dedicated to the department for this 
purpose.  
The interagency board for quality 
assurance shall study the following 
issues and report to the legislature by 
November 1, 1990, on its findings and 
recommendations:  (1) identifying 
indicators of high quality long-term 
care service provided in Minnesota 
nursing homes and boarding care homes; 
and (2) establishing a program of 
incentive payments to reward nursing 
facilities that provide the highest 
quality care to residents.  A study 
advisory committee consisting of 
nursing home consumers and 
representatives of the nursing home 
industry must be appointed by the 
executive director of the interagency 
board for quality assurance to 
participate in the study process. 
 The commissioner shall work with Care 
Providers of Minnesota, the Minnesota 
Association of Homes for the Aging, and 
consumer groups to seek assistance from 
the Minnesota congressional delegation 
and the United States Department of 
Health and Human Services to obtain 
recognition of the Minnesota case mix 
system as an alternative to the current 
Medicare payment system, or other 
appropriate solutions.  The 
commissioner shall report to the 
legislative commission on long-term 
care by November 1, 1989, regarding 
efforts to resolve the conflicts 
between the Medicare and medical 
assistance nursing home reimbursement 
systems.  The commissioner shall report 
on the extent of the conflict and the 
potential impact on Minnesota nursing 
homes and shall make recommendations 
regarding necessary state and federal 
actions. 
 Recoveries obtained by the provider 
appeals unit shall be dedicated to the 
medical assistance account during the 
biennium ending June 30, 1991. 
 Federal receipts received for the 
phone-in system for prior authorization 
for health care providers and the 
provider relations unit within the 
health care management division are 
appropriated to the commissioner for 
those purposes. 
 The receipts realized for the sale of 
the provider manual are appropriated to 
the commissioner for printing and 
distribution of the materials. 
 Any balance remaining in the first year 
of the appropriation for the review of 
medical assistance prepayment programs 
does not cancel but is available for 
the second year.  
 Of this appropriation, $45,000 each 
year is for the establishment of a 
statewide resource center on caregiver 
support and respite care services.  The 
complement of the department is 
increased by one position for this 
purpose.  This appropriation and 
complement increase are not included in 
the base funding level.  The 
commissioner shall report to the 
legislature by February 15, 1990, with 
an analysis of the activities of the 
resource center, information on the 
need for respite care services, a 
projection of the need for respite care 
services, and an evaluation of existing 
caregiver support and respite care 
programs. 
 Money appropriated in Laws 1988, 
chapter 689, article 1, section 2, 
subdivision 5, for a regional 
demonstration project to provide health 
care coverage to low-income uninsured 
persons does not cancel but is 
available for fiscal year 1990.  The 
appropriation is available when 
planning for the project is complete, 
sufficient money has been committed 
from nonstate sources to allow the 
project to proceed, and the project is 
prepared to begin accepting and 
approving applications from uninsured 
individuals.  The commissioner shall 
contract with the coalition formed for 
the nine counties named in Minnesota 
Statutes, section 256B.73, subdivision 
2. 
 The MA and GAMC managed care project 
shall continue through June 30, 1990. 
     Subd. 8.  State Residential 
Facilities                             210,705,000  212,009,000
 The amounts that may be spent from this 
appropriation for each activity are as 
follows: 
(a) Regional Treatment Centers and 
State-operated Community Services 
            Approved Complement 
      June 30, 1990     June 30, 1991 
          4,763             4,687
(1) Salaries
  $169,617,000  $169,005,000
(2) Current Expense 
  $ 14,150,000  $ 15,699,000
(3) Repairs and Betterments
  $  2,772,000  $  1,772,000
(4) Special Equipment
  $    680,000  $  1,150,000
(5) Personnel Mitigation 
  $     -0-     $  2,000,000 
 Money appropriated for personnel 
mitigation expenses in fiscal year 1991 
may be used to cover expenses occurring 
in fiscal year 1990. 
 The commissioner shall prepare and 
present a plan to the legislature by 
February 15, 1990, on methods of 
increasing the use of staff and 
resources at the Willmar Regional 
Treatment Center to serve children with 
severe emotional disturbance who would 
otherwise be placed in treatment in 
other states. 
 Regional treatment center and 
state-operated nursing home employees, 
except temporary or emergency 
employees, affected by changes in the 
department of human services delivery 
system must receive, along with other 
options, priority consideration in 
order to transfer to vacant or newly 
created positions at the Minneapolis 
and Hastings veterans homes and at 
facilities operated by the commissioner 
of corrections.  The veterans homes 
board, in cooperation with the 
commissioners of human services and 
corrections, shall develop procedures 
to facilitate these transfers. 
 The legislative audit commission shall 
evaluate the regional treatment center 
systems project and report findings and 
recommendations to the chair of the 
house health and human services 
division of appropriations and the 
senate health and human services 
division of finance by January 15, 1992.
 Provided there is no conflict with any 
collective bargaining agreement, any 
regional treatment center or state 
nursing home reduction in the human 
services technician classifications and 
other nonprofessional, nonsupervisory 
direct care positions must only be 
accomplished through attrition, 
transfers, and retirement and must not 
be accomplished through layoff, unless 
the position reduction is due to the 
relocation of residents to a different 
state facility and the employee 
declines to accept a transfer to a 
comparable position in another state 
facility. 
 Any regional treatment center employee 
position identified as being vacant by 
the regional treatment center and the 
commissioner of human services may only 
be declared so after review of the 
chair of the house human services 
division of appropriations and the 
chair of the senate health and human 
services division of finance. 
 The legislative auditor shall study the 
admission and discharge policies for 
persons with mental retardation or 
related conditions in regional 
treatment centers, state-operated 
community-based services, and privately 
operated facilities and report to the 
legislature by February 1, 1990. 
 Notwithstanding any other law to the 
contrary, the commissioner may transfer 
money between nonsalary object of 
expenditure classes to salary object of 
expenditure classes for staff training 
and personnel mitigation during the 
biennium ending June 30, 1991.  
 With the approval of the commissioner 
of finance, the commissioner of human 
services may transfer any unencumbered 
balance from any department account, 
except an income maintenance 
entitlement account, to the regional 
treatment salary account during fiscal 
year 1989.  The amounts transferred 
must be identified to the chairs of the 
senate finance division on health and 
human services and the house 
appropriations division on health and 
human services.  
 For the biennium ending June 30, 1991, 
this appropriation includes $40,000 in 
the second year to be transferred to 
the commissioner of health for 
licensure of additional community-based 
supervised living facilities. 
During the biennium ending June 30, 
1991, employees of residential 
facilities who are eligible for 
retraining funds may use those funds to 
attend an approved program in any 
public or private adult education or 
post-secondary institution. 
Of this appropriation, $546,000 each 
year shall be available to the 
commissioner for contingency situations 
related to chemical dependency programs 
operated by regional treatment centers 
during the biennium ending June 30, 
1991. 
The commissioner shall consolidate both 
program and support functions at each 
of the regional centers and state 
nursing homes to ensure efficient and 
effective space utilization that is 
consistent with applicable licensing 
and certification standards.  The 
commissioner may transfer residents and 
positions between the regional center 
and state nursing home system as 
necessary to promote the most efficient 
use of available state buildings.  
Surplus buildings shall be reported to 
the commissioner of administration for 
appropriate disposition according to 
Minnesota Statutes, section 16B.24. 
 Any unencumbered balances in special 
equipment and repairs and betterments 
remaining in the first year do not 
cancel but are available for the second 
year of the biennium.  
(b) Nursing Homes
     Approved Complement - 569.5   534.5
(1) Salaries
  $18,477,000   $17,649,000
(2) Current Expense 
  $ 2,486,000   $ 2,474,000
(3) Repairs and Betterments
  $   378,000   $   222,000 
(4) Special Equipment
  $    66,000   $ 0 
(c) Other State Residential Facilities
Administration Activities
  $ 2,079,000   $ 2,038,000 
     Sec. 3.  OMBUDSMAN FOR MENTAL 
HEALTH AND MENTAL RETARDATION              888,000      921,000
     Sec. 4.  VETERANS NURSING HOMES 
BOARD                               
     Subdivision 1.  Total 
Appropriation                           18,876,000   21,041,000
 The amounts that may be spent from this 
appropriation for each program are more 
specifically described in the following 
subdivisions. 
     Subd. 2.  Veterans Nursing 
Homes                                   18,731,000   20,896,000
At least 80 percent of the new 
positions at the Hastings and 
Minneapolis veterans homes must be 
nonsupervisory positions in direct care 
services, rehabilitation services, 
psychological services, social 
services, pharmaceutical services, food 
services, housekeeping services, and 
internal auditing as recommended in the 
governor's 1989-1991 biennial budget 
document.  Any remaining portion of the 
appropriation for new positions may be 
used to fund other positions. 
 The appropriation for geriatric 
research and teaching is not included 
in the base funding level. 
     Subd. 3.  Veterans Nursing 
Homes Board                                145,000      145,000
     Sec. 5.  COMMISSIONER OF JOBS 
AND TRAINING 
     Subdivision 1.  Total 
Appropriation                           37,755,000   32,349,000
 The amounts that may be spent from this 
appropriation for each program are more 
specifically described in the following 
subdivisions. 
     Subd. 2.  Rehabilitation 
Services                                18,305,000   18,380,000
 Any balance remaining in the first year 
does not cancel but is available for 
the second year. 
 The commissioner shall report to the 
legislature by January 15, 1990, on 
grants for the rehabilitation of 
injured workers, including the number 
of workers served and the outcome on 
injured workers of the services 
provided. 
     Subd. 3.  Services for the Blind    3,380,000    3,383,000
     Subd. 4.  Economic Opportunity 
Office                                   7,257,000    7,257,000
For the biennium ending June 30, 1991, 
the commissioner shall transfer to the 
community services block grant program 
ten percent of the money received under 
the low-income home energy assistance 
block grant in each year of the 
biennium and shall expend all of the 
transferred money during the year of 
the transfer or the year following the 
transfer.  Up to 3.75 percent of the 
transferred money may be used by the 
commissioner for administrative 
purposes. 
For the biennium ending June 30, 1991, 
the commissioner shall transfer to the 
low-income home weatherization program 
at least five percent of money received 
under the low-income home energy 
assistance block grant in each year of 
the biennium and shall expend all of 
the transferred money during the year 
of the transfer or the year following 
the transfer.  Up to 1.63 percent of 
the transferred money may be used by 
the commissioner for administrative 
purposes. 
For the biennium ending June 30, 1991, 
no more than 1.63 percent of money 
remaining under the low-income home 
energy assistance program after 
transfers to the community services 
block grant and the weatherization 
program may be used by the commissioner 
for administrative purposes. 
For the biennium ending June 30, 1991, 
discretionary money from the community 
services block grant (regular) must be 
used to supplement the appropriation 
for local storage, transportation, 
processing, and distribution of United 
States Department of Agriculture 
surplus commodities to the extent 
supplemental funding is required.  Any 
remaining money shall be allocated to 
state-designated and state-recognized 
community action agencies, Indian 
reservations, and the Minnesota migrant 
council. 
 The commissioner shall, by January 1 of 
each year of the biennium, report to 
the legislature on the use of 
discretionary money from the community 
services block grant (regular) and 
discretionary money resulting from 
block grant transfers to the community 
services block grant. 
     Subd. 5.  Employment and Training   8,813,000    3,329,000
Of this amount, $250,000 in each year 
is to be distributed to organizations 
applying for grants through the 
governor's job council to provide 
services and support to dislocated 
workers.  The governor's job council 
may award grants to organizations to 
assist dislocated workers who have been 
dislocated as a result of a plant 
closing or layoff that did not meet the 
threshold levels as provided in article 
2, section 177, subdivisions 6 and 8, 
if the council determines that the 
plant closing or layoff has a 
significant effect on the community.  
An additional $15,000 each year is for 
prefeasibility study grants related to 
this provision.  Any balance remaining 
in the first year of the appropriation 
for dislocated workers does not cancel 
but is available for the second year. 
 The appropriations increase for the 
summer youth employment program must be 
spent on transitional services. 
 Of the money appropriated for the 
summer youth employment programs for 
fiscal year 1990, $750,000 is 
immediately available.  Any remaining 
balance of the immediately available 
money is available for the year in 
which it is appropriated.  If the 
appropriation for either year of the 
biennium is insufficient, money may be 
transferred from the appropriation for 
the other year. 
Any balance remaining in the first year 
of the appropriation for the Minnesota 
employment and economic development 
program does not cancel but is 
available for the second year. 
 Any balance remaining at the end of the 
fiscal year ending June 30, 1989, in 
the appropriation in Laws 1987, article 
1, section 4, subdivision 2, for 
Minnesota employment and economic 
development wage subsidies does not 
cancel and is available for the fiscal 
year ending June 30, 1990.  
 Any balance remaining in the Minnesota 
wage subsidy account established under 
Minnesota Statutes, section 268.681, 
subdivision 4, at the end of the fiscal 
years ending June 30, 1989, and June 
30, 1990, does not cancel and is 
available for the second year. 
     Sec. 6.  COMMISSIONER OF 
CORRECTIONS 
     Subdivision 1.  Appropriation by 
Fund
General Fund                           104,822,000  104,505,000
 The amounts that may be spent from the 
appropriation for each program and 
activity are more specifically 
described in the following subdivisions.
 Positions and administrative money may 
be transferred within the department of 
corrections as the commissioner 
considers necessary, upon the advance 
approval of the commissioner of finance.
     Subd. 2.  Correctional
Institutions                            75,733,000   75,477,000 
 Any unencumbered balances in special 
equipment, repairs and replacement, 
food provisions, and central office 
health care remaining in the first year 
do not cancel but are available for the 
second year. 
 Employees of the St. Paul-Ramsey 
Medical Center who perform the 
functions of psychologist and director 
of the mental health unit at the 
Minnesota correctional facility-Oak 
Park Heights and psychiatric social 
worker at the Minnesota correctional 
facility-Stillwater shall be 
transferred to the state classified 
service without competitive or 
qualifying examination and shall be 
placed by the commissioner of employee 
relations, with no loss in salary, in 
the proper classifications.  These 
transferred employees shall begin on 
the date of transfer to serve a 
probationary period appropriate to the 
classification to which each is 
assigned according to a collective 
bargaining agreement or plans 
established under Minnesota Statutes, 
section 43A.16. 
     Subd. 3.  Community Services       25,041,000   24,950,000
 Base level funding in the probation and 
supervised release activity for 
services to Dakota and Rice counties 
must be transferred to the community 
corrections act appropriation upon the 
entry of those counties into the 
community corrections program.  An 
incumbent whose position is transferred 
under this subdivision retains the 
wages and benefits of the former 
position under the applicable state 
plan or collective bargaining agreement 
until the date upon which a collective 
bargaining agreement under Minnesota 
Statutes, chapter 179A, covering the 
new position is renewed or adjusted. 
 The commissioners of corrections and 
human services shall study the funding 
structure of general assistance per 
diems for emergency shelters for 
battered women and report to the 
legislature by January 15, 1991. 
The commissioner is encouraged to 
direct a portion of the increase in 
funding to battered women's programs 
toward pay increases for employees of 
the programs. 
Of the appropriation for battered 
women's programs, $34,000 in fiscal 
year 1990 is to pay startup costs for 
an American Indian battered women's 
shelter. 
     Subd. 4.  Management Services       4,048,000    4,078,000
     Sec. 7.  SENTENCING GUIDELINES 
COMMISSION                                 218,000      218,000
     Sec. 8.  CORRECTIONS OMBUDSMAN        369,000      364,000
     Sec. 9.  COMMISSIONER OF HEALTH 
     Subdivision 1.  Appropriation by 
Fund 
General Fund                            39,345,000   41,480,000
Metropolitan Landfill Contingency Fund     167,000      167,000
Special Revenue Fund                       435,000      375,000
Trunk Highway Fund                       1,488,000    1,488,000
 The appropriation from the metropolitan 
landfill contingency fund is for 
monitoring well water supplies and 
conducting health assessments in the 
metropolitan area. 
 The appropriation from the trunk 
highway fund is for emergency medical 
services activities. 
 Positions and administrative money may 
be transferred within the department of 
health as the commissioner considers 
necessary, with the advance approval of 
the commissioner of finance. 
The amounts that may be spent from this 
appropriation for each program and 
activity are more specifically 
described in the following subdivisions.
     Subd. 2.  Preventive and Protective 
Health Services 
General Fund                            11,610,000   11,751,000
Metropolitan Landfill Contingency Fund     145,000      145,000
Special Revenue Fund                       255,000      255,000
Trunk Highway Fund                          61,000       61,000
 Of this amount, $135,000 in 1990 and 
$115,000 in 1991 from the general fund 
are one-time appropriations to conduct 
a follow-up study of asbestos-related 
lung disease among Conwed Corporation 
employees and spouses.  The 
commissioner shall by January 1, 1990, 
present to the legislature a report 
addressing recommendations and plans 
for a comprehensive feasibility study 
of a statewide occupational disease 
surveillance system. 
Of this amount, $65,000 in 1990 from 
the general fund is a one-time 
appropriation to develop and pilot test 
the feasibility of an epidemiologic 
study of the relationship between 
emissions of sulfur dioxide and other 
air contaminants and the prevalence and 
severity of asthma in the city of Inver 
Grove Heights and surrounding areas of 
Dakota County.  The commissioner of 
health shall, by February 1, 1990, 
submit to the legislature a report 
including the results of this study and 
specific recommendations related to any 
future epidemiologic studies.  
 For the biennium ending June 30, 1991, 
no less than $2,000,000 from the 
general fund shall be used by the 
commissioner for AIDS prevention grants 
and contracts for certain high risk 
populations, including communities of 
color, adolescents at high risk, 
homosexual men, intravenous drug users, 
and others as determined by the 
commissioner.  By October 1, 1990, and 
October 1, 1991, the commissioner shall 
report to the chairs of the health and 
human services divisions of the house 
appropriations committee and the senate 
finance committee regarding the amounts 
of state and federal money spent by the 
department in fiscal years 1990 and 
1991 on grants and contracts to assist 
each of the above groups. 
The $47,000 required to be transferred 
to the general fund by Laws 1987, 
chapter 388, section 9, paragraph (c), 
shall be transferred not later than 
June 30, 1992. 
The commissioner shall present to the 
legislature by January 1, 1990, a plan 
for implementing the hazardous 
substance exposure provisions required 
under Minnesota Statutes, section 
145.94.  The plan shall include 
proposals for funding and 
recommendations for coordinating the 
implementation efforts of the state 
department of health, the pollution 
control agency, and local health 
departments. 
     Subd. 3.  Health Delivery Systems 
General Fund                            24,028,000   26,028,000
Special Revenue Fund                       180,000      120,000
Trunk Highway Fund                       1,341,000    1,341,000
Of this amount, $80,000 in 1990 and 
$20,000 in 1991 from the health 
occupations licensing account within 
the state government special revenue 
fund are to pay start-up and ongoing 
costs associated with registering 
contact lens technicians and 
respiratory therapists.  These and all 
subsequent costs related to this 
provision shall be returned to the 
health occupations licensing account 
through fees.  The commissioner may use 
unencumbered balances in the health 
occupations licensing account to pay 
start-up costs associated with the 
registration of any additional 
occupational groups, except 
acupuncturists, for which the 
commissioner determines registration is 
appropriate.  All such costs shall be 
returned to the health occupations 
licensing account through fees.  
Of this amount, $5,000 from the general 
fund is available as a state match for 
a grant program to community-based 
organizations to purchase and provide 
paint removal equipment. 
Of this amount, $10,000 from the 
general fund in each year is to 
contract with local health boards to 
provide safe housing for residents who 
are relocated due to a paint-related or 
plaster-related lead contamination 
threat in their place of residence. 
Of this amount, $35,000 from the 
general fund in each year is to conduct 
assessments to determine sources of 
lead contamination in the residences of 
children and pregnant women whose blood 
lead levels exceed 25 micrograms per 
deciliter or the Centers for Disease 
Control recommendation for elevated 
blood level, and to provide education 
on ways of reducing the danger of lead 
contamination. 
Of this amount, $50,000 from the 
general fund in each year is to 
implement a lead education strategy and 
to fund lead abatement advocates.  
Of this amount, $5,000 from the general 
fund is transferred to the commissioner 
of state planning for a task force to 
study lead abatement costs.  The task 
force shall consist of representatives 
of the Minnesota housing finance 
agency, the pollution control agency, 
the department of health, the state 
planning agency, abatement contractors, 
realtors, community residents including 
both tenants and landowners, lead 
advocacy organizatons, and cultural 
groups at high risk of lead poisoning.  
The task force shall evaluate the costs 
of providing assistance to property 
owners and local communities required 
to do lead paint, soil, and dust 
abatement; and of providing subsidized 
programs to assist the property owners 
and communities.  The task force shall 
present recommendations for a statewide 
subsidized abatement service program.  
The task force shall report its 
findings and recommendations to the 
legislature by January 15, 1990. 
 Of the appropriation to supplement the 
federal Women, Infants and Children 
(WIC) program, any balance remaining in 
the first year does not cancel but is 
available for the second year. 
 For the biennium ending June 30, 1991, 
the commissioner of finance may 
authorize the transfer of money to the 
community health services activity from 
other programs in this section if the 
transferred money is to be used to 
supplement the community health 
services subsidy. 
 For the biennium ending June 30, 1991, 
if the appropriation for community 
health services or services to children 
with handicaps is insufficient for 
either year, the appropriation for the 
other year is available by direction of 
the governor after consulting with the 
legislative advisory commission. 
 For the biennium ending June 30, 1991, 
community health services boards should 
give priority consideration in the 
allocation of increased community 
health services subsidy funds to 
activities consistent with 
recommendations of the state community 
health services advisory committee and 
the commissioner's statewide goals 
relating to prevention of human 
immunodeficiency virus. 
For the biennium ending June 30, 1991, 
community health services boards are 
encouraged to use a portion of their 
community health services subsidy 
increases to conduct erythrocyte 
protoporphyrin and blood lead 
screenings among children at high risk 
for lead toxicity. 
 Until the start of the 1992 licensure 
year, the commissioner of health shall 
not apply the provisions of Minnesota 
Statutes, section 144.55, subdivision 
6, paragraph (b), to the Minnesota 
Veterans Home at Hastings. 
 The commissioner shall report to the 
legislature by December 15, 1989, on 
the commissioner's enforcement of 
section 144A.10, subdivision 2, 
relating to the coordination of nursing 
home inspections, and on the 
commissioner's enforcement of section 
144.55, subdivision 5, relating to the 
coordination of hospital inspections.  
The report must include a list of the 
agencies inspecting nursing homes and 
hospitals, the frequency of 
inspections, the legal authority for 
the inspections, the purpose of the 
inspections, and recommendations for 
consolidating and coordinating the 
inspections.  The report must also 
include recommendations for improving 
the enforcement of sections 144A.10, 
subdivision 2, and 144.55, subdivision 
5. 
     Subd. 4.  Health Support Services 
General Fund                             3,707,000    3,701,000
Metropolitan Landfill Contingency Fund      22,000       22,000
Trunk Highway Fund                          86,000       86,000
     Sec. 10.  HEALTH-RELATED BOARDS  
     Subdivision 1.  Total 
Appropriation 
Special Revenue Fund                     4,910,000    5,016,000
General Fund                                75,000  
Notwithstanding any law to the 
contrary, all fees generated by the 
health-related licensing boards or the 
commissioner of health under Minnesota 
Statutes, section 214.06, and all 
unobligated balances in the 
direct-appropriated special revenue 
fund on June 30, 1989, attributable to 
fees generated by the health-related 
licensing boards, shall be credited to 
the health occupations licensing 
account within the state government 
special revenue fund. 
Unless otherwise designated, all 
appropriations in this section are from 
the special revenue fund. 
     Subd. 2.  Board of Chiropractic
Examiners                                  264,000      252,000
     Subd. 3.  Board of Dentistry          400,000      400,000
     Subd. 4.  Board of Medical
Examiners                                1,760,000    1,920,000
 Of this amount, $210,000 in 1990 and 
$262,000 in 1991 are for the purpose of 
purchasing additional legal services 
from the office of the attorney 
general.  This money is available only 
in the event that the board requires 
legal services above and beyond a level 
equivalent to that provided by the 
office of the attorney general during 
1989.  Unencumbered balances in the 
appropriation for purchasing additional 
legal services may be transferred 
between fiscal years of the biennium. 
For the biennium ending June 30, 1991, 
fees set by the board of medical 
examiners pursuant to Minnesota 
Statutes, section 214.06, must be fixed 
by rule.  The procedure for 
noncontroversial rules in Minnesota 
Statutes, sections 14.22 to 14.28, may 
be used except that, notwithstanding 
the requirements of Minnesota Statutes, 
section 14.22, clause (3), no public 
hearing may be held.  The notice of 
intention to adopt the rules must state 
that no hearing will be held.  This 
procedure may be used only when the 
total fees estimated for the biennium 
do not exceed the sum of direct 
appropriations, indirect costs, 
transfers in, and salary supplements 
for that purpose.  A public hearing is 
required for adjustments of fees spent 
under open appropriations of dedicated 
receipts. 
     Subd. 5.  Board of Nursing          1,055,000    1,019,000
     Subd. 6.  Board of Examiners for
Nursing Home Administrators                141,000      141,000
     Subd. 7.  Board of Optometry           57,000       59,000
     Subd. 8.  Board of Pharmacy           445,000      431,000
     Subd. 9.  Board of Podiatry            26,000       26,000
     Subd. 10.  Board of Psychology        181,000      187,000
     Subd. 11.  Social Work and 
Mental Health Boards  
Special Revenue Fund                       485,000      485,000
General Fund                                75,000  
(a) Board of Marriage and Family Therapy
  $     82,000  $     82,000 
(b) Board of Social Work 
  $     87,000  $     87,000 
(c) Board of Unlicensed Mental Health 
Service Providers 
Special Revenue Fund
  $     93,000  $     93,000
General Fund
  $     75,000  $   
 The fee for filing as an unlicensed 
mental health service provider is $50 
until permanent rules establishing the 
amount of the fee are adopted. 
(d) The Office of Social Work and Mental 
Health Boards 
$  223,000 $  223,000 
     Subd. 12.  Board of Veterinary
Medicine                                    96,000       96,000
     Subd. 13.  Revenue 
 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 from fees 
collected by the boards, except that 
the board of unlicensed mental health 
service providers may spend from 
appropriated money in excess of fees 
collected.  Neither this provision nor 
Minnesota Statutes, section 214.06, 
applies to transfers from the general 
contingent account, if the amount 
transferred does not exceed the amount 
of surplus revenue accumulated by the 
transferee during the previous five 
years. 
     Sec. 11.  COMMISSIONER OF FINANCE  
During the biennium ending June 30, 
1991, the commissioner of finance shall 
forward to the chairs of the house 
health and human services 
appropriations committee and the senate 
health and human services finance 
committee all reports of projected 
funding deficiencies in programs 
operated or supervised by the 
departments of human services, health, 
jobs and training, and corrections, and 
the offices of ombudsman for 
corrections and for mental health and 
mental retardation, the sentencing 
guidelines commission, the 
health-related boards, and the 
department of veterans affairs.  If no 
deficiency funding recommendations are 
made by the governor, the commissioner 
shall notify the legislature of any 
projected deficiencies by February 1 of 
each year. 
For the governor's recommended budget 
for fiscal year 1992 and fiscal year 
1993, in those instances where the 
governor recommends funding for a 
change request but at a level different 
from the agency request, the 
commissioner of finance shall include 
in the governor's recommendation detail 
information commensurate with that 
provided by the agency.  This includes 
a breakout of spending items if more 
than one provision is included in the 
request and rationale for the request.  
The commissioner of finance shall also 
adjust the long range implications 
expenditure projections to coincide 
with the revised governor's 
recommendation. 
     Sec. 12.  TRANSFERS OF MONEY 
     Subdivision 1.  Governor's Approval 
Required 
 For the biennium ending June 30, 1991, 
the commissioners of human services, 
corrections, jobs and training, and 
health and the veterans nursing homes 
board shall not transfer money to or 
from the object of expenditure 
"personal services" to or from the 
object of expenditure "grants and aid," 
as shown on the official worksheets of 
the conferees of the senate and house 
of representatives, a true copy of 
which is on file in the office of the 
commissioner of finance, except upon 
the written approval of the governor 
after consulting with the legislative 
advisory commission.  Notwithstanding 
this limitation, money may be 
transferred to "grants and aid" without 
approval of the governor in the 
following programs:  services for the 
blind, basic client rehabilitation 
services, and rehabilitation services 
for workers' compensation recipients. 
    Subd. 2.  Transfers of Unencumbered 
Appropriations
 For the biennium ending June 30, 1991, 
the commissioners of human services, 
corrections, health, and jobs and 
training by direction of the governor 
after consulting with the legislative 
advisory commission may transfer 
unencumbered appropriation balances and 
positions among all programs.  
    Sec. 13.  PROJECT LABOR 
 For human services and corrections 
institutions, wages for project labor 
may be paid if the employee is to be 
engaged in a construction or repair 
project of short-term and nonrecurring 
nature.  Minnesota Statutes, section 
43A.25, does not prevent the payment of 
the prevailing wage rate, as defined in 
Minnesota Statutes, section 177.42, 
subdivision 6, to a person hired to 
work on a project, whether or not the 
person is working under a contract. 
     Sec. 14.  PROVISIONS 
 For the biennium ending June 30, 1991, 
money appropriated to the commissioner 
of corrections and the commissioner of 
human services in this act for the 
purchase of provisions within the item 
"current expense" must be used solely 
for that purpose.  Money provided and 
not used for 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 medical and 
hospital supplies with the written 
approval of the governor after 
consulting with the legislative 
advisory commission.  
 The allowance for food may be adjusted 
annually according to the United States 
Department of Labor, Bureau of Labor 
Statistics publication, producer price 
index, with the approval of the 
commissioner of finance.  Adjustments 
for fiscal year 1990 and fiscal year 
1991 must be based on the June 1989 and 
June 1990 producer price index 
respectively, but the adjustment must 
be prorated if the wholesale food price 
index adjustment would require money in 
excess of this appropriation.  
     Sec. 15.  PUBLIC HEALTH FUND 
 Any balance remaining in the public 
health fund at the close of fiscal year 
1989, regardless of any dedicated 
purpose, shall be transferred to the 
general fund. 
    Sec. 16.  Minnesota Statutes 1988, section 144.122, is 
amended to read: 
    144.122 [LICENSE AND PERMIT FEES.] 
    (a) The state commissioner of health, by rule, may 
prescribe reasonable procedures and fees for filing with the 
commissioner as prescribed by statute and for the issuance of 
original and renewal permits, licenses, registrations, and 
certifications issued under authority of the commissioner.  The 
expiration dates of the various licenses, permits, 
registrations, and certifications as prescribed by the rules 
shall be plainly marked thereon.  Fees may include application 
and examination fees and a penalty fee for renewal applications 
submitted after the expiration date of the previously issued 
permit, license, registration, and certification.  The 
commissioner may also prescribe, by rule, reduced fees for 
permits, licenses, registrations, and certifications when the 
application therefor is submitted during the last three months 
of the permit, license, registration, or certification period.  
Fees proposed to be prescribed in the rules shall be first 
approved by the department of finance.  All fees proposed to be 
prescribed in rules shall be reasonable.  The fees shall be in 
an amount so that the total fees collected by the commissioner 
will, where practical, approximate the cost to the commissioner 
in administering the program.  All fees collected shall be 
deposited in the state treasury and credited to the general fund 
unless otherwise specifically appropriated by law for specific 
purposes. 
    (b) The commissioner may charge a fee for voluntary 
certification of medical laboratories and environmental 
laboratories, and for environmental and medical laboratory 
services provided by the department, without complying with 
subdivision 1 or chapter 14.  Fees charged for environment and 
medical laboratory services provided by the department must be 
approximately equal to the costs of providing the services.  
     (c) The commissioner may develop a schedule of fees for 
diagnostic evaluations conducted at clinics held by the services 
for children with handicaps program.  All receipts generated by 
the program are annually appropriated to the commissioner for 
use in the maternal and child health program. 
    Sec. 17.  Minnesota Statutes 1988, section 145.894, is 
amended to read: 
    145.894 [STATE COMMISSIONER OF HEALTH; DUTIES, 
RESPONSIBILITIES.] 
    The commissioner of health shall: 
    (a) Develop a comprehensive state plan for the delivery of 
nutritional supplements to pregnant and lactating women, 
infants, and children; 
    (b) Contract with existing local public or private 
nonprofit organizations for the administration of the 
nutritional supplement program; 
    (c) Develop and implement a public education program 
promoting the provisions of sections 145.891 to 145.897, and 
provide for the delivery of individual and family nutrition 
education and counseling at project sites; 
    (d) Develop in cooperation with other agencies and vendors 
a uniform state voucher system for the delivery of nutritional 
supplements; 
    (e) Authorize local health agencies to issue vouchers 
bimonthly to some or all eligible individuals served by the 
agency, provided the agency demonstrates that the federal 
minimum requirements for providing nutrition education will 
continue to be met and that the quality of nutrition education 
and health services provided by the agency will not be adversely 
impacted; 
     (f) Investigate and implement an infant formula cost 
reduction system that will reduce the cost of nutritional 
supplements so that by October 1, 1988, additional mothers and 
children will be served; 
     (g) Develop, analyze, and evaluate the health aspects of 
the nutritional supplement program and establish nutritional 
guidelines for the program; 
     (h) Apply for, administer, and annually expend at least 99 
percent of available federal or private funds; 
     (i) Aggressively market services to eligible individuals by 
conducting ongoing outreach activities and by coordinating with 
and providing marketing materials and technical assistance to 
local human services and community service agencies and 
nonprofit service providers; 
     (j) Determine, on July 1 of each year, the number of 
pregnant women participating in each special supplemental food 
program for women, infants, and children (W.I.C.) and, in 1986, 
1987, and 1988, at the commissioner's discretion, designate a 
different food program deliverer if the current deliverer fails 
to increase the participation of pregnant women in the program 
by at least ten percent over the previous year's participation 
rate; 
     (k) Promulgate all rules necessary to carry out the 
provisions of sections 145.891 to 145.897; and 
    (l) Report to the legislature by November 15 of every year 
on the expenditures and activities under sections 145.891 to 
145.897 of the state and local health agencies for the preceding 
fiscal year; and 
    (m) Ensure that any state appropriation to supplement the 
federal program is spent consistent with federal requirements. 
    Sec. 18.  Minnesota Statutes 1988, section 268.37, is 
amended by adding a subdivision to read: 
    Subd. 6.  [ELIGIBILITY CRITERIA.] To the extent allowed by 
federal regulations, the commissioner shall ensure that the same 
income eligibility criteria apply to both the weatherization 
program and the energy assistance program. 
    Sec. 19.  Minnesota Statutes 1988, section 287.12, is 
amended to read: 
    287.12 [TAXES, HOW APPORTIONED.] 
    All taxes paid to the county treasurer under the provisions 
of sections 287.01 to 287.12 shall be credited to the county 
revenue fund. 
    On or before the tenth day of each month the county 
treasurer shall determine the receipts from the mortgage 
registration tax during the preceding month.  The treasurer 
shall report to the county welfare agency on or before the tenth 
day of each month 97 percent of the receipts attributable to the 
statutory rate in section 287.05.  That amount, in addition to 
97 percent of the amount determined under section 287.29, must 
be shown as a deduction from the report filed with the 
department of human services as required by section 256.82.  The 
net receipts from the preceding month must be credited to the 
county welfare fund by the tenth day of each month.  If a 
county's mortgage and deed tax receipts exceed the state share 
of AFDC grants for the county, the excess amount must be offset 
against state payments to the county for the state share of the 
income maintenance programs.  Any excess remaining after 
offsetting all state payments for income maintenance programs 
must be paid to the commissioner of human services and credited 
to the AFDC account. 

                               ARTICLE 2

              SOCIAL SERVICES, HEALTH, AND ADMINISTRATION
    Section 1.  Minnesota Statutes 1988, section 16B.06, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [EXCEPTION.] The requirements of subdivision 2 
do not apply to state contracts distributing state or federal 
funds pursuant to the federal economic dislocation and worker 
adjustment assistance act, United States Code, title 29, section 
1651 et seq., or sections 268.973 and 268.974.  For these 
contracts, the commissioner of jobs and training is authorized 
to directly enter into state contracts with approval of the 
governor's job training council, and encumber available funds to 
ensure a rapid response to the needs of dislocated workers.  The 
commissioner shall adopt internal procedures to administer and 
monitor funds distributed under these contracts. 
    Sec. 2.  Minnesota Statutes 1988, section 43A.27, 
subdivision 2, is amended to read: 
    Subd. 2.  [ELECTIVE ELIGIBILITY.] The following persons, if 
not otherwise covered by section 43A.24, may elect coverage for 
themselves or their dependents at their own expense: 
    (a) a state employee, including persons on layoff from a 
civil service position as provided in collective bargaining 
agreements or a plan established pursuant to section 43A.18; 
    (b) an employee of the board of regents of the University 
of Minnesota, including persons on layoff, as provided in 
collective bargaining agreements or by the board of regents; 
    (c) an officer or employee of the state agricultural 
society, state horticultural society, Sibley house association, 
Minnesota humanities commission, Minnesota international center, 
Minnesota academy of science, science museum of Minnesota, 
Minnesota safety council, state office of disabled American 
veterans, state office of the American Legion and its auxiliary, 
or state office of veterans of foreign wars and its auxiliary, 
or state office of the Military Order of the Purple Heart; 
    (d) a civilian employee of the adjutant general who is paid 
from federal funds and who is not eligible for benefits from any 
federal civilian employee group life insurance or health 
benefits program; and 
    (e) an officer or employee of the state capitol credit 
union or the highway credit union. 
    Sec. 3.  Minnesota Statutes 1988, section 62D.041, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITION.] (a) For the purposes of this 
section, the term "uncovered expenditures" means the costs of 
health care services that are covered by a health maintenance 
organization for which an enrollee would also be liable in the 
event of the organization's insolvency, and that are not 
guaranteed, insured, or assumed by a person other than the 
health maintenance organization. 
    (b) For purposes of this section, if a health maintenance 
organization offers supplemental benefits as described in 
section 62D.05, subdivision 6, "uncovered expenditures" excludes 
any expenditures attributable to the supplemental benefit.  
    Sec. 4.  Minnesota Statutes 1988, section 62D.041, is 
amended by adding a subdivision to read: 
    Subd. 10.  [SUPPLEMENTAL DEPOSIT.] A health maintenance 
organization offering supplemental benefits as described in 
section 62D.05, subdivision 6, must maintain an additional 
deposit in the first year such benefits are offered equal to 
$50,000.  At the end of the second year such benefits are 
offered, the health maintenance organization must maintain an 
additional deposit equal to $150,000.  At the end of the third 
year such benefits are offered and every year thereafter, the 
health maintenance organization must maintain an additional 
deposit of $250,000. 
    Sec. 5.  Minnesota Statutes 1988, section 62D.042, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, "guaranteeing organization" means an organization that 
has agreed to make necessary contributions or advancements to 
the health maintenance organization to maintain the health 
maintenance organization's statutorily required net worth. 
    (b) For this section, "working capital" means current 
assets minus current liabilities. 
    (c) For purposes of this section, if a health maintenance 
organization offers supplemental benefits as described in 
section 62D.05, subdivision 6, "expenses" does not include any 
expenses attributable to the supplemental benefit.  
    Sec. 6.  Minnesota Statutes 1988, section 62D.05, 
subdivision 6, is amended to read: 
    Subd. 6.  [SUPPLEMENTAL BENEFITS.] (a) A health maintenance 
organization may, as a supplemental benefit, provide coverage to 
its enrollees for health care services and supplies received 
from providers who are not employed by, under contract with, or 
otherwise affiliated with the health maintenance organization.  
Supplemental benefits may be provided if the following 
conditions are met:  
    (1) a health maintenance organization desiring to offer 
supplemental benefits must at all times comply with the 
requirements of sections 62D.041 and 62D.042; 
    (2) a health maintenance organization offering supplemental 
benefits must maintain an additional surplus in the first year 
supplemental benefits are offered equal to the lesser of 
$500,000 or 33 percent of the supplemental benefit expenses.  At 
the end of the second year supplemental benefits are offered, 
the health maintenance organization must maintain an additional 
surplus equal to the lesser of $1,000,000 or 33 percent of the 
supplemental benefit expenses.  At the end of the third year 
benefits are offered and every year after that, the health 
maintenance organization must maintain an additional surplus 
equal to the greater of $1,000,000 or 33 percent of the 
supplemental benefit expenses.  When in the judgment of the 
commissioner the health maintenance organization's surplus is 
inadequate, the commissioner may require the health maintenance 
organization to maintain additional surplus; 
    (3) claims relating to supplemental benefits must be 
processed in accordance with the requirements of section 
72A.201; and 
    (4) in marketing supplemental benefits, the health 
maintenance organization shall fully disclose and describe to 
enrollees and potential enrollees the nature and extent of the 
supplemental coverage, and any claims filing and other 
administrative responsibilities in regard to supplemental 
benefits.  
    (b) The commissioner may, pursuant to chapter 14, adopt, 
enforce, and administer rules relating to this subdivision, 
including:  rules insuring that these benefits are supplementary 
and not substitutes for comprehensive health maintenance 
services by addressing percentage of out-of-plan coverage; rules 
relating to protection against insolvency, including the 
establishment of necessary financial reserves; rules relating to 
appropriate standards for claims processing; rules relating to 
marketing practices; and other rules necessary for the effective 
and efficient administration of this subdivision.  The 
commissioner, in adopting rules, shall give consideration to 
existing laws and rules administered and enforced by the 
department of commerce relating to health insurance 
plans.  Except as otherwise provided by law, a health 
maintenance organization may not advertise, offer, or enter into 
contracts for the coverage described in this subdivision until 
30 days after the effective date of rules adopted by the 
commissioner of health to implement this subdivision. 
    Sec. 7.  [144.0535] [ENTRY FOR INSPECTION.] 
    For the purposes of performing their official duties, all 
officers and employees of the state department of health shall 
have the right to enter any building, conveyance, or place where 
contagion, infection, filth, or other source or cause of 
preventable disease exists or is reasonably suspected. 
    Sec. 8.  Minnesota Statutes 1988, section 144.50, 
subdivision 6, is amended to read: 
    Subd. 6.  [SUPERVISED LIVING FACILITY LICENSES.] (a) The 
commissioner may license as a supervised living facility a 
facility seeking medical assistance certification as an 
intermediate care facility for persons with mental retardation 
or related conditions for four or more persons as authorized 
under section 252.291. 
    (b) Class B supervised living facilities for six or less 
persons seeking medical assistance certification as an 
intermediate care facility for persons with mental retardation 
or related conditions shall meet Group R, Division 3, occupancy 
requirements of the state building code, the fire protection 
provisions of chapter 21 of the 1985 life safety code, NFPA 101, 
for facilities housing persons with impractical evacuation 
capabilities, and shall provide the necessary physical plant 
accommodations to meet the needs and functional disabilities of 
the residents. 
    Sec. 9.  Minnesota Statutes 1988, section 144.562, 
subdivision 2, is amended to read: 
    Subd. 2.  [ELIGIBILITY FOR LICENSE CONDITION.] A hospital 
is not eligible to receive a license condition for swing beds 
unless (1) it either has a licensed bed capacity of less than 50 
beds defined in the federal medicare regulations, Code of 
Federal Regulations, title 42, section 405.1041 482.66, or it 
has a licensed bed capacity of 50 beds or more and has swing 
beds that were approved for medicare reimbursement before May 1, 
1985 or it has a licensed bed capacity of less than 65 beds and, 
as of the effective date, the available nursing homes within 50 
miles have had occupancy rates of 96 percent or higher in the 
past two years; (2) it is located in a rural area as defined in 
the federal medicare regulations, Code of Federal Regulations, 
title 42, section 405.1041 482.66; and (3) it agrees to utilize 
no more than four hospital beds as swing beds at any one time, 
except that the commissioner may approve the utilization of up 
to three additional beds at the request of a hospital if no 
medicare certified skilled nursing facility beds are available 
within 25 miles of that hospital. 
    Sec. 10.  Minnesota Statutes 1988, section 144.562, 
subdivision 3, is amended to read: 
    Subd. 3.  [APPROVAL OF LICENSE CONDITION.] The commissioner 
of health shall approve a license condition for swing beds if 
the hospital meets all of the criteria of this subdivision: 
    (a) The hospital must meet the eligibility criteria in 
subdivision 2. 
    (b) The hospital must be in compliance with the medicare 
conditions of participation for swing beds under Code of Federal 
Regulations, title 42, section 405.1041 482.66. 
    (c) The hospital must agree, in writing, to limit the 
length of stay of a patient receiving services in a swing bed to 
not more than 40 days, or the duration of medicare eligibility, 
unless the commissioner of health approves a greater length of 
stay in an emergency situation.  To determine whether an 
emergency situation exists, the commissioner shall require the 
hospital to provide documentation that continued services in the 
swing bed are required by the patient; that no skilled nursing 
facility beds are available within 25 miles from the patient's 
home, or in some more remote facility of the resident's choice, 
that can provide the appropriate level of services required by 
the patient; and that other alternative services are not 
available to meet the needs of the patient.  If the commissioner 
approves a greater length of stay, the hospital shall develop a 
plan providing for the discharge of the patient upon the 
availability of a nursing home bed or other services that meet 
the needs of the patient.  Permission to extend a patient's 
length of stay must be requested by the hospital at least ten 
days prior to the end of the maximum length of stay. 
    (d) The hospital must agree, in writing, to limit admission 
to a swing bed only to (1) patients who have been hospitalized 
and not yet discharged from the facility, or (2) patients who 
are transferred directly from an acute care hospital.  
    (e) The hospital must agree, in writing, to report to the 
commissioner of health by December 1, 1985, and annually 
thereafter, in a manner required by the commissioner (1) the 
number of patients readmitted to a swing bed within 60 days of a 
patient's discharge from the facility, (2) the hospital's 
charges for care in a swing bed during the reporting period with 
a description of the care provided for the rate charged, and (3) 
the number of beds used by the hospital for transitional care 
and similar subacute inpatient care.  
    (f) The hospital must agree, in writing, to report 
statistical data on the utilization of the swing beds on forms 
supplied by the commissioner.  The data must include the number 
of swing beds, the number of admissions to and discharges from 
swing beds, medicare reimbursed patient days, total patient 
days, and other information required by the commissioner to 
assess the utilization of swing beds. 
    Sec. 11.  Minnesota Statutes 1988, section 144.698, 
subdivision 1, is amended to read:  
    Subdivision 1.  [YEARLY REPORTS.] Each hospital and each 
outpatient surgical center, which has not filed the financial 
information required by this section with a voluntary, nonprofit 
reporting organization pursuant to section 144.702, shall file 
annually with the commissioner of health after the close of the 
fiscal year: 
    (a) (1) a balance sheet detailing the assets, liabilities, 
and net worth of the hospital; 
    (b) (2) a detailed statement of income and expenses; 
    (c) (3) a copy of its most recent cost report, if any, 
filed pursuant to requirements of Title XVIII of the United 
States Social Security Act; and 
    (d) (4) a copy of all changes to articles of incorporation 
or bylaws; 
    (5) information on services provided to benefit the 
community, including services provided at no cost or for a 
reduced fee to patients unable to pay, teaching and research 
activities, or other community or charitable activities; 
    (6) information required on the revenue and expense report 
form set in effect on July 1, 1989; and 
    (7) other information required by the commissioner in rule. 
    Sec. 12.  Minnesota Statutes 1988, section 144.701, is 
amended to read:  
    144.701 [RATE DISCLOSURE.] 
    Subdivision 1.  [CONSUMER INFORMATION.] The commissioner of 
health shall ensure that the total costs, total revenues, and 
total services of each hospital and each outpatient surgical 
center are reported to the public in a form understandable to 
consumers.  
    Subd. 2.  [DATA FOR POLICY MAKING.] The commissioner of 
health shall compile relevant financial and accounting data 
concerning hospitals and outpatient surgical centers in order to 
have statistical information available for legislative policy 
making. 
    Subd. 3.  [RATE SCHEDULE.] The commissioner of health shall 
obtain from each hospital and outpatient surgical center a 
current rate schedule.  Any subsequent amendments or 
modifications of that schedule shall be filed with the 
commissioner of health at least 60 days in advance of on or 
before their effective date.  
    Subd. 4.  [FILING FEES.] Each report which is required to 
be submitted to the commissioner of health under sections 
144.695 to 144.703 and which is not submitted to a voluntary, 
nonprofit reporting organization in accordance with section 
144.702 shall be accompanied by a filing fee in an amount 
prescribed by rule of the commissioner of health.  Fees received 
pursuant to this subdivision shall be deposited in the general 
fund of the state treasury.  Upon the withdrawal of approval of 
a reporting organization, or the decision of the commissioner to 
not renew a reporting organization, fees collected under section 
144.702 shall be submitted to the commissioner and deposited in 
the general fund.  The commissioner shall report the termination 
or nonrenewal of the voluntary reporting organization to the 
chair of the health and human services subdivision of the 
appropriations committee of the house of representatives, to the 
chair of the health and human services division of the finance 
committee of the senate, and the commissioner of finance. 
    Sec. 13.  Minnesota Statutes 1988, section 144.702, 
subdivision 2, is amended to read:  
    Subd. 2.  [APPROVAL OF ORGANIZATION'S REPORTING 
PROCEDURES.] The commissioner of health may approve voluntary 
reporting procedures which are substantially equivalent to 
reporting requirements and procedures adopted by the 
commissioner of health for reporting procedures under sections 
144.695 to 144.703. consistent with written operating 
requirements for the voluntary, nonprofit reporting organization 
which shall be established annually by the commissioner.  These 
written operating requirements shall specify reports, analyses, 
and other deliverables to be produced by the voluntary, 
nonprofit reporting organization, and the dates on which those 
deliverables must be submitted to the commissioner.  The 
commissioner of health shall, by rule, prescribe standards 
for approval of voluntary reporting procedures, which submission 
of data by hospitals and outpatient surgical centers to the 
voluntary, nonprofit reporting organization or to the 
commissioner.  These standards shall provide for: 
    (a) The filing of appropriate financial information with 
the reporting organization; 
    (b) Adequate analysis and verification of that financial 
information; and 
    (c) Timely publication of the costs, revenues, and rates of 
individual hospitals and outpatient surgical centers prior to 
the effective date of any proposed rate increase.  The 
commissioner of health shall annually review the procedures 
approved pursuant to this subdivision. 
    Sec. 14.  Minnesota Statutes 1988, section 144.702, is 
amended by adding a subdivision to read: 
    Subd. 7.  [STAFF SUPPORT.] The commissioner may require as 
part of the written operating requirements for the voluntary, 
nonprofit reporting organization that the organization provide 
sufficient funds to cover the costs of one professional staff 
position who will directly administer the health care cost 
information system. 
    Sec. 15.  Minnesota Statutes 1988, section 144.702, is 
amended by adding a subdivision to read: 
    Subd. 8.  [TERMINATION OR NONRENEWAL OF REPORTING 
ORGANIZATION.] The commissioner may withdraw approval of any 
voluntary, nonprofit reporting organization for failure on the 
part of the voluntary, nonprofit reporting organization to 
comply with the written operating requirements under subdivision 
2.  Upon the effective date of the withdrawal, all funds 
collected by the voluntary, nonprofit reporting organization 
under section 144.701, subdivision 4, but not expended shall be 
deposited in the general fund. 
    The commissioner may choose not to renew approval of a 
voluntary, nonprofit reporting organization if the organization 
has failed to perform its obligations satisfactorily under the 
written operating requirements under subdivision 2. 
    Sec. 16.  [144.851] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 144.851 to 144.862. 
    Subd. 2.  [ABATEMENT.] "Abatement" means the use of the 
best available technology to remove or encapsulate deteriorating 
or intact lead paint or to reduce the availability of lead in 
soil and house dust, medicine, water, and any other sources 
considered a lead hazard by the commissioner. 
    Subd. 3.  [BOARD OF HEALTH.] "Board of health" means an 
administrative authority established under section 145A.03 or 
145A.07. 
    Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
commissioner of health. 
    Subd. 5.  [ELEVATED BLOOD LEAD LEVEL.] "Elevated blood lead 
level" means at least 25 micrograms per deciliter. 
    Subd. 6.  [ENCAPSULATION.] "Encapsulation" refers to the 
covering or containment of a lead source in soil or paint to 
prevent harmful exposure to lead.  Encapsulation includes, but 
is not limited to, covering of bare soil that contains more than 
acceptable levels of lead under rules adopted under section 
144.862 with sod or soil that contains acceptable parts per 
million lead under rules adopted under section 144.862, seeding, 
and treatment for walkways and parking areas. 
    Subd. 7.  [LEAD ABATEMENT CONTRACTOR.] "Lead abatement 
contractor" means an employer or other person or entity who, for 
financial gain, directly performs or causes to be performed, 
through subcontracting or similar delegation, work related to 
lead hazard abatement or immediate hazard removal. 
    Sec. 17.  [144.852] [PROACTIVE LEAD EDUCATION STRATEGY.] 
    The commissioner shall contract with boards of health in 
communities at high risk for toxic lead exposure to children, 
lead advocacy organizations, and businesses to design and 
implement a uniform, proactive educational program to introduce 
sections 144.851 to 144.861 and promote the prevention of 
exposure to all sources of lead to target populations.  Priority 
shall be given to provide ongoing education to health care and 
social service providers, registered lead abatement contractors, 
building trades professionals and nonprofessionals, property 
owners, and parents.  Educational materials shall be 
multilingual and multicultural to meet the needs of diverse 
populations. 
    Sec. 18.  [144.853] [LEAD SCREENING FOR CHILDREN.] 
    Within limits of available appropriations, the commissioner 
shall contract with the boards of health in Minneapolis, St. 
Paul, and Duluth to promote and subsidize a baseline blood lead 
test of all children at risk who live in the high risk areas 
served by these boards of health and who are under six years of 
age.  The lead screening shall be advocated on a statewide basis 
through the proactive education efforts of boards of health.  
The lead screening shall be promoted to be carried out in 
conjunction with routine blood tests. 
    Medical laboratories performing blood lead analyses must 
provide copies of the laboratory report form for all blood 
levels of at least ten micrograms per deciliter to the 
commissioner and to the board of health of the city or county in 
which the patient resides. 
    The information obtained from the screenings shall be 
reported by census tract and made available for research and to 
the public. 
    The commissioner shall work through the statewide WIC 
program to ensure that erythrocyte protoporphyrin testing of 
children for lead toxicity is integrated as a state reimbursed 
screening component of WIC services.  The commissioner shall 
also evaluate the accessibility and affordability of lead 
screening for children throughout the state as provided by other 
health care providers and report the findings to the legislature 
by January 1990. 
    Sec. 19.  [144.854] [ASSESSMENT AND ABATEMENT.] 
    Subdivision 1.  [RESIDENCE ASSESSMENT.] If a child or 
pregnant woman is identified as having a blood lead level that 
exceeds 25 micrograms per deciliter or the Center for Disease 
Control recommendation for elevated blood level, the board of 
health must do a timely assessment of the child's or pregnant 
woman's residence to determine the sources of lead contamination 
and must provide education to the residents and the owner on the 
best means of reducing the danger of the lead sources. 
    Subd. 2.  [ABATEMENT ORDERS.] If the level of lead in 
paint, soil, or dust found during the assessment conducted under 
subdivision 1 exceeds the toxic level of lead standards 
established in rules adopted under section 144.862, the board of 
health must order the property owner to abate the lead sources. 
    Subd. 3.  [PROVISION OF EQUIPMENT.] State matching funds 
shall be made available for a grant program to community-based 
organizations to purchase and provide paint removal equipment.  
Equipment shall include:  drop cloth, secure containers, power 
water sprayers, scrapers, and any other equipment required by 
local health department or state health department rules.  
Equipment shall be made available to low-income households on a 
priority basis. 
    Subd. 4.  [PROTECTION OF RESIDENT AND YARD.] No person 
shall be required to scrape loose paint or remove intact paint 
in response to a housing code violation order or environmental 
health or abatement order unless the municipality provides: 
    (1) specific information regarding personal safety 
precautions, and proper removal, containment, and cleanup of 
lead paint and debris; 
    (2) a referral to an organization with proper removal 
equipment; and 
    (3) a lead paint removal hot-line phone number for 
information and technical assistance. 
    Subd. 5.  [WARNING NOTICE.] A warning notice must be posted 
on all entrances to properties for which an order to abate a 
lead source has been issued by a board of health.  This notice 
must remain posted until the abatement has been completed in 
accordance with the order, or until the board of health removes 
it.  This warning must be at least 8-1/2 by 11 inches in size, 
and must include the following provisions, or provisions using 
substantially similar language: 
    (a) "This property contains dangerous amounts of lead to 
which children under age six and pregnant women should not be 
exposed." 
    (b) "It is unlawful to remove or deface this warning.  This 
warning may be removed only upon the direction of the board of 
health." 
    Subd. 6.  [RELOCATION OF RESIDENTS.] Relocation of 
residents is required from rooms or dwellings for removal of 
intact paint and the removal or disruption of lead painted 
surfaces and plaster walls during construction or remodeling 
projects.  The commissioner shall contract with boards of health 
for safe housing for relocation requirements.  Efforts must be 
made to minimize disruption and ensure that a family may return 
to their place of residence if they desire, after abatement is 
completed.  
    Subd. 7.  [RETESTING REQUIRED.] After completion of the 
abatement as ordered, the board of health must retest the paint, 
soil, and dust previously in violation to assure the violations 
no longer exist. 
    Sec. 20.  [144.856] [REGISTRATION OF ABATEMENT 
CONTRACTORS.] 
    After July 1, 1989, abatement contractors who contract for 
the removal of leaded soil, dust, or deteriorating paint must 
register by phone, mail, or in person with the commissioner and 
notify the board of health of all abatement projects undertaken 
in response to an abatement order.  All abatement contractors 
shall be given instructional materials on safe abatement methods 
and the requirements of relocation from rooms or dwellings by 
residents.  By July 1, 1990, the commissioner shall develop a 
training program for abatement contractors and adopt rules 
specifying the abatement methods that must be used by 
contractors to provide for the safe collection, handling, 
storage, encapsulation, removal, transportation, and disposal of 
lead containing material.  The commissioner shall adopt 
emergency rules for abatement methods and standards for paint, 
bare soil, dust, and drinking water from public fountains for 
cities of the first class.  By January 1, 1991, the commissioner 
shall report to the legislature concerning the need for 
licensure or certification of lead abatement contractors. 
    Sec. 21.  [144.860] [LEAD ABATEMENT ADVOCATE.] 
    The commissioner shall create and administer a program to 
fund locally based advocates who, following the issuance of an 
abatement order, will visit the family in their residence to 
instruct them about safety measures, materials, and methods to 
be followed before, during, and after the abatement process. 
    Sec. 22.  [144.861] [STUDY ON ABATEMENT COSTS.] 
    The commissioner of state planning shall convene a task 
force of representatives of the Minnesota housing finance 
agency, the pollution control agency, the department of health, 
the state planning agency, abatement contractors, realtors, 
community residents including both tenants and landowners, lead 
advocacy organizations, and cultural groups at high risk of lead 
poisoning to evaluate the costs of providing assistance to 
property owners and local communities required to do abatement 
under this law and of providing subsidized programs to assist 
them.  The task force shall also present recommendations for a 
statewide subsidized abatement service program.  The agency 
shall report its findings and recommendations to the legislature 
by January 1990. 
    Sec. 23.  [144.862] [RULES.] 
    By June 30, 1990, the commissioner of the pollution control 
agency and the commissioner of health shall jointly adopt rules 
to set toxic lead levels for paint, bare soil, dust, and 
drinking water from public fountains. 
    Sec. 24.  Minnesota Statutes 1988, section 144A.01, 
subdivision 5, is amended to read: 
    Subd. 5.  "Nursing home" means a facility or that part of a 
facility which provides nursing care to five or more persons.  
"Nursing home" does not include a facility or that part of a 
facility which is a hospital, a hospital with approved swing 
beds as defined in section 144.562, clinic, doctor's office, 
diagnostic or treatment center, or a residential facility 
program licensed pursuant to sections 245.781 to 245.821 245A.01 
to 245A.16 or 252.28. 
    Sec. 25.  Minnesota Statutes 1988, section 144A.45, 
subdivision 2, is amended to read:  
    Subd. 2.  [REGULATORY FUNCTIONS.] (a) The commissioner 
shall:  
    (1) evaluate, monitor, and license home care providers in 
accordance with sections 144A.45 to 144A.49; 
    (2) inspect the office and records of a provider during 
regular business hours, provided that when conducting routine 
office visits or inspections, the commissioner shall provide at 
least 48 hours without advance notice to the home care provider; 
    (3) with the consent of the consumer, visit the home where 
services are being provided; 
    (4) issue correction orders and assess civil penalties in 
accordance with section 144.653, subdivisions 5 to 8; and 
    (5) take other action reasonably required to accomplish the 
purposes of sections 144A.43 to 144A.49. 
    (b) In the exercise of the authority granted in sections 
144A.43 to 144A.49, the commissioner shall comply with the 
applicable requirements of section 144.122, the government data 
practices act, and the administrative procedure act. 
    Sec. 26.  Minnesota Statutes 1988, section 144A.46, is 
amended to read:  
    144A.46 [LICENSURE.] 
    Subdivision 1.  [LICENSE REQUIRED.] (a) A home care 
provider may not operate in the state without a current license 
issued by the commissioner of health. 
    (b) Within ten days after receiving an application for a 
license, the commissioner shall acknowledge receipt of the 
application in writing.  The acknowledgment must indicate 
whether the application appears to be complete or whether 
additional information is required before the application will 
be considered complete.  Within 90 days after receiving a 
complete application, the commissioner shall either grant or 
deny the license.  If an applicant is not granted or denied a 
license within 90 days after submitting a complete application, 
the license must be deemed granted.  An applicant whose license 
has been deemed granted must provide written notice to the 
commissioner before providing a home care service. 
    (c) Each application for a home care provider license, or 
for a renewal of a license, shall be accompanied by a fee to be 
set by the commissioner under section 144.122. 
    Subd. 2.  [EXEMPTIONS.] The following individuals or 
organizations are exempt from the requirement to obtain a home 
care provider license: 
    (1) a person who is licensed under sections 148.171 to 
148.285 and who independently provides nursing services in the 
home without any contractual or employment relationship to a 
home care provider or other organization; 
    (2) a personal care assistant who provides services under 
the medical assistance program as authorized under section 
256B.0625, subdivision 19, and section 256B.04, subdivision 16; 
    (3) a person or organization that exclusively offers, 
provides, or arranges for personal care assistant services under 
the medical assistance program as authorized under section 
256B.0625, subdivision 19, and section 256B.04, subdivision 16; 
    (4) a person who is registered under sections 148.65 to 
148.78 and who independently provides physical therapy services 
in the home without any contractual or employment relationship 
to a home care provider or other organization; 
    (5) a person who provides services to a person with mental 
retardation under a program of semi-independent living services 
regulated by Minnesota Rules, parts 9525.0500 to 9525.0660; or 
    (6) a person who provides services to a person with mental 
retardation under contract with a county to provide home and 
community-based services that are reimbursed under the medical 
assistance program, chapter 256B, and regulated by Minnesota 
Rules, parts 9525.1800 to 9525.1930. 
    An exemption under this subdivision does not excuse the 
individual from complying with applicable provisions of the home 
care bill of rights. 
    Subd. 3.  [ENFORCEMENT.] The commissioner may refuse to 
grant or renew a license, or may suspend or revoke a license, 
for violation of statutes or rules relating to home care 
services or for conduct detrimental to the welfare of the 
consumer.  Prior to any suspension, revocation, or refusal to 
renew a license, the home care provider shall be entitled to 
notice and a hearing as provided by sections 14.57 to 14.70.  In 
addition to any other remedy provided by law, the commissioner 
may, without a prior contested case hearing, temporarily suspend 
a license or prohibit delivery of services by a provider for not 
more than 60 days if the commissioner determines that the health 
or safety of a consumer is in imminent danger, provided (1) 
advance notice is given to the provider; (2) after notice, the 
provider fails to correct the problem; (3) the commissioner has 
reason to believe that other administrative remedies are not 
likely to be effective; and (4) there is an opportunity for a 
contested case hearing within the 60 days.  The process of 
suspending or revoking a license must include a plan for 
transferring affected clients to other providers.  
    Subd. 3a.  [INJUNCTIVE RELIEF.] In addition to any other 
remedy provided by law, the commissioner may bring an action in 
district court to enjoin a person who is involved in the 
management, operation, or control of a home care provider, or an 
employee of the home care provider from illegally engaging in 
activities regulated by sections 144A.43 to 144A.48.  The 
commissioner may bring an action under this subdivision in the 
district court in Ramsey county or in the district in which a 
home care provider is providing services.  The court may grant a 
temporary restraining order in the proceeding if continued 
activity by the person who is involved in the management, 
operation, or control of a home care provider, or by an employee 
of the home care provider, would create an imminent risk of harm 
to a recipient of home care services. 
    Subd. 3b.  [SUBPOENA.] In matters pending before the 
commissioner under sections 144A.43 to 144A.48, the commissioner 
may issue subpoenas and compel the attendance of witnesses and 
the production of all necessary papers, books, records, 
documents, and other evidentiary material.  If a person fails or 
refuses to comply with a subpoena or order of the commissioner 
to appear or testify regarding any matter about which the person 
may be lawfully questioned or to produce any papers, books, 
records, documents, or evidentiary materials in the matter to be 
heard, the commissioner may apply to the district court in any 
district, and the court shall order the person to comply with 
the commissioner's order or subpoena.  The commissioner of 
health may administer oaths to witnesses, or take their 
affirmation.  Depositions may be taken in or outside the state 
in the manner provided by law for the taking of depositions in 
civil actions.  A subpoena or other process or paper may be 
served upon a named person anywhere within the state by an 
officer authorized to serve subpoenas in civil actions, with the 
same fees and mileage and in the same manner as prescribed by 
law for process issued out of a district court.  A person 
subpoenaed under this subdivision shall receive the same fees, 
mileage, and other costs that are paid in proceedings in 
district court. 
    Subd. 4.  [RELATION TO OTHER REGULATORY PROGRAMS.] In the 
exercise of the authority granted under sections 144A.43 to 
144A.49, the commissioner shall not duplicate or replace 
standards and requirements imposed under another state 
regulatory program.  The commissioner shall not impose 
additional training or education requirements upon members of a 
licensed or registered occupation or profession, except as 
necessary to address or prevent problems that are unique to the 
delivery of services in the home or to enforce and protect the 
rights of consumers listed in section 144A.44.  For home care 
providers certified under the Medicare program, the state 
standards must not be inconsistent with the Medicare standards 
for Medicare services.  To the extent possible, the commissioner 
shall coordinate the inspections required under sections 144A.45 
to 144A.48 with the health facility licensure inspections 
required under sections 144.50 to 144.58 or 144A.10 when the 
health care facility is also licensed under the provisions of 
Laws 1987, chapter 378. 
    Subd. 5.  [PRIOR CRIMINAL CONVICTIONS.] An applicant for a 
home care provider license shall disclose to the commissioner 
all criminal convictions of persons involved in the management, 
operation, or control of the provider.  A home care provider 
shall require employees of the provider and applicants for 
employment in positions that involve contact with recipients of 
home care services to disclose all criminal convictions.  The 
commissioner may adopt rules that may require a person who must 
disclose criminal convictions under this subdivision to provide 
fingerprints and releases that authorize law enforcement 
agencies, including the bureau of criminal apprehension and the 
federal bureau of investigation, to release information about 
the person's criminal convictions to the commissioner and home 
care providers.  The bureau of criminal apprehension, county 
sheriffs, and local chiefs of police shall, if requested, 
provide the commissioner with criminal conviction data available 
from local, state, and national criminal record repositories, 
including the criminal justice data communications network.  No 
person may be employed by a home care provider or in a position 
that involves contact with recipients of home care services nor 
may any person be involved in the management, operation, or 
control of a provider, if the person has been convicted of a 
crime that relates to the provision of home care services or to 
the position, duties, or responsibilities undertaken by that 
person in the operation of the home care provider, unless the 
person can provide sufficient evidence of rehabilitation.  The 
commissioner shall adopt rules for determining what types of 
employment positions, including volunteer positions, involve 
contact with recipients of home care services, and whether a 
crime relates to home care services and what constitutes 
sufficient evidence of rehabilitation.  The rules must require 
consideration of the nature and seriousness of the crime; the 
relationship of the crime to the purposes of home care licensure 
and regulation; the relationship of the crime to the ability, 
capacity, and fitness required to perform the duties and 
discharge the responsibilities of the person's position; 
mitigating circumstances or social conditions surrounding the 
commission of the crime; the length of time elapsed since the 
crime was committed; the seriousness of the risk to the home 
care client's person or property; and other factors the 
commissioner considers appropriate.  Data collected under this 
subdivision shall be classified as private data under section 
13.02, subdivision 12. 
    Sec. 27.  [144A.465] [LICENSURE; PENALTY.] 
    A person involved in the management, operation, or control 
of a home care provider who violates section 144A.46, 
subdivision 1, paragraph (a), is guilty of a misdemeanor.  This 
section does not apply to a person who had no legal authority to 
affect or change decisions related to the management, operation, 
or control of a home care provider. 
    Sec. 28.  Minnesota Statutes 1988, section 145.38, 
subdivision 1, is amended to read: 
    Subdivision 1.  No person shall sell to a person under 19 
18 years of age any glue or, cement, or aerosol paint containing 
toluene, benzene, xylene, amyl nitrate, butyl nitrate, nitrous 
oxide, or other aromatic hydrocarbon solvents, or any similar 
substance which the state commissioner of health has, by rule 
adopted pursuant to sections 14.02, 14.04 to 14.36, 14.38, and 
14.44 to 14.45, declared to have potential for abuse and toxic 
effects on the central nervous system.  This section does not 
apply if the glue or, cement, or aerosol paint is contained in a 
packaged kit for the construction of a model automobile, 
airplane, or similar item. 
    Sec. 29.  [145.385] [WARNING SIGNS.] 
    A business establishment that offers for sale at retail any 
item as described in section 145.38, subdivision 1, must display 
a conspicuous sign that contains the following, or substantially 
similar, language: 
"NOTICE
It is unlawful for a person to sell glue, cement, or aerosol 
paint containing intoxicating substances to a person under 18 
years of age, except as provided by law.  Such an offense is a 
misdemeanor.  It is also unlawful for a person to use or possess 
glue, cement, or aerosol paint with the intent of inducing 
intoxication, excitement, or stupefaction of the central nervous 
system.  Such an offense is a misdemeanor.  Such use can be 
harmful or fatal." 
    Sec. 30.  Minnesota Statutes 1988, section 145.39, 
subdivision 1, is amended to read: 
    Subdivision 1.  No person under 19 years of age shall use 
or possess any glue, cement, aerosol paint, or any other 
substance containing toluene, benzene, xylene, amyl nitrate, 
butyl nitrate, nitrous oxide, or other aromatic hydrocarbon 
solvents, or any similar substance which the state commissioner 
of health has, by rule adopted pursuant to sections 14.02, 14.04 
to 14.36, 14.38, and 14.44 to 14.45, declared to have potential 
for abuse and toxic effects on the central nervous system with 
the intent of inducing intoxication, excitement or stupefaction 
of the central nervous system, except under the direction and 
supervision of a medical doctor. 
    Sec. 31.  [145.406] [INFORMATION ON THE SALE AND USE OF 
TOXIC SUBSTANCES.] 
    The commissioner of health shall prepare and distribute 
materials designed to provide information to retail businesses 
on the requirements of sections 145.38 to 145.40. 
    Sec. 32.  [145.867] [PERSONS REQUIRING SPECIAL DIETS.] 
    Subdivision 1.  [PUBLIC FACILITY.] "Public facility" means 
an auditorium, concert hall, sports stadium, sports arena, or 
theater. 
     Subd. 2.  [IDENTIFICATION CARD FOR INDIVIDUALS NEEDING A 
SPECIAL DIET.] The commissioner of health shall make special 
diet identification cards available to physicians and to persons 
with diabetes and other conditions requiring special diets.  The 
identification card must contain spaces for:  (1) the person's 
name, address, and signature; (2) the physician's name, phone 
number, and signature; (3) a description of the person's medical 
condition; and (4) an expiration date.  The card must also 
contain the following provision, in identical or substantially 
similar language:  "The owner of this card is exempted by the 
commissioner of health from prohibitions on bringing outside 
food and drink into a public facility."  Persons with medical 
conditions requiring a special diet may ask their physician to 
fill out and sign the card.  The physician shall fill out and 
sign the card if, in the physician's medical judgment, the 
person has a medical condition that requires a special diet.  
Persons with diabetes shall be automatically assumed by 
physicians to require special diets.  Special diet 
identification cards shall be valid for five years.  Persons 
with a medical condition requiring a special diet may request a 
new card from their physician up to six months before the 
expiration date. 
    Subd. 3.  [EXEMPTION FROM FOOD AND DRINK 
PROHIBITIONS.] Persons with medical conditions requiring a 
special diet who present a valid special diet identification 
card to any employee of a public facility shall be allowed to 
bring in outside food and drink, subject to the limitations in 
subdivision 4.  To be valid, the card must be filled out 
according to subdivision 2 and must be current.  Persons with 
special diet identification cards must obey all other food and 
drink regulations established by a public facility including 
prohibitions on eating or drinking in certain areas of the 
public facility. 
    Subd. 4.  [LIMITATION ON EXEMPTION.] Public facilities may 
limit the amount of food and drink that may be brought into a 
public facility by a person with a special diet identification 
card to the amount that can reasonably be consumed by a single 
individual.  Public facilities may also place limits on the size 
of any food or drink container carried in, if the container 
would be a safety hazard or interfere with other patrons or 
customers.  Public facilities may also require persons 
displaying a special diet identification card to show some other 
form of identification. 
    Sec. 33.  Minnesota Statutes 1988, section 145.882, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CONTINUATION OF 1983 PROJECTS FUNDING 
LEVELS AND ADVISORY TASK FORCE REVIEW.] (a) Notwithstanding 
subdivisions 2 and 3, recipients of maternal and child health 
grants for special projects in state fiscal year 1983 shall 
continue to be funded at the same level as in state fiscal year 
1983 until December 31, 1987.  Beginning January 1, 1988, 
recipients of maternal and child health special project grants 
awarded in state fiscal year 1983 must receive: 
    (1) for calendar year 1988, no less than 80 percent of the 
amount awarded in state fiscal year 1983; and 
    (2) for calendar year 1989, no less than 70 percent of the 
amount awarded in state fiscal year 1983. 
    (b) The amount of grants awarded under this subdivision 
must be deducted from the allocation under subdivisions 3 and 4 
for the community health services area within which the grantee 
is located.  In order to receive money under this subdivision, 
recipients must continue to comply with sections 145.881 and 
145.882 to 145.888.  These recipients are also eligible to apply 
for grants under subdivisions 2, 3, and 4.  Any decrease in the 
amount of federal funding to the state for the maternal and 
child health block grant must be apportioned to reflect a 
proportional decrease for each recipient.  Any increase in the 
amount of federal funding to the state must be distributed under 
subdivisions 2, 3, and 4. 
    (c) The advisory task force shall review and recommend the 
proportion of maternal and child health block grant funds to be 
expended for indirect costs, direct services and special 
projects.  
    Sec. 34.  Minnesota Statutes 1988, section 145.882, 
subdivision 3, is amended to read: 
    Subd. 3.  [ALLOCATION TO COMMUNITY HEALTH SERVICES AREAS.] 
(a) The maternal and child health block grant money remaining 
after distributions made under subdivisions 1 and subdivision 2 
must be allocated according to the formula in subdivision 4 to 
community health services areas for distribution by community 
health boards as defined in section 145A.02, subdivision 5, to 
qualified programs that provide essential services within the 
community health services area as long as:  
    (1) the Minneapolis community health service area is 
allocated at least $1,626,215 per year; 
    (2) the St. Paul community health service area is allocated 
at least $822,931 per year; and 
    (3) all other community health service areas are allocated 
at least $30,000 per county per year or their 1988-1989 funding 
cycle award, whichever is less. 
    (b) Notwithstanding paragraph (a), if the total amount of 
maternal and child health block grant funding decreases, the 
decrease must be apportioned to reflect a proportional decrease 
for each recipient, including recipients who would otherwise 
receive a guaranteed minimum allocation under paragraph (a). 
    Sec. 35.  Minnesota Statutes 1988, section 145.882, 
subdivision 7, is amended to read: 
    Subd. 7.  [USE OF BLOCK GRANT MONEY.] (a) Maternal and 
child health block grant money allocated to a community health 
board or community health services area under this section must 
be used for qualified programs for high risk and low income 
individuals.  Block grant money must be used for programs that: 
    (1) specifically address the highest risk populations, 
particularly low income and minority groups with a high rate of 
infant mortality and children with low birth weight, by 
providing services calculated to produce measurable decreases in 
infant mortality rates, instances of children with low birth 
weight, and medical complications associated with pregnancy and 
childbirth; 
    (2) specifically target pregnant women whose age, medical 
condition, or maternal history substantially increases the 
likelihood of complications associated with pregnancy and 
childbirth or the birth of a child with an illness, disability, 
or special medical needs; 
    (3) specifically address the health needs of young children 
who have or are likely to have a chronic disease or disability 
or special medical needs; or 
    (4) provide family planning and preventive medical care for 
specifically identified target populations, such as minority and 
low income teenagers, in a manner calculated to decrease the 
occurrence of inappropriate pregnancy and minimize the risk of 
complications associated with pregnancy and childbirth.; or 
    (5) specifically address the frequency and severity of 
childhood injuries in high risk target populations by providing 
services calculated to produce measurable decreases in mortality 
and morbidity.  However, money may be used for this purpose only 
if the community health board's application includes program 
components for the purposes in clauses (1) to (4) in the 
proposed geographic service area and the total expenditure for 
injury-related programs under this clause does not exceed ten 
percent of the total allocation under subdivision 3. 
    (b) Maternal and child health block grant money may be used 
for purposes other than the purposes listed in this subdivision 
only if under the following conditions:  
    (1) the community health board or community health services 
area can demonstrate that existing programs fully address the 
needs of the highest risk target populations described in this 
subdivision.; or 
    (2) the money is used to continue projects that received 
funding before creation of the maternal and child health block 
grant in 1981. 
    (c) Projects that received funding before creation of the 
maternal and child health block grant in 1981, must be allocated 
at least the amount of maternal and child health special project 
grant funds received in 1989, unless (1) the local board of 
health provides equivalent alternative funding for the project 
from another source; or (2) the local board of health 
demonstrates that the need for the specific services provided by 
the project has significantly decreased as a result of changes 
in the demographic characteristics of the population, or other 
factors that have a major impact on the demand for services.  If 
the amount of federal funding to the state for the maternal and 
child health block grant is decreased, these projects must 
receive a proportional decrease as required in subdivision 1.  
Increases in allocation amounts to local boards of health under 
subdivision 4 may be used to increase funding levels for these 
projects. 
    Sec. 36.  [145.898] [SUDDEN INFANT DEATH.] 
    The department of health shall develop uniform 
investigative guidelines and protocols for coroners and medical 
examiners conducting death investigations and autopsies of 
children under two years of age. 
    Sec. 37.  [145.9245] [GRANTS FOR CASE MANAGEMENT SERVICES 
FOR AIDS INFECTED PERSONS.] 
    The commissioner may award special grants to community 
health boards as defined in section 145A.02, subdivision 5, or 
nonprofit corporations for the development, implementation, and 
evaluation of case management services for individuals infected 
with the human immunodeficiency virus to assist in preventing 
transmission of the human immunodeficiency virus to others. 
    Sec. 38.  Minnesota Statutes 1988, section 146.13, is 
amended to read: 
    146.13 [REGISTRATION FEES.] 
    Every person not hereinafter excepted from the provisions 
of this chapter authorized to practice healing in this state 
shall, in the month of January each year, annually register with 
the director of the particular board of examiners which examined 
and registered or licensed the person to practice that branch or 
system of healing pursued; and shall, at that time, for the 
purpose of making such registration, sign and send to such 
director in writing the following:  name, the name of the place, 
and the address, at which the practice of healing is engaged in, 
and pay to the director each year a fee in an amount to be fixed 
by rule of the respective board of examiners.  Any person who 
shall change the address or place of practice during the year 
shall forthwith notify such director in writing of such change, 
giving such new address or place.  The director of each board of 
examiners shall keep a proper register of all such persons and 
to each person so registering the proper board shall issue a 
certificate for the current year, signed by the president and 
the director and sealed with the seal of such board, setting 
forth name, the name of the place and the address at which the 
practice of healing is engaged in, and the branch or system of 
healing pursued.  Any person not hereinafter excepted from the 
provisions of this chapter lawfully entitled to engage in the 
practice of healing in this state after the month of January in 
any year, and who shall not be currently registered as provided 
in this section, shall, within 30 days after first so engaging 
in the practice of healing, register with the proper examining 
board in the manner provided in this chapter, pay to the 
director of such board the fee above required, and received from 
such board a certificate as above prescribed for the balance of 
such year.  Every person receiving a certificate, as herein 
provided, shall display the same in a conspicuous place in the 
office or other corresponding place where the practice of 
healing is pursued.  
    All fees received by the director of any examining board 
for registration required by this section shall be paid to the 
general fund.  The expenses of keeping proper registers, 
furnishing the certificates herein provided for, employing 
inspectors for procuring evidence of any violation of the laws 
administered thereby and aiding in the enforcement of such laws, 
and for such other expenses as may be necessarily paid or 
incurred in the exercise of its powers or performance of its 
duties, shall be paid from the appropriation made to the 
examining board.  
    Sec. 39.  Minnesota Statutes 1988, section 147.02, 
subdivision 1, is amended to read:  
    Subdivision 1.  [UNITED STATES OR CANADIAN MEDICAL SCHOOL 
GRADUATES.] The board shall, with the consent of six of its 
members, issue a license to practice medicine to a person who 
meets the following requirements:  
    (a) An applicant for a license shall file a written 
application on forms provided by the board, showing to the 
board's satisfaction that the applicant is of good moral 
character and satisfies the requirements of this section.  
    (b) The applicant shall present evidence satisfactory to 
the board of being a graduate of a medical or osteopathic school 
located in the United States, its territories or Canada, and 
approved by the board based upon its faculty, curriculum, 
facilities, accreditation by a recognized national accrediting 
organization approved by the board, and other relevant data, or 
is currently enrolled in the final year of study at the school.  
    (c) The applicant must have passed an a comprehensive 
examination for initial licensure prepared and graded by the 
national board of medical examiners or the federation of state 
medical boards.  The board shall by rule determine what 
constitutes a passing score in the examination.  
    (d) The applicant shall present evidence satisfactory to 
the board of the completion of one year of graduate, clinical 
medical training in a program accredited by a national 
accrediting organization approved by the board or other graduate 
training approved in advance by the board as meeting standards 
similar to those of a national accrediting organization.  
    (e) The applicant shall make arrangements with the 
executive director to appear in person before the board or its 
designated representative to show that the applicant satisfies 
the requirements of this section.  The board may establish as 
internal operating procedures the procedures or requirements for 
the applicant's personal presentation.  
    (f) The applicant shall pay a fee established by the board 
by rule.  The fee may not be refunded.  
    (g) The applicant must not have engaged in conduct 
warranting disciplinary action against a licensee.  If the 
applicant does not satisfy the requirements of this paragraph, 
the board may refuse to issue a license unless it determines 
that the public will be protected through issuance of a license 
with conditions and limitations the board considers appropriate. 
    Sec. 40.  Minnesota Statutes 1988, section 148B.23, 
subdivision 1, is amended to read: 
    Subdivision 1.  [EXEMPTION FROM EXAMINATION.] For two years 
from July 1, 1987, the board shall issue a license without 
examination to an applicant: 
    (1) for a licensed social worker, if the board determines 
that the applicant has received a baccalaureate degree from an 
accredited program of social work, or that the applicant has at 
least a baccalaureate degree from an accredited college or 
university and two years in full-time employment or 4,000 hours 
of experience in the supervised practice of social work within 
the five years before July 1, 1989, or within a longer time 
period as specified by the board; 
    (2) for a licensed graduate social worker, if the board 
determines that the applicant has received a master's degree 
from an accredited program of social work or doctoral degree in 
social work; or a master's or doctoral degree from a graduate 
program in a human service discipline, as approved by the board; 
    (3) for a licensed independent social worker, if the board 
determines that the applicant has received a master's degree 
from an accredited program of social work or doctoral degree in 
social work; or a master's or doctoral degree from a graduate 
program in a human service discipline, as approved by the board; 
and, after receiving the degree, has practiced social work for 
at least two years in full-time employment or 4,000 hours under 
the supervision of a social worker meeting these requirements, 
or of another qualified professional; and 
    (4) for a licensed independent clinical social worker, if 
the board determines that the applicant has received a master's 
degree from an accredited program of social work or doctoral 
degree in social work; or a master's or doctoral degree from a 
graduate program in a human service discipline as approved by 
the board; and, after receiving the degree, has practiced 
clinical social work for at least two years in full-time 
employment or 4,000 hours under the supervision of a clinical 
social worker meeting these requirements, or of another 
qualified mental health professional. 
    Sec. 41.  Minnesota Statutes 1988, section 148B.27, 
subdivision 2, is amended to read: 
    Subd. 2.  [USE OF TITLES.] After the board adopts rules, no 
individual shall be presented to the public by any title 
incorporating the words "social work" or "social worker" unless 
that individual holds a valid license issued under sections 
148B.18 to 148B.28.  City, county, and state agency social 
workers who are not licensed under sections 148B.18 to 148B.28 
may use the title city agency social worker or county agency 
social worker or state agency social worker.  Hospital social 
workers who are not licensed under sections 148B.18 to 148B.28 
may use the title hospital social worker while acting within the 
scope of their employment. 
    Sec. 42.  Minnesota Statutes 1988, section 148B.32, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPEARANCE AS LICENSEE PROHIBITED.] After 
adoption of rules by the board implementing sections 148B.29 to 
148B.39, no individual shall be held out to be a marriage and 
family therapist unless that individual holds a valid license 
issued under sections 148B.29 to 148B.39, is a psychologist 
licensed by the board of psychology with a competency in 
marriage and family therapy, or is a person providing marriage 
and family therapy who is employed by a hospital licensed under 
chapter 144 and who is acting within the scope of the person's 
employment.  
    Sec. 43.  Minnesota Statutes 1988, section 148B.40, 
subdivision 3, is amended to read: 
    Subd. 3.  [MENTAL HEALTH SERVICE PROVIDER.] "Mental health 
service provider" or "provider" means any person who provides, 
for a remuneration, mental health services as defined in 
subdivision 4.  It does not include persons licensed by the 
board of medical examiners under chapter 147; the board of 
nursing under sections 148.171 to 148.285; or the board of 
psychology under sections 148.88 to 148.98; the board of social 
work under sections 148B.18 to 148B.28; the board of marriage 
and family therapy under sections 148B.29 to 148B.39; or another 
licensing board if the person is practicing within the scope of 
the license.  In addition, the term does not include employees 
of the state of Minnesota or any of its political subdivisions 
while acting within the scope of their public employment; 
hospital and nursing home social workers exempt from licensure 
by the board of social work under section 148B.28, subdivision 
6, including hospital and nursing home social workers acting as 
marriage and family counselors within the scope of their 
employment by the hospital or nursing home; persons employed by 
a program licensed by the commissioner of human services who are 
acting as mental health service providers within the scope of 
their employment; and persons certified as chemical dependency 
professionals by the Institute for Chemical Dependency 
Professionals of Minnesota, Inc.  The Institute for Chemical 
Dependency Professionals shall provide the board of unlicensed 
mental health service providers with the name and address of any 
person whose certification has been discontinued, along with the 
reason for the discontinuance.  Any chemical dependency 
treatment professional who does not maintain a current and valid 
certification with the Institute of Chemical Treatment 
Professionals of Minnesota, Inc., must register with the board 
of unlicensed mental health service providers in order to 
provide chemical dependency treatment services. 
    Sec. 44.  Minnesota Statutes 1988, section 149.02, is 
amended to read:  
    149.02 [EXAMINATION; LICENSING.] 
    The state commissioner of health is hereby authorized and 
empowered to examine, upon submission of an application therefor 
and fee as prescribed by the commissioner pursuant to section 
144.122, all applicants for license to practice mortuary science 
or funeral directing and to determine whether or not the 
applicants possess the necessary qualifications to practice 
mortuary science or funeral directing.  If upon examination the 
commissioner shall determine that an applicant is properly 
qualified to practice mortuary science or funeral directing, the 
commissioner shall grant a license to the person to practice 
mortuary science or funeral directing.  Licenses shall expire 
and be renewed as prescribed by the commissioner pursuant to 
section 144.122. 
    On or after the thirty-first day of December, 1955, 
separate licenses as embalmer or funeral director shall not be 
issued, except that a license as funeral director shall be 
issued to those apprentices who have been registered under rules 
of the commissioner as apprentice funeral directors on the first 
day of July, 1955, qualify by examination for licensure under 
such rules as funeral directors before the first day of August, 
1957.  Such applicants shall file an application for license as 
a funeral director in the manner as is required in section 
149.03 for a license in mortuary science.  It shall be 
accompanied by a fee in an amount prescribed by the commissioner 
pursuant to section 144.122.  However, a single license as a 
funeral director shall be issued to those persons whose custom, 
rites, or religious beliefs forbid the practice of embalming.  
An applicant for a single license as a funeral director under 
this exception shall submit to the commissioner of health two 
affidavits substantiating the beliefs and convictions of the 
applicant and shall meet any other standards for licensure as 
are required by law or by rule of the commissioner.  Such a 
funeral director shall only direct funerals for persons of the 
same customs, rites or religious beliefs as those of the funeral 
director.  In the case of a funeral conducted for persons of 
such customs, rites or religious beliefs where embalming and 
funeral directing is necessary according to law, such embalming 
and funeral directing shall be performed only by a person 
licensed to do so in this state. 
    All licensees who on the thirty-first day of December, 
1955, hold licenses as embalmers only shall be granted licenses 
to practice mortuary science and may renew their licenses at the 
times and in the manner specified by the commissioner pursuant 
to section 144.122. 
    All licensees who on the thirty-first day of December, 
1955, hold licenses as funeral director only may continue to 
renew their licenses at the times and in the manner specified by 
the commissioner pursuant to section 144.122.  If a licensee 
fails to renew, as in this chapter required, that person's 
license as a funeral director shall not thereafter be reinstated.
    To assist in the holding of the examination and enforcement 
of the provisions of this chapter, the commissioner shall 
establish a mortuary sciences advisory council and shall appoint 
four five members to it.  Two members shall be licensed in 
mortuary science and shall have had at least five years 
experience immediately preceding their appointment in the 
preparation and disposition of dead human bodies and in the 
practice of mortuary science.  A third member shall be a 
representative of the commissioner Two members must be public 
members as defined by section 214.02, and the fourth fifth 
member shall be a full-time academic staff member of the course 
in mortuary science of the University of Minnesota.  The terms, 
compensation and removal of members and expiration of the 
council shall be as provided in section 15.059. 
    Sec. 45.  Minnesota Statutes 1988, section 149.06, is 
amended to read:  
    149.06 [VIOLATIONS, PENALTIES.] 
    Any person who shall embalm a dead human body, or who shall 
hold out as a mortician, embalmer, funeral director, or trainee, 
without being licensed or registered, shall be guilty of a 
misdemeanor and punished accordingly.  This chapter shall not 
apply to or in any way interfere with the duties of any officer 
of any public institution, or with the duties of any officer of 
a medical college, county medical society, anatomical 
association, accredited college of mortuary science, or to any 
person engaged in the performance of duties prescribed by law 
relating to the conditions under which the indigent dead human 
bodies are held subject to anatomical study, or to the custom or 
rites of any religious sect in the burial of their dead. 
    The name of a person registered as a trainee must not be 
used or caused or permitted to be used by the person, in any 
way, in the name, designation, or title, or in the advertising 
of the funeral establishment with which the person is associated 
or in which the person may have acquired a proprietary or 
financial interest. 
    Nothing in this chapter shall in any way affect the 
operation of corporations or burial associations, providing all 
work of embalming or funeral directing is done by licensed 
morticians or funeral directors, as provided by this chapter.  
It shall be unlawful for any such corporation or burial 
association to: 
    (1) Violate any of the laws of this state relative to the 
burial or disposal of dead human bodies, or any of the rules of 
the state commissioner of health in relation to the care, 
custody, or disposition of dead human bodies, or the 
disinfecting of premises where contagion exists; 
    (2) Publish or disseminate misleading advertising; 
    (3) Directly or indirectly pay or cause to be paid any sum 
of money or other valuable consideration for the securing of 
business, other than by advertising, or for obtaining authority 
to dispose of any dead human bodies; 
    (4) Permit unlicensed persons to render or perform any of 
the services required to be performed by persons licensed under 
the provisions of this chapter. 
    Any corporation or burial association violating any of the 
provisions of this chapter shall be deemed guilty of a 
misdemeanor. 
    Nothing in this chapter shall be construed as repealing any 
of the laws of this state in regard to the organizing or 
incorporating of cooperative associations. 
    Sec. 46.  Minnesota Statutes 1988, section 153A.13, 
subdivision 4, is amended to read:  
    Subd. 4.  [HEARING INSTRUMENT SELLING.] "Hearing instrument 
selling" means fitting and selling hearing instruments, 
assisting the consumer in instrument selection, selling hearing 
instruments at retail, and or testing human hearing in 
connection with these activities. 
    Sec. 47.  Minnesota Statutes 1988, section 153A.15, 
subdivision 3, is amended to read:  
    Subd. 3.  [PROCEDURES.] The commissioner shall establish, 
in writing, internal operating procedures for receiving and 
investigating complaints and imposing enforcement actions.  The 
written internal operating procedures may include procedures for 
sharing complaint information with government agencies in this 
and other states.  Establishment of the operating procedures are 
not subject to rulemaking procedures under chapter 
14.  Procedures for sharing complaint information shall be 
consistent with the requirements for handling government data 
under chapter 13. 
    Sec. 48.  Minnesota Statutes 1988, section 153A.16, is 
amended to read:  
    153A.16 [BOND REQUIRED.] 
    A sole proprietor, partnership, association, or corporation 
engaged in hearing instrument sales shall provide a surety bond 
in favor of the state of Minnesota in the amount of $5,000 for 
every individual engaged in the practice of selling hearing 
instruments, up to a maximum of $25,000.  The bond required by 
this section must be in favor of the state for the benefit of 
any person who suffers loss of payments for the purchase or 
repair of a hearing instrument after July 1, 1988, due to 
insolvency or cessation of the business of the sole proprietor, 
partnership, association, or corporation engaged in hearing 
instrument sales.  A copy of the bond must be filed with the 
attorney general commissioner of health.  A person claiming 
against the bond may maintain an action at law against the 
surety and the sole proprietor, partnership, association, or 
corporation.  The aggregate liability of the surety to all 
persons for all breaches of the conditions of the bonds provided 
herein must not exceed the amount of the bond. 
    Sec. 49.  [157.031] [ADDITIONAL LICENSE REQUIRED FOR BOARD 
AND LODGING ESTABLISHMENTS; SPECIAL SERVICES.] 
    Subdivision 1.  [DEFINITIONS.] (a) "Supportive services" 
means the provision of supervision and minimal assistance with 
independent living skills such as social and recreational 
opportunities, assistance with transportation, arranging for 
meetings and appointments, arranging for medical and social 
services, and dressing, grooming, or bathing.  Supportive 
services also include providing reminders to residents to take 
medications that are self administered or providing storage for 
medications if requested. 
    (b) "Health supervision services" means the provision of 
assistance in the preparation and administration of medications 
other than injectables, the provision of therapeutic diets, 
taking vital signs, or providing assistance in bathing or with 
walking devices. 
    Subd. 2.  [REGISTRATION.] A board and lodging establishment 
that provides supportive services or health supervision services 
must register with the commissioner by September 1, 1989.  The 
registration must include the name, address, and telephone 
number of the establishment, the types of services that are 
being provided, a description of the residents being served, the 
type and qualifications of staff in the facility, and other 
information that is necessary to identify the needs of the 
residents and the types of services that are being provided.  
The commissioner shall develop and furnish to the board and 
lodging establishment the necessary form for submitting the 
registration.  The requirement for registration is effective 
until the special license rules required by subdivision 5 are 
effective. 
    Subd. 3.  [RESTRICTION ON THE PROVISION OF SERVICES.] 
Effective September 1, 1989, and until the rules required under 
subdivision 5 are adopted, a board and lodging establishment may 
provide health supervision services only if a licensed nurse is 
on site in the facility for at least four hours a week to 
provide supervision and health monitoring of the residents.  A 
board and lodging facility that admits or retains residents 
using wheelchairs or walkers must have the necessary clearances 
from the office of the state fire marshal. 
    Subd. 4.  [SPECIAL LICENSE REQUIRED.] Upon adoption of the 
rules required by subdivision 5, a board and lodging 
establishment that provides either supportive care or health 
supervision services must obtain a special license from the 
commissioner.  The special license is required until rules 
resulting from the recommendations made in accordance with 
section 213 are implemented. 
    Subd. 5.  [RULES.] By July 1, 1990, the commissioner of 
health shall adopt rules necessary to implement the special 
license provisions.  The rules may address the type of services 
that can be provided, staffing requirements, and the training 
and qualifications of staff.  The rules must set a fee for the 
issuance of the special service license.  The special license 
fee is in addition to the license fee prescribed in section 
157.03.  Nothing in section 157.031 and sections 213 and 214 is 
intended to prevent the promulgation of rules by the 
commissioner of human services governing the licensure or 
delivery of services to persons with mental illness or the 
requirement to comply with those rules. 
    Subd. 6.  [SERVICES THAT MAY NOT BE PROVIDED IN A BOARD AND 
LODGING ESTABLISHMENT.] A board and lodging establishment may 
not admit or retain individuals who: 
    (1) would require assistance from facility staff because of 
the following needs:  incontinence, catheter care, use of 
injectable or parenteral medications, wound care, or dressing 
changes or irrigations of any kind; or 
    (2) require a level of care and supervision beyond 
supportive services or health supervision services. 
    Subd. 7.  [CERTAIN INDIVIDUALS MAY PROVIDE SERVICES.] This 
section does not prohibit the provision of health care services 
to residents of a board and lodging establishment by family 
members of the resident or by a registered or licensed home care 
agency employed by the resident. 
    Subd. 8.  [EXEMPTION FOR ESTABLISHMENTS WITH A HUMAN 
SERVICES LICENSE.] This section does not apply to a board and 
lodging establishment that is licensed by the commissioner of 
human services under chapter 245A.  
    Subd. 9.  [VIOLATIONS.] The commissioner may revoke both 
the special service license, when issued, and the establishment 
license, if the establishment is found to be in violation of 
this section.  Violation of this section is a gross misdemeanor. 
     Sec. 50.  Minnesota Statutes 1988, section 157.14, is 
amended to read: 
    157.14 [EXEMPTIONS.] 
    This chapter shall not be construed to apply to interstate 
carriers under the supervision of the United States Department 
of Health, Education and Welfare or to any building constructed 
and primarily used for religious worship, nor to any building 
owned, operated and used by a college or university in 
accordance with regulations promulgated by the college or 
university.  Any person, firm or corporation whose principal 
mode of business is licensed under sections 28A.04 and 28A.05 is 
exempt at that premises from licensure as a place of refreshment 
or restaurant; provided, that the holding of any license 
pursuant to sections 28A.04 and 28A.05 shall not exempt any 
person, firm, or corporation from the applicable provisions of 
the chapter or the rules of the state commissioner of health 
relating to food and beverage service establishments.  This 
chapter does not apply to family day care homes or group family 
day care homes governed by sections 245.781 to 245.812 and does 
not apply to nonprofit senior citizen centers for the sale of 
home-baked goods. 
    Sec. 51.  Minnesota Statutes 1988, section 176.136, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SCHEDULE.] The commissioner shall by rule 
establish procedures for determining whether or not the charge 
for a health service is excessive.  In order to accomplish this 
purpose, the commissioner shall consult with insurers, 
associations and organizations representing the medical and 
other providers of treatment services and other appropriate 
groups.  The procedures established by the commissioner shall 
limit the charges allowable for medical, chiropractic, 
podiatric, surgical, hospital and other health care provider 
treatment or services, as defined and compensable under section 
176.135, to the 75th percentile of usual and customary fees or 
charges based upon billings for each class of health care 
provider during all of the calendar year preceding the year in 
which the determination is made of the amount to be paid the 
health care provider for the billing.  The procedures 
established by the commissioner for determining whether or not 
the charge for a health service is excessive shall be structured 
to encourage providers to develop and deliver services for 
rehabilitation of injured workers.  The procedures shall 
incorporate the provisions of sections 144.701, 144.702, and 
144.703 to the extent that the commissioner finds that these 
provisions effectively accomplish the intent of this section or 
are otherwise necessary to insure that quality hospital care is 
available to injured employees. 
    Sec. 52.  Minnesota Statutes 1988, section 176.136, 
subdivision 5, is amended to read: 
    Subd. 5.  [PERMANENT RULES.] Where permanent rules have 
been adopted to implement this section, the commissioner shall 
annually give notice in the State Register of the 75th 
percentile reimbursement allowance to meet the requirements of 
subdivision 1.  The notice shall be in lieu of the requirements 
of chapter 14 if the 75th percentile for the service meets and 
shall be set at the 75th percentile of the billings for each 
service in the data base; provided that the requirements of 
paragraphs (a) to (e) are met. 
    (a) The data base includes at least three different 
providers of the service. 
    (b) The data base contains at least 20 billings for the 
service. 
    (c) The standard deviation as a percentage of the mean of 
billings for the service is 50 percent or less. data is taken 
from the data base of Blue Cross and Blue Shield of Minnesota 
where available; if not available from Blue Cross and Blue 
Shield of Minnesota, the data will be taken directly from the 
health care providers, professional associations, or other 
available sources. 
    (d) The means of the Blue Cross and Blue Shield data base 
and of the department of human services data base for the 
service are within 20 percent of each other. standard deviation 
is less than or equal to 50 percent of the mean of the billings 
for each service in the data base or the value of the 75th 
percentile is not greater than or equal to three times the value 
of the 25th percentile of the billings for each service in the 
data base. 
    (e) The data is taken from the data base of Blue Cross and 
Blue Shield or the department of human services 75th percentile 
logically reflects the usual and customary charges for the 
service. 
    Sec. 53.  [196.27] [AGENT ORANGE SETTLEMENT PAYMENTS.] 
    (a) Payments received by veterans or their dependents 
because of settlements between them and the manufacturers of 
Agent Orange or other chemical agents, as defined in section 
196.21, must not be treated as income (or an available resource) 
of the veterans or their dependents for the purposes of any 
program of public assistance or benefit program administered by 
the department of veterans affairs, the department of human 
services, or other agencies of the state or political 
subdivisions of the state, except as provided in paragraph (b). 
    (b) The income and resource exclusion in paragraph (a) does 
not apply to the medical assistance, food stamps, or aid to 
families with dependent children programs until the commissioner 
of human services receives formal approval from the United 
States Department of Health and Human Services, for the medical 
assistance and aid to families with dependent children programs, 
and from the United States Department of Agriculture, for the 
food stamps program.  The income exclusion does not apply to the 
Minnesota supplemental aid program until the commissioner 
receives formal federal approval of the exclusion for the 
medical assistance program. 
    Sec. 54.  Minnesota Statutes 1988, section 214.04, 
subdivision 3, is amended to read: 
    Subd. 3.  The executive secretary of each health-related 
and non-health-related board shall be the chief administrative 
officer for the board but shall not be a member of the board.  
The executive secretary shall maintain the records of the board, 
account for all fees received by it, supervise and direct 
employees servicing the board, and perform other services as 
directed by the board.  The executive secretaries and other 
employees of the following boards shall be hired by the board, 
and the executive secretaries shall be in the unclassified civil 
service, except as provided in this subdivision:  
     (1) dentistry; 
     (2) medical examiners; 
     (3) nursing; 
    (4) pharmacy; 
    (5) accountancy; 
    (6) architecture, engineering, land surveying and landscape 
architecture; 
    (7) barber examiners; 
    (8) cosmetology; 
    (9) electricity; 
    (10) teaching; 
    (11) peace officer standards and training; 
    (12) social work; 
    (13) marriage and family therapy; 
    (14) unlicensed mental health service providers; and 
    (15) office of social work and mental health boards. 
    The board of medical examiners shall set the salary of its 
executive director, which may not exceed 95 percent of the top 
of the salary range set for the commissioner of health in 
section 15A.081, subdivision 1.  The board of dentistry shall 
set the salary of its executive director, which may not exceed 
80 percent of the top of the salary range set for the 
commissioner of health in section 15A.081, subdivision 1.  The 
board shall submit a proposed salary increase to the legislative 
commission on employee relations and the full legislature for 
approval, modification, or rejection in the manner provided in 
section 43A.18, subdivision 2.  
    The executive secretaries serving the remaining boards are 
hired by those boards and are in the unclassified civil service, 
except for part-time executive secretaries, who are not required 
to be in the unclassified service.  Boards not requiring 
full-time executive secretaries may employ them on a part-time 
basis.  To the extent practicable, the sharing of part-time 
executive secretaries by boards being serviced by the same 
department is encouraged.  Persons providing services to those 
boards not listed in this subdivision, except executive 
secretaries of the boards and employees of the attorney general, 
are classified civil service employees of the department 
servicing the board.  To the extent practicable, the 
commissioner shall ensure that staff services are shared by the 
boards being serviced by the department.  If necessary, a board 
may hire part-time, temporary employees to administer and grade 
examinations. 
    Sec. 55.  Minnesota Statutes 1988, section 245.73, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COMMISSIONER'S DUTY.] The commissioner 
shall establish a statewide program to assist counties in 
ensuring provision of services to adult mentally ill persons.  
The commissioner shall make grants to county boards to provide 
community based services to mentally ill persons through 
facilities programs licensed under sections 245.781 to 245.812 
245A.01 to 245A.16.  
    Sec. 56.  Minnesota Statutes 1988, section 245.73, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION; CRITERIA.] County boards may submit 
an application and budget for use of the money in the form 
specified by the commissioner.  The commissioner shall make 
grants only to counties whose applications and budgets are 
approved by the commissioner for residential facilities programs 
for adult mentally ill persons to meet licensing requirements 
pursuant to sections 245.781 to 245.812 245A.01 to 245A.16.  
Funds shall not be used to supplant or reduce local, state, or 
federal expenditure levels supporting existing resources unless 
the reduction in available moneys is the result of a state or 
federal decision not to refund an existing program.  State funds 
received by a county pursuant to this section shall be used only 
for direct service costs.  Both direct service and other costs, 
including but not limited to renovation, construction or rent of 
buildings, purchase or lease of vehicles or equipment as 
required for licensure as a facility residential program for 
adult mentally ill persons under sections 245.781 to 245.812 
245A.01 to 245A.16, may be paid out of the matching funds 
required under subdivision 3.  Neither the state funds nor the 
matching funds shall be used for room and board costs. 
    Sec. 57.  Minnesota Statutes 1988, section 245.91, is 
amended by adding a subdivision to read: 
    Subd. 6.  [SERIOUS INJURY.] "Serious injury" means: 
    (1) fractures; 
    (2) dislocations; 
    (3) evidence of internal injuries; 
    (4) head injuries with loss of consciousness; 
    (5) lacerations involving injuries to tendons or organs, 
and those for which complications are present; 
    (6) extensive second degree or third degree burns, and 
other burns for which complications are present; 
    (7) extensive second degree or third degree frost bite, and 
others for which complications are present; 
    (8) irreversible mobility or avulsion of teeth; 
    (9) injuries to the eyeball; 
    (10) ingestion of foreign substances and objects that are 
harmful; 
    (11) near drowning; 
    (12) heat exhaustion or sunstroke; and 
    (13) all other injuries considered serious by a physician. 
    Sec. 58.  Minnesota Statutes 1988, section 245.94, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POWERS.] (a) The ombudsman may prescribe 
the methods by which complaints to the office are to be made, 
reviewed, and acted upon.  The ombudsman may not levy a 
complaint fee. 
    (b) The ombudsman may mediate or advocate on behalf of a 
client.  
    (c) The ombudsman may investigate the quality of services 
provided to clients and determine the extent to which quality 
assurance mechanisms within state and county government work to 
promote the health, safety, and welfare of clients, other than 
clients in acute care facilities who are receiving services not 
paid for by public funds. 
    (d) At the request of a client, or upon receiving a 
complaint or other information affording reasonable grounds to 
believe that the rights of a client who is not capable of 
requesting assistance have been adversely affected, the 
ombudsman may gather information about and analyze, on behalf of 
the client, the actions of an agency, facility, or program. 
    (e) The ombudsman may examine, on behalf of a client, 
records of an agency, facility, or program if the records relate 
to a matter that is within the scope of the ombudsman's 
authority.  If the records are private and the client is capable 
of providing consent, the ombudsman shall first obtain the 
client's consent.  The ombudsman is not required to obtain 
consent for access to private data on clients with mental 
retardation or a related condition.  
    (f) The ombudsman may subpoena a person to appear, give 
testimony, or produce documents or other evidence that the 
ombudsman considers relevant to a matter under inquiry.  The 
ombudsman may petition the appropriate court to enforce the 
subpoena.  A witness who is at a hearing or is part of an 
investigation possesses the same privileges that a witness 
possesses in the courts or under the law of this state.  Data 
obtained from a person under this paragraph are private data as 
defined in section 13.02, subdivision 12. 
    (f) (g) The ombudsman may, at reasonable times in the 
course of conducting a review, enter and view premises within 
the control of an agency, facility, or program.  
    (g) (h) The ombudsman may attend department of human 
services review board and special review board proceedings; 
proceedings regarding the transfer of patients or residents, as 
defined in section 246.50, subdivisions 4 and 4a, between 
institutions operated by the department of human services; and, 
subject to the consent of the affected client, other proceedings 
affecting the rights of clients.  The ombudsman is not required 
to obtain consent to attend meetings or proceedings and have 
access to private data on clients with mental retardation or a 
related condition. 
    (h) (i) The ombudsman shall have access to data of 
agencies, facilities, or programs classified as private or 
confidential as defined in section 13.02, subdivisions 12 and 
13, regarding services provided to clients with mental 
retardation or a related condition. 
    (i) (j) To avoid duplication and preserve evidence, the 
ombudsman shall inform relevant licensing or regulatory 
officials before undertaking a review of an action of the 
facility or program. 
    (j) (k) Sections 245.91 to 245.97 are in addition to other 
provisions of law under which any other remedy or right is 
provided. 
    Sec. 59.  Minnesota Statutes 1988, section 245.94, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [MANDATORY REPORTING.] Within 24 hours after a 
client suffers death or serious injury, the facility or program 
director shall notify the ombudsman of the death or serious 
injury. 
    Sec. 60.  Minnesota Statutes 1988, section 245A.02, 
subdivision 3, is amended to read: 
    Subd. 3.  [APPLICANT.] "Applicant" means an individual, 
corporation, partnership, voluntary association, controlling 
individual, or other organization that has applied for licensure 
under sections 245A.01 to 245A.16 and the rules of the 
commissioner. 
    Sec. 61.  Minnesota Statutes 1988, section 245A.02, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [CONTROLLING INDIVIDUAL.] "Controlling 
individual" means a public body, governmental agency, business 
entity, officer, program administrator, or director whose 
responsibilities include the direction of the management or 
policies of a program.  Controlling individual also means an 
individual who, directly or indirectly, beneficially owns an 
interest in a corporation, partnership, or other business 
association that is a controlling individual.  Controlling 
individual does not include: 
    (1) a bank, savings bank, trust company, building and loan 
association, savings and loan association, credit union, 
industrial loan and thrift company, investment banking firm, or 
insurance company unless the entity operates a program directly 
or through a subsidiary; 
    (2) an individual who is a state or federal official, or 
state or federal employee, or a member or employee of the 
governing body of a political subdivision of the state or 
federal government that operates one or more programs, unless 
the individual is also an officer or director of the program, 
receives remuneration from the program, or owns any of the 
beneficial interests not excluded in this subdivision; 
    (3) an individual who owns less than five percent of the 
outstanding common shares of a corporation: 
    (i) whose securities are exempt under section 80A.15, 
subdivision 1, clause (f); or 
    (ii) whose transactions are exempt under section 80A.15, 
subdivision 2, clause (b); or 
    (4) an individual who is a member of an organization exempt 
from taxation under section 290.05, unless the individual is 
also an officer or director of the program or owns any of the 
beneficial interests not excluded in this subdivision.  This 
clause does not exclude from the definition of controlling 
individual an organization that is exempt from taxation. 
    Sec. 62.  Minnesota Statutes 1988, section 245A.02, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [DROP-IN CHILD CARE PROGRAM.] "Drop-in child 
care program" means a nonresidential program of child care 
provided to children for a maximum per child of five hours in 
any one day and 40 hours in any one calendar month at a child 
care center that does not have a regularly scheduled, ongoing 
child care program with a stable enrollment, and that is 
licensed exclusively for that purpose. 
    Sec. 63.  Minnesota Statutes 1988, section 245A.02, 
subdivision 9, is amended to read: 
    Subd. 9.  [LICENSE HOLDER.] "License holder" means an 
individual, corporation, partnership, voluntary association, or 
other organization that is legally responsible for the operation 
of the program and, has been granted a license by the 
commissioner under sections 245A.01 to 245A.16 and the rules of 
the commissioner, and is a controlling individual. 
    Sec. 64.  Minnesota Statutes 1988, section 245A.02, 
subdivision 10, is amended to read: 
    Subd. 10.  [NONRESIDENTIAL PROGRAM.] "Nonresidential 
program" means care, supervision, rehabilitation, training or 
habilitation of a person provided outside the person's own home 
and provided for fewer than 24 hours a day, including adult day 
care programs; a nursing home that receives public funds to 
provide services for five or more persons whose primary 
diagnosis is mental retardation or a related condition or mental 
illness and who do not have a significant physical or medical 
problem that necessitates nursing home care; a nursing home or 
hospital that was licensed by the commissioner on July 1, 1987, 
to provide a program for persons with a physical handicap that 
is not the result of the normal aging process and considered to 
be a chronic condition; and chemical dependency or chemical 
abuse programs that are located in a nursing home or hospital 
and receive public funds for providing chemical abuse or 
chemical dependency treatment services under chapter 254B.  
Nonresidential programs include home and community-based 
services and semi-independent living services for persons with 
mental retardation or a related condition that are provided in 
or outside of a person's own home. 
    Sec. 65.  Minnesota Statutes 1988, section 245A.02, 
subdivision 14, is amended to read: 
    Subd. 14.  [RESIDENTIAL PROGRAM.] "Residential program" 
means a program that provides 24-hour-a-day care, supervision, 
food, lodging, rehabilitation, training, education, 
habilitation, or treatment outside a person's own home, 
including a nursing home or hospital that receives public funds, 
administered by the commissioner, to provide services for five 
or more persons whose primary diagnosis is mental retardation or 
a related condition or mental illness and who do not have a 
significant physical or medical problem that necessitates 
nursing home care; a program in an intermediate care facility 
for four or more persons with mental retardation or a related 
condition; a nursing home or hospital that was licensed by the 
commissioner on July 1, 1987, to provide a program for persons 
with a physical handicap that is not the result of the normal 
aging process and considered to be a chronic condition; and 
chemical dependency or chemical abuse programs that are located 
in a hospital or nursing home and receive public funds for 
providing chemical abuse or chemical dependency treatment 
services under chapter 254B.  Residential programs include home 
and community-based services and semi-independent living 
services for persons with mental retardation or a related 
condition that are provided in or outside of a person's own home.
    Sec. 66.  Minnesota Statutes 1988, section 245A.03, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LICENSE REQUIRED.] Unless licensed by the 
commissioner, an individual, corporation, partnership, voluntary 
association or, other organization, or controlling individual 
must not: 
    (1) operate a residential or a nonresidential program; 
    (2) receive a child or adult for care, supervision, or 
placement in foster care or adoption; 
    (3) help plan the placement of a child or adult in foster 
care or adoption; or 
    (4) advertise a residential or nonresidential program. 
    Sec. 67.  Minnesota Statutes 1988, section 245A.03, 
subdivision 2, is amended to read: 
    Subd. 2.  [EXCLUSION FROM LICENSURE.] Sections 245A.01 to 
245A.16 do not apply to: 
     (1) residential or nonresidential programs that are 
provided to a person by an individual who is related; 
     (2) nonresidential programs that are provided by an 
unrelated individual to persons from a single related family; 
     (3) residential or nonresidential programs that are 
provided to adults who do not abuse chemicals or who do not have 
a chemical dependency, a mental illness, mental retardation or a 
related condition, a functional impairment, or a physical 
handicap; 
     (4) sheltered workshops or work activity programs that are 
certified by the commissioner of jobs and training; 
     (5) programs for children enrolled in kindergarten to the 
12th grade and prekindergarten special education programs that 
are operated by the commissioner of education or a school as 
defined in section 120.101, subdivision 4; 
     (6) nonresidential programs for children that provide care 
or supervision for periods of less than three hours a day while 
the child's parent or legal guardian is in the same building or 
present on property that is contiguous with the physical 
facility where the nonresidential program is provided; 
    (7) nursing homes or hospitals licensed by the commissioner 
of health except as specified under section 245A.02; 
    (8) board and lodge facilities licensed by the commissioner 
of health that provide services for five or more persons whose 
primary diagnosis is mental illness who have refused an 
appropriate residential program offered by a county agency.  
This exclusion expires on July 1, 1989 1990; 
    (9) homes providing programs for persons placed there by a 
licensed agency for legal adoption, unless the adoption is not 
completed within two years; 
    (10) programs licensed by the commissioner of corrections; 
    (11) recreation programs for children or adults that 
operate for fewer than 40 calendar days in a calendar year; 
    (12) programs not located in family or group family day 
care homes whose primary purpose is to provide social or 
recreational activities outside of the regular school day for 
adults or school-age children age five and older, until such 
time as appropriate rules have been adopted by the 
commissioner such as scouting, boys clubs, girls clubs, sports, 
or the arts; except that a program operating in a school 
building is not excluded unless it is approved by the district's 
school board; 
    (13) head start nonresidential programs which operate for 
less than 31 days in each calendar year; 
    (14) noncertified boarding care homes unless they provide 
services for five or more persons whose primary diagnosis is 
mental illness or mental retardation; 
    (15) nonresidential programs for nonhandicapped children 
provided for a cumulative total of less than 30 days in any 
12-month period; or 
    (16) residential programs for persons with mental illness, 
that are located in hospitals, until the commissioner adopts 
appropriate rules; 
    (17) the religious instruction of school-age children; 
Sabbath or Sunday schools; or the congregate care of children by 
a church, congregation, or religious society during the period 
used by the church, congregation, or religious society for its 
regular worship; 
    (18) camps licensed by the commissioner of health under 
Minnesota Rules, chapter 4630; 
    (19) until July 1, 1991, nonresidential programs for 
persons with mental illness; or 
    (20) residential programs serving school-age children whose 
sole purpose is cultural or educational exchange, until the 
commissioner adopts appropriate rules. 
    Sec. 68.  Minnesota Statutes 1988, section 245A.03, 
subdivision 3, is amended to read: 
    Subd. 3.  [UNLICENSED PROGRAMS.] (a) It is a misdemeanor 
for an individual, corporation, partnership, voluntary 
association, or other organization, or a controlling individual 
to provide a residential or nonresidential program without a 
license and in willful disregard of sections 245A.01 to 245A.16 
unless the program is excluded from licensure under subdivision 
2. 
    (b) If, after receiving notice that a license is required, 
the individual, corporation, partnership, voluntary association, 
or other organization, or controlling individual has failed to 
apply for a license, the commissioner may ask the appropriate 
county attorney or the attorney general to begin proceedings to 
secure a court order against the continued operation of the 
program.  The county attorney and the attorney general have a 
duty to cooperate with the commissioner.  
    Sec. 69.  Minnesota Statutes 1988, section 245A.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  [APPLICATION FOR LICENSURE.] (a) An 
individual, corporation, partnership, voluntary association, or 
other organization or controlling individual that is subject to 
licensure under section 245A.03 must apply for a license.  The 
application must be made on the forms and in the manner 
prescribed by the commissioner.  The commissioner shall provide 
the applicant with instruction in completing the application and 
provide information about the rules and requirements of other 
state agencies that affect the applicant.  
    The commissioner shall act on the application within 90 
working days after a complete application and any required 
reports have been received from other state agencies or 
departments, counties, municipalities, or other political 
subdivisions.  
    (b) An application for licensure must specify one or more 
controlling individuals as an agent who is responsible for 
dealing with the commissioner of human services on all matters 
provided for in this chapter and on whom service of all notices 
and orders must be made.  The agent must be authorized to accept 
service on behalf of all of the controlling individuals of the 
program.  Service on the agent is service on all of the 
controlling individuals of the program.  It is not a defense to 
any action arising under this chapter that service was not made 
on each controlling individual of the program.  The designation 
of one or more controlling individuals as agents under this 
paragraph does not affect the legal responsibility of any other 
controlling individual under this chapter. 
    Sec. 70.  Minnesota Statutes 1988, section 245A.04, 
subdivision 3, is amended to read: 
    Subd. 3.  [STUDY OF THE APPLICANT.] (a) Before issuing the 
commissioner issues a license, the commissioner shall conduct a 
study of the applicant individuals specified in clauses (1) to 
(4) according to rules of the commissioner.  The applicant, 
license holder, the bureau of criminal apprehension, county 
attorneys, county sheriffs, and county agencies, and local 
chiefs of police, after written notice to the individual who is 
the subject of the data study, shall help with the study by 
giving the commissioner criminal conviction data, arrest 
information, and reports about abuse or neglect of children or 
adults, and investigation results available from local, state, 
and national criminal record repositories, including the 
criminal justice data communications network, 
about substantiated under section 626.557 and the maltreatment 
of minors substantiated under section 626.556.  The individuals 
to be studied shall include: 
    (1) the applicant; 
    (2) persons over the age of 13 living in the household 
where the licensed program will be provided; 
    (3) current employees or contractors of the applicant who 
will have direct contact with persons served by the program; and 
    (4) volunteers who have direct contact with persons served 
by the program to provide program services, if the contact is 
not directly supervised by the individuals listed in clause (1) 
or (3). 
    The commissioner and agencies required to help conduct the 
study may charge the applicant or the subject of the data a 
reasonable fee for conducting the study. 
    For purposes of this subdivision, "direct contact" means 
providing face-to-face care, training, supervision, counseling, 
consultation, or medication assistance to persons served by a 
program.  For purposes of this subdivision, "directly supervised"
means an individual listed in clause (1) or (3) is within sight 
or hearing of a volunteer to the extent that the individual 
listed in clause (1) or (3) is capable at all times of 
intervening to protect the health and safety of the persons 
served by the program who have direct contact with the volunteer.
    A study of an individual in clauses (1) to (4) shall be 
conducted on at least an annual basis.  No applicant, license 
holder, or individual who is the subject of the study shall pay 
any fees required to conduct the study.  
    (b) The individual who is the subject of the study must 
provide the applicant or license holder with sufficient 
information to ensure an accurate study including the 
individual's first, middle, and last name; home address, city, 
county, and state of residence; zip code; sex; date of birth; 
and driver's license number.  The applicant or license holder 
shall provide this information about an individual in paragraph 
(a), clauses (1) to (4), on forms prescribed by the 
commissioner.  The commissioner may request additional 
information of the individual, which shall be optional for the 
individual to provide, such as the individual's social security 
number or race. 
    (c) A study must meet the following minimum criteria: 
    (1) if the subject of the data has resided in the same 
county for at least the past five years, the study must include 
information from the county sheriff, the local chief of police, 
and the county agency 
    (2) if the subject of the data has resided in the state, 
but not in the same county, for the past five years, the study 
must include agency's record of substantiated abuse of adults, 
neglect of adults, and the maltreatment of minors, and 
information from the agencies listed in clause (1) and the 
bureau of criminal apprehension; and 
    (3) if the subject of the data has not resided in the state 
for at least five years, the study must include information from 
the agencies listed in clauses (1) and (2) and the national 
criminal records repository and the state law enforcement 
agencies in the states where the subject of the data has 
maintained a residence during the past five years. 
    The commissioner may also review arrest and investigative 
information from the bureau of criminal apprehension, a county 
attorney, county sheriff, county agency, local chief of police, 
other states, the courts, or a national criminal record 
repository if the commissioner has reasonable cause to believe 
the information is pertinent to the disqualification of an 
individual listed in paragraph (a), clauses (1) to (4). 
    (c) (d) An applicant's or license holder's failure or 
refusal to cooperate with the commissioner is reasonable cause 
to deny an application or immediately suspend, suspend, or 
revoke or suspend a license.  Failure or refusal of an 
individual to cooperate with the study is just cause for denying 
or terminating employment of the individual if the individual's 
failure or refusal to cooperate could cause the applicant's 
application to be denied or the license holder's license to be 
immediately suspended, suspended, or revoked. 
    (d) (e) The commissioner shall not consider an application 
to be complete until all of the information required to be 
provided under this subdivision has been received.  
    (f) No person in paragraph (a), clause (1), (2), (3), or 
(4) who is disqualified as a result of this act may be retained 
by the agency in a position involving direct contact with 
persons served by the program. 
    (g) The commissioner shall not implement the procedures 
contained in this subdivision until appropriate rules have been 
adopted, except for the applicants and license holders for child 
foster care, adult foster care, and family day care homes. 
    (h) Termination of persons in paragraph (a), clause (1), 
(2), (3), or (4) made in good faith reliance on a notice of 
disqualification provided by the commissioner shall not subject 
the applicant or license holder to civil liability. 
    (i) The commissioner may establish records to fulfill the 
requirements of this section.  The information contained in the 
records is only available to the commissioner for the purpose 
authorized in this section. 
    Sec. 71.  Minnesota Statutes 1988, section 245A.04, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [NOTIFICATION TO SUBJECT OF STUDY RESULTS.] The 
commissioner shall notify the applicant or license holder and 
the individual who is the subject of the study, in writing, 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. 
    The commissioner shall notify the individual studied if the 
information contained in the study could cause disqualification 
from direct contact with persons served by the program.  The 
commissioner shall disclose the information 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 could cause disqualification of the subject 
from direct contact with persons served by the program.  
However, the applicant or license holder shall not be told what 
that information is unless the data practices act provides for 
release of the information and the individual studied authorizes 
the release of the information. 
    Sec. 72.  Minnesota Statutes 1988, section 245A.04, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [RECONSIDERATION OF DISQUALIFICATION.] (a) 
Within 30 days after receiving notice of possible 
disqualification under subdivision 3a, the individual who is the 
subject of the study may request reconsideration of the notice 
of possible disqualification.  The individual must submit the 
request for reconsideration to the commissioner in writing.  The 
individual must present information to show that: 
    (1) the information the commissioner relied upon is 
incorrect; or 
    (2) the subject of the study does not pose a risk of harm 
to any person served by the applicant or license holder. 
    (b) The commissioner may set aside the disqualification if 
the commissioner finds that the information the commissioner 
relied upon is incorrect or the individual does not pose a risk 
of harm to any person served by the applicant or license holder 
and rules adopted by the commissioner do not preclude 
reconsideration.  The commissioner shall review the consequences 
of the event or events that could lead to disqualification, the 
vulnerability of the victim at the time of the event, the time 
elapsed without a repeat of the same or similar event, and 
documentation of successful completion by the individual studied 
of training or rehabilitation pertinent to the event. 
    (c) The commissioner shall respond in writing to all 
reconsideration requests within 15 working days after receiving 
the request for reconsideration.  If the disqualification is set 
aside, the commissioner shall notify the applicant or license 
holder in writing of the decision. 
    (d) Except as provided in subdivision 3c, the 
commissioner's decision to grant or deny a reconsideration of 
disqualification under this subdivision, or to set aside or 
uphold the results of the study under subdivision 3, is the 
final administrative agency action.  
    Sec. 73.  Minnesota Statutes 1988, section 245A.04, is 
amended by adding a subdivision to read: 
    Subd. 3c.  [CONTESTED CASE.] If a disqualification is not 
set aside, a person who, on or after the effective date of rules 
adopted under subdivision 3, paragraph (i), is an employee of an 
employer, as defined in section 179A.03, subdivision 15, may 
request a contested case hearing under chapter 14.  Rules 
adopted under this chapter may not preclude an employee in a 
contested case hearing for disqualification from submitting 
evidence concerning information gathered under subdivision 3, 
paragraph (e). 
    Sec. 74.  Minnesota Statutes 1988, section 245A.04, 
subdivision 5, is amended to read: 
    Subd. 5.  [COMMISSIONER'S RIGHT OF ACCESS.] When the 
commissioner is exercising the powers conferred by sections 
245A.01 to 245A.15, the commissioner must be given access to the 
physical plant and grounds where the program is provided, 
documents, persons served by the program, and staff whenever the 
program is in operation and the information is relevant to 
inspections or investigations conducted by the commissioner.  
The commissioner must be given access without prior notice and 
as often as the commissioner considers necessary if the 
commissioner is conducting an investigation of allegations of 
abuse, neglect, maltreatment, or other violation of applicable 
laws or rules.  In conducting inspections, the commissioner may 
request and shall receive assistance from other state, county, 
and municipal governmental agencies and departments.  The 
applicant or license holder shall allow the commissioner to 
photocopy, photograph, and make audio and video tape recordings 
during the inspection of the program at the commissioner's 
expense.  The commissioner shall obtain a court order or the 
consent of the subject of the records or the parents or legal 
guardian of the subject before photocopying hospital medical 
records.  
    Persons served by the program have the right to refuse to 
consent to be interviewed, photographed, or audio or videotaped. 
Failure or refusal of an applicant or license holder to fully 
comply with this subdivision is reasonable cause for the 
commissioner to deny the application or immediately suspend or 
revoke the license. 
    Sec. 75.  Minnesota Statutes 1988, section 245A.04, 
subdivision 6, is amended to read: 
    Subd. 6.  [COMMISSIONER'S EVALUATION.] Before granting, 
suspending, revoking, or making probationary a license, the 
commissioner shall evaluate information gathered under this 
section.  The commissioner's evaluation shall consider facts, 
conditions, or circumstances concerning the program's operation, 
the well-being of persons served by the program, consumer 
evaluations of the program, and information about the character 
and qualifications of the personnel employed by the applicant or 
license holder. 
    The commissioner shall evaluate the results of the study 
required in subdivision 3 and determine whether a risk of harm 
to the persons served by the program exists.  In conducting this 
evaluation, the commissioner shall apply the disqualification 
standards set forth in rules adopted under this chapter.  If any 
rule currently does not include these disqualification 
standards, the commissioner shall apply the standards in section 
364.03, subdivision 2 3, until the rule is revised to include 
disqualification standards.  The commissioner shall revise all 
rules authorized by this chapter to include disqualification 
standards.  Prior to the adoption of rules establishing 
disqualification standards, the commissioner shall forward the 
proposed rules to the commissioner of human rights for review 
and recommendation concerning the protection of individual 
rights.  The recommendation of the commissioner of human rights 
is not binding on the commissioner of human services.  The 
provisions of chapter 364 do not apply to applicants or license 
holders governed by sections 245A.01 to 245A.16 except as 
provided in this subdivision. 
    Sec. 76.  Minnesota Statutes 1988, section 245A.04, 
subdivision 7, is amended to read: 
    Subd. 7.  [ISSUANCE OF A LICENSE; PROVISIONAL LICENSE.] (a) 
If the commissioner determines that the program complies with 
all applicable rules and laws, the commissioner shall issue a 
license.  At minimum, the license shall state:  
    (1) the name of the license holder; 
    (2) the address of the program; 
    (3) the effective date and expiration date of the license; 
    (4) the type of license; 
    (5) the maximum number and ages of persons that may receive 
services from the program; and 
    (6) any special conditions of licensure. 
    (b) The commissioner may issue a provisional license for a 
period not to exceed one year if:  
    (1) the commissioner is unable to conduct the evaluation or 
observation required by subdivision 4, paragraph (a), clauses (3)
and (4), because the program is not yet operational; 
    (2) certain records and documents are not available because 
persons are not yet receiving services from the program; and 
    (3) the applicant complies with applicable laws and rules 
in all other respects.  
A provisional license must not be issued except at the time that 
a license is first issued to an applicant. 
    A license shall not be transferable to another individual, 
corporation, partnership, voluntary association or, other 
organization, or controlling individual, or to another 
location.  All licenses expire at 12:01 a.m. on the day after 
the expiration date stated on the license.  A license holder 
must apply for and be granted a new license to operate the 
program or the program must not be operated after the expiration 
date.  
    Sec. 77.  Minnesota Statutes 1988, section 245A.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CONTENTS OF CORRECTION ORDERS.] (a) If the 
commissioner finds that the applicant or license holder has 
failed to comply with an applicable law or rule and this failure 
does not imminently endanger the health, safety, or rights of 
the persons served by the program, the commissioner may issue a 
correction order to the applicant or license holder.  The 
correction order must state: 
    (1) the conditions that constitute a violation of the law 
or rule; 
    (2) the specific law or rule violated; and 
    (3) the time allowed to correct each violation. 
    (b) Nothing in this section prohibits the commissioner from 
proposing a sanction as specified in section 245A.07, prior to 
issuing a correction order or fine. 
    Sec. 78.  Minnesota Statutes 1988, section 245A.06, 
subdivision 5, is amended to read: 
    Subd. 5.  [FORFEITURE OF FINES.] The license holder shall 
pay the fines assessed within 15 calendar days of receipt of 
notice of on or before the payment date specified in the 
commissioner's order.  If the license holder fails to fully 
comply with the order, the commissioner shall suspend the 
license until the license holder complies.  If the license 
holder receives state funds, the state, county, or municipal 
agencies or departments responsible for administering the funds 
shall withhold payments and recover any payments made while the 
license is suspended for failure to pay a fine.  
    Sec. 79.  Minnesota Statutes 1988, section 245A.06, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [ACCRUAL OF FINES.] A license holder shall 
promptly notify the commissioner of human services, in writing, 
when a violation specified in an order to forfeit is corrected.  
A fine assessed for a violation shall stop accruing when the 
commissioner receives the written notice.  The commissioner 
shall reinspect the program within three working days after 
receiving the notice.  If upon reinspection the commissioner 
determines that a violation has not been corrected as indicated 
by the order to forfeit, accrual of the daily fine resumes on 
the date of reinspection and the amount of fines that otherwise 
would have accrued between the date the commissioner received 
the notice and date of the reinspection is added to the total 
assessment due from the license holder.  The commissioner shall 
notify the license holder by certified mail that accrual of the 
fine has resumed.  The license holder may challenge the 
resumption in a contested case under chapter 14 by written 
request within 15 days after receipt of the notice of 
resumption.  Recovery of the resumed fine must be stayed if a 
controlling individual or a legal representative on behalf of 
the license holder makes a written request for a hearing.  The 
request for hearing, however, may not stay accrual of the daily 
fine for violations that have not been corrected.  The cost of 
reinspection conducted under this subdivision for uncorrected 
violations must be added to the total amount of accrued fines 
due from the license holder. 
    Sec. 80.  Minnesota Statutes 1988, section 245A.07, 
subdivision 2, is amended to read: 
    Subd. 2.  [IMMEDIATE SUSPENSION IN CASES OF IMMINENT DANGER 
TO HEALTH, SAFETY, OR RIGHTS.] If the license holder's failure 
to comply with applicable law or rule has placed the health, 
safety, or rights of persons served by the program in imminent 
danger, the commissioner shall act immediately to suspend the 
license.  No state funds shall be made available or be expended 
by any agency or department of state, county, or municipal 
government for use by a license holder regulated under sections 
245A.01 to 245A.16 while a license is under immediate 
suspension.  A notice stating the reasons for the immediate 
suspension and informing the license holder of the right to a 
contested case hearing under chapter 14 must be delivered by 
personal service to the address shown on the application or the 
last known address of the license holder.  The license holder 
may appeal an order immediately suspending a license by 
notifying the commissioner in writing by certified mail within 
five calendar days after receiving notice that the license has 
been immediately suspended.  A license holder and any 
controlling individual shall discontinue operation of the 
program upon receipt of the commissioner's order to immediately 
suspend the license. 
    Sec. 81.  Minnesota Statutes 1988, 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. 
    Sec. 82.  Minnesota Statutes 1988, section 245A.12, is 
amended to read: 
    245A.12 [VOLUNTARY RECEIVERSHIP FOR RESIDENTIAL 
FACILITIES PROGRAMS.] 
    A majority of controlling persons individuals of a 
residential program may at any time ask the commissioner to 
assume operation of the residential program through appointment 
of a receiver.  On receiving the request for a receiver, the 
commissioner may enter into an agreement with a majority of 
controlling persons individuals and provide for the appointment 
of a receiver to operate the residential program under 
conditions acceptable to both the commissioner and the majority 
of controlling persons.  The agreement must specify the terms 
and conditions of the receivership and preserve the rights of 
the persons being served by the residential program.  A 
receivership set up under this section terminates at the time 
specified by the parties to the agreement or 30 days after 
either of the parties gives written notice to the other party of 
termination of the receivership agreement. 
    Sec. 83.  Minnesota Statutes 1988, section 245A.13, is 
amended to read: 
    245A.13 [INVOLUNTARY RECEIVERSHIP FOR RESIDENTIAL 
FACILITIES PROGRAMS.] 
    Subdivision 1. [APPLICATION.] In addition to any other 
remedy provided by law, the commissioner may petition the 
district court in the county where the residential program is 
located for an order directing the controlling 
persons individuals of the residential program to show cause why 
the commissioner or the commissioner's designated representative 
should not be appointed receiver to operate the residential 
program.  The petition to the district court must contain proof 
by affidavit:  (1) that the commissioner has either begun 
license suspension or revocation proceedings, suspended or 
revoked a license, or has decided to deny an application for 
licensure of the residential program; or (2) it appears to the 
commissioner that the health, safety, or rights of the residents 
may be in jeopardy because of the manner in which the 
residential program may close, the residential program's 
financial condition, or violations committed by the residential 
program of federal or state laws or rules.  If the license 
holder or, applicant, or controlling individual operates more 
than one residential program, the commissioner's petition must 
specify and be limited to the residential program for which the 
commissioner has either begun license suspension or revocation 
proceedings, suspended or revoked a license, or has decided to 
deny an application for licensure of the residential program it 
seeks receivership.  The affidavit submitted by the commissioner 
must set forth alternatives to receivership that have been 
considered, including rate adjustments.  The order to show cause 
is returnable not less than five days after service is completed 
and must provide for personal service of a copy to the 
residential program administrator and to the persons designated 
as agents by the controlling persons individuals to accept 
service on their behalf. 
    Subd. 2.  [APPOINTMENT OF RECEIVER; RENTAL.] If the court 
finds that involuntary receivership is necessary as a means of 
protecting the health, safety, or rights of persons being served 
by the residential program, the court shall appoint the 
commissioner or the commissioner's designated representative as 
a receiver to operate the residential program.  In the event 
that no receiver can be found who meets the conditions of this 
section, the commissioner or commissioner's designated 
representative may serve as the receiver.  The court shall 
determine a fair monthly rental for the physical plant, taking 
into account all relevant factors including necessary to meet 
required arms-length obligations of controlling individuals such 
as mortgage payments, real estate taxes, special assessments, 
and the conditions of the physical plant.  The rental fee must 
be paid by the receiver to the appropriate controlling persons 
individuals for each month that the receivership remains in 
effect.  No payment made to a controlling person individual by 
the receiver or any state agency during a period of involuntary 
receivership shall include any allowance for profit or be based 
on any formula that includes an allowance for profit. 
    Subd. 3.  [POWERS AND DUTIES OF THE RECEIVER.] Within 18 36 
months after the receivership order, a receiver appointed to 
operate a residential program during a period of involuntary 
receivership shall provide for the orderly transfer of the 
persons served by the residential program to other residential 
programs or make other provisions to protect their health, 
safety, and rights.  The receiver shall correct or eliminate 
deficiencies in the residential program that the commissioner 
determines endanger the health, safety, or welfare of the 
persons being served by the residential program unless the 
correction or elimination of deficiencies involves major 
alteration in the structure of the physical plant.  If the 
correction or elimination of the deficiencies requires major 
alterations in the structure of the physical plant, the receiver 
shall take actions designed to result in the immediate transfer 
of persons served by the residential program.  During the period 
of the receivership, the receiver shall operate the residential 
program in a manner designed to guarantee preserve the health, 
safety, rights, adequate care, and supervision of the persons 
served by the residential program.  The receiver may make 
contracts and incur lawful expenses.  The receiver shall collect 
incoming payments from all sources and apply them to the cost 
incurred in the performance of the receiver's functions 
including the receiver's fee set under subdivision 4.  No 
security interest in any real or personal property comprising 
the residential program or contained within it, or in any 
fixture of the physical plant, shall be impaired or diminished 
in priority by the receiver.  The receiver shall pay all valid 
obligations of the residential program and may deduct these 
expenses, if necessary, from rental payments owed to any 
controlling person individual by virtue of the receivership. 
    Subd. 4.  [RECEIVER'S FEE; LIABILITY; ASSISTANCE FROM THE 
COMMISSIONER.] A receiver appointed under an involuntary 
receivership is entitled to a reasonable receiver's fee as 
determined by the court.  The receiver's fee is governed by 
section 256B.495.  The receiver is liable only in an official 
capacity for injury to person and property by reason of the 
conditions of the residential program.  The receiver is not 
personally liable, except for gross negligence and intentional 
acts.  
    Subd. 5.  [TERMINATION.] An involuntary receivership 
terminates 12 36 months after the date on which it was ordered 
or at any other time designated by the court or when any of the 
following events occurs: 
    (1) the commissioner determines that the residential 
program's license application should be granted or should not be 
suspended or revoked; 
    (2) a new license is granted to the residential program; or 
    (3) the commissioner determines that all persons residing 
in the residential program have been provided with alternative 
residential programs. 
    Subd. 6.  [EMERGENCY PROCEDURE.] If it appears from the 
petition filed under subdivision 1, from an affidavit or 
affidavits filed with the petition, or from testimony of 
witnesses under oath if the court determines it necessary, that 
there is probable cause to believe that an emergency exists in a 
residential program, the court shall issue a temporary order for 
appointment of a receiver within five days after receipt of the 
petition.  Notice of the petition must be served on the 
residential program administrator and on the persons designated 
as agents by the controlling individuals to accept service on 
their behalf.  A hearing on the petition must be held within 
five days after notice is served unless the administrator or 
designated agent consents to a later date.  After the hearing, 
the court may continue, modify, or terminate the temporary order.
    Subd. 7.  [RATE RECOMMENDATION.] The commissioner of human 
services may review rates of a residential program participating 
in the medical assistance program which is in involuntary 
receivership and that has needs or deficiencies documented by 
the department of health or the department of human services.  
If the commissioner of human services determines that a review 
of the rate established under section 256B.501 is needed, the 
commissioner shall: 
    (1) review the order or determination that cites the 
deficiencies or needs; and 
     (2) determine the need for additional staff, additional 
annual hours by type of employee, and additional consultants, 
services, supplies, equipment, repairs, or capital assets 
necessary to satisfy the needs or deficiencies. 
    Subd. 8.  [ADJUSTMENT TO THE RATE.] Upon review of rates 
under subdivision 7, the commissioner may adjust the residential 
program's payment rate.  The commissioner shall review the 
circumstances, together with the residential program cost 
report, to determine whether or not the deficiencies or needs 
can be corrected or met by reallocating residential program 
staff, costs revenues, or other resources including any 
investments, efficiency incentives, or allowances.  If the 
commissioner determines that any deficiency cannot be corrected 
or the need cannot be met, the commissioner shall determine the 
payment rate adjustment by dividing the additional annual costs 
established during the commissioner's review by the residential 
program's actual resident days from the most recent desk-audited 
cost report or the estimated resident days in the projected 
receivership period.  The payment rate adjustment must meet the 
conditions in Minnesota Rules, parts 9553.0010 to 9553.0080, and 
remains in effect during the period of the receivership or until 
another date set by the commissioner.  Upon the subsequent sale 
or transfer of the residential program, the commissioner may 
recover amounts that were paid as payment rate adjustments under 
this subdivision.  The buyer or transferee shall repay this 
amount to the commissioner within 60 days after the commissioner 
notifies the buyer or transferee of the obligation to repay.  
This provision does not limit the liability of the seller to the 
commissioner pursuant to section 256B.0641. 
    Sec. 84.  Minnesota Statutes 1988, section 245A.14, 
subdivision 3, is amended to read: 
    Subd. 3.  [CONDITIONAL LICENSE.] Until such time as the 
commissioner adopts appropriate rules for conditional licenses, 
no license holder or applicant for a family or group family day 
care license is required to spend more than $100 to meet fire 
safety rules in excess of those required to meet Group "R" 
occupancies under the Uniform Building Code, chapter 12, as 
incorporated by reference in Minnesota Rules, part 1305.0100. 
    When the commissioner determines that an applicant or 
license holder of a family or group family day care license 
would be required to spend over $100 for physical changes to 
ensure fire safety, the commissioner may issue a conditional 
license when all of the following conditions have been met: 
    (a)  The commissioner shall notify the provider license 
holder or applicant in writing of the fire safety deficiencies. 
    (b) The commissioner shall notify the provider license 
holder or applicant in writing of alternative compliance 
standards that would correct deficiencies, if available. 
    (c) The provider license holder or applicant agrees in 
writing to notify each parent, on a form prescribed by the 
commissioner that requires the signature of the parent, of the 
fire safety deficiencies, and the existence of the conditional 
license. 
    Sec. 85.  Minnesota Statutes 1988, section 245A.14, is 
amended by adding a subdivision to read: 
    Subd. 6.  [DROP-IN CHILD CARE PROGRAMS.] Except as 
expressly set forth in this subdivision, drop-in child care 
programs must be licensed as a drop-in program under the rules 
governing child care programs operated in a center.  Drop-in 
child care programs are exempt from the requirements in 
Minnesota Rules, parts 9503.0040; 9503.0045, subpart 1, items F 
and G; 9503.0050, subpart 6, except for children less than two 
and one-half years old; one-half the requirements of 9503.0060, 
subpart 4, item A, subitems (2), (5), and (8), subpart 5, item 
A, subitems (2), (3), and (7), and subpart 6, item A, subitems 
(3) and (6); 9507.0070; and 9503.0090, subpart 2.  A drop-in 
child care program must be operated under the supervision of a 
person qualified as a director and a teacher.  A drop-in child 
care program must maintain a minimum staff ratio for children 
age two and one-half or greater of one staff person for each ten 
children, except that there must be at least two persons on 
staff whenever the program is operating.  If the program has 
additional staff who are on call as a mandatory condition of 
their employment, the minimum ratio may be exceeded only for 
children age two and one-half or greater, by a maximum of four 
children, for no more than 20 minutes while additional staff are 
in transit.  The minimum staff-to-child ratio for infants up to 
16 months of age is one staff person for every four infants.  
The minimum staff-to-child ratio for children age 17 months to 
30 months is one staff for every seven children.  In drop-in 
care programs that serve both infants and older children, 
children up to age two and one-half may be supervised by 
assistant teachers, as long as other staff are present in 
appropriate ratios.  The minimum staff distribution pattern for 
a drop-in child care program serving children age two and 
one-half or greater is:  the first staff member must be a 
teacher; the second, third, and fourth staff members must have 
at least the qualifications of a child care aide; the fifth 
staff member must have at least the qualifications of an 
assistant teacher; the sixth, seventh, and eighth staff members 
must have at least the qualifications of a child care aide; and 
the ninth staff person must have at least the qualifications of 
an assistant teacher.  A drop-in child care program serving 
children less than two and one-half years of age must serve 
these children in an area separated from older children.  
Children age two and one-half and older may be cared for in the 
same child care group. 
    Sec. 86.  Minnesota Statutes 1988, section 245A.16, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DELEGATION OF AUTHORITY TO AGENCIES.] (a) 
County agencies and private agencies that have been designated 
or licensed by the commissioner to perform licensing functions 
and activities under section 245A.04, to recommend denial of 
applicants under section 245A.05, to recommend correction orders 
and fines under section 245A.06, or to recommend suspending, 
revoking, and making licenses probationary under section 
245A.07, shall comply with rules and directives of the 
commissioner governing those functions and with this section. 
    (b) By January 1, 1991, the commissioner shall study and 
make recommendations to the legislature regarding the licensing 
and provision of support services to child foster homes.  In 
developing the recommendations, the commissioner shall consult 
licensed private agencies, county agencies, and licensed foster 
home providers. 
    Sec. 87.  Minnesota Statutes 1988, section 246.50, 
subdivision 3, is amended to read: 
    Subd. 3.  [REGIONAL TREATMENT CENTER STATE FACILITY.] 
"Regional treatment center State facility" means a any state 
facility for treating persons with mental illness, mental 
retardation, or chemical dependency now existing or hereafter 
established. owned or operated by the state of Minnesota and 
under the programmatic direction or fiscal control of the 
commissioner.  State facility includes regional treatment 
centers; the state nursing homes; state-operated, 
community-based programs; and other facilities owned or operated 
by the state and under the commissioner's control.  
    Sec. 88.  Minnesota Statutes 1988, section 246.50, 
subdivision 4, is amended to read:  
    Subd. 4.  [PATIENT OR RESIDENT CLIENT.] "Patient Client" 
means any person with mental illness or chemical 
dependency. receiving services at a state facility, whether or 
not those services require occupancy of a bed overnight.  
    Sec. 89.  Minnesota Statutes 1988, section 246.50, 
subdivision 5, is amended to read: 
    Subd. 5.  [COST OF CARE.] "Cost of care" means the 
commissioner's determination of the anticipated average per 
capita cost of all maintenance, treatment and expense, including 
depreciation of buildings and equipment, interest paid on bonds 
issued for capital improvements to state facilities, and 
indirect costs related to the operation other than that paid 
from the Minnesota state building fund, at all of the state 
facilities during the current year for which billing is being 
made.  The commissioner shall determine the anticipated average 
per capita cost.  The commissioner may establish one all 
inclusive rate or separate rates for each patient or resident 
disability group, and may establish separate charges for each 
facility.  "Cost of care" for outpatient or day care patients or 
residents shall be on a cost for service basis under a schedule 
the commissioner shall establish. 
    For purposes of this subdivision "resident patient" means a 
person who occupies a bed while housed in a state facility for 
observation, care, diagnosis, or treatment. 
    For purposes of this subdivision "outpatient" or "day care" 
patient or resident means a person who makes use of diagnostic, 
therapeutic, counseling, or other service in a state facility or 
through state personnel but does not occupy a bed overnight. 
    For the purposes of collecting from the federal government 
for the care of those patients eligible for medical care under 
the Social Security Act "cost of care" shall be determined as 
set forth in the rules and regulations of the Department of 
Health and Human Services or its successor agency. charge for 
services provided to any person admitted to a state facility. 
    For purposes of this subdivision, "charge for services" 
means the cost of services, treatment, maintenance, bonds issued 
for capital improvements, depreciation of buildings and 
equipment, and indirect costs related to the operation of state 
facilities.  The commissioner may determine the charge for 
services on an anticipated average per diem basis as an all 
inclusive charge per facility, per disability group, or per 
treatment program.  The commissioner may determine a charge per 
service, using a method that includes direct and indirect costs. 
    Sec. 90.  Minnesota Statutes 1988, section 246.51, is 
amended by adding a subdivision to read: 
    Subd. 3.  [APPLICABILITY.] The commissioner may recover, 
under sections 246.50 to 246.55, the cost of any care provided 
in a state facility, including care provided prior to the 
effective date of this section regardless of the terminology 
used to designate the status or condition of the person 
receiving the care or the terminology used to identify the 
facility.  For purposes of recovering the cost of care provided 
prior to the effective date of this section, the term "state 
facility" as used in sections 246.50 to 246.55 includes "state 
hospital," "regional treatment center," or "regional center"; 
and the term "client" includes, but is not limited to, persons 
designated as "mentally deficient," "inebriate," "chemically 
dependent," or "intoxicated." 
    Sec. 91.  Minnesota Statutes 1988, section 246.54, is 
amended to read: 
    246.54 [LIABILITY OF COUNTY; REIMBURSEMENT.] 
    Except for chemical dependency services provided under 
sections 254B.01 to 254B.09, the patient's or resident's county 
shall pay to the state of Minnesota a portion of the cost of 
care provided in a regional treatment center to a patient or 
resident legally settled in that county.  A county's payment 
shall be made from the county's own sources of revenue and 
payments shall be paid as follows:  payments to the state from 
the county shall equal ten percent of the per capita rate cost 
of care, as determined by the commissioner, for each day, or the 
portion thereof, that the patient or resident spends at a 
regional treatment center.  If payments received by the state 
under sections 246.50 to 246.53 exceed 90 percent of the per 
capita rate cost of care, the county shall be responsible for 
paying the state only the remaining amount.  The county shall 
not be entitled to reimbursement from the patient or resident, 
the patient's or resident's estate, or from the patient's or 
resident's relatives, except as provided in section 246.53.  No 
such payments shall be made for any patient or resident who was 
last committed prior to July 1, 1947. 
    Sec. 92.  Minnesota Statutes 1988, section 252.27, 
subdivision 1, is amended to read: 
    Subdivision 1.  Whenever any child who has mental 
retardation or a related condition, or a physical or emotional 
handicap is in 24 hour care outside the home including respite 
care, in a facility licensed by the commissioner of human 
services, the cost of care shall be paid by the county of 
financial responsibility determined pursuant to section 256E.08, 
subdivision 7 chapter 256G.  If the child's parents or guardians 
do not reside in this state, the cost shall be paid by the 
county in which the child is found the responsible governmental 
agency in the state from which the child came, by the parents or 
guardians of the child if they are financially able, or, if no 
other payment source is available, by the commissioner of human 
services.  
     Subd. 1a.  [DEFINITIONS.] A person has a "related 
condition" if that person has a severe, chronic disability that 
is (a) attributable to cerebral palsy, epilepsy, 
autism, prader-willi syndrome, or any other condition, other 
than mental illness, found to be closely related to mental 
retardation because the condition results in impairment of 
general intellectual functioning or adaptive behavior similar to 
that of persons with mental retardation or requires treatment or 
services similar to those required for persons with mental 
retardation; (b) is likely to continue indefinitely; and (c) 
results in substantial functional limitations in three or more 
of the following areas of major life activity:  self-care, 
understanding and use of language, learning, mobility, 
self-direction, or capacity for independent living.  For the 
purposes of this section, a child has an "emotional handicap" if 
the child has a psychiatric or other emotional disorder which 
substantially impairs the child's mental health and requires 24 
hour treatment or supervision. 
    Sec. 93.  Minnesota Statutes 1988, section 252.46, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RATES FOR CALENDAR YEARS 1988 AND 1989 AND 
1990.] Payment rates to vendors, except regional centers, for 
county-funded day training and habilitation services and 
transportation provided to persons receiving day training and 
habilitation services established by a county board for calendar 
years 1988 and 1989 and 1990 are governed by subdivisions 2 to 
10.  
    "Payment rate" as used in subdivisions 2 to 10 refers to 
three kinds of payment rates:  a full-day service rate for 
persons who receive at least six service hours a day, including 
the time it takes to transport the person to and from the 
service site; a partial-day service rate that must not exceed 75 
percent of the full-day service rate for persons who receive 
less than a full day of service; and a transportation rate for 
providing, or arranging and paying for, transportation of a 
person to and from the person's residence to the service site. 
    Sec. 94.  Minnesota Statutes 1988, section 252.46, 
subdivision 2, is amended to read: 
    Subd. 2.  [1988 AND 1989 AND 1990 MINIMUM.] Unless a 
variance is granted under subdivision 6, the minimum payment 
rates set by a county board for each vendor for calendar 
years 1988 and 1989 and 1990 must be equal to the payment rates 
approved by the commissioner for that vendor in effect January 
1, 1987 1988, and January 1, 1988 1989, respectively. 
    Sec. 95.  Minnesota Statutes 1988, section 252.46, 
subdivision 3, is amended to read: 
    Subd. 3.  [1988 AND 1989 AND 1990 MAXIMUM.] Unless a 
variance is granted under subdivision 6, the maximum payment 
rates for each vendor for calendar years 1988 and 1989 and 1990 
must be equal to the payment rates approved by the commissioner 
for that vendor in effect December 1, 1987 1988, and December 1, 
1988 1989, respectively, increased by no more than the projected 
percentage change in the urban consumer price index, all items, 
published by the United States Department of Labor, for the 
upcoming calendar year over the current calendar year. 
    Sec. 96.  Minnesota Statutes 1988, section 252.46, 
subdivision 4, is amended to read: 
    Subd. 4.  [NEW VENDORS.] Payment rates established by a 
county for calendar years 1988 and 1989 and 1990, for a new 
vendor for which there were no previous rates must not exceed 
125 percent of the average payment rates in the regional 
development commission district under sections 462.381 to 
462.396 in which the new vendor is located. 
    Sec. 97.  Minnesota Statutes 1988, section 252.46, 
subdivision 6, is amended to read: 
    Subd. 6.  [VARIANCES.] 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 with the 
recommended payment rates.  The commissioner shall develop by 
October 1, 1989, a uniform format for submission of 
documentation for the variance requests.  This format shall be 
used by each vendor requesting a variance.  The form shall be 
developed by the commissioner and shall be reviewed by 
representatives of advocacy and provider groups and counties.  A 
variance 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, and transportation.  The county board shall review all 
vendors' payment rates that are ten or more than ten percent 
lower than the statewide median payment rates.  If the county 
determines that the payment rates do not provide sufficient 
revenue to the vendor for authorized service delivery the county 
must recommend a variance under this section.  When the county 
board contracts for increased services from any vendor for some 
or all individuals receiving services from the vendor, the 
county board shall review the vendor's payment rates to 
determine whether the increase requires that a variance to the 
minimum rates be recommended under this section to reflect the 
vendor's lower per unit fixed costs.  The written variance 
request 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 proposed changes are required for the vendor to 
deliver authorized individual services in an effective and 
efficient manner. 
    (3) The proposed changes are necessary to demonstrate 
compliance with minimum licensing standards., or to provide 
community-integrated and supported employment services after a 
change in the vendor's existing services has been approved as 
provided in section 252.28.  
    (4) The vendor documents that the changes cannot be 
achieved by reallocating current staff or by reallocating 
financial resources. 
    (5) The county board submits evidence that the need for 
additional staff cannot be met by using temporary special needs 
rate exceptions under Minnesota Rules, parts 9510.1020 to 
9510.1140. 
    (6) The county board submits 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.  
    (7) The county board's recommended payment rates do not 
exceed 125 percent of the current calendar year's statewide 
median payment rates. 
    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. 98.  Minnesota Statutes 1988, section 252.46, 
subdivision 12, is amended to read: 
    Subd. 12.  [RATES ESTABLISHED AFTER 1989 1990.] Payment 
rates established by a county board to be paid to a vendor on or 
after January 1, 1990 1991, must be determined under permanent 
rules adopted by the commissioner.  No county shall pay a rate 
that is less than the minimum rate determined by the 
commissioner. 
    In developing procedures for setting minimum payment rates 
and procedures for establishing payment rates, the commissioner 
shall consider the following factors: 
    (1) a vendor's payment rate and historical cost in the 
previous year; 
    (2) current economic trends and conditions; 
    (3) costs that a vendor must incur to operate efficiently, 
effectively and economically and still provide training and 
habilitation services that comply with quality standards 
required by state and federal regulations; 
    (4) increased liability insurance costs; 
    (5) costs incurred for the development and continuation of 
supported employment services; 
    (6) cost variations in providing services to people with 
different needs; 
    (7) the adequacy of reimbursement rates that are more than 
15 percent below the statewide average; and 
    (8) other appropriate factors. 
    The commissioner may develop procedures to establish 
differing hourly rates that take into account variations in the 
number of clients per staff hour, to assess the need for day 
training and habilitation services, and to control the 
utilization of services. 
    In developing procedures for setting transportation rates, 
the commissioner may consider allowing the county board to set 
those rates or may consider developing a uniform standard. 
    Medical assistance rates for home and community-based 
services provided under section 256B.501 by licensed vendors of 
day training and habilitation services must not be greater than 
the rates for the same services established by counties under 
sections 252.40 to 252.47.  
    Sec. 99.  Minnesota Statutes 1988, section 252.47, is 
amended to read: 
    252.47 [RULES.] 
    To implement sections 252.40 to 252.47, the commissioner 
shall adopt permanent rules under sections 14.01 to 14.38.  The 
rules may include a plan for phasing in implementation of the 
procedures and rates established by the rules.  The phase-in may 
occur prior to calendar year 1990 1991.  The commissioner shall 
establish an advisory task force to advise and make 
recommendations to the commissioner during the rulemaking 
process.  The advisory task force must include legislators, 
vendors, residential service providers, counties, consumers, 
department personnel, and others as determined by the 
commissioner. 
    Sec. 100.  Minnesota Statutes 1988, section 253B.03, 
subdivision 6a, is amended to read: 
    Subd. 6a.  [ADMINISTRATION OF NEUROLEPTIC MEDICATIONS.] (a) 
Neuroleptic medications may be administered to persons committed 
as mentally ill or mentally ill and dangerous only as described 
in this subdivision. 
    (b) A neuroleptic medication may be administered to a 
patient who is competent to consent to neuroleptic medications 
only if the patient has given written, informed consent to 
administration of the neuroleptic medication. 
    (c) A neuroleptic medication may be administered to a 
patient who is not competent to consent to neuroleptic 
medications only if a court approves the administration of the 
neuroleptic medication or: 
    (1) the patient does not object to or refuse the 
medication; 
    (2) a guardian ad litem appointed by the court with 
authority to consent to neuroleptic medications gives written, 
informed consent to the administration of the neuroleptic 
medication; and 
    (3) a multidisciplinary treatment review panel composed of 
persons who are not engaged in providing direct care to the 
patient gives written approval to administration of the 
neuroleptic medication. 
    (d) A person who consents to treatment pursuant to this 
subdivision is not civilly or criminally liable for the 
performance of or the manner of performing the treatment.  A 
person is not liable for performing treatment without consent if 
written, informed consent was given pursuant to this 
subdivision.  This provision does not affect any other liability 
that may result from the manner in which the treatment is 
performed. 
    (e) The court may allow and order paid to a guardian ad 
litem a reasonable fee for services provided under paragraph 
(c), or the court may appoint a volunteer guardian ad litem. 
    Sec. 101.  Minnesota Statutes 1988, section 254A.08, 
subdivision 2, is amended to read: 
    Subd. 2.  For the purpose of this section, a detoxification 
program means a social rehabilitation program established for 
the purpose of facilitating access into care and treatment by 
detoxifying and evaluating the person and providing entrance 
into a comprehensive program.  Such a Evaluation of the person 
shall include verification by a professional, after preliminary 
examination, that the person is intoxicated or has symptoms of 
chemical dependency and appears to be in imminent danger of 
harming self or others.  A detoxification program shall have 
available the services of a licensed physician for medical 
emergencies and routine medical surveillance.  A detoxification 
program licensed by the department of human services to serve 
both adults and minors at the same site must provide for 
separate sleeping areas for adults and minors. 
    Sec. 102.  [254A.145] [INHALANT ABUSE DEMONSTRATION 
PROJECT.] 
    Within the limits of the available appropriation and 
notwithstanding the requirements of chapter 254B, the 
commissioner of human services shall create a demonstration 
project to provide intervention and to coordinate community 
services for inhalant abusers aged seven to 14.  The project 
shall be established in a community that has been shown to be at 
great risk of such inhalant abuse and shall include assessment, 
education, and case management components.  For individuals 
identified as inhalant abusers, case managers shall make 
referrals to services otherwise offered in the community.  The 
case manager shall also monitor the progress of the individuals 
referred. 
    As part of this project, the commissioner of human services 
shall work with other agencies that provide services to youth 
and children, including education agencies and other drug 
treatment and counseling agencies, to increase public awareness 
concerning inhalant abuse among youth and children. 
    Sec. 103.  Minnesota Statutes 1988, section 254B.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CHEMICAL DEPENDENCY TREATMENT ALLOCATION.] 
The chemical dependency funds appropriated for allocation shall 
be placed in a special revenue account.  For the fiscal year 
beginning July 1, 1987, funds shall be transferred to operate 
the vendor payment, invoice processing, and collections system 
for one year.  The commissioner shall annually transfer funds 
from the chemical dependency fund to pay for operation of the 
drug and alcohol abuse normative evaluation system and to pay 
for all costs incurred by adding two positions for licensing of 
chemical dependency treatment and rehabilitation programs 
located in hospitals for which funds are not otherwise 
appropriated.  The commissioner shall annually divide the money 
available in the chemical dependency fund that is not held in 
reserve by counties from a previous allocation.  Twelve percent 
of the remaining money must be reserved for treatment of 
American Indians by eligible vendors under section 254B.05.  The 
remainder of the money must be allocated among the counties 
according to the following formula, using state demographer data 
and other data sources determined by the commissioner: 
    (a) The county non-Indian and over age 14 per capita-months 
of eligibility for aid to families with dependent children, 
general assistance, and medical assistance is divided by the 
total state non-Indian and over age 14 per capita-months of 
eligibility to determine the caseload factor for each county. 
    (b) The average median family married couple income for the 
previous three years for the state is divided by the average 
median family married couple income for the previous three years 
for each county to determine the income factor.  
    (c) The non-Indian and over age 14 population of the county 
is multiplied by the sum of the income factor and the caseload 
factor to determine the adjusted population.  
    (d) $15,000 shall be allocated to each county.  
    (e) The remaining funds shall be allocated proportional to 
the county adjusted population. 
    Sec. 104.  Minnesota Statutes 1988, section 254B.03, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LOCAL AGENCY DUTIES.] (a) Every local 
agency shall provide chemical dependency services to persons 
residing within its jurisdiction who meet criteria established 
by the commissioner for placement in a chemical dependency 
residential or nonresidential treatment service.  Chemical 
dependency money must be administered by the local agencies 
according to law and rules adopted by the commissioner under 
sections 14.01 to 14.69. 
     (b) In order to contain costs, the county board shall, with 
the approval of the commissioner of human services, select 
eligible vendors of chemical dependency services who can provide 
economical and appropriate treatment.  Unless the local agency 
is a social services department directly administered by a 
county or human services board, the local agency shall not be an 
eligible vendor under section 254B.05.  The commissioner may 
approve proposals from county boards to provide services in an 
economical manner or to control utilization, with safeguards to 
ensure that necessary services are provided.  If a county 
implements a demonstration or experimental medical services 
funding plan, the commissioner shall transfer the money as 
appropriate.  If a county selects a vendor located in another 
state, the county shall ensure that the vendor is in compliance 
with the rules governing licensure of programs located in the 
state.  
    (c) A culturally specific vendor that provides assessments 
under a variance under Minnesota Rules, part 9530.6610, shall be 
allowed to provide assessment services to persons not covered by 
the variance. 
    Sec. 105.  Minnesota Statutes 1988, section 254B.03, 
subdivision 4, is amended to read: 
    Subd. 4.  [DIVISION OF COSTS.] Except for services provided 
by a county under section 254B.09, subdivision 1, the county 
shall, out of local money, pay the state for 15 percent of the 
cost of chemical dependency services.  Counties may use the 
indigent hospitalization levy for treatment and hospital 
payments made under this section.  Fifteen percent of any state 
collections from private or third-party pay, less 15 percent of 
the cost of payment and collections, must be distributed to the 
county that paid for a portion of the treatment under this 
section.  If all funds allocated according to section 254B.02 
are exhausted by a county and the county has met or exceeded the 
base level of expenditures under section 254B.02, subdivision 3, 
the county shall pay the state for 15 percent of the costs paid 
by the state under this section.  The commissioner may refuse to 
pay state funds for services to persons not eligible under 
section 254B.04, subdivision 1, if the county financially 
responsible for the persons has exhausted its allocation. 
    Sec. 106.  Minnesota Statutes 1988, section 254B.04, is 
amended by adding a subdivision to read: 
    Subd. 3.  [AMOUNT OF CONTRIBUTION.] The commissioner shall 
adopt a sliding fee scale to determine the amount of 
contribution to be required from persons whose income is greater 
than the standard of assistance under sections 256B.055, 
256B.056, 256B.06, and 256D.01 to 256D.21.  The commissioner may 
adopt rules to amend existing fee scales.  The commissioner may 
establish a separate fee scale for recipients of chemical 
dependency transitional and extended care rehabilitation 
services that provides for the collection of fees for board and 
lodging expenses.  The fee schedule shall ensure that employed 
persons are allowed the income disregards and savings accounts 
that are allowed residents of community mental illness 
facilities under section 256D.06, subdivisions 1 and 1b.  The 
fee scale must not provide assistance to persons whose income is 
more than 115 percent of the state median income.  Payments of 
liabilities under this section are medical expenses for purposes 
of determining spend-down under sections 256B.055, 256B.056, 
256B.06, and 256D.01 to 256D.21.  The required amount of 
contribution established by the fee scale in this subdivision is 
also the cost of care responsibility subject to collection under 
section 254B.06, subdivision 1. 
    Sec. 107.  Minnesota Statutes 1988, section 254B.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [STATE COLLECTIONS.] The commissioner is 
responsible for all collections from persons determined to be 
partially responsible for the cost of care of an eligible person 
receiving services under Laws 1986, chapter 394, sections 8 to 
20.  The commissioner may initiate, or request the attorney 
general to initiate, necessary civil action to recover the 
unpaid cost of care.  The commissioner may collect all 
third-party payments for chemical dependency services provided 
under Laws 1986, chapter 394, sections 8 to 20, including 
private insurance and federal medicaid and medicare financial 
participation.  The commissioner shall deposit in a dedicated 
account a percentage of collections to pay for the cost of 
operating the chemical dependency consolidated treatment fund 
invoice processing and vendor payment system, billing, and 
collections.  The remaining receipts must be deposited in the 
chemical dependency fund. 
    Sec. 108.  Minnesota Statutes 1988, section 254B.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AMERICAN INDIAN CHEMICAL DEPENDENCY 
ACCOUNT.] The commissioner shall pay eligible vendors for 
chemical dependency services to American Indians on the same 
basis as other payments, except that no local match is required 
when an invoice is submitted by the governing authority of a 
federally recognized American Indian tribal body or a county if 
the tribal governing body has not entered into an agreement 
under subdivision 2 on behalf of a current resident of the 
reservation under this section. 
    Sec. 109.  Minnesota Statutes 1988, section 254B.09, 
subdivision 4, is amended to read: 
    Subd. 4.  [TRIBAL ALLOCATION.] Forty-two and one-half 
percent of the American Indian chemical dependency account must 
be allocated to the federally recognized American Indian tribal 
governing bodies that have entered into an agreement under 
subdivision 2 as follows:  $10,000 must be allocated to each 
governing body and the remainder must be allocated in direct 
proportion to the population of the reservation according to the 
most recently available estimates from the federal Bureau of 
Indian Affairs.  When a tribal governing body has not entered 
into an agreement with the commissioner under subdivision 2, the 
county may use funds allocated to the reservation to pay for 
chemical dependency services for a current resident of the 
county and of the reservation. 
    Sec. 110.  Minnesota Statutes 1988, section 254B.09, 
subdivision 5, is amended to read: 
    Subd. 5.  [TRIBAL RESERVE ACCOUNT.] The commissioner shall 
reserve 7.5 percent of the American Indian chemical dependency 
account.  The reserve must be allocated to those tribal units 
that have used all money allocated under subdivision 4 according 
to agreements made under subdivision 2 and to counties 
submitting invoices for American Indians under subdivision 1 
when all money allocated under subdivision 4 has been used.  An 
American Indian tribal governing body or a county submitting 
invoices under subdivision 1 may receive not more than 30 
percent of the reserve account in a year.  The commissioner may 
refuse to make reserve payments for persons not eligible under 
section 254B.04, subdivision 1, if the tribal governing body 
responsible for treatment placement has exhausted its 
allocation.  Money must be allocated as invoices are received. 
     Sec. 111.  Minnesota Statutes 1988, 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 local 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 local 
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 local agencies to make an adjustment to the 
public assistance benefits issued to any individual consistent 
with federal law and regulation and state law and rule and to 
issue or recover benefits as appropriate; 
    (e) delay or deny payment of all or part of the state and 
federal share of benefits and administrative reimbursement 
according to the procedures set forth in section 256.017; and 
    (f) make contracts with and grants to public and private 
agencies and organizations, both profit and nonprofit, and 
individuals, using appropriated funds. 
    (2) Inform local agencies, on a timely basis, of changes in 
statute, rule, federal law, regulation, and policy necessary to 
local 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) The commissioner is Act as designated as 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.  
    (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 local agencies for 
medical, dental, surgical, hospital, nursing and nursing home 
care and medicine and medical supplies under all programs of 
medical care provided by the state and for congregate living 
care under the income maintenance programs. 
     (12) Have the authority to conduct and administer 
experimental projects to test methods and procedures of 
administering assistance and services to recipients or potential 
recipients of public welfare.  To carry out such experimental 
projects, it is further provided that the commissioner of human 
services is authorized to waive the enforcement of existing 
specific statutory program requirements, rules, and standards in 
one or more counties.  The order establishing the waiver shall 
provide alternative methods and procedures of administration, 
shall not be in conflict with the basic purposes, coverage, or 
benefits provided by law, and in no event shall the duration of 
a project exceed four years.  It is further provided that no 
order establishing an experimental project as authorized by the 
provisions of this section shall become effective until the 
following conditions have been met: 
     (a) The proposed comprehensive plan including estimated 
project costs and the proposed order establishing the waiver 
shall be filed with the secretary of the senate and chief clerk 
of the house of representatives at least 60 days prior to its 
effective date. 
     (b) The secretary of health, education, and welfare of the 
United States has agreed, for the same project, to waive state 
plan requirements relative to statewide uniformity. 
    (c) A comprehensive plan, including estimated project 
costs, shall be approved by the legislative advisory commission 
and filed with the commissioner of administration.  
    (13) In accordance with federal requirements establish 
procedures to be followed by local welfare boards in creating 
citizen advisory committees, including procedures for selection 
of committee members. 
    (14) Allocate federal fiscal disallowances or sanctions 
which are based on quality control error rates for the aid to 
families with dependent children, medical assistance, or food 
stamp program in the following manner:  
    (a) One-half of the total amount of the disallowance shall 
be borne by the county boards responsible for administering the 
programs.  For the medical assistance and AFDC programs, 
disallowances shall be shared by each county board in the same 
proportion as that county's expenditures for the sanctioned 
program are to the total of all counties' expenditures for the 
AFDC and medical assistance programs.  For the food stamp 
program, sanctions shall be shared by each county board, with 50 
percent of the sanction being distributed to each county in the 
same proportion as that county's administrative costs for food 
stamps are to the total of all food stamp administrative costs 
for all counties, and 50 percent of the sanctions being 
distributed to each county in the same proportion as that 
county's value of food stamp benefits issued are to the total of 
all benefits issued for all counties.  Each county shall pay its 
share of the disallowance to the state of Minnesota.  When a 
county fails to pay the amount due hereunder, the commissioner 
may deduct the amount from reimbursement otherwise due the 
county, or the attorney general, upon the request of the 
commissioner, may institute civil action to recover the amount 
due. 
    (b) Notwithstanding the provisions of paragraph (a), if the 
disallowance results from knowing noncompliance by one or more 
counties with a specific program instruction, and that knowing 
noncompliance is a matter of official county board record, the 
commissioner may require payment or recover from the county or 
counties, in the manner prescribed in paragraph (a), an amount 
equal to the portion of the total disallowance which resulted 
from the noncompliance, and may distribute the balance of the 
disallowance according to paragraph (a).  
    (15) Develop and implement special projects that maximize 
reimbursements and result in the recovery of money to the 
state.  For the purpose of recovering state money, the 
commissioner may enter into contracts with third parties.  Any 
recoveries that result from projects or contracts entered into 
under this paragraph shall be deposited in the state treasury 
and credited to a special account until the balance in the 
account reaches $400,000.  When the balance in the account 
exceeds $400,000, the excess shall be transferred and credited 
to the general fund.  All money in the account is appropriated 
to the commissioner for the purposes of this paragraph. 
    (16) Have the authority to make direct payments to 
facilities providing shelter to women and their children 
pursuant to section 256D.05, subdivision 3.  Upon the written 
request of a shelter facility that has been denied payments 
under section 256.05, 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) Allocate federal fiscal disallowances or sanctions for 
audit exceptions when federal fiscal disallowances or sanctions 
are based on a statewide random sample for the foster care 
program under title IV-E of the Social Security Act, United 
States Code, title 42, in direct proportion to each county's 
title IV-E foster care maintenance claim for that period. 
    Sec. 112.  Minnesota Statutes 1988, section 256.01, is 
amended by adding a subdivision to read: 
    Subd. 12.  [CHILD MORTALITY REVIEW PANEL.] (a) The 
commissioner shall establish a child mortality review panel for 
reviewing deaths of children in Minnesota, including deaths 
attributed to maltreatment or in which maltreatment may be a 
contributing cause.  The commissioners of health, education, and 
public safety and the attorney general shall each designate a 
representative to the child mortality review panel.  Other panel 
members shall be appointed by the commissioner, including a 
board-certified pathologist and a physician who is a coroner or 
a medical examiner.  The purpose of the panel shall be to make 
recommendations to the state and to local agencies for improving 
the child protection system, including modifications in statute, 
rule, policy, and procedure. 
    (b) The commissioner may require a local agency to 
establish a local child mortality review panel.  The 
commissioner may establish procedures for conducting local 
reviews and may require that all professionals with knowledge of 
a child mortality case participate in the local review.  In this 
section, "professional" means a person licensed to perform or a 
person performing a specific service in the child protective 
service system.  "Professional" includes law enforcement 
personnel, social service agency attorneys, educators, and 
social service, health care, and mental health care providers. 
    (c) If the commissioner of human services has reason to 
believe that a child's death was caused by maltreatment or that 
maltreatment was a contributing cause, the commissioner has 
access to not public data under chapter 13 maintained by state 
agencies, statewide systems, or political subdivisions that are 
related to the child's death or circumstances surrounding the 
care of the child.  The commissioner shall also have access to 
records of private hospitals as necessary to carry out the 
duties prescribed by this section.  Access to data under this 
paragraph is limited to police investigative data; autopsy 
records and coroner or medical examiner investigative data; 
hospital, public health, or other medical records of the child; 
hospital and other medical records of the child's parent that 
relate to prenatal care; and records created by social service 
agencies that provided services to the child or family within 
three years preceding the child's death.  A state agency, 
statewide system, or political subdivision shall provide the 
data upon request of the commissioner.  Not public data may be 
shared with members of the state or local child mortality review 
panel in connection with an individual case. 
    (d) Notwithstanding the data's classification in the 
possession of any other agency, data acquired by a local or 
state child mortality review panel in the exercise of its duties 
is protected nonpublic or confidential data as defined in 
section 13.02, but may be disclosed as necessary to carry out 
the purposes of the review panel.  The data is not subject to 
subpoena or discovery.  The commissioner may disclose 
conclusions of the review panel, but shall not disclose data 
that was classified as confidential or private data on 
decedents, under section 13.10, or private, confidential, or 
protected nonpublic data in the disseminating agency. 
    (e) A person attending a child mortality review panel 
meeting shall not disclose what transpired at the meeting, 
except to carry out the purposes of the mortality review panel.  
The proceedings and records of the mortality review panel are 
protected nonpublic data as defined in section 13.02, 
subdivision 13, and are not subject to discovery or introduction 
into evidence in a civil or criminal action against a 
professional, the state or a local agency, arising out of the 
matters the panel is reviewing.  Information, documents, and 
records otherwise available from other sources are not immune 
from discovery or use in a civil or criminal action solely 
because they were presented during proceedings of the review 
panel.  A person who presented information before the review 
panel or who is a member of the panel shall not be prevented 
from testifying about matters within the person's knowledge.  
However, in a civil or criminal proceeding a person shall not be 
questioned about the person's presentation of information to the 
review panel or opinions formed by the person as a result of the 
review meetings.  
    Sec. 113.  Minnesota Statutes 1988, section 256.018, is 
amended to read: 
    256.018 [COUNTY PUBLIC ASSISTANCE INCENTIVE FUND.] 
    Beginning in 1990, $1,000,000 is appropriated from the 
general fund to the department in each fiscal year for The 
commissioner shall grant incentive awards of money specifically 
appropriated for this purpose to counties:  (1) that have not 
been assessed an administrative penalty under section 256.017 in 
the corresponding fiscal year; and (2) that perform 
satisfactorily according to indicators established by the 
commissioner.  
    After consultation with local agencies, the commissioner 
shall inform local agencies in writing of the performance 
indicators that govern the awarding of the incentive fund for 
each fiscal year by April of the preceding fiscal year. 
    The commissioner may set performance indicators to govern 
the awarding of the total fund, may allocate portions of the 
fund to be awarded by unique indicators, or may set a sole 
indicator to govern the awarding of funds. 
    The funds shall be awarded to qualifying local agencies 
according to their share of benefits for the programs related to 
the performance indicators governing the distribution of the 
fund or part of it as compared to the total benefits of all 
qualifying local agencies for the programs related to the 
performance indicators governing the distribution of the fund or 
part of it. 
     Sec. 114.  Minnesota Statutes 1988, section 256.87, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [CONTINUING SUPPORT CONTRIBUTIONS.] In addition 
to granting the county or state agency a money judgment, the 
court may, upon a motion or order to show cause, order 
continuing support contributions by a parent found able to 
reimburse the county or state agency.  Except as provided in 
subdivision 4, The order shall be effective for the period of 
time during which the recipient receives public assistance from 
any county or state agency and for five months thereafter.  The 
order shall require support according to chapter 518.  An order 
for continuing contributions is reinstated without further 
hearing upon notice to the parent by any county or state agency 
that assistance is again being provided for the child of the 
parent under sections 256.72 to 256.87.  The notice shall be in 
writing and shall indicate that the parent may request a hearing 
for modification of the amount of support or maintenance. 
     Sec. 115.  Minnesota Statutes 1988, section 256.974, is 
amended to read: 
    256.974 [OFFICE OF OMBUDSMAN FOR OLDER MINNESOTANS; LOCAL 
PROGRAMS.] 
    The ombudsman for older Minnesotans serves in the 
classified service under section 256.01, subdivision 7, in an 
office within the Minnesota board on aging that incorporates the 
long-term care ombudsman program required by the Older Americans 
Act, Public Law Number 98-456 100-75, United States Code, title 
42, section 3027(a)(12), and established within the Minnesota 
board on aging.  The Minnesota board on aging may make grants to 
and designate local programs or area agencies on aging for the 
provision of ombudsman services to clients in county or 
multicounty areas.  Individuals providing local ombudsman 
services must be qualified to perform the duties required by 
section 256.9742. The local program may not be an agency engaged 
in the provision of nursing home care, hospital care, or home 
care services either directly or by contract, or have the 
responsibility for planning, coordinating, funding, or 
administering nursing home care, hospital care, or home care 
services. 
    Sec. 116.  Minnesota Statutes 1988, section 256.9741, 
subdivision 3, is amended to read: 
    Subd. 3.  "Client" means an individual who requests, or on 
whose behalf a request is made for, ombudsman services and is (a)
a resident of a long-term care facility or (b) a patient in an 
acute care facility who is eligible for Medicare and beneficiary 
who requests assistance relating to admission or discharge from 
an acute care facility access, discharge, or denial of inpatient 
or outpatient services, or (c) an individual reserving or 
requesting a home care service.  
    Sec. 117.  Minnesota Statutes 1988, section 256.9741, 
subdivision 5, is amended to read: 
    Subd. 5.  "Office" means the office of ombudsman 
established within the Minnesota board on aging or local 
ombudsman programs that the board on aging designates.  
    Sec. 118.  Minnesota Statutes 1988, section 256.9741, is 
amended by adding a subdivision to read: 
    Subd. 6.  "Home care service" means health, social, or 
supportive services provided to an individual for a fee in the 
individual's residence and in the community to promote, 
maintain, or restore health, or maximize the individual's level 
of independence, while minimizing the effects of disability and 
illness. 
    Sec. 119.  Minnesota Statutes 1988, section 256.9742, is 
amended to read: 
    256.9742 [DUTIES AND POWERS OF THE OFFICE.] 
    Subdivision 1.  [DUTIES.] The ombudsman shall: 
    (1) gather information and evaluate any act, practice, 
policy, procedure, or administrative action of a long-term care 
facility, acute care facility, home care service provider, or 
government agency that may adversely affect the health, safety, 
welfare, or rights of any client; 
    (2) mediate or advocate on behalf of clients; 
    (3) monitor the development and implementation of federal, 
state, or local laws, rules, regulations, and policies affecting 
the rights and benefits of clients; 
    (4) comment on and recommend to the legislature and public 
and private agencies regarding laws, rules, regulations, and 
policies affecting clients; 
    (5) inform public agencies about the problems of clients; 
    (6) provide for training of volunteers and promote the 
development of citizen participation in the work of the office; 
    (7) conduct public forums to obtain information about and 
publicize issues affecting clients; 
    (8) provide public education regarding the health, safety, 
welfare, and rights of clients; and 
    (9) collect and analyze data relating to complaints and, 
conditions in long-term care facilities, and services. 
     Subd. 1a.  [DESIGNATION; LOCAL OMBUDSMAN 
REPRESENTATIVES.] (a) In designating an individual to perform 
duties under this section, the ombudsman must determine that the 
individual is qualified to perform the duties required by this 
section. 
    (b) An individual designated under this section must 
successfully complete an orientation training conducted under 
the direction of the ombudsman or approved by the ombudsman.  
Orientation training shall be at least 20 hours and will consist 
of training in:  investigation, dispute resolution, health care 
regulation, confidentiality, resident and patients' rights, and 
health care reimbursement. 
    (c) The ombudsman shall develop and implement a continuing 
education program for individuals designated under this 
section.  The continuing education program shall be at least 60 
hours annually. 
    (d) The ombudsman may withdraw an individual's designation 
if the individual fails to perform duties of this section or 
meet continuing education requirements.  The individual may 
request a reconsideration of such action by the board on aging 
whose decision shall be final. 
    Subd. 2.  [IMMUNITY FROM LIABILITY.] A person designated as 
an The ombudsman or designee under this section is immune from 
civil liability that otherwise might result from the person's 
actions or omissions if the person's actions are in good faith, 
are within the scope of the person's responsibilities as an 
ombudsman, and do not constitute willful or reckless misconduct. 
    Subd. 3.  [POSTING.] Every long-term care facility and 
acute care facility shall post in a conspicuous place the 
address and telephone number of the office.  A home care service 
provider shall provide all recipients with the address and 
telephone number of the office.  The posting or notice is 
subject to approval by the ombudsman.  
    Subd. 4.  [ACCESS TO LONG-TERM CARE AND ACUTE CARE 
FACILITIES AND CLIENTS.] The ombudsman or designee may: 
    (1) enter any long-term care facility without notice at any 
time; 
    (2) enter any acute care facility without notice during 
normal business hours; 
    (3) enter any acute care facility without notice at any 
time to interview a patient or observe services being provided 
to the patient as part of an investigation of a matter that is 
within the scope of the ombudsman's authority, but only if the 
ombudsman's or designee's presence does not intrude upon the 
privacy of another patient or interfere with routine hospital 
services provided to any patient in the facility; 
     (4) communicate privately and without restriction with any 
client in accordance with section 144.651; and 
    (4) (5) inspect records of a long-term care facility, home 
care service provider, or acute care facility that pertain to 
the care of the client according to sections 144.335 and 
144.651.; and 
    (6) with the consent of a client or client's legal 
guardian, have access to review records pertaining to the care 
of the client according to sections 144.335 and 144.651.  If a 
client cannot consent and has no legal guardian, access to the 
records is authorized by this section.  
    A person who denies access to the ombudsman or designee in 
violation of this subdivision or aids, abets, invites, compels, 
or coerces another to do so is guilty of a misdemeanor. 
    Subd. 5.  [ACCESS TO STATE RECORDS.] The ombudsman or 
designee has access to data of a state agency necessary for the 
discharge of the ombudsman's duties, including records 
classified confidential or private under chapter 13, or any 
other law.  The data requested must be related to a specific 
case and is subject to section 13.03, subdivision 4.  If the 
data concerns an individual, the ombudsman or designee shall 
first obtain the individual's consent.  If the individual cannot 
consent and has no legal guardian, then access to the data is 
authorized by this section. 
    Each state agency responsible for licensing, regulating, 
and enforcing state and federal laws and regulations concerning 
long-term care, home care service providers, and acute care 
facilities shall forward to the ombudsman on a quarterly basis, 
copies of all correction orders, penalty assessments, and 
complaint investigation reports, for all long-term care 
facilities and, acute care facilities, and home care service 
providers. 
    Subd. 6.  [PROHIBITION AGAINST DISCRIMINATION OR 
RETALIATION.] (a) No entity shall take discriminatory, 
disciplinary, or retaliatory action against an employee or 
volunteer, or a patient, resident, or guardian or family member 
of a patient, resident, or guardian for filing in good faith a 
complaint with or providing information to the ombudsman or 
designee.  A person who violates this subdivision or who aids, 
abets, invites, compels, or coerces another to do so is guilty 
of a misdemeanor. 
    (b) There shall be a rebuttable presumption that any 
adverse action, as defined below, within 90 days of report, is 
discriminatory, disciplinary, or retaliatory.  For the purpose 
of this clause, the term "adverse action" refers to action taken 
by the entity involved in a report against the person making the 
report or the person with respect to whom the report was made 
because of the report, and includes, but is not limited to: 
    (1) discharge or transfer from a facility; 
    (2) termination of service; 
    (3) restriction or prohibition of access to the facility or 
its residents; 
    (4) discharge from or termination of employment; 
    (5) demotion or reduction in remuneration for services; and 
    (6) any restriction of rights set forth in section 144.651 
or 144A.44. 
    Sec. 120.  Minnesota Statutes 1988, section 256.9744, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CLASSIFICATION.] Except as provided in 
this section, data maintained by the office under sections 
256.974 to 256.9744 are private data on individuals or nonpublic 
data as defined in section 13.02, subdivision 9 or 12, and must 
be maintained in accordance with the requirements of Public Law 
Number 98-459 100-75, United States Code, title 42, section 
3027(a)(12)(D). 
    Sec. 121.  Minnesota Statutes 1988, section 256.975, 
subdivision 2, is amended to read: 
    Subd. 2.  [DUTIES.] The board shall carry out the following 
duties: 
    (a) to advise the governor and heads of state departments 
and agencies regarding policy, programs, and services affecting 
the aging; 
    (b) to provide a mechanism for coordinating plans and 
activities of state departments and citizens' groups as they 
pertain to aging; 
    (c) to create public awareness of the special needs and 
potentialities of older persons; 
    (d) to gather and disseminate information about research 
and action programs, and to encourage state departments and 
other agencies to conduct needed research in the field of aging; 
    (e) to stimulate, guide, and provide technical assistance 
in the organization of local councils on aging; 
    (f) to provide continuous review of ongoing services, 
programs and proposed legislation affecting the elderly in 
Minnesota; and 
    (g) to administer and to make policy relating to all 
aspects of the older americans act of 1965, as amended, 
including implementation thereof.; and 
    (h) to award grants, enter into contracts, and adopt rules 
the Minnesota board on aging deems necessary to carry out the 
purposes of this section. 
    Sec. 122.  Minnesota Statutes 1988, section 256C.28, 
subdivision 3, is amended to read: 
    Subd. 3.  [DUTIES.] The council shall: 
    (1) advise the commissioner, the governor, and the 
legislature on the nature of the issues and disabilities 
confronting hearing impaired persons in Minnesota; 
    (2) advise the commissioner and, the governor, and the 
legislature on the development of policies, programs, and 
services affecting the hearing impaired persons, and on the use 
of appropriate federal and state money; 
    (2) (3) create a public awareness of the special needs and 
potential of hearing impaired persons; and 
    (3) (4) provide the commissioner and, the governor, and 
the legislature with a review of ongoing services, programs, and 
proposed legislation affecting the hearing impaired. persons; 
    (5) advise the commissioner, the governor, and the 
legislature on statutes or rules necessary to ensure that 
hearing impaired persons have access to benefits and services 
provided to individuals in Minnesota; 
    (6) recommend to the commissioner, the governor, and the 
legislature legislation designed to improve the economic and 
social conditions of hearing impaired persons in Minnesota; 
    (7) propose solutions to problems of hearing impaired 
persons in the areas of education, employment, human rights, 
human services, health, housing, and other related programs; 
    (8) recommend to the governor and the legislature any 
needed revisions in the state's affirmative action program and 
any other steps necessary to eliminate the underemployment or 
unemployment of hearing impaired persons in the state's work 
force; 
    (9) work with other state and federal agencies and 
organizations to promote economic development for hearing 
impaired Minnesotans; and 
    (10) coordinate its efforts with other state and local 
agencies serving hearing impaired persons. 
    Sec. 123.  Minnesota Statutes 1988, section 256C.28, is 
amended by adding a subdivision to read: 
    Subd. 4.  [STAFF.] The council may appoint, subject to the 
approval of the governor, an executive director who must be 
experienced in administrative activities and familiar with the 
problems and needs of hearing impaired persons.  The council may 
delegate to the executive director any powers and duties under 
this section that do not require council approval.  The 
executive director serves in the unclassified service and may be 
removed at any time by a majority vote of the council.  The 
executive director shall coordinate the provision of necessary 
support services to the council with the state department of 
human services. 
    Sec. 124.  Minnesota Statutes 1988, section 256C.28, is 
amended by adding a subdivision to read: 
    Subd. 5.  [POWERS.] The council may contract in its own 
name.  Contracts must be approved by a majority of the members 
of the council and executed by the chair and the executive 
director.  The council may apply for, receive, and expend in its 
own name grants and gifts of money consistent with the powers 
and duties specified in this section. 
    Sec. 125.  Minnesota Statutes 1988, section 256C.28, is 
amended by adding a subdivision to read: 
    Subd. 6.  [REPORT.] The council shall prepare and 
distribute a report to the commissioner, the governor, and the 
legislature by December 31 of each even-numbered year.  The 
report must summarize the activities of the council since its 
prior report, list receipts and expenditures, identify the major 
problems and issues confronting hearing impaired persons, make 
recommendations regarding needed policy and program development 
on behalf of hearing impaired individuals in Minnesota, and list 
the specific objectives the council seeks to attain during the 
next biennium. 
    Sec. 126.  Minnesota Statutes 1988, section 256E.03, 
subdivision 2, is amended to read: 
    Subd. 2.  (a) "Community social services" means services 
provided or arranged for by county boards to fulfill the 
responsibilities prescribed in section 256E.08, subdivision 1 to 
the following groups of persons: 
    (a) (1) families with children under age 18, who are 
experiencing child dependency, neglect or abuse, and also 
pregnant adolescents, adolescent parents under the age of 18, 
and their children; 
    (b) (2) persons who are under the guardianship of the 
commissioner of human services as dependent and neglected wards; 
    (c) (3) adults who are in need of protection and vulnerable 
as defined in section 626.557; 
    (d) (4) persons age 60 and over who are experiencing 
difficulty living independently and are unable to provide for 
their own needs; 
    (e) (5) emotionally disturbed children and adolescents, 
chronically and acutely mentally ill persons who are unable to 
provide for their own needs or to independently engage in 
ordinary community activities; 
    (f) (6) persons with mental retardation as defined in 
section 252A.02, subdivision 2, or with related conditions as 
defined in section 252.27, subdivision 1, who are unable to 
provide for their own needs or to independently engage in 
ordinary community activities; 
    (g) (7) drug dependent and intoxicated persons as defined 
in section 254A.02, subdivisions 5 and 7, and persons at risk of 
harm to self or others due to the ingestion of alcohol or other 
drugs; 
    (h) (8) parents whose income is at or below 70 percent of 
the state median income and who are in need of child care 
services in order to secure or retain employment or to obtain 
the training or education necessary to secure employment; and 
    (i) (9) other groups of persons who, in the judgment of the 
county board, are in need of social services. 
    (b) Except as provided in section 256E.08, subdivision 5, 
community social services do not include public assistance 
programs known as aid to families with dependent children, 
Minnesota supplemental aid, medical assistance, general 
assistance, general assistance medical care, or community health 
services authorized by sections 145A.09 to 145A.13.  
    Sec. 127.  Minnesota Statutes 1988, section 256E.05, 
subdivision 3, is amended to read: 
    Subd. 3.  [ADDITIONAL DUTIES.] The commissioner shall also: 
    (a) Provide necessary forms and instructions to the 
counties for plan format and information; 
    (b) Identify and then amend or repeal the portions of all 
applicable department rules which mandate counties to provide 
specific community social services or programs, unless state or 
federal law requires the commissioner to mandate a service or 
program.  The commissioner shall be exempt from the rulemaking 
provisions of chapter 14 in amending or repealing rules pursuant 
to this clause.  However, when the commissioner proposes to 
amend or repeal any rule under the authority granted by this 
clause, notice shall be provided by publication in the State 
Register.  When the commissioner proposes to amend a rule, the 
notice shall include that portion of the existing rule necessary 
to provide adequate notice of the nature of the proposed 
change.  On proposing to repeal an entire rule, the commissioner 
need only publish that fact, giving the exact citation to the 
rule to be repealed.  In all cases, the notice shall contain a 
statement indicating that interested persons may submit comment 
on the proposed repeal or amendment for a period of 30 days 
after publication of the notice.  The commissioner shall take no 
final action until after the close of the comment period.  The 
commissioner's actions shall not be effective until five days 
after the commissioner publishes notice of adoption in the State 
Register.  If the final action is the same as the action 
originally proposed, publication may be made by notice in the 
State Register that the amendment and repeals have been adopted 
as proposed, and by citing the prior publication.  If the final 
action differs from the action as previously proposed in the 
State Register, the text which differs from the original 
proposal shall be included in the notice of adoption together 
with a citation to the prior State Register publication.  The 
commissioner shall provide to all county boards separate notice 
of all final actions which become effective under this clause, 
advising the boards with respect to services or programs which 
have now become optional, to be provided at county 
discretion; To the extent possible, coordinate other categorical 
social service grant applications and plans required of counties 
so that the applications and plans are included in and are 
consistent with the timetable and other requirements for the 
community social services plan in subdivision 2 and section 
256E.09; 
    (c) Provide to the chair of each county board, in addition 
to notice required pursuant to sections 14.05 to 14.36, timely 
advance notice and a written summary of the fiscal impact of any 
proposed new rule or changes in existing rule which will have 
the effect of increasing county costs for community social 
services; 
    (d) Provide training, technical assistance, and other 
support services to county boards to assist in needs assessment, 
planning, implementing, and monitoring social services programs 
in the counties; 
    (e) Design and implement a method of monitoring and 
evaluating social services, including site visits that utilize 
quality control audits to assure county compliance with 
applicable standards, guidelines, and the county and state 
social services plans; and 
    (f) Annually publish a report on community social services 
which shall reflect the contents of the individual county 
reports.  The report shall be submitted to the governor and the 
legislature with an evaluation of community social services and 
recommendations for changes needed to fully implement state 
social service policies; and 
    (g) Request waivers from federal programs as necessary to 
implement sections 256E.01 to 256E.12.  
    Sec. 128.  Minnesota Statutes 1988, section 256E.08, 
subdivision 5, is amended to read: 
    Subd. 5.  [COMMUNITY SOCIAL SERVICES FUND.] In the accounts 
and records of each county there shall be created a community 
social services fund.  All moneys provided for community social 
services programs under sections 256E.06 and 256E.07 and all 
other revenues,; fees,; grants-in-aid, including those from 
public assistance programs identified in section 256E.03, 
subdivision 2, paragraph (b), that pay for services such as 
child care, waivered services under the medical assistance 
programs, alternative care grants, and other services funded by 
these programs through federal or state waivers; gifts,; or 
bequests designated for community social services purposes shall 
be identified in the record of the fund and in the report 
required in subdivision 8.  This fund shall be used exclusively 
for planning and delivery of community social services as 
defined in section 256E.03, subdivision 2.  If county boards 
have joined for purposes of administering community social 
services, the county boards may create a joint community social 
services fund.  If a human service board has been established, 
the human service board shall account for community social 
services money as required in chapter 402.  
    Sec. 129.  Minnesota Statutes 1988, section 256E.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PLAN PROPOSAL.] In 1988, the county board 
shall publish a one-year update to its 1987-1988 biennial plan 
for calendar year 1989, and make it available upon request to 
all residents of the county.  Beginning in 1989, and every two 
years after that, the county board shall publish and make 
available upon request to all county residents a proposed 
biennial community social services plan for the next two 
calendar years. 
    Sec. 130.  Minnesota Statutes 1988, section 256E.09, 
subdivision 3, is amended to read: 
    Subd. 3.  [PLAN CONTENT.] The biennial community social 
services plan published by the county shall include: 
    (a) A statement of the goals of community social service 
programs in the county; 
    (b) Methods used pursuant to subdivision 2 to encourage 
participation of citizens and providers in the development of 
the plan and the allocation of money; 
    (c) Methods used to identify persons in need of service and 
the social problems to be addressed by the community social 
service programs, including efforts the county proposes to make 
in providing for early intervention, prevention and education 
aimed at minimizing or eliminating the need for services for 
groups of persons identified in section 256E.03, subdivision 2; 
    (d) A statement describing how the county will fulfill its 
responsibilities identified in section 256E.08, subdivision 1, 
to the groups of persons described in section 256E.03, 
subdivision 2, and a description of each community social 
service proposed and identification of the agency or person 
proposed to provide the service; 
    (e) A statement describing how the county proposes to make 
the following services available for persons identified by the 
county as in need of services:  daytime developmental 
achievement services for children,; day training and 
habilitation services for adults,; extended employment program 
services for persons with disabilities,; supported employment 
services as defined in section 252.41, subdivision 8; 
community-based employment programs as defined in section 
129A.01, subdivision 12; subacute detoxification services,; and 
residential services and nonresidential social support services 
as appropriate for the groups identified in section 256E.03, 
subdivision 2; 
    (f) A statement specifying how the county will 
collaboratively plan the development of supported employment 
services and community-based employment services with local 
representatives of public rehabilitation agencies and local 
education agencies, including, if necessary, how existing day or 
employment services could be modified to provide supported 
employment services and community-based employment services; 
    (g) A statement describing how the county is fulfilling its 
responsibility to establish a comprehensive and coordinated 
system of early intervention services as required under section 
120.17, subdivisions 11a, 12, and 14; 
    (g) (h) The amount of money proposed to be allocated to 
each service; 
    (h) (i) An inventory of public and private resources 
including associations of volunteers which are available to the 
county for social services; 
    (i) (j) Evidence that serious consideration was given to 
the purchase of services from private and public agencies; and 
    (j) (k) Methods whereby community social service programs 
will be monitored and evaluated by the county. 
    Sec. 131.  [256E.115] [SAFE HOUSES.] 
    The commissioner shall have authority to make grants for 
pilot programs when the legislature authorizes money to 
encourage innovation in the development of safe house programs 
to respond to the needs of homeless youth. 
    Sec. 132.  Minnesota Statutes 1988, section 256F.05, 
subdivision 2, is amended to read: 
    Subd. 2.  [ADDITIONAL MONEY AVAILABLE.] Additional Money 
appropriated for family-based services permanency planning 
grants to counties, together with an amount as determined by the 
commissioner of title IV-B funds distributed to Minnesota 
according to the Social Security Act, United States Code, title 
42, section 621, must be distributed to counties according to 
the formula in subdivision 3. 
    Sec. 133.  Minnesota Statutes 1988, section 256F.05, 
subdivision 4, is amended to read: 
    Subd. 4.  [PAYMENTS.] The commissioner shall make grant 
payments to each county whose biennial community social services 
plan includes a permanency plan under section 256F.04, 
subdivision 2.  The payment must be made in four installments 
per year.  The commissioner may certify the payments for the 
first three months of a calendar year.  Subsequent payments must 
be made on April 1 30, July 1 30, and October 1 30, of each 
calendar year.  When an amount of title IV-B funds as determined 
by the commissioner is made available, it shall be reimbursed to 
counties on October 30. 
    Sec. 134.  [256F.08] [GRANTS FOR PLACEMENT PREVENTION AND 
FAMILY REUNIFICATION; AMERICAN INDIAN AND MINORITY CHILDREN.] 
    Subdivision 1.  [GRANT PROGRAM.] Within the limits of funds 
appropriated for this purpose, the commissioner shall establish 
a specialized grants program for placement prevention and family 
reunification for American Indian and minority children. 
    Subd. 2.  [REQUEST FOR PROPOSALS.] The commissioner shall 
request proposals for the development and provision of services 
listed in 256F.07, subdivisions 3 and 3a. 
    Subd. 3.  [GRANT APPLICATIONS.] Local social services 
agencies may apply for American Indian and minority children 
placement prevention and family reunification grants.  
Application may be made alone or in combination with neighboring 
local social services agencies. 
    Subd. 4.  [FORMS AND INSTRUCTIONS.] The commissioner shall 
provide necessary forms and instructions to the counties to 
apply for an American Indian and minority child placement 
prevention and family reunification grant. 
    Subd. 5.  [MONITORING.] The commissioner shall design and 
implement methods for monitoring, delivering, and evaluating the 
effectiveness of placement prevention and family reunification 
services for American Indian and minority children. 
    Sec. 135.  Minnesota Statutes 1988, section 256H.01, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SCOPE.] For the purposes of sections 
256H.01 to 265H.19 256H.19, the following terms have the 
meanings given. 
    Sec. 136.  Minnesota Statutes 1988, section 256H.01, 
subdivision 2, is amended to read: 
    Subd. 2.  [CHILD CARE SERVICES.] "Child care services" 
means child care provided in family day care homes, group day 
care homes, nursery schools, day nurseries, child day care 
centers, play groups, head start, and parent cooperatives, and 
extended day school age child care programs or in or out of the 
child's home. 
    Sec. 137.  Minnesota Statutes 1988, section 256H.01, 
subdivision 7, is amended to read: 
    Subd. 7.  [EDUCATION PROGRAM.] "Education program" means 
remedial or basic education or English as a second language 
instruction, high school education, a program leading to a 
general equivalency or high school diploma, and post-secondary 
education excluding post-baccalaureate programs and other 
education and training needs as documented in an employability 
plan that is developed by an employment and training service 
provider certified by the commissioner of jobs and training or 
an individual designated by the county to provide employment and 
training services.  The employability plan must outline 
education and training needs of a recipient, meet state 
requirements for employability plans, and meet the requirements 
of other programs that provide federal reimbursement for child 
care services.  The county must incorporate into a recipient's 
employability plan an educational plan developed by a 
post-secondary institution for a nonpriority AFDC recipient who 
is enrolled or planning to enroll at that institution.  
    Sec. 138.  Minnesota Statutes 1988, section 256H.01, 
subdivision 8, is amended to read: 
    Subd. 8.  [EMPLOYMENT PROGRAM.] "Employment program" means 
employment of recipients financially eligible for the child care 
sliding fee program, vocational assessment, and job readiness 
and job search activities. assistance, preemployment activities, 
or other activities approved in an employability plan that is 
developed by an employment and training service provider 
certified by the commissioner of jobs and training or an 
individual designated by the county to provide employment and 
training services.  The plans must meet the requirements of 
other programs that provide federal reimbursement for child care 
services. 
    Sec. 139.  Minnesota Statutes 1988, section 256H.01, 
subdivision 11, is amended to read: 
    Subd. 11.  [INCOME.] "Income" means earned or unearned 
income received by all family members 16 years or older, 
including public assistance benefits, unless specifically 
excluded.  The following are excluded from income:  
scholarships, work study income, and grants that cover costs for 
tuition, fees, books, and educational supplies; student loans 
for tuition, fees, books, supplies, and living expenses; earned 
income tax credits; in-kind income such as food stamps, energy 
assistance, medical assistance, and housing subsidies; income 
from summer or part-time employment of 16-, 17-, and 18-year-old 
full-time secondary school students; grant awards under the 
family subsidy program; and nonrecurring lump sum income only to 
the extent that it is earmarked and used for the purpose for 
which it is paid. 
    Sec. 140.  Minnesota Statutes 1988, section 256H.01, 
subdivision 12, is amended to read: 
    Subd. 12.  [PROVIDER.] "Provider" means the a child care 
license holder or the legal nonlicensed caregiver who operates a 
family day care home, a group family day care home, a day care 
center, a nursery school, or a day nursery, an extended day 
school age child care program; a person exempt from licensure 
who meets child care standards established by the state board of 
education; or who functions in the child's home a legal 
nonlicensed caregiver who is at least 18 years of age.  
    Sec. 141.  Minnesota Statutes 1988, section 256H.02, is 
amended to read: 
    256H.02 [DUTIES OF COMMISSIONER.] 
    The commissioner shall develop standards for county and 
human services boards, and post-secondary educational systems , 
to provide child care services to enable eligible families to 
participate in employment, training, or education programs.  
Within the limits of available appropriations, the commissioner 
shall distribute money to counties to reduce the costs of child 
care for eligible families.  The commissioner shall adopt rules 
to govern the program in accordance with this section.  The 
rules must establish a sliding schedule of fees for parents 
receiving child care services.  The commissioner shall maximize 
the use of federal money under the AFDC employment special needs 
program in section 256.736, subdivision 8, and other programs 
that provide federal reimbursement for child care services for 
recipients of aid to families with dependent children who are in 
education, training, job search, or other activities allowed 
under that program those programs.  Money appropriated under 
this section must be coordinated with the AFDC employment 
special needs program and other programs that provide federal 
reimbursement for child care services to accomplish this 
purpose.  Federal reimbursement obtained must be allocated to 
the county that spent money for child care that is federally 
reimbursable under the AFDC employment special needs program or 
other programs that provide federal reimbursement for child care 
services.  The counties shall use the federal money to expand 
services to AFDC recipients under this section. 
    Sec. 142.  Minnesota Statutes 1988, section 256H.03, is 
amended to read: 
    256H.03 [ALLOCATION OF FUNDS BASIC SLIDING FEE PROGRAM.] 
    Subdivision 1.  [COUNTIES; NOTICE OF ALLOCATION; REPORT.] 
By June 1 of each odd-numbered year, the commissioner shall 
notify all county and human services boards and post-secondary 
educational systems of their allocation.  If the appropriation 
is insufficient to meet the needs in all counties, the amount 
must be prorated among the counties.  When the commissioner 
notifies county and human service boards of the forms and 
instructions they are to follow in the development of their 
biennial community social services plans required under section 
256E.08, the commissioner shall also notify county and human 
services boards of their estimated child care fund program 
allocation for the two years covered by the plan.  By June 1 of 
each year, the commissioner shall notify all counties of their 
final child care fund program allocation. 
    Subd. 1a.  [WAITING LIST.] Each county that receives funds 
under this section and section 256H.05 must keep a written 
record and report to the commissioner the number of eligible 
families who have applied for a child care subsidy or have 
requested child care assistance.  Counties shall perform a 
cursory determination of eligibility when a family requests 
information about child care assistance.  A family that appears 
to be eligible must be put on a waiting list if funds are not 
immediately available.  The waiting list must identify students 
in need of child care.  When money is available counties shall 
expedite the processing of student applications during key 
enrollment periods. 
    Subd. 2.  [ALLOCATION; LIMITATIONS.] Except for set-aside 
money allocated under sections 256H.04, 256H.05, 256H.06, and 
256H.07, the commissioner shall allocate money appropriated The 
commissioner shall allocate 66 percent of the money appropriated 
under the child care fund for the basic sliding fee program and 
shall allocate those funds between the metropolitan area, 
comprising the counties of Anoka, Carver, Dakota, Hennepin, 
Ramsey, Scott, and Washington, and the area outside the 
metropolitan area so that no more than 55 percent of the total 
appropriation goes to either area after excluding allocations 
for statewide administrative costs.  The commissioner shall 
allocate 50 percent of the money among counties on the basis of 
the number of families below the poverty level, as determined 
from the most recent special census, and 50 percent on the basis 
of caseloads of aid to families with dependent children for the 
preceding fiscal year, as determined by the commissioner of 
human services. as follows: 
    (1) 50 percent of the money shall be allocated among the 
counties on the basis of the number of families below the 
poverty level, as determined from the most recent census or 
special census; and 
    (2) 50 percent of the money shall be allocated among the 
counties on the basis of the counties' portion of the AFDC 
caseload for the preceding state fiscal year . 
    If under the preceding formula, either the seven-county 
metropolitan area consisting of Anoka, Carver, Dakota, Hennepin, 
Ramsey, Scott, and Washington counties or the area consisting of 
counties outside the seven-county metropolitan area is allocated 
more than 55 percent of the basic sliding fee funds, each 
county's allocation in that area shall be proportionally reduced 
until the total for the area is no more than 55 percent of the 
basic sliding fee funds.  The amount of the allocations 
proportionally reduced shall be used to proportionally increase 
each county's allocation in the other area. 
    Subd. 2a.  [ELIGIBLE RECIPIENTS.] Families that meet the 
eligibility requirements under sections 256H.10 and 256H.11 are 
eligible for child care assistance under the basic sliding fee 
program.  Counties shall make vendor payments to the child care 
provider or pay the parent directly for eligible child care 
expenses on a reimbursement basis. 
     Subd. 2b.  [FUNDING PRIORITY.] (a) First priority for child 
care assistance under the basic sliding fee program must be 
given to eligible recipients who do not have a high school or 
general equivalency diploma or who need remedial and basic skill 
courses in order to pursue employment or to pursue education 
leading to employment.  Priority for child care assistance under 
the basic sliding fee program must be given to non-AFDC families 
for this first priority unless a county can demonstrate that 
funds available in the AFDC child care program allocation are 
inadequate to serve all AFDC families needing child care 
services.  Within this priority, the following subpriorities 
must be used: 
    (1) child care needs of minor parents; 
    (2) child care needs of parents under 21 years of age; and 
    (3) child care needs of other parents within the priority 
group described in this paragraph. 
    (b) Second priority must be given to all other parents who 
are eligible for the basic sliding fee program. 
    Subd. 3.  [REVIEW OF USE OF FUNDS; REALLOCATION.] Once 
After each quarter, the commissioner shall review the use 
of child care fund basic sliding fee program and AFDC child care 
program allocations by county.  The commissioner may reallocate 
unexpended or unencumbered money among those counties who have 
expended their full portion allocation.  Any unexpended money 
from the first year of the biennium may be carried forward to 
the second year of the biennium.  
    Sec. 143.  Minnesota Statutes 1988, section 256H.05, is 
amended to read: 
    256H.05 [SET-ASIDE MONEY FOR AFDC PRIORITY GROUPS AFDC 
CHILD CARE PROGRAM.] 
    Subdivision 1.  [ALLOCATIONS; USE NOTICE OF ALLOCATION.] 
Set-aside money for AFDC priority groups must be allocated among 
the counties based on the average monthly number of caretakers 
receiving AFDC under the age of 21 and the average monthly 
number of AFDC cases open 24 or more consecutive months.  By 
June 1 of each year, the commissioner shall notify all county 
and human services boards of their allocation under the AFDC 
child care fund program. 
    Subd. 1a.  [COUNTY ALLOCATION; LIMITATIONS.] The 
commissioner shall allocate 34 percent of the money appropriated 
under the child care fund for the AFDC child care program and 
shall allocate those funds among the counties as follows: 
    (1) 50 percent of the funds shall be allocated to the 
counties based on the average number of AFDC caretakers less 
than 21 years of age and the average number of AFDC cases which 
were open 24 or more consecutive months during the preceding 
fiscal year; and 
    (2) 50 percent of the funds shall be allocated to the 
counties based on the average number of AFDC recipients for the 
preceding state fiscal year.  For each fiscal year the average 
monthly caseload AFDC caseloads shall be based on counts taken 
at three-month intervals during the 12-month period ending March 
31 December 31 of the previous state fiscal year.  The 
commissioner may reallocate quarterly unexpended or unencumbered 
set-aside money to counties that expend their full allocation.  
The county shall use the set-aside money for AFDC priority 
groups and for former AFDC recipients who (1) have had their 
child care subsidized under the set-aside for AFDC priority 
groups; (2) continue to require a child care subsidy in order to 
remain employed; and (3) are on a waiting list for the basic 
sliding fee program. 
    Subd. 1b.  [ELIGIBLE RECIPIENTS.] Families eligible for 
child care assistance under the AFDC child care program are 
families receiving AFDC and former AFDC recipients who, during 
their first year of employment, continue to require a child care 
subsidy in order to retain employment.  The commissioner shall 
designate between 20 to 60 percent of the AFDC child care 
program as the minimum to be reserved for AFDC recipients in an 
educational program.  If a family meets the eligibility 
requirements of the AFDC child care program and the caregiver 
has an approved employability plan that meets the requirements 
of appropriate federal reimbursement programs, that family is 
eligible for child care assistance. 
    Subd. 1c.  [FUNDING PRIORITY.] Priority for child care 
assistance under the AFDC child care program shall be given to 
AFDC priority groups who are engaged in an employment or 
education program consistent with their employability plan.  If 
the AFDC recipient is employed, the AFDC child care disregard 
shall be applied before the remaining child care costs are 
subsidized by the AFDC child care program.  AFDC recipients 
leaving AFDC due to their earned income, who have been on AFDC 
three out of the last six months and who apply for child care 
assistance under subdivision 1b within the first year after 
leaving AFDC, shall be entitled to one year of child care 
subsidies during the first year of employment.  AFDC recipients 
must be put on a waiting list for the basic sliding fee program 
when they leave AFDC due to their earned income. 
    Subd. 2.  [COOPERATION WITH OTHER PROGRAMS.] The county 
shall develop cooperative agreements with the employment and 
training service provider for coordination of child care funding 
with employment, training, and education programs for aid to 
families with dependent children priority groups all AFDC 
recipients.  The cooperative agreement shall specify that 
individuals receiving employment, training, and education 
services under an employability plan from the employment and 
training service provider shall, as resources permit, be 
guaranteed set-aside money for child care assistance from the 
county of their residence.  
    Subd. 3.  [CONTRACTS; OTHER USES ALLOWED.] Counties may 
contract for administration of the program or may arrange for or 
contract for child care funds to be used by other appropriate 
programs, in accordance with this section and as permitted by 
federal law and regulations.  
    Subd. 3a.  [AFDC CHILD CARE PROGRAM REALLOCATION.] The 
commissioner shall review the use of child care funds allocated 
under this section after every quarter.  Priority for use of 
this money shall continue to be given to the AFDC priority 
groups. 
    The commissioner may reallocate to other counties AFDC 
child care program funds which a county has failed to encumber 
or expend according to the following procedure: 
    (a) Unexpended or unencumbered funds reserved for 
recipients in educational programs may be reallocated to 
counties that have expended their funds for recipients in 
educational programs. 
    (b) If any funds reserved for recipients in educational 
programs remain after this reallocation, or any funds remain 
unencumbered or unexpended from the entire AFDC child care 
program, the funds may be reallocated to counties that have 
expended their full allocation for the AFDC child care program. 
    (c) If any AFDC child care program funds remain after this 
reallocation, they may be reallocated to counties who have 
expended their full allocation for the basic sliding fee program.
    Subd. 4.  [USE OF FUNDS FOR OTHER APPLICANTS.] If the 
commissioner finds, on or after January 1 of a fiscal year, that 
set-aside money for AFDC priority groups is not being fully 
utilized, the commissioner may permit counties to use set-aside 
money for other eligible applicants, as long as priority for use 
of the money will continue to be given to the AFDC priority 
groups. 
    Subd. 5.  [FEDERAL REIMBURSEMENT.] A county may claim 
Counties shall maximize their federal reimbursement under the 
AFDC special needs program or other federal reimbursement 
programs for money spent for persons listed in this section 
256H.04, subdivision 1, clause (1) and section 256H.03.  The 
commissioner shall allocate any federal earnings to the county.  
The county shall use the money to be used to expand child care 
sliding fee services under this subdivision these sections. 
    Sec. 144.  Minnesota Statutes 1988, section 256H.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ALLOCATION; USE.] Each post-secondary 
educational system shall be allocated a portion of the set-aside 
money for persons listed in section 256H.04, subdivision 1, 
clause (3), based on the number of students with dependent 
children enrolled in each system in the preceding fiscal year.  
The post-secondary educational systems shall allocate their 
money among institutions under their authority based on the 
number of students with dependent children enrolled in each 
institution in the last fiscal year.  For the purposes of this 
subdivision, "students with dependent children" means the sum of 
all Minnesota residents enrolled in public post-secondary 
institutions who report dependents on their applications to the 
state scholarship and grant program.  The commissioner shall 
transfer the allocation for each post-secondary institution to 
the county board of the county in which the institution is 
located, to be held in an account for students found eligible 
for child care sliding fee assistance and attending the 
institution.  The higher education coordinating board will 
administer the non-AFDC post-secondary child care program 
utilizing the sliding fee scale developed by the department of 
human services.  The board will determine eligibility for the 
child care subsidy based on family income and family size.  For 
purposes of this determination, "income" means the income amount 
used to calculate eligibility for state scholarships and grants 
under section 136A.121.  "Family size" means the family size 
used to calculate eligibility for state scholarships and grants 
under section 136A.121. 
     Students receiving subsidies shall: 
     (1) choose providers utilizing a licensed or legal 
unlicensed provider that meets the needs of their family; 
     (2) continue to receive a subsidy as long as they are 
eligible, to the limit of the allocation; and 
     (3) receive a subsidy to cover all eligible hours of 
education and employment. 
     The higher education coordinating board shall consult with 
the commissioner to ensure a program comparable to the child 
care subsidy program administered by the commissioner. 
    Sec. 145.  Minnesota Statutes 1988, section 256H.08, is 
amended to read: 
    256H.08 [USE OF MONEY.] 
    Money for persons listed in section 256H.04, subdivision 1, 
clauses (2) and (3) sections 256H.03, subdivision 2a, and 
256H.05, subdivision 1b, shall be used to reduce the costs of 
child care for students, including the costs of child care for 
students while employed if enrolled in an eligible education 
program at the same time and making satisfactory progress 
towards completion of the program.  The county may plan for and 
provide child care assistance to persons listed in section 
256H.04, subdivision 1, clauses (2) and (3), from the regular 
sliding fee fund to supplement the set-aside funds.  Counties 
may not limit the duration of child care subsidies for a person 
in an employment or educational program, except when the person 
is found to be ineligible under the child care fund eligibility 
standards.  Any limitation must be based on a person's 
employability plan in the case of an AFDC recipient, and county 
policies included in the child care allocation plan.  
Financially eligible students who have received child care 
assistance for one academic year shall be provided child care 
assistance in the following academic year if funds allocated 
under section 256H.06 or 256H.07 are available sections 256H.03 
and 256H.05.  If a student who is receiving AFDC child care 
assistance under this chapter moves to another county as 
specified in their employability plan, continues to be enrolled 
in a post-secondary institution, and continues to be eligible 
for AFDC child care assistance under this chapter, the student 
must receive continued child care assistance from their county 
of origin without interruption to the limit of the county's 
allocation. 
    Sec. 146.  Minnesota Statutes 1988, section 256H.09, is 
amended to read: 
    256H.09 [REPORTING AND PAYMENTS.] 
    Subdivision 1.  [QUARTERLY REPORTS.] Counties and 
post-secondary educational systems shall submit on forms 
prescribed by the commissioner a quarterly financial and program 
activity report which is due 20 calendar days after the end of 
each quarter.  The failure to submit a complete report by the 
end of the quarter in which the report is due may result in a 
reduction of child care fund allocations equal to the next 
quarter's allocation.  The financial and program activity report 
must include: 
    (1) a detailed accounting of the expenditures and revenues 
for the program during the preceding quarter by funding source 
and by eligibility group; 
    (2) a description of activities and concomitant 
expenditures that are federally reimbursable under the AFDC 
employment special needs program and other federal reimbursement 
programs; 
    (3) a description of activities and concomitant 
expenditures of set-aside child care money; 
    (4) information on money encumbered at the quarter's end 
but not yet reimbursable, for use in adjusting allocations as 
provided in section sections 256H.03, subdivision 3, and 
256H.05, subdivision 4 1a; 256H.06, subdivision 3; and 256H.07, 
subdivision 3; and 
    (5) other data the commissioner considers necessary to 
account for the program or to evaluate its effectiveness in 
preventing and reducing participants' dependence on public 
assistance and in providing other benefits, including 
improvement in the care provided to children.  
    Subd. 2.  [QUARTERLY PAYMENTS.] The commissioner shall make 
payments to each county in quarterly installments.  The 
commissioner may certify an advance for the first quarter of the 
fiscal year.  Later payments must be based on actual 
expenditures as reported in the quarterly financial and program 
activity report.  The commissioner may make payments to each 
county in quarterly installments.  The commissioner may certify 
an advance up to 25 percent of the allocation.  Subsequent 
payments shall be made on a reimbursement basis for reported 
expenditures, and may be adjusted for anticipated spending 
patterns.  Payments may be withheld if quarterly reports are 
incomplete or untimely. 
    Subd. 3.  [CHILD CARE FUND PLAN.] Effective January 1, 
1992, the county will include the plan required under this 
subdivision in its biennial community social services plan 
required in this section, for the group described in section 
256E.03, subdivision 2, paragraph (h).  For the period July 1, 
1989, to December 31, 1991, the county shall submit separate 
child care fund plans required under this subdivision for the 
periods July 1, 1989, to June 30, 1990; and July 1, 1990, to 
December 31, 1991.  The commissioner shall establish the dates 
by which the county must submit these plans.  The county and 
designated administering agency shall submit to the commissioner 
an annual child care fund allocation plan.  The plan shall 
include: 
    (1) a narrative of the total program for child care 
services, including all policies and procedures that affect 
eligible families and are used to administer the child care 
funds; 
    (2) the number of families that requested a child care 
subsidy in the previous year, the number of families receiving 
child care assistance, the number of families on a waiting list, 
and the number of families projected to be served during the 
fiscal year; 
    (3) the methods used by the county to inform eligible 
groups of the availability of child care assistance and related 
services; 
    (4) the provider rates paid for all children by provider 
type; 
    (5) the county prioritization policy for all eligible 
groups under the basic sliding fee program and AFDC child care 
program; 
    (6) a report of all funds available to be used for child 
care assistance, including demonstration of compliance with the 
maintenance of funding effort required under section 256H.12; 
and 
    (7) other information as requested by the department to 
insure compliance with the child care fund statutes and rules 
promulgated by the commissioner. 
    The commissioner shall notify counties within 60 days of 
the date the plan is submitted whether the plan is approved or 
the corrections or information needed to approve the plan.  The 
commissioner shall withhold a county's allocation until it has 
an approved plan.  Plans not approved by the end of the second 
quarter after the plan is due may result in a 25 percent 
reduction in allocation.  Plans not approved by the end of the 
third quarter after the plan is due may result in a 100 percent 
reduction in the allocation to the county.  Counties are to 
maintain services despite any reduction in their allocation due 
to plans not being approved. 
    Subd. 4.  [TERMINATION OF ALLOCATION.] The commissioner may 
withhold, reduce, or terminate the allocation of any county or 
post-secondary educational system that does not meet the 
reporting or other requirements of this program.  The 
commissioner shall reallocate to other counties or 
post-secondary educational systems money so reduced or 
terminated.  
    Sec. 147.  Minnesota Statutes 1988, section 256H.10, 
subdivision 3, is amended to read: 
    Subd. 3.  [PRIORITIES; ALLOCATIONS.] If a disproportionate 
amount more than 75 percent of the available money is provided 
to any one of the groups described in subdivision 1 section 
256H.03 or 256H.05, the county board shall document to the 
commissioner the reason the group received a disproportionate 
share unless approved in the plan.  If a county projects that 
its child care allocation is insufficient to meet the needs of 
all eligible groups, it may prioritize among the groups that 
remain to be served after the county has complied with the 
priority requirements of sections 256H.03 and 256H.05.  Counties 
shall assure that a person receiving child care assistance from 
the sliding fee program prior to July 1, 1987, continues to 
receive assistance, providing the person meets all other 
eligibility criteria.  Set-aside money must be prioritized by 
the state, and counties do not have discretion over the use of 
this money.  Counties that have established a priority must 
submit the policy in the annual allocation plan. 
    Sec. 148.  Minnesota Statutes 1988, section 256H.10, is 
amended by adding a subdivision to read: 
    Subd. 5.  [PROVIDER CHOICE.] Parents may choose child care 
providers as defined under section 256H.01, subdivision 12, that 
best meet the needs of their family.  Counties shall make 
resources available to parents in choosing quality child care 
services.  Counties may require a parent to sign a release 
stating their knowledge and responsibilities in choosing a legal 
provider described under section 256H.01, subdivision 12.  When 
a county knows that a particular provider is unsafe, or that the 
circumstances of the child care arrangement chosen by the parent 
are unsafe, the county may deny a child care subsidy.  A county 
may not restrict access to a general category of provider 
allowed under section 256H.01, subdivision 12. 
    Sec. 149.  Minnesota Statutes 1988, section 256H.11, is 
amended to read: 
    256H.11 [EMPLOYMENT OR TRAINING ELIGIBILITY.] 
    Subdivision 1.  [ASSISTANCE FOR PERSONS SEEKING AND 
RETAINING EMPLOYMENT.] Persons who are seeking employment and 
who are eligible for assistance under this section are eligible 
to receive the equivalent of one month of child care.  Employed 
persons who work at least ten hours a week and receive at least 
a minimum wage for all hours worked are eligible for continued 
child care assistance.  
    Subd. 2.  [FINANCIAL ELIGIBILITY REQUIRED.] Persons 
participating in employment programs, training programs, or 
education programs are eligible for continued assistance from 
the child care sliding fee program fund, if they are financially 
eligible under the sliding fee scale set by the commissioner in 
section 256H.14.  Counties shall assure that a person receiving 
child care assistance from the sliding fee program while 
attending a post-secondary institution prior to July 1, 1987, 
continues to receive assistance from the regular sliding fee 
program, or the set-asides in section 256H.06 or 256H.07, 
providing the person meets all other eligibility criteria. 
    Sec. 150.  Minnesota Statutes 1988, section 256H.12, is 
amended to read: 
    256H.12 [COUNTY CONTRIBUTION.] 
    Subdivision 1.  [COUNTY CONTRIBUTIONS REQUIRED.] In 
addition to payments from parents, the program must be funded by 
county contributions.  Except for set-aside money, counties 
shall contribute from county tax or other sources a minimum of 
15 percent of the cost of the basic sliding fee program.  The 
commissioner shall recover funds from the county as necessary to 
bring county expenditures into compliance with this subdivision. 
    Subd. 2.  [FEDERAL MONEY; STATE RECOVERY.] The commissioner 
shall recover from counties any state or federal money that was 
spent for persons found to be ineligible.  If a federal audit 
exception is taken based on a percentage of federal earnings, 
all counties shall pay a share proportional to their respective 
federal earnings during the period in question.  
    Subd. 3.  [OTHER SOURCES MUST BE MAINTAINED MAINTENANCE OF 
FUNDING EFFORT.] To receive money through this program, each 
county shall certify, in its annual plan to the commissioner, 
that the county has not reduced allocations from other federal, 
state, and county sources, which, in the absence of the child 
care sliding fee or wage subsidy money fund, would have been 
available for child care services assistance. 
    Sec. 151.  Minnesota Statutes 1988, section 256H.15, is 
amended to read: 
    256H.15 [CHILD CARE RATES.] 
    Subdivision 1.  [SUBSIDY RESTRICTIONS.] The county board 
may limit the subsidy allowed by setting a maximum on the 
provider child care rate that the county shall subsidize.  
The maximum rate set by any county shall not be lower than 110 
percent or higher than 125 percent of the median rate in that 
county for like care arrangements in that county for all types 
of care, including special needs and handicapped care, as 
determined by the commissioner.  If the county sets a maximum 
rate, it must pay the provider's rate for each child receiving a 
subsidy, up to the maximum rate set by the county.  In order to 
be reimbursed for more than 110 percent of the median rate, a 
provider with employees must pay wages for teachers, assistants, 
and aides that are more than 110 percent of the county average 
rate for child care workers.  If a county does not set a maximum 
provider rate, it shall pay the provider's rate for every child 
in care.  The maximum state payment is 125 percent of the median 
provider rate.  If the county has not set a maximum provider 
rate and the provider rate is greater than 125 percent of the 
median provider rate in the county, the county shall pay the 
amount in excess of 125 percent of the median provider rate from 
county funding sources.  When the provider charge is greater 
than the maximum provider rate set by the county, the parent is 
responsible for payment of the difference in the rates in 
addition to any family copayment fee. 
    Subd. 2.  [PROVIDER RATE BONUS FOR ACCREDITATION.] 
Currently accredited child care centers shall be paid a five 
percent bonus above the maximum rate established by the county 
in subdivision 1, if the center can demonstrate that its staff 
wages are greater than 110 percent of the average wages in the 
county for similar care, up to the actual provider rate.  A 
family day care provider shall be paid a five percent bonus 
above the maximum rate established by the county in subdivision 
1, if the provider holds a current child development associate 
certificate, up to the actual provider rate.  A county is not 
required to review wages under this subdivision unless the 
county has set a maximum above 110 percent for all providers 
with employees in their county. 
    Subd. 3.  [PROVIDER RATE FOR CARE OF CHILDREN WITH 
HANDICAPS OR SPECIAL NEEDS.] Counties shall reimburse providers 
for the care of children with handicaps or special needs, at a 
special rate to be set by the county for care of these children, 
subject to the approval of the commissioner. 
    Sec. 152.  Minnesota Statutes 1988, section 256H.18, is 
amended to read: 
    256H.18 [ADMINISTRATIVE EXPENSES.] 
    A county must may not use more than seven percent of its 
allocation for its administrative expenses under this section, 
except a county may not use any of its allocation of the 
set-aside funds under subdivisions 3b and 3c for administrative 
expenses the basic sliding fee program.  A county may use up to 
four percent of the funds transferred to it under subdivision 3d 
for administrative expenses. 
    Sec. 153.  Minnesota Statutes 1988, section 256H.20, 
subdivision 3, is amended to read: 
    Subd. 3.  [PROGRAM SERVICES.] The commissioner may make 
grants to public or private nonprofit entities to fund child 
care resource and referral programs.  Child care resource and 
referral programs must serve a defined geographic area. 
    Subd. 3a.  [GRANT REQUIREMENTS AND PRIORITY.] Priority for 
awarding resource and referral grants shall be given in the 
following order: 
    (1) start up resource and referral programs in areas of the 
state where they do not exist; and 
    (2) improve resource and referral programs. 
    Resource and referral programs shall meet the following 
requirements:  
    (a) Each program shall identify all existing child care 
services through information provided by all relevant public and 
private agencies in the areas of service, and shall develop a 
resource file of the services which shall be maintained and 
updated at least quarterly.  These services must include family 
day care homes; public and private day care programs; full-time 
and part-time programs; infant, preschool, and extended care 
programs; and programs for school age children. 
    The resource file must include:  the type of program, hours 
of program service, ages of children served, fees, location of 
the program, eligibility requirements for enrollment, special 
needs services, and transportation available to the program.  
The file may also include program information and special needs 
services program features. 
    (b) Each program shall establish a referral process which 
responds to parental need for information and which fully 
recognizes confidentiality rights of parents.  The referral 
process must afford parents maximum access to all referral 
information.  This access must include telephone referral 
available for no less than 20 hours per week. 
    Each child care resource and referral agency shall 
publicize its services through popular media sources, agencies, 
employers, and other appropriate methods. 
    (c) Each program shall maintain ongoing documentation of 
requests for service.  All child care resource and referral 
agencies must maintain documentation of the number of calls and 
contacts to the child care information and referral agency or 
component.  A program may shall collect and maintain the 
following information: 
    (1) ages of children served; 
    (2) time category of child care request for each child; 
    (3) special time category, such as nights, weekends, and 
swing shift; and 
    (4) reason that the child care is needed. 
    (d) Each program shall have make available the following 
information as an educational aid to parents: 
    (1) information on aspects of evaluating the quality and 
suitability of child care services, including licensing 
regulation, financial assistance available, child abuse 
reporting procedures, appropriate child development information; 
    (2) information on available parent, early childhood, and 
family education programs in the community. 
    (e) On or after one year of operation a program may shall 
provide technical assistance to employers and existing and 
potential providers of all types of child care services and 
employers.  This assistance shall include: 
    (1) information on all aspects of initiating new child care 
services including licensing, zoning, program and budget 
development, and assistance in finding information from other 
sources; 
    (2) information and resources which help existing child 
care providers to maximize their ability to serve the children 
and parents of their community; 
    (3) dissemination of information on current public issues 
affecting the local and state delivery of child care services; 
    (4) facilitation of communication between existing child 
care providers and child-related services in the community 
served; 
    (5) recruitment of licensed providers; and 
    (6) options, and the benefits available to employers 
utilizing the various options, to expand child care services to 
employees. 
    Services prescribed by this section must be designed to 
maximize parental choice in the selection of child care and to 
facilitate the maintenance and development of child care 
services and resources. 
    (f) Child care resource and referral information must be 
provided to all persons requesting services and to all types of 
child care providers and employers. 
    (g) Public or private entities may apply to the 
commissioner for funding.  The maximum amount of money which may 
be awarded to any entity for the provision of service under this 
subdivision is $60,000 per year.  A local match of up to 25 
percent is required. 
    Sec. 154.  [256H.21] [CHILD CARE SERVICES GRANT 
DEFINITIONS.] 
    Subdivision 1.  [DEFINITIONS.] As used in sections 256H.20 
to 256H.23, the words defined in this section shall have the 
meanings given them. 
    Subd. 2.  [CHILD.] "Child" means a person 12 years old or 
younger, or a person age 13 or 14 who is handicapped, as defined 
in section 120.03. 
    Subd. 3.  [CHILD CARE.] "Child care" means the care of a 
child by someone other than a parent or legal guardian outside 
the child's own home for gain or otherwise, on a regular basis, 
for any part of a 24-hour day. 
    Subd. 4.  [CHILD CARE SERVICES.] "Child care services" 
means child care provided in family day care homes, group day 
care homes, nursery schools, day nurseries, child day care 
centers, head start, and extended day school age child care 
programs. 
    Subd. 5.  [CHILD CARE WORKER.] "Child care worker" means a 
person who cares for children for compensation, including a 
licensed provider of child care services, an employee of a 
provider, a person who has applied for a license as a provider, 
or a person who meets the standards established by the state 
board of education. 
    Subd. 6.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services. 
    Subd. 7.  [FACILITY IMPROVEMENT EXPENSES.] "Facility 
improvement expenses" means funds for building improvements, 
equipment, toys, and supplies needed to establish, expand, or 
improve a licensed child care facility or a child care program 
under the jurisdiction of the state board of education. 
    Subd. 8.  [INTERIM FINANCING.] "Interim financing" means 
funds to carry out such activities as are necessary for family 
day care homes, group family day care homes, and child care 
centers to receive and maintain state licensing, to expand an 
existing program or to improve program quality, and to provide 
operating funds for a period of six consecutive months after a 
family day care home, group family day care home, or child care 
center becomes licensed or satisfies standards of the state 
board of education.  Interim financing may not exceed a period 
of 18 months. 
    Subd. 9.  [MINI-GRANTS.] "Mini-grants" means child care 
grants for facility improvements that are less than $1,000.  
Mini-grants include, but are not limited to, improvements to 
meet licensing requirements, improvements to expand a child care 
facility or program, toys and equipment, start-up costs, staff 
training, and development costs. 
    Subd. 10.  [RESOURCE AND REFERRAL PROGRAM.] "Resource and 
referral program" means a program that provides information to 
parents, including referrals and coordination of community child 
care resources for parents and public or private providers of 
care.  Services may include parent education, technical 
assistance for providers, staff development programs, and 
referrals to social services. 
    Subd. 11.  [STAFF TRAINING OR DEVELOPMENT EXPENSES.] "Staff 
training or development expenses" include the cost to a child 
care worker of tuition, transportation, required materials and 
supplies, and wages for a substitute while the child care worker 
is engaged in a training program. 
    Subd. 12.  [TRAINING PROGRAM.] "Training program" means 
child development courses offered by an accredited 
post-secondary institution or similar training approved by a 
county board or the department of human services.  To qualify as 
a training program under this section, a course of study must 
teach specific skills that meet licensing requirements or 
requirements of the state board of education. 
    Sec. 155.  [256H.22] [CHILD CARE SERVICES GRANTS.] 
    Subdivision 1.  [GRANTS ESTABLISHED.] The commissioner 
shall award grants to develop child care services, including 
facility improvement expenses, interim financing, resource and 
referral programs, and staff training expenses.  Child care 
services grants may include mini-grants up to $1,000.  The 
commissioner shall develop a grant application form, inform 
county social service agencies about the availability of child 
care services grants, and set a date by which applications must 
be received by the commissioner. 
    The commissioner may renew grants to existing resource and 
referral agencies that have met state standards and have been 
designated as the child care resource and referral service for a 
particular geographical area.  The recipients of renewal grants 
are exempt from the proposal review process. 
    Subd. 2.  [DISTRIBUTION OF FUNDS.] (a) The commissioner 
shall allocate grant money appropriated for child care service 
(development and resource and referral services) among the 
development regions designated by the governor under section 
462.385, as follows: 
    (1) 50 percent of the child care service development grant 
appropriation shall be allocated to the metropolitan area; and 
    (2) 50 percent of the child care service development grant 
appropriation shall be allocated to greater Minnesota counties. 
    (b) The following formulas shall be used to allocate grant 
appropriations among the counties:  
    (1) 50 percent of the funds shall be allocated in 
proportion to the ratio of children under 12 years of age in 
each county to the total number of children under 12 years of 
age in all counties; and 
    (2) 50 percent of the funds shall be allocated in 
proportion to the ratio of children under 12 years of age in 
each county to the number of licensed child care spaces 
currently available in each county. 
    (c) Out of the amount allocated for each development region 
and county, the commissioner shall award grants based on the 
recommendation of the grant review advisory task force.  In 
addition, the commissioner shall award no more than 75 percent 
of the money either to child care facilities for the purpose of 
facility improvement or interim financing or to child care 
workers for staff training expenses.  The commissioner shall 
award no more than 50 percent of the money for resource and 
referral services to maintain or improve an existing resource 
and referral until all regions are served by resource and 
referral programs. 
    (d) Any funds unobligated may be used by the commissioner 
to award grants to proposals that received funding 
recommendations by the advisory task force but were not awarded 
due to insufficient funds.  
    Subd. 3.  [CHILD CARE REGIONAL ADVISORY COMMITTEES.] Child 
care regional advisory committees shall review and make 
recommendations to the commissioner on applications for service 
development grants under this section.  The commissioner shall 
appoint the child care regional advisory committees in each 
governor's economic development regions.  People appointed under 
this subdivision must represent the following constituent 
groups:  family child care providers, group center providers, 
parent users, health services, social services, public schools, 
and other citizens with demonstrated interest in child care 
issues.  Members of the advisory task force with a direct 
financial interest in a pending grant proposal may not provide a 
recommendation or participate in the ranking of that grant 
proposal.  Committee members may be reimbursed for their actual 
travel expenses for up to six committee meetings per year.  The 
child care regional advisory committees shall complete their 
reviews and forward their recommendations to the commissioner by 
the date specified by the commissioner. 
    Subd. 4.  [PURPOSES FOR WHICH A CHILD CARE SERVICES GRANT 
MAY BE AWARDED.] The commissioner may award grants for any of 
the following purposes: 
    (1) for creating new licensed day care facilities and 
expanding existing facilities, including, but not limited to, 
supplies, equipment, facility renovation, and remodeling; 
    (2) for improving licensed day care facility programs, 
including, but not limited to, staff specialists, staff 
training, supplies, equipment, and facility renovation and 
remodeling.  In awarding grants for training, priority must be 
given to child care workers caring for infants, toddlers, sick 
children, children in low-income families, and children with 
special needs; 
    (3) for supportive child development services including, 
but not limited to, in-service training, curriculum development, 
consulting specialist, resource centers, and program and 
resource materials; 
    (4) for carrying out programs including, but not limited 
to, staff, supplies, equipment, facility renovation, and 
training; 
    (5) for interim financing; and 
    (6) for carrying out the resource and referral program 
services identified in section 256H.20, subdivision 3. 
    Subd. 5.  [FUNDING PRIORITIES; FACILITY IMPROVEMENT AND 
INTERIM FINANCING.] In evaluating applications for funding and 
making recommendations to the commissioner, the grant review 
advisory task force shall rank and give priority to:  
    (1) new programs or projects, or the expansion or 
improvement of existing programs or projects in areas where a 
demonstrated need for child care facilities has been shown, with 
special emphasis on programs or projects in areas where there is 
a shortage of licensed child care; 
    (2) new programs and projects, or the expansions or 
enrichment of existing programs or projects that serve sick 
children, infants or toddlers, children with special needs, and 
children from low-income families; 
    (3) unlicensed providers who wish to become licensed; and 
    (4) improvement of existing programs. 
    Subd. 6.  [FUNDING PRIORITIES; TRAINING GRANTS.] In 
evaluating applications for training grants and making 
recommendations to the commissioner, the grant review advisory 
task force shall give priority to: 
    (1) applicants who will work in facilities caring for sick 
children, infants, toddlers, children with special needs, and 
children from low-income families; 
    (2) applicants who will work in geographic areas where 
there is a shortage of child care; 
    (3) unlicensed providers who wish to become licensed; 
    (4) child care programs seeking accreditation and child 
care providers seeking certification; and 
    (5) entities that will use grant money for scholarships for 
child care workers attending educational or training programs 
sponsored by the entity. 
    Subd. 7.  [ELIGIBLE GRANT RECIPIENTS.] Eligible recipients 
of child care grants are licensed providers of child care, or 
those in the process of being licensed, resource and referral 
programs, or corporations or public agencies, or any combination 
thereof.  With the exception of mini-grants, priority for child 
care grants shall be given to grant applicants as follows: 
    (1) public and private nonprofit agencies; 
    (2) employer-based child care centers; 
    (3) for-profit child care centers; and 
    (4) family day care providers. 
    Subd. 8.  [GRANT MATCH REQUIREMENTS.] Child care grants for 
facility improvements, interim financing, resource and referral, 
and staff training and development require a 25 percent local 
match by the grant applicant.  A local match is not required for 
a mini-grant. 
    Subd. 9.  [CHILD CARE MINI-GRANTS.] Mini-grants for child 
care service development must be used by the grantee for 
facility improvements, including, but not limited to, 
improvements to meet licensing requirements, improvements to 
expand the facility, toys and equipment, start-up costs, interim 
financing, or staff training and development.  Priority for 
child care mini-grants shall be given to grant applicants as 
follows: 
    (1) family day care providers; 
    (2) public and private nonprofit agencies; 
    (3) employer-based child care centers; and 
    (4) for-profit child care centers. 
    Subd. 10.  [ADVISORY TASK FORCE.] The commissioner shall 
convene a statewide advisory task force which shall advise the 
commissioner on grants and other child care issues.  The 
statewide advisory task force shall review and make 
recommendations to the commissioner on child care resource and 
referral grants and on statewide child care training grants.  
Members of the advisory task force with a direct financial 
interest in a resource and referral or a statewide training 
proposal may not provide a recommendation or participate in the 
ranking of that grant proposal.  Each regional grant review 
committee formed under subdivision 3, shall appoint a 
representative to the advisory task force.  The commissioner may 
convene meetings of the task force as needed.  Terms of office 
and removal from office are governed by the appointing body.  
The commissioner may compensate members for their expenses of 
travel to meetings of the task force.  The members of the child 
care advisory task force shall also meet once with the 
interagency advisory committee on child care under section 
256H.25. 
    Subd. 11.  [ADVISORY COMMITTEE COSTS.] The commissioner may 
use money appropriated for services under this section for 
administrative expenses associated with advisory committees and 
task forces authorized by this section. 
    Sec. 156.  [256H.23] [OTHER AUTHORIZATION TO MAKE GRANTS.] 
    Subdivision 1.  [AUTHORITY.] In addition to the 
commissioner's authority to make child care services grants, the 
county board is authorized to provide child care services, or to 
make grants from the community social service fund, special tax 
revenue, or its general fund, or other sources to any 
municipality, corporation, or combination thereof, for the cost 
of providing technical assistance and child care services.  The 
county board is also authorized to contract for services with 
any licensed day care facility, as the board deems necessary or 
proper to carry out the purposes of this section. 
    The county board may also make grants to or contract with 
any municipality, licensed child care facility, or resource and 
referral program, or corporation or combination thereof, for any 
of the following purposes: 
    (1) creating new licensed day care facilities and expanding 
existing facilities including, but not limited to, supplies, 
equipment, and facility renovation and remodeling; 
    (2) improving licensed day care facility programs, 
including, but not limited to, staff specialists, staff 
training, supplies, equipment, and facility renovation and 
remodeling.  In awarding grants for training, counties must give 
priority to child care workers caring for infants, toddlers, 
sick children, children in low-income families, and children 
with special needs; 
    (3) supportive child development services, including, but 
not limited to, in-service training, curriculum development, 
consulting specialists, resource centers, and program and 
resource materials; 
    (4) carrying out programs, including, but not limited to, 
staff, supplies, equipment, facility renovation, and training; 
    (5) interim financing; and 
    (6) carrying out the resource and referral program services 
identified in section 256H.20, subdivision 3. 
    Subd. 2.  [DONATED MATERIALS AND SERVICES; MATCHING SHARE 
OF COST.] For the purposes of this section, donated professional 
and volunteer services, program materials, equipment, supplies, 
and facilities may be approved as part of a matching share of 
the cost, provided that total costs shall be reduced by the 
costs charged to parents if a sliding fee scale has been used. 
    Subd. 3.  [BIENNIAL PLAN.] The county board shall 
biennially develop a plan for the distribution of money for 
child care services as part of the community social services 
plan described in section 256E.09.  All licensed child care 
programs shall be given written notice concerning the 
availability of money and the application process. 
    Sec. 157.  [256H.24] [DUTIES OF COMMISSIONER.] 
    In addition to the powers and duties already conferred by 
law, the commissioner of human services shall: 
    (1) by September 1, 1990, and by September 1 of each 
subsequent even-numbered year, survey and report on all 
components of the child care system, including, but not limited 
to, availability of licensed child care slots, the number of 
children in various kinds of child care settings, staff wages, 
rate of staff turnover, qualifications of child care workers, 
cost of child care by type of service and ages of children, and 
child care availability through school systems; 
    (2) by September 1, 1990, and September 1 of each 
subsequent even-numbered year, survey and report on the extent 
to which existing child care services fulfill the need for child 
care, giving particular attention to the need for part-time care 
and for care of infants, sick children, children with special 
needs, low-income children, toddlers, and school-age children; 
    (3) administer the child care fund, including the sliding 
fee program authorized under sections 256H.01 to 256H.19; 
    (4) monitor the child care resource and referral programs 
established under section 256H.20; and 
    (5) encourage child care providers to participate in a 
nationally recognized accreditation system for early childhood 
programs.  The commissioner shall reimburse licensed child care 
providers for one-half of the direct cost of accreditation fees, 
upon successful completion of accreditation. 
    Sec. 158.  [256H.25] [INTERAGENCY ADVISORY COMMITTEE ON 
CHILD CARE.] 
    Subdivision 1.  [MEMBERSHIP.] By January 1, 1990, the 
commissioner of the state planning agency shall convene and 
chair an interagency advisory committee on child care.  In 
addition to the commissioner, members of the committee are the 
commissioners of each of the following agencies and departments: 
health, human services, jobs and training, public safety, 
education, and the higher education coordinating board.  The 
purpose of the committee is to improve the quality and quantity 
of child care and the coordination of child care related 
activities among state agencies. 
    Subd. 2.  [DUTIES.] The committee shall advise its member 
agencies on matters related to child care policy and planning.  
Specifically, the committee shall: 
    (1) develop a consistent policy on issues related to child 
care; 
    (2) advise the member agencies on implementing policies and 
developing rules that are consistent with the committee's policy 
on child care; 
    (3) advise the member agencies on state efforts to increase 
the supply and improve the quality of child care facilities and 
options; and 
    (4) perform other advisory tasks related to improving child 
care options throughout the state. 
    Subd. 3.  [MEETINGS.] The committee shall meet as often as 
necessary to perform its duties.  The committee shall meet at 
least once per year with the members of the child care advisory 
task force. 
    Sec. 159.  [256H.26] [CHILD CARE INFORMATION SERVICE.] 
    The commissioner shall establish, on a pilot project basis, 
a toll-free information service for child care providers, 
potential providers, and parents to assist callers to find 
existing child care services at the state or local level and to 
facilitate expansion and marketing of child care services.  The 
telephone must be staffed during regular business hours to 
respond promptly to questions and during regular business hours 
to respond promptly to questions and concerns.  The information 
and assistance must be made available free to all callers.  The 
commissioner shall report to the legislature by January 1, 1991 
on the effectiveness of this service and shall recommend how and 
by whom the operation should be administered.  The commissioner 
shall consult with local resource and referral agencies, both 
public and private, in making its recommendations.  The 
commissioner may use money appropriated for child care resource 
and referral grants for the administrative costs incurred under 
this section. 
    Sec. 160.  Minnesota Statutes 1988, section 257.071, 
subdivision 7, is amended to read: 
    Subd. 7.  [RULES.] By December 31, 1988 1989, the 
commissioner shall revise Minnesota Rules, parts 9545.0010 to 
9545.0269 9545.0260, the rules setting standards for family and 
group family foster care. The commissioner shall: 
    (1) require that, as a condition of licensure, foster care 
providers attend training on the importance of protecting 
cultural heritage within the meaning of Laws 1983, chapter 278, 
the Indian Child Welfare Act, Public Law Number 95-608, and the 
Minnesota Indian family preservation act, sections 257.35 to 
257.357; and 
    (2) review and, where necessary, revise foster care rules 
to reflect sensitivity to cultural diversity and differing 
lifestyles.  Specifically, the commissioner shall examine 
whether space and other requirements discriminate against 
single-parent, minority, or low-income families who may be able 
to provide quality foster care reflecting the values of their 
own respective cultures. 
    Sec. 161.  Minnesota Statutes 1988, section 257.55, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PRESUMPTION.] A man is presumed to be the 
biological father of a child if:  
    (a) He and the child's biological mother are or have been 
married to each other and the child is born during the marriage, 
or within 280 days after the marriage is terminated by death, 
annulment, declaration of invalidity, dissolution, or divorce, 
or after a decree of legal separation is entered by a court; 
    (b) Before the child's birth, he and the child's biological 
mother have attempted to marry each other by a marriage 
solemnized in apparent compliance with law, although the 
attempted marriage is or could be declared void, voidable, or 
otherwise invalid, and, 
      (1) if the attempted marriage could be declared invalid 
only by a court, the child is born during the attempted 
marriage, or within 280 days after its termination by death, 
annulment, declaration of invalidity, dissolution or divorce; or 
      (2) if the attempted marriage is invalid without a court 
order, the child is born within 280 days after the termination 
of cohabitation; 
    (c) After the child's birth, he and the child's biological 
mother have married, or attempted to marry, each other by a 
marriage solemnized in apparent compliance with law, although 
the attempted marriage is or could be declared void, voidable, 
or otherwise invalid, and, 
     (1) he has acknowledged his paternity of the child in 
writing filed with the state registrar of vital statistics; 
     (2) with his consent, he is named as the child's father on 
the child's birth certificate; or 
     (3) he is obligated to support the child under a written 
voluntary promise or by court order; 
     (d) While the child is under the age of majority, he 
receives the child into his home and openly holds out the child 
as his biological child; or 
    (e) He and the child's biological mother acknowledge his 
paternity of the child in a writing signed by both of them under 
section 257.34 and filed with the state registrar of vital 
statistics.  If another man is presumed under this clause to be 
the child's father, acknowledgment may be effected only with the 
written consent of the presumed father or after the presumption 
has been rebutted.  
    (f) Evidence of statistical probability of paternity based 
on blood testing establishes that the likelihood that the man is 
the father of the child, calculated with a prior probability of 
no more than 0.5 (50 percent), is 99 percent or greater. 
    Sec. 162.  Minnesota Statutes 1988, section 257.57, 
subdivision 1, is amended to read: 
    Subdivision 1.  A child, the child's biological mother, or 
a man presumed to be the child's father under section 257.55, 
subdivision 1, clause (a), (b), or (c) may bring an action: 
    (a) At any time for the purpose of declaring the existence 
of the father and child relationship presumed under section 
257.55, subdivision 1, clause (a), (b), or (c); or 
    (b) Within three years after the child's birth for the 
purpose of declaring the nonexistence of the father and child 
relationship presumed under section 257.55, subdivision 1, 
clause (a), (b), or (c) only if the action is brought within a 
reasonable time after the person bringing the action has 
obtained knowledge of relevant facts, but in no event later than 
three years after the child's birth.  However, if the presumed 
father was divorced from the child's mother after service by 
publication, and, if, on or before the 280th day after the 
judgment and decree of divorce or dissolution became final, he 
did not know that the child was born during the marriage or 
within 280 days after the marriage was terminated, the action is 
not barred until one year after the child reaches the age of 
majority.  After the presumption has been rebutted, paternity of 
the child by another man may be determined in the same action, 
if he has been made a party.  
    Sec. 163.  Minnesota Statutes 1988, section 257.62, 
subdivision 5, is amended to read: 
    Subd. 5.  [POSITIVE TEST RESULTS.] (a) If the results of 
the blood tests completed in a laboratory accredited by the 
American Association of Blood Banks indicate that the likelihood 
of the alleged father's paternity, calculated with a prior 
probability of no more than 0.5 (50 percent), is more than 92 
percent or greater, upon motion the court shall order the 
alleged father to pay temporary child support determined 
according to chapter 518.  The alleged father shall pay the 
support money into court pursuant to the rules of civil 
procedure to await the results of the paternity proceedings.  
    (b) If the results of blood tests completed in a laboratory 
accredited by the American Association of Blood Banks indicate 
that likelihood of the alleged father's paternity, calculated 
with a prior probability of no more than 0.5 (50 percent), is 99 
percent or greater, the alleged father is presumed to be the 
parent and the party opposing the establishment of the alleged 
father's paternity has the burden of proving by clear and 
convincing evidence that the alleged father is not the father of 
the child. 
    Sec. 164.  [259.44] [REIMBURSEMENT OF NONRECURRING ADOPTION 
EXPENSES.] 
    The commissioner of human services shall provide 
reimbursement of up to $2,000 to the adoptive parent or parents 
for costs incurred in adopting a child with special needs.  The 
commissioner shall determine the child's eligibility for 
adoption expense reimbursement under title IV-E of the Social 
Security Act, United States Code, title 42, sections 670 to 676. 
    Sec. 165.  Minnesota Statutes 1988, section 259.47, 
subdivision 5, is amended to read: 
    Subd. 5.  [CHARGES.] Agencies The commissioner, the 
commissioner's agents, and licensed child-placing agencies may 
require a reasonable expense reimbursement for providing 
services required in this section.  Reimbursements received by 
the commissioner according to this subdivision shall be 
deposited in the general fund.  
    Sec. 166.  [259.471] [POSTADOPTION SERVICE GRANTS PROGRAM.] 
    Subdivision 1.  [PURPOSE.] The commissioner of human 
services shall establish and supervise a postadoption service 
grants program to be administered by local social service 
agencies for the purpose of preserving and strengthening 
adoptive families.  The program will provide financial 
assistance to adoptive parents to meet the special needs of an 
adopted child that cannot be met by other resources available to 
the family.  
    Subd. 2.  [ELIGIBILITY CRITERIA.] A child may be certified 
by the local social service agency as eligible for a 
postadoption service grant after a final decree of adoption and 
before the child's 18th birthday if: 
    (a) The child was a ward of the commissioner or a Minnesota 
licensed child placing agency before adoption; 
    (b) The child had special needs at the time of adoption.  
For the purposes of this section, "special needs" means a child 
who had a physical, mental, emotional, or behavioral disability 
at the time of an adoption or has a preadoption background to 
which the current development of such disabilities can be 
attributed; and 
    (c) The adoptive parents have exhausted all other available 
resources.  Available resources include public income support 
programs, medical assistance, health insurance coverage, 
services available through community resources, and any other 
private or public benefits or resources available to the family 
or to the child to meet the child's special needs.  
    Subd. 3.  [CERTIFICATION STATEMENT.] The local social 
service agency shall certify a child's eligibility for a 
postadoption service grant in writing to the commissioner.  The 
certification statement shall include:  
    (1) a description and history of the special needs upon 
which eligibility is based; and 
    (2) applicable supporting documentation including: 
    (i) the child's individual service plan; 
    (ii) medical, psychological, or special education 
evaluations; 
    (iii) documentation that all other resources have been 
exhausted; and 
    (iv) an estimate of the costs necessary to meet the special 
needs of the child.  
     Subd. 4.  [COMMISSIONER REVIEW.] The commissioner shall 
review the facts upon which eligibility is based and shall award 
postadoption service grants to eligible adoptive parents to the 
extent funds are appropriated consistent with subdivision 5.  
    Subd. 5.  [GRANT PAYMENTS.] The amount of the postadoption 
service grant payment shall be based on the special needs of the 
child and the determination that other resources to meet those 
special needs are not available.  The amount of any grant 
payments shall be based on the severity of the child's 
disability and the effect of the disability on the family and 
must not exceed $10,000 annually.  
    Permissible expenses that may be paid from grants shall be 
limited to:  
    (1) medical expenses not covered by the family's health 
insurance or medical assistance; 
     (2) therapeutic expenses, including individual and family 
therapy; and 
     (3) nonmedical services, items, or equipment required to 
meet the special needs of the child.  
     The grants under this section shall not be used for 
maintenance for out-of-home placement of the child in substitute 
care. 
    Sec. 167.  Minnesota Statutes 1988, section 259.49, 
subdivision 2, is amended to read: 
    259.49 [ACCESS TO ADOPTION RECORDS ORIGINAL BIRTH 
CERTIFICATE INFORMATION.] 
    Subd. 2.  [SEARCH.] Within six months after receiving 
notice of the request of the adopted person, the commissioner of 
human services shall make complete and reasonable efforts to 
notify each parent identified on the original birth certificate 
of the adopted person.  The commissioner, the commissioner's 
agents, and licensed child-placing agencies may charge a 
reasonable fee to the adopted person for the cost of making a 
search pursuant to this subdivision.  Every licensed child 
placing agency in the state shall cooperate with the 
commissioner of human services in efforts to notify an 
identified parent.  All communications under this subdivision 
are confidential pursuant to section 13.02, subdivision 3.  
    For purposes of this subdivision, "notify" means a personal 
and confidential contact with the genetic parents named on the 
original birth certificate of the adopted person.  The contact 
shall not be by mail and shall be by an employee or agent of the 
licensed child placing agency which processed the pertinent 
adoption or some other licensed child placing agency designated 
by the commissioner of human services.  The contact shall be 
evidenced by filing with the commissioner of health an affidavit 
of notification executed by the person who notified each parent 
certifying that each parent was given the following information: 
    (a) The nature of the information requested by the adopted 
person; 
    (b) The date of the request of the adopted person; 
    (c) The right of the parent to file, within 120 days of 
receipt of the notice, an affidavit with the commissioner of 
health stating that the information on the original birth 
certificate should not be disclosed; 
    (d) The right of the parent to file a consent to disclosure 
with the commissioner of health at any time; and 
    (e) The effect of a failure of the parent to file either a 
consent to disclosure or an affidavit stating that the 
information on the original birth certificate should not be 
disclosed. 
    Sec. 168.  Minnesota Statutes 1988, section 260.251, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CARE, EXAMINATION, OR TREATMENT.] (a) 
Except where parental rights are terminated, 
    (1) whenever legal custody of a child is transferred by the 
court to a county welfare board, or 
    (2) whenever legal custody is transferred to a person other 
than the county welfare board, but under the supervision of the 
county welfare board, 
    (3) whenever a child is given physical or mental 
examinations or treatment under order of the court, and no 
provision is otherwise made by law for payment for the care, 
examination, or treatment of the child, these costs are a charge 
upon the welfare funds of the county in which proceedings are 
held upon certification of the judge of juvenile court. 
    (b) The court shall order, and the county welfare board 
shall require, the parents or custodian of a child, while the 
child is under the age of 18, to use the total income and 
resources attributable to the child for the period of care, 
examination, or treatment, except for clothing and personal 
needs allowance as provided in section 256B.35, to reimburse the 
county for the cost of care, examination, or treatment.  Income 
and resources attributable to the child include, but are not 
limited to, social security benefits, supplemental security 
income (SSI), veterans benefits, railroad retirement benefits 
and child support.  When the child is over the age of 18, and 
continues to receive care, examination, or treatment, the court 
shall order, and the county welfare board shall require, 
reimbursement from the child to reimburse the county for the 
cost of care, examination, or treatment from the income and 
resources attributable to the child less the clothing and 
personal needs allowance.  
    (c) If the income and resources attributable to the child 
are not enough to reimburse the county for the full cost of the 
care, examination, or treatment, the court shall inquire into 
the ability of the parents to support the child and, after 
giving the parents a reasonable opportunity to be heard, the 
court shall order, and the county welfare board shall require, 
the parents to reimburse the county, in the manner and to whom 
the court may direct, such sums as will cover in whole or in 
part contribute to the cost of care, examination, or treatment 
of the child.  When determining the amount to be contributed by 
the parents, the court shall use a fee schedule based upon 
ability to pay that is established by the county welfare board 
and approved by the commissioner of human services.  The income 
of a stepparent who has not adopted a child shall be excluded in 
calculating the parental contribution under this section. 
    (d) The court shall order the amount of reimbursement 
attributable to the parents or custodian, or attributable to the 
child, or attributable to both sources, withheld under chapter 
518 from the income of the parents or the custodian of the 
child.  A parent or custodian or child over the age of 18 who 
fails to pay this sum without good reason may be proceeded 
against for contempt, or the court may inform the county 
attorney, who shall proceed against any of them to collect the 
unpaid sums, or both procedures may be used. 
    (e) If the court orders a physical or mental examination 
for a child, the examination is a medically necessary service 
for purposes of determining whether the service is covered by a 
health insurance policy, health maintenance contract, or other 
health coverage plan.  Court-ordered treatment shall be subject 
to policy, contract, or plan requirements for medical 
necessity.  Nothing in this paragraph changes or eliminates 
benefit limits, conditions of coverage, copayments or 
deductibles, provider restrictions, or other requirements in the 
policy, contract, or plan that relate to coverage of other 
medically necessary services. 
    Sec. 169.  Minnesota Statutes 1988, section 268.08, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBILITY CONDITIONS.] An individual 
shall be eligible to receive benefits with respect to any week 
of unemployment only if the commissioner finds that the 
individual: 
    (1) has registered for work at and thereafter has continued 
to report to an employment office, or agent of the office, in 
accordance with rules the commissioner may adopt; except that 
the commissioner may by rule waive or alter either or both of 
the requirements of this clause as to types of cases or 
situations with respect to which the commissioner finds that 
compliance with the requirements would be oppressive or would be 
inconsistent with the purposes of sections 268.03 to 268.24; 
    (2) has made a claim for benefits in accordance with rules 
as the commissioner may adopt; 
    (3) was able to work and was available for work, and was 
actively seeking work.  The individual's weekly benefit amount 
shall be reduced one-fifth for each day the individual is unable 
to work or is unavailable for work.  Benefits shall not be 
denied by application of this clause to an individual who is in 
training with the approval of the commissioner, is a dislocated 
worker as defined in section 268.975, subdivision 3, who is in 
training approved by the commissioner, or in training approved 
pursuant to section 236 of the Trade Act of 1974, as amended. 
    An individual is deemed unavailable for work with respect 
to any week which occurs in a period when the individual is a 
full-time student in attendance at, or on vacation from an 
established school, college, or university unless a majority of 
the wage credits earned in the base period were for services 
performed during weeks in which the student was attending school 
as a full-time student.  
    An individual serving as a juror shall be considered as 
available for work and actively seeking work on each day the 
individual is on jury duty; and 
    (4) has been unemployed for a waiting period of one week 
during which the individual is otherwise eligible for benefits 
under sections 268.03 to 268.24.  However, payment for the 
waiting week, not to exceed $20, shall be made to the individual 
after the individual has qualified for and been paid benefits 
for four weeks of unemployment in a benefit year which period of 
unemployment is terminated because of the individual's return to 
employment.  No individual is required to serve a waiting period 
of more than one week within the one-year period subsequent to 
filing a valid claim and commencing with the week within which 
the valid claim was filed. 
    Sec. 170.  Minnesota Statutes 1988, section 268.31, is 
amended to read: 
    268.31 [DEVELOPMENT OF YOUTH EMPLOYMENT OPPORTUNITIES.] 
    (a) To the extent of available funding, the commissioner of 
jobs and training shall establish a program to employ 
individuals from the ages of 14 years up to 22 years.  Available 
money may be used to operate this program on a full calendar 
year basis, to provide transitional services, link basic skills 
training and remedial education to job training and school 
completion, and for support services.  The amount spent on 
support services in any one fiscal year may not exceed 15 
percent of the total annual appropriation for this program.  
Individuals employed in this program will be placed in service 
with departments, agencies, and instrumentalities of the state, 
county, local governments, school districts, with nonprofit 
organizations, and private sector employers.  The maximum number 
of hours that an individual may be employed in a position 
supported under this program is 480 hours.  Program funds may 
not be used for private sector placements.  Program operators 
must use the targeted jobs tax credit, other federal, state, and 
local government resources, as well as private sector resources 
to fund private sector placements.  The commissioner shall 
cooperate with the commissioner of human services in determining 
and implementing the most effective means of disregarding a 
youth's earnings from family income for purposes of the aid to 
families with dependent children program, to the extent 
permitted by the federal government. 
    (b) Upon request of the commissioner of the department of 
natural resources, the commissioner will contract for or provide 
available services for remedial skills, life skills, and career 
counseling activities to youth in the Minnesota conservation 
corps program. 
    (c) The commissioner shall evaluate the services provided 
under this section.  The evaluation shall include information on 
the effectiveness of program services in promoting the 
employability of young people.  In order to measure the 
long-term effectiveness of the program, the evaluation shall 
include follow-up information on each participant. 
    Sec. 171.  [268.912] [HEAD START PROGRAM.] 
    The department of jobs and training is the state agency 
responsible for administering the head start program.  The 
commissioner of jobs and training may make grants to public or 
private nonprofit agencies for the purpose of providing 
supplemental funds for the federal head start program. 
    Sec. 172.  [268.913] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] As used in sections 268.914 to 
268.916, the terms defined in this section have the meanings 
given them. 
    Subd. 2.  [PROGRAM ACCOUNT 20.] "Program account 20" means 
the federally designated and funded account limited to training 
activities. 
    Subd. 3.  [PROGRAM ACCOUNT 22.] "Program account 22" means 
the federally designated and funded account for basic services. 
    Subd. 4.  [PROGRAM ACCOUNT 26.] "Program account 26" means 
the federally designated and funded account that can only be 
used to provide special services to handicapped diagnosed 
children. 
    Subd. 5.  [PROGRAM ACCOUNT 23.] "Program account 23" means 
the federally designated and funded account for all day services.
    Subd. 6.  [START-UP COSTS.] "Start-up costs" means one-time 
costs incurred in expanding services to additional children. 
    Sec. 173.  [268.914] [DISTRIBUTION OF APPROPRIATION.] 
    (a) The commissioner of jobs and training shall distribute 
money appropriated for that purpose to head start program 
grantees to expand services to additional low-income children.  
Money must be allocated to each project head start grantee in 
existence on the effective date of this act.  Migrant and Indian 
reservation grantees must be initially allocated money based on 
the grantees' share of federal funds.  The remaining money must 
be initially allocated to the remaining local agencies based 
equally on the agencies' share of federal funds and on the 
proportion of eligible children in the agencies' service area 
who are not currently being served.  A head start grantee must 
be funded at a per child rate equal to its contracted, federally 
funded base level for program accounts 20 to 26 at the start of 
the fiscal year.  The commissioner may provide additional 
funding to grantees for start-up costs incurred by grantees due 
to the increased number of children to be served.  Before paying 
money to the grantees, the commissioner shall notify each 
grantee of its initial allocation, how the money must be used, 
and the number of low-income children that must be served with 
the allocation.  Each grantee must notify the commissioner of 
the number of additional low-income children it will be able to 
serve.  For any grantee that cannot serve additional children to 
its full allocation, the commissioner shall reduce the 
allocation proportionately.  Money available after the initial 
allocations are reduced must be redistributed to eligible 
grantees. 
    (b) Up to 11 percent of the funds appropriated annually may 
be used to provide grants to local head start agencies to 
provide funds for innovative programs designed either to target 
head start resources to particular at-risk groups of children or 
to provide services in addition to those currently allowable 
under federal head start regulations.  The commissioner shall 
award funds for innovative programs under this paragraph on a 
competitive basis. 
    Sec. 174.  [268.915] [FEDERAL REQUIREMENTS.] 
    Grantees and the commissioner shall comply with federal 
regulations governing the federal head start program, except for 
innovative programs funded under section 268.914, paragraph (b), 
which may operate differently than federal head start 
regulations, and except that when a state statute or regulation 
conflicts with a federal statute or regulation, the state 
statute or regulation prevails. 
    Sec. 175.  [268.916] [REPORTS.] 
    Each grantee shall submit an annual report to the 
commissioner on the format designated by the commissioner, 
including program information report data.  By January 1 of each 
year, the commissioner shall prepare an annual report to the 
health and human services committees of the legislature 
concerning the uses and impact of head start supplemental 
funding, including a summary of innovative programs and the 
results of innovative programs and an evaluation of the 
coordination of head start programs with employment and training 
services provided to AFDC recipients. 
    Sec. 176.  [268.971] [HOSPITALITY HOST PROGRAM.] 
    Subdivision 1.  [ESTABLISHMENT.] A hospitality host older 
worker tourism program is established in the department of jobs 
and training to assist economically disadvantaged older workers 
to gain employment in the promotion of the tourism industry in 
Minnesota and to become self-sufficient.  The objectives of the 
program are to: 
    (1) assist in the diversification of industry in rural 
areas by stimulating and promoting tourism; 
    (2) create full-time and part-time employment for 
low-income persons 55 years old or older; 
    (3) raise the income of older persons living in poverty; 
and 
    (4) promote tourism in selected local areas throughout the 
state, thereby improving local economies. 
    Subd. 2.  [DEFINITIONS.] (a) [SCOPE.] As used in this 
section, the terms defined in this section have the meanings 
given them. 
   (b) [COMMISSIONER.] "Commissioner" means the commissioner 
of the department of jobs and training. 
    (c) [OLDER WORKER.] "Older worker" means an economically 
disadvantaged person 55 years or older. 
    (d) [ECONOMICALLY DISADVANTAGED.] "Economically 
disadvantaged" means a person having an income of 125 percent or 
less of the federal poverty income guidelines.  In determining 
income, the federal Job Training Partnership Act definition of 
family and family income will prevail. 
    (e) [PROGRAM.] "Program" means the hospitality host older 
worker program created in subdivision 1. 
    (f) [COORDINATING AGENCY.] "Coordinating agency" means the 
Arrowhead economic opportunity agency. 
    Subd. 3.  [DISTRIBUTION AND USE OF STATE MONEY.] Money 
allocated to the coordinating agency by the commissioner must be 
used for activities consistent with the objectives of the 
program including, but not limited to:  outreach, selection of 
eligible participants, program sites, individual work sites, 
classroom training, on-the-job training opportunities, and 
program marketing.  Program funds shall be used to provide 
training-related costs to enrollees during orientation and 
classroom training segments.  Program funds shall be used to 
subsidize up to 50 percent of enrollee wages during contracted 
on-the-job training periods with the employer being responsible 
for the remainder.  Salaries upon employment shall be at least 
the state or federal minimum wage, whichever is higher. 
    Subd. 4.  [RESPONSIBILITIES OF COORDINATING AGENCY.] The 
commissioner shall enter into written agreement with the 
coordinating agency for the design, delivery, and general 
administration of the program.  The commissioner shall set 
program goals and objectives, and monitor the program. 
    Subd. 5.  [REPORTS.] The coordinating agency shall submit 
an annual report to the commissioner one year from the effective 
date of this act and annually thereafter.  In addition, the 
coordinating agency shall submit to the commissioner such other 
reports as required to document the status and progress of the 
program.  The annual report must include:  information on the 
number and types of jobs created; status of program sites; wages 
paid program participants; types of services provided by 
programs; the retention of program participants; and other 
information to assess the progress and status of the program. 
    Sec. 177.  [268.975] [DEFINITIONS.] 
    Subdivision 1.  [TERMS.] For the purposes of sections 
268.975 to 268.98, the following terms have the meanings given 
them. 
    Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
commissioner of jobs and training. 
    Subd. 3.  [DISLOCATED WORKER.] "Dislocated worker" means an 
individual who: 
    (1) has been terminated or has received a notice of 
termination of employment as a result of a plant closing or any 
substantial layoff at a plant, facility, or enterprise located 
in the state; 
    (2) was a resident of the state at the time of termination 
of employment or at the time of receiving the notification of 
termination of employment; and 
    (3) is eligible for or has exhausted unemployment 
compensation and is unlikely to return to the previous industry 
or occupation. 
    Subd. 4.  [ELIGIBLE ORGANIZATION.] "Eligible organization" 
means a local government unit, nonprofit organization, community 
action agency, business organization or association, or labor 
organization that has applied for a prefeasibility grant under 
section 268.978. 
    Subd. 5.  [LOCAL GOVERNMENT UNIT.] "Local government unit" 
means a statutory or home rule charter city, county, or town. 
    Subd. 6.  [PLANT CLOSING.] "Plant closing" means the 
announced or actual permanent or temporary shutdown of a single 
site of employment, or one or more facilities or operating units 
within a single site of employment, if the shutdown results in 
an employment loss at the single site of employment during any 
30-day period for (a) 50 or more employees excluding employees 
who work less than 20 hours per week; or (b) at least 500 
employees who in the aggregate work at least 20,000 hours per 
week, exclusive of hours of overtime. 
    Subd. 7.  [PREFEASIBILITY STUDY GRANT; GRANT.] 
"Prefeasibility study grant" or "grant" means the grant awarded 
under section 268.978. 
    Subd. 8.  [SUBSTANTIAL LAYOFF.] "Substantial layoff" means 
a reduction in the work force, which is not a result of a plant 
closing, and which results in an employment loss at a single 
site of employment during any 30-day period for (a) at least 50 
employees excluding those employees that work less than 20 hours 
a week; or (b) at least 500 employees who in the aggregate work 
at least 20,000 hours per week, exclusive of hours of overtime. 
    Sec. 178.  [268.976] [EARLY WARNING SYSTEM.] 
    Subdivision 1.  [EARLY WARNING INDICATORS.] The 
commissioner, in cooperation with the commissioners of revenue 
and trade and economic development, shall establish and oversee 
an early warning system to identify industries and businesses 
likely to experience large losses in employment including a 
plant closing or a substantial layoff, by collecting and 
analyzing information which may include, but not be limited to, 
products and markets experiencing declining growth rates, 
companies and industries subject to competition from production 
in low wage counties, changes in ownership, layoff and 
employment patterns, payments of unemployment compensation 
contributions, and state tax payments.  The commissioner may 
request the assistance of businesses, business organizations, 
and trade associations in identifying businesses, industries, 
and specific establishments that are likely to experience large 
losses in employment.  The commissioner may request information 
and other assistance from other state agencies for the purposes 
of this subdivision. 
    Subd. 2.  [NOTICE.] The commissioner shall encourage those 
business establishments considering a decision to effect a plant 
closing, substantial layoff or relocation of operations located 
in this state to give notice of that decision as early as 
possible to the commissioner, the employees of the affected 
establishment, any employee organization representing the 
employees, and the local government unit in which the affected 
establishment is located.  This notice shall be in addition to 
any notice required under the Worker Adjustment and Retraining 
Notification Act, United States Code, title 29, section 2101. 
    Subd. 3.  [EMPLOYER RESPONSIBILITY.] An employer providing 
notice of a plant closing, substantial layoff, or relocation of 
operations under the Worker Adjustment and Retraining 
Notification Act, United States Code, title 29, section 2101, or 
under subdivision 2 must report to the commissioner the names, 
addresses, and occupations of the employees who will be or have 
been terminated. 
    Sec. 179.  [268.977] [RAPID RESPONSE PROGRAM.] 
    Subdivision 1.  [PROGRAM ESTABLISHMENT.] (a) The 
commissioner shall establish a rapid response program to assist 
employees, employers, business organizations or associations, 
labor organizations, local government units, and community 
organizations to quickly and effectively respond to announced or 
actual plant closings and substantial layoffs. 
    (b) The program must include or address at least the 
following: 
    (1) within five working days after becoming aware of an 
announced or actual plant closing or substantial layoff, 
establish on-site contact with the employer, employees, labor 
organizations if there is one representing the employees, and 
leaders of the local government units and community 
organizations to provide coordination of efforts to formulate a 
communitywide response to the plant closing or substantial 
layoff, provide information on the public and private service 
and programs that might be available, inform the affected 
parties of the prefeasibility study grants under section 
268.978, and collect any information required by the 
commissioner to assist in responding to the plant closing or 
substantial layoff; 
    (2) provide ongoing technical assistance to employers, 
employees, business organizations or associations, labor 
organizations, local government units, and community 
organizations to assist them in reacting to or developing 
responses to plant closings or substantial layoffs; 
    (3) establish and administer the prefeasibility study grant 
program under section 268.978 to provide an initial assessment 
of the feasibility of alternatives to plant closings or 
substantial layoffs; 
    (4) work with employment and training service providers, 
employers, business organizations or associations, labor 
organizations, local government units, and community 
organizations in providing training, education, community 
support service, job search programs, job clubs, and other 
services to address the needs of potential or actual dislocated 
workers; 
    (5) coordinate with providers of economic development 
related financial and technical assistance services so that 
communities that are experiencing plant closings or substantial 
layoffs have immediate access to economic development related 
services; and 
    (6) collect and make available information on programs that 
might assist dislocated workers and the communities affected by 
plant closings or substantial layoffs. 
    Subd. 2.  [APPLICABILITY.] Notwithstanding section 268.975, 
subdivisions 6 and 8, the commissioner may waive the threshold 
requirements for finding a plant closing or substantial layoff 
in special cases where the governor's job training council 
recommends waiver to the commissioner following a finding by the 
council that the number of workers dislocated as a result of a 
plant closing or substantial layoff would have a substantial 
impact on the community or labor market where the closure or 
layoff occurs and, in the absence of intervention through the 
rapid response program, would overwhelm the capacity of other 
programs to provide effective assistance. 
    Sec. 180.  [268.978] [PREFEASIBILITY STUDIES.] 
    Subdivision 1.  [PREFEASIBILITY STUDY GRANTS.] (a) The 
commissioner may make grants for up to $10,000 to eligible 
organizations to provide an initial assessment of the 
feasibility of alternatives to plant closings or substantial 
layoffs.  The alternatives may include employee ownership, other 
new ownership, new products or production processes, or public 
financial or technical assistance to keep a plant open.  Two or 
more eligible organizations may jointly apply for a grant under 
this section. 
    (b) Interested organizations shall apply to the 
commissioner for the grants.  As part of the application 
process, applicants must provide a statement of need for a 
grant, information relating to the workforce at the plant, the 
area's unemployment rate, the community's and surrounding area's 
labor market characteristics, information of efforts to 
coordinate the community's response to the plant closing or 
substantial layoff, a timetable of the prefeasibility study, a 
description of the organization applying for the grant, a 
description of the qualifications of persons conducting the 
study, and other information required by the commissioner. 
    (c) The commissioner shall respond to the applicant within 
five working days of receiving the organization's application.  
The commissioner shall inform each organization that applied for 
but did not receive a grant the reasons for the grant not being 
awarded.  The commissioner may request further information from 
those organizations that did not receive a grant, and the 
organization may reapply for the grant. 
    Subd. 2.  [PREFEASIBILITY STUDY.] (a) The prefeasibility 
study must explore the current and potential viability, 
profitability, and productivity of the plant that may close or 
experience a substantial layoff and alternative uses for the 
plant.  The study is not intended to be a major examination of 
each possible alternative, but rather is meant to quickly 
determine if further action or examination is feasible and 
should be fully explored. 
     (b) The prefeasibility study must contain: 
    (1) a description of the plant's present products, 
production techniques, management structure, and history; 
    (2) a brief discussion of the feasibility of the various 
alternatives for ownership, production technique, and products; 
    (3) an estimate of the financing required to keep the plant 
open and the potential sources of that financing; 
    (4) a description of the employer's, employees', and 
community's efforts to maintain the operation of the plant; and 
    (5) other information the commissioner may require. 
    Subd. 3.  [REPORTS.] (a) The commissioner shall report 
monthly to the program subcommittee of the governor's job 
training council on the grants made and studies completed during 
the previous month. 
    (b) The commissioner shall provide an annual report to the 
governor, legislature, and the governor's job training council 
on the administration of the prefeasibility study grant 
program.  The report must also include details of actions taken 
as a result of a grant. 
    Sec. 181.  [268.979] [DISLOCATED WORKER COORDINATION.] 
    The commissioner shall coordinate the actions taken by 
state agencies and public post-secondary educational 
institutions to respond to or address the specific needs of 
dislocated workers and to provide services to dislocated workers 
including education and retraining.  The commissioner shall also 
assist local government units, community groups, business 
associations or organizations, labor organizations, and others 
in coordinating their efforts in providing services to 
dislocated workers. 
    Sec. 182.  [268.98] [PERFORMANCE STANDARDS.] 
    The commissioner shall establish performance standards for 
the programs and activities administered or funded through the 
rapid response program under section 268.977.  The commissioner 
may use existing federal performance standards or, if the 
commissioner determines that the federal standards are 
inadequate or not suitable, may formulate new performance 
standards to ensure that the programs and activities of the 
rapid response program are effectively administered. 
    Sec. 183.  Minnesota Statutes 1988, section 326.78, 
subdivision 2, is amended to read:  
    Subd. 2.  [ISSUANCE OF LICENSES AND CERTIFICATES.] The 
commissioner may issue licenses to employers and certificates to 
employees who meet the criteria in sections 326.70 to 326.82 and 
the commissioner's rules.  Licenses and certificates shall be 
valid for at least 12 months, except that the initial 
certificate will be issued to expire one year after the 
completion date on the approved training course diploma.  
    Sec. 184.  Minnesota Statutes 1988, section 327C.02, 
subdivision 2, is amended to read: 
    Subd. 2.  [MODIFICATION OF RULES.] The park owner must give 
the resident at least 60 days notice in writing of any rule 
change.  A rule adopted or amended after the resident initially 
enters into a rental agreement may be enforced against that 
resident only if the new or amended rule is reasonable and is 
not a substantial modification of the original agreement.  Any 
security deposit increase is a substantial modification of the 
rental agreement.  A reasonable rent increase made in compliance 
with section 327C.06 is not a substantial modification of the 
rental agreement and is not considered to be a rule for purposes 
of section 327C.01, subdivision 8.  A rule change necessitated 
by government action is not a substantial modification of the 
rental agreement.  A rule change requiring all residents to 
maintain their homes, sheds and other appurtenances in good 
repair and safe condition shall not be deemed a substantial 
modification of a rental agreement.  If a part of a resident's 
home, shed or other appurtenance becomes so dilapidated that 
repair is impractical and total replacement is necessary, the 
park owner may require the resident to make the replacement in 
conformity with a generally applicable rule adopted after the 
resident initially entered into a rental agreement with the park 
owner.  
    In any action in which a rule change is alleged to be a 
substantial modification of the rental agreement, a court may 
consider the following factors in limitation of the criteria set 
forth in section 327C.01, subdivision 11:  
    (a) any significant changes in circumstances which have 
occurred since the original rule was adopted and which 
necessitate the rule change; and 
    (b) any compensating benefits which the rule change will 
produce for the residents. 
    Sec. 185.  Minnesota Statutes 1988, section 357.021, 
subdivision 2, is amended to read: 
    Subd. 2.  [FEE AMOUNTS.] The fees to be charged and 
collected by the court administrator shall be as follows: 
    (1) In every civil action or proceeding in said court, the 
plaintiff, petitioner, or other moving party shall pay, when the 
first paper is filed for that party in said action, a fee of 
$30, except that in an action for marriage dissolution, the fee 
is $55 $75. 
    The defendant or other adverse or intervening party, or any 
one or more of several defendants or other adverse or 
intervening parties appearing separately from the others, shall 
pay, when the first paper is filed for that party in said 
action, a fee of $30. 
    The party requesting a trial by jury shall pay $30. 
    The fees above stated shall be the full trial fee 
chargeable to said parties irrespective of whether trial be to 
the court alone, to the court and jury, or disposed of without 
trial, and shall include the entry of judgment in the action, 
but does not include copies or certified copies of any papers so 
filed or proceedings under sections 106A.005 to 106A.811, except 
the provisions therein as to appeals. 
    (2) Certified copy of any instrument from a civil or 
criminal proceeding $5, plus 25 cents per page after the first 
page and $3.50, plus 25 cents per page after the first page for 
an uncertified copy. 
     (3) Issuing a subpoena $3 for each name. 
     (4) Issuing an execution and filing the return thereof; 
issuing a writ of attachment, injunction, habeas corpus, 
mandamus, quo warranto, certiorari, or other writs not 
specifically mentioned, $5. 
     (5) Issuing a transcript of judgment, or for filing and 
docketing a transcript of judgment from another court, $5. 
     (6) Filing and entering a satisfaction of judgment, partial 
satisfaction or assignment of judgment, $5. 
     (7) Certificate as to existence or nonexistence of 
judgments docketed, $1 for each name certified to and $3 for 
each judgment certified to. 
     (8) Filing and indexing trade name; or recording notary 
commission; or recording basic science certificate; or recording 
certificate of physicians, osteopaths, chiropractors, 
veterinarians or optometrists, $5. 
     (9) For the filing of each partial, final, or annual 
account in all trusteeships, $10. 
     (10) All other services required by law for which no fee is 
provided such fee as compares favorably with those herein 
provided, or such as may be fixed by rule or order of the court. 
    Sec. 186.  Minnesota Statutes 1988, section 357.021, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [CERTAIN FEE PURPOSES.] Of the marriage 
dissolution fee collected pursuant to subdivision 1, the court 
administrator shall pay $35 $55 to the state treasurer to be 
deposited in the special revenue fund to be used as follows:  
$15 $35 for the purposes of funding grant programs for emergency 
shelter services and support services to battered women under 
sections 611A.31 to 611A.36 and for administering displaced 
homemaker programs established under section 268.96; and $20 is 
appropriated to the commissioner of corrections for the purpose 
of funding emergency shelter services and support services to 
battered women, on a matching basis with local money for 20 
percent of the costs and state money for 80 percent.  Of 
the $15 $35 for the purposes of funding grant programs for 
emergency shelter services and support services to battered 
women under sections 611A.31 to 611A.36 and for administering 
displaced homemaker programs established under section 
268.96, $6.75 $16.75 is appropriated to the commissioner of 
corrections and $8.25 $18.25 is appropriated to the commissioner 
of jobs and training.  The commissioner of jobs and training may 
use money appropriated in this subdivision for the 
administration of a displaced homemaker program regardless of 
the date on which the program was established.  
    Sec. 187.  Minnesota Statutes 1988, section 517.08, 
subdivision 1b, is amended to read: 
    Subd. 1b.  [TERM OF LICENSE; FEE.] The court administrator 
shall examine upon oath the party applying for a license 
relative to the legality of the contemplated marriage.  If at 
the expiration of a five-day period, on being satisfied that 
there is no legal impediment to it, the court administrator 
shall issue the license, containing the full names of the 
parties before and after marriage, and county and state of 
residence, with the district court seal attached, and make a 
record of the date of issuance.  The license shall be valid for 
a period of six months.  In case of emergency or extraordinary 
circumstances, a judge of the county court or a judge of the 
district court of the county in which the application is made, 
may authorize the license to be issued at any time before the 
expiration of the five days.  The court administrator shall 
collect from the applicant a fee of $45 $65 for administering 
the oath, issuing, recording, and filing all papers required, 
and preparing and transmitting to the state registrar of vital 
statistics the reports of marriage required by this section.  If 
the license should not be used within the period of six months 
due to illness or other extenuating circumstances, it may be 
surrendered to the court administrator for cancellation, and in 
that case a new license shall issue upon request of the parties 
of the original license without fee.  A court administrator who 
knowingly issues or signs a marriage license in any manner other 
than as provided in this section shall pay to the parties 
aggrieved an amount not to exceed $1,000. 
    Sec. 188.  Minnesota Statutes 1988, section 517.08, 
subdivision 1c, is amended to read: 
    Subd. 1c.  [DISPOSITION OF LICENSE FEE.] Of the marriage 
license fee collected pursuant to subdivision 1b, the court 
administrator shall pay $30 $50 to the state treasurer to be 
deposited in the special revenue fund to be used as follows:  
$6.75 $16.75 is appropriated to the commissioner of corrections 
for the purposes of funding grant programs for emergency shelter 
services and support services to battered women under sections 
611A.31 to 611A.36, and $23.25 $33.25 is appropriated to the 
commissioner of jobs and training for displaced homemaker 
programs under section 268.96.  The commissioner of jobs and 
training may use money appropriated in this subdivision for the 
administration of a displaced homemaker program regardless of 
the date on which the program was established. 
    Sec. 189.  Minnesota Statutes 1988, section 518.54, 
subdivision 6, is amended to read: 
    Subd. 6.  [INCOME.] "Income" means any form of periodic 
payment to an individual including, but not limited to, wages, 
salaries, payments to an independent contractor, workers' 
compensation, unemployment compensation, annuity, military and 
naval retirement, pension and disability payments.  Benefits 
received under sections 256.72 to 256.87 and chapter 256D are 
not income under this section. 
    Sec. 190.  Minnesota Statutes 1988, section 518.551, is 
amended by adding a subdivision to read:  
    Subd. 5a.  [ORDER FOR COMMUNITY SERVICES.] If the court 
finds that the obligor earns $400 or less per month and does not 
have the ability to provide support based on the guidelines and 
factors under subdivision 5, the court may order the obligor to 
perform community services to fulfill the obligor's support 
obligation.  In ordering community services under this 
subdivision, the court shall consider whether the obligor has 
the physical capability of performing community services, and 
shall order community services that are appropriate for the 
obligor's abilities.  
    Sec. 191.  Minnesota Statutes 1988, section 518.551, 
subdivision 10, is amended to read: 
    Subd. 10.  [ADMINISTRATIVE PROCESS FOR CHILD AND MEDICAL 
SUPPORT PILOT PROJECT ORDERS.] A pilot project An administrative 
process is established to obtain, modify, and enforce child and 
medical support orders and maintenance through administrative 
process, to evaluate the efficiency of the administrative 
process.  The pilot project shall begin when the procedures have 
been established and end on June 30, 1989.  
    During the pilot project, The commissioner of human 
services may designate counties to participate in the 
administrative process established by this section.  All 
proceedings for obtaining, modifying, or enforcing child and 
medical support orders and maintenance and adjudicating 
uncontested parentage proceedings, required to be conducted 
in Dakota county counties designated by the commissioner of 
human services in which Dakota the county human services agency 
is a party or represents a party to the action must be conducted 
by an administrative law judge from the office of administrative 
hearings, except for the following proceedings: 
    (1) adjudication of paternity contested parentage; 
    (2) motions to set aside a paternity adjudication or 
declaration of parentage; 
    (3) evidentiary hearing on contempt motions; and 
    (4) motions to sentence or to revoke the stay of a jail 
sentence in contempt proceedings. 
    An administrative law judge may hear a stipulation reached 
on a contempt motion, but any stipulation that involves a 
finding of contempt and a jail sentence, whether stayed or 
imposed, shall require the review and signature of a county or 
district judge. 
    For the purpose of this pilot project process, all powers, 
duties, and responsibilities conferred on judges of the county 
or district court to obtain and enforce child and medical 
support obligations, subject to the limitation set forth herein, 
are conferred on the administrative law judge conducting the 
proceedings, including the power to issue orders to show cause 
and to issue bench warrants for failure to appear.  
    During fiscal year 1988 Before implementing the process in 
a county, the chief administrative law judge, the commissioner 
of human services, the director of Dakota the county human 
services agency, the Dakota county attorney, and the clerk of 
the Dakota county court administrator shall jointly establish 
procedures and the county shall provide hearing facilities for 
the implementation of implementing this pilot project process in 
a county.  
    Nonattorney employees of Dakota county human services the 
public agency responsible for child support in the counties 
designated by the commissioner, acting at the direction of the 
county attorney, may prepare, sign, serve, and file complaints 
and motions for obtaining, modifying, or enforcing child and 
medical support orders and maintenance and related documents, 
appear at prehearing conferences, and participate in proceedings 
before an administrative law judge.  This activity shall not be 
considered to be the unauthorized practice of law. 
    For the purpose of this pilot project, The hearings shall 
be conducted under the conference contested case rules adopted 
by the chief administrative law judge.  Any discovery required 
in a proceeding shall be conducted under the rules of family 
court and the rules of civil procedure. rules of the office of 
administrative hearings, Minnesota Rules, parts 1400.7100 to 
1400.7500, 1400.7700, and 1400.7800, as adopted by the chief 
administrative law judge.  All other aspects of the case, 
including, but not limited to, pleadings, discovery, and 
motions, shall be conducted under the rules of family court, the 
rules of civil procedure and chapter 518.  The administrative 
law judge shall make findings of fact, conclusions, and a final 
decision and issue an order.  Orders issued by an administrative 
law judge shall be are enforceable by the contempt powers of the 
county or and district courts. 
    The administrative law judge shall make a report to the 
chief administrative law judge or the chief administrative law 
judge's designee, stating findings of fact and conclusions and 
recommendations concerning the proposed action, in accordance 
with sections 14.48 to 14.56.  The chief administrative law 
judge or a designee shall render the final decision and order in 
accordance with sections 14.61 and 14.62.  The decision and 
order of the chief administrative law judge or a designee shall 
be a final agency decision for purposes of sections 14.63 to 
14.69. 
    Sec. 192.  Minnesota Statutes 1988, section 518.611, 
subdivision 4, is amended to read: 
    Subd. 4.  [EFFECT OF ORDER.] Notwithstanding any law to the 
contrary, the order is binding on the employer, trustee, or 
other payor of the funds when service under subdivision 2 has 
been made.  Withholding must begin no later than the first pay 
period that occurs after 14 days following the date of the 
notice.  An employer or other payor of funds in this state is 
required to withhold income according to court orders for 
withholding issued by other states or territories.  The payor 
shall withhold from the income payable to the obligor the amount 
specified in the order and amounts required under subdivision 2, 
paragraph (b) and section 518.613 and shall remit, within ten 
days of the date the obligor is paid the remainder of the 
income, the amounts withheld to the public authority.  The payor 
shall identify on the remittance information the date the 
obligor is paid the remainder of the income.  Employers may 
combine all amounts withheld from one pay period into one 
payment to each public authority, but shall separately identify 
each obligor making payment.  Amounts received by the public 
authority which are in excess of public assistance expended for 
the party or for a child shall be remitted to the party.  An 
employer shall not discharge, or refuse to hire, or otherwise 
discipline an employee as a result of a wage or salary 
withholding authorized by this section.  The employer or other 
payor of funds shall be liable to the obligee for any amounts 
required to be withheld. 
    Sec. 193.  Minnesota Statutes 1988, section 518.613, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERAL.] Notwithstanding any provision of 
section 518.611, subdivision 2 or 3, to the contrary, whenever 
an obligation for child support or maintenance, enforced by the 
public authority, is initially determined and ordered or 
modified by the court in a county in which this section applies, 
the amount of child support or maintenance ordered by the court 
must be withheld from the income, regardless of source, of the 
person obligated to pay the support. 
    Sec. 194.  Minnesota Statutes 1988, section 518.613, 
subdivision 2, is amended to read: 
    Subd. 2.  [ORDER; COLLECTION SERVICES.] Every order for 
child support must include the obligor's social security number 
and the name and address of the obligor's employer or other 
payor of funds.  Upon entry of the order for support or 
maintenance, the court shall mail a copy of the 
court's automatic income withholding order and the provisions of 
section 518.611 and this section to the obligor's employer or 
other payor of funds and to the public agency authority 
responsible for child support enforcement.  An obligee who is 
not a recipient of public assistance shall apply for the 
collection services of the public authority when an order for 
support is entered unless the requirements of this section have 
been waived under subdivision 7.  No later than January 1, 1990, 
the supreme court shall develop a standard automatic income 
withholding form to be used by all Minnesota courts.  This form 
shall be made a part of any order for support or decree by 
reference. 
    Sec. 195.  Minnesota Statutes 1988, section 518.613, 
subdivision 4, is amended to read: 
    Subd. 4.  [APPLICATION.] On and after August 1, 1987, and 
prior to August 1, 1989, this section applies in a county 
selected under Laws 1987, chapter 403, article 3, section 93 and 
in a county that chooses to have this section apply by 
resolution of a majority vote of its county board.  On and after 
November 1, 1990, this section applies to all child support and 
maintenance obligations that are initially ordered or modified 
on and after November 1, 1990, and that are being enforced by 
the public authority. 
    Sec. 196.  Minnesota Statutes 1988, section 518.613, is 
amended by adding a subdivision to read: 
    Subd. 6.  [NOTICE OF SERVICES.] The department of human 
services shall prepare and make available to the courts a form 
notice of child support and maintenance collection services 
available through the public authority responsible for child 
support enforcement, including automatic income withholding 
under this section.  Promptly upon the filing of a petition for 
dissolution of marriage or legal separation by parties who have 
a minor child, the court administrator shall send the form 
notice to the petitioner and respondent at the addresses given 
in the petition.  The rulemaking provisions of chapter 14 shall 
not apply to the preparation of the form notice. 
    Sec. 197.  Minnesota Statutes 1988, section 518.613, is 
amended by adding a subdivision to read: 
    Subd. 7.  [WAIVER.] (a) The court may waive the 
requirements of this section if the court finds that there is no 
arrearage in child support or maintenance as of the date of the 
hearing, that it would not be contrary to the best interests of 
the child, and:  (1) one party demonstrates and the court finds 
that there is good cause to waive the requirements of this 
section or to terminate automatic income withholding on an order 
previously entered under this section; or (2) all parties reach 
a written agreement that provides for an alternative payment 
arrangement and the agreement is approved by the court after a 
finding that the agreement is likely to result in regular and 
timely payments.  If the court waives the requirements of this 
section: 
    (1) in all cases where the obligor is at least 30 days in 
arrears, withholding must be carried out pursuant to section 
518.611; 
    (2) the obligee may at any time and without cause request 
the court to issue an order for automatic income withholding 
under this section; and 
    (3) the obligor may at any time request the public 
authority to begin withholding pursuant to this section, by 
serving upon the public authority the request and a copy of the 
order for child support or maintenance.  Upon receipt of the 
request, the public authority shall serve a copy of the court's 
order and the provisions of section 518.611 and this section on 
the obligor's employer or other payor of funds.  The public 
authority shall notify the court that withholding has begun at 
the request of the obligor pursuant to this clause. 
    (b) For purposes of this subdivision, "parties" includes 
the public authority in cases when it is a party pursuant to 
section 518.551, subdivision 9. 
    Sec. 198.  Minnesota Statutes 1988, section 540.08, is 
amended to read: 
    540.08 [INJURY TO CHILD OR WARD; SUIT BY PARENT OR 
GUARDIAN.] 
    A parent may maintain an action for the injury of a minor 
son or daughter.  A general guardian may maintain an action for 
an injury to the ward.  A guardian of a dependent, neglected, or 
delinquent child, appointed by a court having jurisdiction, may 
maintain an action for the injury of the child.  If no action is 
brought by the father or mother, an action for the injury may be 
brought by a guardian ad litem, either before or after the death 
of the parent.  Before a parent receives property as a result of 
the action, the parent shall file a bond as the court prescribes 
and approves as security therefor.  In lieu of this bond, upon 
petition of the parent, the court may order that the property 
received be invested in securities issued by the United States, 
which shall be deposited pursuant to the order of the court, or 
that the property be invested in a savings account, savings 
certificate, or certificate of deposit, in a bank, savings and 
loan association, or trust company, or an annuity or other form 
of structured settlement, subject to the order of the court.  A 
copy of the court's order and the evidence of the deposit shall 
be filed with the court administrator.  Money or assets in an 
account established by the court under this section are not 
available to the minor child or the child's parent or guardian 
until released by the court to the child or the child's parent 
or guardian.  No settlement or compromise of the action is valid 
unless it is approved by a judge of the court in which the 
action is pending. 
    Sec. 199.  Minnesota Statutes 1988, section 609.378, is 
amended to read: 
    609.378 [NEGLECT OR ENDANGERMENT OF A CHILD.] 
    Subdivision 1.  [PERSONS GUILTY OF NEGLECT OR 
ENDANGERMENT.] The following people are guilty of neglect or 
endangerment of a child and may be sentenced to imprisonment for 
not more than one year or to payment of a fine of not more than 
$3,000, or both. 
    (a) [NEGLECT.] (1) A parent, legal guardian, or caretaker 
who willfully deprives a child of necessary food, clothing, 
shelter, health care, or supervision appropriate to the child's 
age, when the parent, guardian, or caretaker is reasonably able 
to make the necessary provisions and which the deprivation 
substantially harms the child's physical or emotional health or 
(b) is guilty of neglect of a child.  If a parent, guardian, or 
caretaker responsible for the child's care in good faith selects 
and depends upon spiritual means or prayer for treatment or care 
of disease or remedial care of the child, this treatment or care 
is "health care," for purposes of this clause.  
    (2) A parent, legal guardian, or foster parent caretaker 
who knowingly permits the continuing physical or sexual abuse of 
a child, is guilty of neglect of a child and may be sentenced to 
imprisonment for not more than one year or to payment of a fine 
of not more than $3,000, or both. 
    (b) [ENDANGERMENT.] A parent, legal guardian, or caretaker 
who endangers the child's person or health by intentionally 
causing or permitting a child to be placed in a situation likely 
to substantially harm the child's physical or mental health or 
cause the child's death is guilty of child endangerment.  This 
paragraph does not prevent a parent, legal guardian, or 
caretaker from causing or permitting a child to engage in 
activities that are appropriate to the child's age, stage of 
development, and experience, or from selecting health care as 
defined in subdivision 1, paragraph (a). 
    Subd. 2.  [DEFENSES.] It is a defense to a prosecution 
under clause (b) subdivision 1, paragraph (a), clause (2), or 
paragraph (b), that at the time of the neglect or endangerment 
there was a reasonable apprehension in the mind of the defendant 
that acting to stop or prevent the neglect or endangerment would 
result in substantial bodily harm to the defendant or the child 
in retaliation.  
    If a parent, guardian, or caretaker responsible for the 
child's care in good faith selects and depends upon spiritual 
means or prayer for treatment or care of disease or remedial 
care of the child, this treatment shall constitute "health care" 
as used in clause (a). 
    Sec. 200.  Minnesota Statutes 1988, section 626.556, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINITIONS.] As used in this section, the 
following terms have the meanings given them unless the specific 
content indicates otherwise: 
    (a) "Sexual abuse" means the subjection by a person 
responsible for the child's care, or by a person in a position 
of authority, as defined in section 609.341, subdivision 10, to 
any act which constitutes a violation of section 609.342, 
609.343, 609.344, or 609.345.  Sexual abuse also includes any 
act which involves a minor which constitutes a violation of 
sections 609.321 to 609.324 or 617.246.  
    (b) "Person responsible for the child's care" means (1) an 
individual functioning within the family unit and having 
responsibilities for the care of the child such as a parent, 
guardian, or other person having similar care responsibilities, 
or (2) an individual functioning outside the family unit and 
having responsibilities for the care of the child such as a 
teacher, school administrator, or other lawful custodian of a 
child having either full-time or short-term care 
responsibilities including, but not limited to, day care, 
babysitting whether paid or unpaid, counseling, teaching, and 
coaching.  
     (c) "Neglect" means failure by a person responsible for a 
child's care to supply a child with necessary food, clothing, 
shelter or medical care when reasonably able to do so or failure 
to protect a child from conditions or actions which imminently 
and seriously endanger the child's physical or mental health 
when reasonably able to do so.  Nothing in this section shall be 
construed to (1) mean that a child is neglected solely because 
the child's parent, guardian, or other person responsible for 
the child's care in good faith selects and depends upon 
spiritual means or prayer for treatment or care of disease or 
remedial care of the child, or (2) in lieu of medical care; 
except that there is a duty to report if a lack of medical care 
may cause imminent and serious danger to the child's health.  
This section does not impose upon persons, not otherwise legally 
responsible for providing a child with necessary food, clothing, 
shelter, or medical care, a duty to provide that care.  Neglect 
also means "medical neglect" as defined in section 260.015, 
subdivision 10 2a, clause (e) (5). 
    (d) "Physical abuse" means any physical injury inflicted by 
a person responsible for the child's care on a child other than 
by accidental means, or any physical injury that cannot 
reasonably be explained by the child's history of injuries, or 
any aversive and deprivation procedures that have not been 
authorized under section 245.825.  
    (e) "Report" means any report received by the local welfare 
agency, police department, or county sheriff pursuant to this 
section. 
    (f) "Facility" means a day care facility, residential 
facility, agency, hospital, sanitarium, or other facility or 
institution required to be licensed pursuant to sections 144.50 
to 144.58, 241.021, or 245.781 to 245.812.  
    (g) "Operator" means an operator or agency as defined in 
section 245A.02.  
    (h) "Commissioner" means the commissioner of human services.
    (i) "Assessment" includes authority to interview the child, 
the person or persons responsible for the child's care, the 
alleged perpetrator, and any other person with knowledge of the 
abuse or neglect for the purpose of gathering the facts, 
assessing the risk to the child, and formulating a plan.  
     (j) "Practice of social services," for the purposes of 
subdivision 3, includes but is not limited to employee 
assistance counseling and the provision of guardian ad litem 
services.  
    Sec. 201.  Minnesota Statutes 1988, section 626.556, 
subdivision 10e, is amended to read: 
    Subd. 10e.  [DETERMINATIONS.] Upon the conclusion of every 
assessment or investigation it conducts, the local welfare 
agency shall make two determinations:  first, whether 
maltreatment has occurred; and second, whether child protective 
services are needed. 
     (a) For the purposes of this subdivision, "maltreatment" 
means any of the following acts or omissions committed by a 
person responsible for the child's care: 
     (1) an assault, as defined in section 609.02, subdivision 
10, or any physical contact not exempted by section 609.379, 
where the assault or physical contact is either severe or 
recurring and causes either injury or significant risk of injury 
to the child; 
     (2) neglect as defined in subdivision 2, paragraph (c); or 
     (3) sexual abuse as defined in subdivision 2, paragraph (a).
     (b) For the purposes of this subdivision, a determination 
that child protective services are needed means that the local 
welfare agency has documented conditions during the assessment 
or investigation sufficient to cause a child protection worker, 
as defined in section 626.559, subdivision 1, to conclude that a 
child is at significant risk of maltreatment if protective 
intervention is not provided and that the individuals 
responsible for the child's care have not taken or are not 
likely to take actions to protect the child from maltreatment or 
risk of maltreatment. 
    (c) This subdivision does not mean that maltreatment has 
occurred solely because the child's parent, guardian, or other 
person responsible for the child's care in good faith selects 
and depends upon spiritual means or prayer for treatment or care 
of disease or remedial care of the child, in lieu of medical 
care.  However, if lack of medical care may result in imminent 
and serious danger to the child's health, the local welfare 
agency may ensure that necessary medical services are provided 
to the child. 
    Sec. 202.  Minnesota Statutes 1988, section 626.558, is 
amended to read: 
    626.558 [MULTIDISCIPLINARY CHILD PROTECTION TEAM.] 
    Subdivision 1.  [ESTABLISHMENT OF THE TEAM.] A county may 
establish a multidisciplinary child protection team comprised of 
that may include, but not be limited to, the director of the 
local welfare agency or designees, the county attorney or 
designees, the county sheriff or designees, and representatives 
of health and education.  In addition, representatives of mental 
health or other appropriate human service agencies, and parent 
groups may be added to the child protection team. 
    Subd. 2.  [DUTIES OF TEAM.] A multidisciplinary child 
protection team may provide public and professional education, 
develop resources for prevention, intervention, and treatment, 
and provide case consultation to the local welfare agency to 
better enable the agency to carry out its child protection 
functions under section 626.556 and the community social 
services act.  As used in this section, "case consultation" 
means a case review process in which recommendations are made 
concerning services to be provided to the identified children 
and family.  Case consultation must may be performed by a 
committee or subcommittee of the team composed of the team 
members representing social human services, including mental 
health and chemical dependency; law enforcement, including 
probation and parole; the county attorney,; health care,; 
education,; and other necessary agencies; and persons directly 
involved in an individual case as determined designated by the 
case consultation committee.  Case consultation is a case review 
process that results in recommendations about services to be 
provided to the identified children and family other members 
performing case consultation. 
    Subd. 2a.  [JUVENILE PROSTITUTION OUTREACH PROGRAM.] A 
multidisciplinary child protection team may assist the local 
welfare agency, local law enforcement agency, or an appropriate 
private organization in developing a program of outreach 
services for juveniles who are engaging in prostitution.  For 
the purposes of this subdivision, at least one representative of 
a youth intervention program or, where this type of program is 
unavailable, one representative of a nonprofit agency serving 
youth in crisis, shall be appointed to and serve on the 
multidisciplinary child protection team in addition to the 
standing members of the team.  These services may include 
counseling, medical care, short-term shelter, alternative living 
arrangements, and drop-in centers.  The county may finance these 
services by means of the penalty assessment authorized by 
section 609.3241.  A juvenile's receipt of intervention services 
under this subdivision may not be conditioned upon the juvenile 
providing any evidence or testimony. 
    Subd. 3.  [INFORMATION SHARING.] (a) The local welfare 
agency may make available to the case consultation committee of 
the team or subcommittee, all records collected and maintained 
by the agency under section 626.556 and in connection with case 
consultation.  Any member of the A case consultation committee 
or subcommittee member may share information acquired in the 
member's professional capacity with the committee or 
subcommittee to assist the committee in its function case 
consultation. 
    (b) Case consultation committee or subcommittee members 
must annually sign a data sharing agreement, approved by the 
commissioner of human services, assuring compliance with chapter 
13.  Not public data, as defined by section 13.02, subdivision 
8a, may be shared with members appointed to the committee or 
subcommittee in connection with an individual case when the 
members have signed the data sharing agreement.  
    (c) All data acquired by the case consultation committee or 
subcommittee in exercising case consultation duties, are 
confidential as defined in section 13.02, subdivision 3, and 
shall not be disclosed except to the extent necessary to perform 
case consultation, and shall not be subject to subpoena or 
discovery. 
    (d) No members of a case consultation committee or 
subcommittee meeting shall disclose what transpired at a case 
consultation meeting, except to the extent necessary to carry 
out the case consultation plan.  The proceedings and records of 
the case consultation meeting are not subject to discovery, and 
may not be introduced into evidence in any civil or criminal 
action against a professional or local welfare agency arising 
out of the matter or matters which are the subject of 
consideration of the case consultation meeting.  Information, 
documents, or records otherwise available from original sources 
are not immune from discovery or use in any civil or criminal 
action merely because they were presented during a case 
consultation meeting.  Any person who presented information 
before the consultation committee or subcommittee or who is a 
member shall not be prevented from testifying as to matters 
within the person's knowledge.  However, in a civil or criminal 
proceeding a person shall not be questioned about the person's 
presentation of information before the case consultation 
committee or subcommittee or about opinions formed as a result 
of the case consultation meetings.  
    A person who violates this subdivision is subject to the 
civil remedies and penalties provided under chapter 13. 
    Sec. 203.  [626.5593] [PEER REVIEW OF LOCAL AGENCY 
RESPONSE.] 
    Subdivision 1.  [ESTABLISHMENT.] By January 1, 1991, the 
commissioner of human services shall establish a pilot program 
for peer review of local agency responses to child maltreatment 
reports made under section 626.556.  The peer review program 
shall examine agency assessments of maltreatment reports and 
delivery of child protection services in at least two counties.  
The commissioner shall designate the local agencies to be 
reviewed, and shall appoint a peer review panel composed of 
child protection workers, as defined in section 626.559, and law 
enforcement personnel who are responsible for investigating 
reports of child maltreatment under section 626.556, subdivision 
10, within the designated counties. 
    Subd. 2.  [DUTIES.] The peer review panel shall meet at 
least quarterly to review case files representative of child 
maltreatment reports that were investigated or assessed by the 
local agency.  These cases shall be selected randomly from local 
welfare agency files by the commissioner.  Not public data, as 
defined in section 13.02, subdivision 8, may be shared with 
panel members in connection with a case review. 
    The panel shall review each case for compliance with 
relevant laws, rules, agency policies, appropriateness of agency 
actions, and case determinations.  The panel shall issue a 
report to the designated agencies after each meeting which 
includes findings regarding the agency's compliance with 
relevant laws, rules, policies, case practice, and any 
recommendations to be considered by the agency.  The panel shall 
also issue a semiannual report concerning its activities.  This 
semiannual report shall be available to the public, but may not 
include any information that is classified as not public data. 
    Subd. 3.  [REPORT TO LEGISLATURE.] By January 1, 1992, the 
commissioner shall report to the legislature regarding the 
activities of the peer review panel, compliance findings, 
barriers to the effective delivery of child protection services, 
and recommendations for the establishment of a permanent peer 
review system for child protection services. 
    Subd. 4.  [FUNDS.] The commissioner may use funds allocated 
for child protection services, training, and grants to pay 
administrative expenses associated with the peer review panel 
pilot program created by this section. 
    Sec. 204.  Laws 1984, chapter 654, article 5, section 57, 
subdivision 1, as amended by Laws 1987, chapter 75, section 1, 
and by Laws 1988, chapter 689, article 2, section 238, is 
amended to read: 
    Subdivision 1.  [RESTRICTED CONSTRUCTION OR MODIFICATION.] 
Through June 30, 1990, the following construction or 
modification may not be commenced: 
    (1) any erection, building, alteration, reconstruction, 
modernization, improvement, extension, lease, or other 
acquisition by or on behalf of a hospital that increases the bed 
capacity of a hospital, relocates hospital beds from one 
physical facility, complex, or site to another, or otherwise 
results in an increase or redistribution of hospital beds within 
the state; and 
    (2) the establishment of a new hospital. 
    This section does not apply to: 
    (1) construction or relocation within a county by a 
hospital, clinic, or other health care facility that is a 
national referral center engaged in substantial programs of 
patient care, medical research, and medical education meeting 
state and national needs that receives more than 40 percent of 
its patients from outside the state of Minnesota; 
    (2) a project for construction or modification for which a 
health care facility held an approved certificate of need on May 
1, 1984, regardless of the date of expiration of the 
certificate; 
    (3) a project for which a certificate of need was denied 
prior to the date of enactment of this act if a timely appeal 
results in an order reversing the denial; 
    (4) a project exempted from certificate of need 
requirements by Laws 1981, chapter 200, section 2; 
    (5) a project involving consolidation of pediatric 
specialty hospital services within the Minneapolis-St. Paul 
metropolitan area that would not result in a net increase in the 
number of pediatric specialty hospital beds among the hospitals 
being consolidated; 
    (6) a project involving the temporary relocation of 
pediatric-orthopedic hospital beds to an existing licensed 
hospital that will allow for the reconstruction of a new 
philanthropic, pediatric-orthopedic hospital on an existing site 
and that will not result in a net increase in the number of 
hospital beds.  Upon completion of the reconstruction, the 
licenses of both hospitals must be reinstated at the capacity 
that existed on each site prior to the relocation; 
    (7) the relocation or redistribution of hospital beds 
within a hospital building or identifiable complex of buildings 
provided the relocation or redistribution does not result in:  
(i) an increase in the overall bed capacity at that site; (ii) 
relocation of hospital beds from one physical site or complex to 
another,; or (iii) redistribution of hospital beds within the 
state or a region of the state; 
    (8) relocation or redistribution of hospital beds within a 
hospital corporate system that involves the transfer of beds 
from a closed facility site or complex to an existing site or 
complex provided that:  (i) no more than 50 percent of the 
capacity of the closed facility is transferred; (ii) the 
capacity of the site or complex to which the beds are 
transferred does not increase by more than 50 percent; (iii) the 
beds are not transferred outside of a federal health systems 
agency boundary in place on July 1, 1983; and (iv) the 
relocation or redistribution does not involve the construction 
of a new hospital building; or 
    (9) a construction project involving up to 35 new beds in a 
psychiatric hospital in Rice county that primarily serves 
adolescents and that receives more than 70 percent of its 
patients from outside the state of Minnesota; or 
    (10) a project to replace a 130-bed or less hospital if:  
(i) the new hospital site is located within five miles of the 
current site; and (ii) the total licensed capacity of the 
replacement hospital, either at the time of construction of the 
initial building or as the result of future expansion, will not 
exceed 70 licensed hospital beds. 
    Sec. 205.  Laws 1988, chapter 689, article 2, section 248, 
is amended to read: 
    Sec. 248.  [LOCAL INCOME ASSISTANCE FROM FEDERAL FOOD 
STAMPS.] 
    To the extent of available appropriations, the commissioner 
of human services shall contract with community outreach 
programs to encourage participation in the food stamp program of 
eligible low-income households, including, but not limited to, 
seniors, disabled persons, farmers, veterans, unemployed 
workers, low-income working heads of households, battered women 
residing in shelters, migrant workers, refugee families with 
children, and other eligible individuals who are homeless.  For 
purposes of this section, "homeless" means that the individual 
lacks a fixed and regular nighttime residence or has a primary 
nighttime residence that is: 
    (1) a publicly supervised or privately operated shelter, 
including a welfare hotel or congregate shelter, designed to 
provide temporary living accommodations; 
    (2) an institution that provides a temporary residence for 
individuals who will be institutionalized; 
    (3) a temporary accommodation in the residence of another 
individual; or 
    (4) a public or private place not designed for, or 
ordinarily used as, a regular sleeping accommodation for human 
beings.  
     The commissioner shall seek federal reimbursement for state 
money used for grants and contracts under this section.  Federal 
money received is appropriated to the commissioner for purposes 
of this section.  The commissioner shall convene an advisory 
committee to help establish criteria for awarding grants, to 
make recommendations regarding grant proposals, to assist in the 
development of training and educational materials, and to 
participate in the evaluation of grant programs.  The grantees 
shall provide training for program workers, offer technical 
assistance, and prepare educational materials.  Grantees must 
demonstrate that grants were used to increase participation in 
the food stamp program by creating new outreach activities, and 
not by replacing existing activities.  No more than five percent 
of the appropriation for community outreach programs shall be 
used by the commissioner for the department's administrative 
costs.  The rulemaking requirements of Minnesota Statutes, 
chapter 14 do not apply to the procedures used by the 
commissioner to request and evaluate grant proposals and to 
award grants and contracts under this section.  Distribution of 
grant money must begin within three months after any transfer of 
funds from the commissioner of health to the commissioner of 
human services. 
    Sec. 206.  Laws 1988, chapter 689, article 2, section 269, 
subdivision 2, is amended to read: 
    Subd. 2.  Section 248 is repealed effective July 1, 1990 
1991. 
    Sec. 207.  Laws 1988, chapter 719, article 8, section 32, 
is amended to read: 
    Sec. 32.  [TRANSFER OF COUNTY FOOD STAMP QUALITY CONTROL 
SYSTEM EMPLOYEES.] 
    (a) All positions covered by the Minnesota merit system 
located in Crow Wing county family social service center and in 
the Redwood county welfare department classified as food stamp 
corrective action specialist I and II and as financial assistant 
supervisor I, if the positions supervise food stamp corrective 
action specialists, are transferred to the department of human 
services and become state civil service positions. 
    (b) All incumbent employees affected by this transfer, who 
choose to transfer to state civil service positions in the 
department of human services, must be transferred with no 
reduction in salary.  Salaries of individual employees who 
transfer must be adjusted to the minimum salary or to the 
nearest equal or higher step on the state compensation plan for 
their class, whichever is greater. 
    (c) Existing sick leave and vacation accruals for an 
employee who transfers must be transferred to the department of 
human services and the employee shall accrue additional vacation 
and sick leave under the provisions of the appropriate state 
collective bargaining agreement based on the employee's years of 
service in either Crow Wing county family service center or in 
the Redwood county welfare department. 
    (d) If an employee who transfers chooses to retain the 
county coverage for employee and dependent health, dental, and 
life insurance, the department of human services shall reimburse 
the employee for one month of continued enrollment in the 
health, dental, and life insurance plans in an amount equal to 
what their former county employer would have paid for the 
coverage had the employee remained a county employee, until the 
employee is eligible for coverage under the state insurance 
plans.  
    (e) Classification seniority for an employee who transfers 
must be calculated according to the provisions of the 
appropriate state collective bargaining agreement based upon the 
employee's years of service in the county merit system.  The 
state must negotiate with the exclusive representative for the 
bargaining unit to which food stamp quality control employees 
are transferring regarding their classification seniority.  For 
purposes of calculating classification seniority for employees 
transferring into state service, a transferred employee must 
retain the same seniority ranking the employee had within the 
employee's current classification within the county relative to 
the other employees with that classification within the county.  
Classification seniority for classifications outside of the 
bargaining unit into which the employee is transferring must be 
calculated according to the provisions of the appropriate state 
collective bargaining agreement based upon the employee's years 
of service in the county merit system. 
    Sec. 208.  [REPORT ON INHALANT ABUSE DEMONSTRATION 
PROJECT.] 
    The commissioner shall prepare a report on the outcome of 
the inhalant abuse demonstration project in Minnesota Statutes, 
section 254A.145, to be presented to the legislature by February 
1, 1991.  In that report, the commissioner shall include 
information on the effectiveness of the chemical dependency 
treatment system for children under 14 years of age, 
particularly children who are inhalant abusers, and shall issue 
recommendations for the appropriate provision of services for 
this population group. 
    Sec. 209.  [PLANNING GRANT.] 
    The commissioner of human services is authorized to award, 
for the biennium ending June 30, 1991, a planning grant to a 
public or private agency or program experienced in working with 
youth and inhalant/chemical abuse, in order to establish a 
treatment program for children under age 12 identified as 
inhalant abusers.  This treatment program shall evaluate 
clients, provide treatment and aftercare services, and 
coordinate services provided with existing agencies.  The agency 
or program receiving the planning grant must report program 
results and recommendations to the commissioner of human 
services by February 15, 1991. 
    Sec. 210.  [COMMUNITY ACTION PROGRAM LEGISLATIVE TASK 
FORCE.] 
    Subdivision 1.  [PURPOSE.] On this 25th anniversary of the 
Economic Opportunity Act of 1964, the legislature recognizes the 
need to evaluate how Minnesota can, through community action 
programs, meet the needs of its low-income residents and provide 
them with opportunities to escape poverty.  With the population 
of low-income residents increasing, and federal financial 
support for community action programs decreasing, the 
legislature must evaluate the ability of community action 
programs to serve low-income residents.  The purpose of the task 
force is to chart a course for community action programs to 
ensure that the needs of low-income residents are met. 
    Subd. 2.  [MEMBERSHIP.] There is established a legislative 
task force consisting of five members of the house of 
representatives appointed by the speaker of the house and five 
members of the senate appointed by the senate majority leader.  
At least two members should be of the minority caucus. 
    Subd. 3.  [CHAIR.] The members of the task force shall 
elect one member to serve as chair of the task force.  
    Subd. 4.  [STAFF.] The task force shall use legislative 
staff to carry out its duties. 
    Subd. 5.  [DUTIES.] The task force shall examine the role 
and future of community action programs in Minnesota.  At least 
three hearings shall be held in the area of Minnesota outside 
the metropolitan area as defined in Minnesota Statutes, section 
473.121, subdivision 2.  Community action programs shall 
organize regional presentations as well as selected tours for 
the task force.  The task force shall examine and make 
recommendations on how community action programs can better 
address the needs of Minnesota's low-income residents.  The task 
force shall also examine programs, advocacy efforts, funding 
trends, and local initiatives to reduce poverty, as well as the 
state's role in supporting community action programs in 
Minnesota.  The task force shall submit a report on its findings 
and recommendations to the legislature by January 15, 1990. 
    Sec. 211.  [RULES FOR DROP-IN CARE.] 
    By April 1, 1990, the commissioner of human services must 
adopt permanent rules to amend Minnesota Rules, part 9503.0075, 
to bring that rule part into conformity with the requirements of 
section 245A.14, subdivision 6. 
    Sec. 212.  [RULES PROVIDING VARIANCES.] 
    The commissioner of human services is authorized to amend 
Minnesota Rules, part 9503.0170, subpart 6, item D, to permit 
variances from the staff distribution requirements of part 
9503.0040, subpart 2, item D; to permit variances from the age 
category grouping requirements of part 9503.0040, subpart 3, 
item B, subitem (1); and to permit variances from the 
transportation requirements of part 9503.0150, item E.  Variance 
requests submitted to the commissioner according to the 
amendments authorized in this section must comply in all 
respects with the provisions of part 9503.0170, subpart 6, items 
A to C.  The commissioner's authority to adopt rules under this 
section expires on April 1, 1990.  
    Sec. 213.  [SUPPORTIVE RESIDENTIAL PROGRAMS REPORT.] 
    Subdivision 1.  [SUPPORTIVE RESIDENTIAL PROGRAM REGULATION 
RECOMMENDATION.] By February 1, 1990, the commissioners of 
health and human services shall jointly make a recommendation to 
the legislature on the regulation and licensure of facilities 
and programs that provide housing services and provide or 
coordinate supportive services or health supervision services to 
residents.  The recommendations must address: 
    (1) the existing use of residential arrangements with a 
lodging, hotel, or food service license under Minnesota 
Statutes, chapter 157; 
    (2) existing county board and local human service agency 
administrative or certification standards for board and lodging 
houses or supportive living residences; 
    (3) county referral and placement practices for persons 
who, in addition to food or lodging services, need assistance 
with health or supportive services; 
    (4) the status of persons in these facilities with respect 
to the vulnerable adults abuse reporting act and their need for 
referral to protective services or social services for 
assessment prior to placement by the county or referral to the 
residence by the county; 
    (5) the applicability of laws governing the rights of 
patients and residents specified in Minnesota Statutes, section 
144.651, and the rights of tenants in housing; 
    (6) a determination as to the need for and degree of 
regulation of these services; 
    (7) recommendations for repeal or revision of existing 
facility and program statutes and regulations; and 
    (8) a fiscal analysis of the current costs associated with 
the provision of supportive programs and facilities, 
recommendations for methods for maximizing all funding sources 
used for these services, and an analysis of the costs for 
licensure and regulation. 
    Subd. 2.  [CONSULTATION WITH AFFECTED PARTIES.] In 
developing the recommendations, the commissioners may consult 
other state departments and agencies, the interagency board for 
quality assurance established under Minnesota Statutes, section 
144A.31, counties and other affected political subdivisions, 
advocacy groups, representatives or owners of facilities and 
programs, lodging houses and assisted or supportive living 
services, and service consumers. 
    Subd. 3.  [COUNTY REPORTING.] No later than September 1, 
1989, and annually after that date, the county board or human 
services board in each county shall report to the commissioner 
of human services the names and addresses of the owners and 
operators of all facilities and programs with which the county 
has a negotiated rate agreement and which are not licensed under 
Minnesota Statutes, chapter 144, 144A, or 245A.  The report must 
identify the amount of the negotiated rate for each facility or 
program, services other than the provision of lodging that the 
owner or operator is responsible for coordinating or providing, 
the number of persons receiving services, and the per unit cost 
for the services.  No later than September 1, 1989, the county 
board or human services agency in each county shall also provide 
the commissioner of human services with a copy of any 
administrative standards or certification standards adopted by 
or used by the county for board and lodging facilities and 
supervised living residences that are in addition to or 
different from those contained in Minnesota Rules, chapter 4625, 
or that are for facilities and programs not licensed under 
Minnesota Statutes, chapter 144, 144A, or 245A. 
    Sec. 214.  [LICENSURE EXCLUSIONS.] 
    Until July 1, 1990, Minnesota Statutes, sections 245A.01 to 
245A.16, do not apply to board and lodging establishments 
licensed by the commissioner of health that provide services for 
five or more persons whose primary diagnosis is mental illness 
and who have refused an appropriate residential program offered 
by a county agency. 
    Sec. 215.  [STUDY; BOND REQUIREMENT FOR HEARING INSTRUMENT 
SELLERS.] 
    The commissioner of health shall study issues relating to 
the requirement in Minnesota Statutes, section 153A.16, that 
hearing instruments obtain a surety bond.  The study must 
address the availability of bonds, the costs of obtaining the 
bonds, and the underwriter financial requirements for obtaining 
bonds.  The commissioner of health shall report to the 
legislature by January 1, 1990, with the results of the study 
and the commissioner's recommendations, including findings and 
recommendations on whether other mechanisms are available to 
protect purchasers of hearing instrument products and services. 
    Sec. 216.  [STUDY OF EXEMPTIONS TO REGISTRATION WITH THE 
BOARD OF UNLICENSED MENTAL HEALTH SERVICE PROVIDERS.] 
    The commissioner of human services, in consultation with 
the board of unlicensed mental health service providers, shall 
study and report to the legislature by February 15, 1990, on 
whether any of the persons exempted from registration by reason 
of their employment in a program licensed by the commissioner of 
human services should be required to register with the board. 
    Sec. 217.  [IRIS COORDINATING COMMITTEE.] 
    Subdivision 1.  [MEMBERSHIP.] The coordinating committee 
for the inventory, referral, and intake system (IRIS) required 
under Minnesota Statutes, section 268.86, subdivision 10, 
consists of the commissioners or their designees of the 
departments of human services, administration, and jobs and 
training; a representative of the information policy office; two 
members of the senate appointed under the rules of the senate; 
and two members of the house of representatives appointed under 
the rules of the house. 
    Subd. 2.  [DUTIES.] The IRIS coordinating committee shall:  
    (1) monitor the implementation of IRIS; 
    (2) oversee a delivery system study to determine the scope 
and nature of the current delivery system problems; 
    (3) oversee the development of a strategic plan for human 
service delivery which must include, in addition to planned 
improvements in delivery systems, information system objectives 
and policy requirements accomplished through IRIS; and 
    (4) evaluate the IRIS prototype pilot project conducted 
jointly by the department of human services and the department 
of jobs and training.  
    Subd. 3.  [REPORT.] The IRIS coordinating committee shall 
report to the legislature every six months beginning July 1, 
1989, on the activities of the committee.  
    Subd. 4.  [EXPIRATION.] The IRIS coordinating committee 
expires on July 1, 1991, or six months after full implementation 
of IRIS, whichever occurs later. 
    Sec. 218.  [INSTRUCTION TO REVISOR.] 
    In Minnesota Statutes 1989 Supplement and subsequent 
editions of the statutes, the revisor of statutes shall change 
the words "resident" and "patient," wherever they appear in 
Minnesota Statutes, sections 246.50 to 246.55, to "client." 
    Sec. 219.  [REPEALER.] 
    Subdivision 1.  [HEALTH DEPARTMENT HOSPITAL 
INFORMATION.] Minnesota Rules, parts 4650.0162 and 4650.0164, 
are repealed. 
    Subd. 2.  [HUMAN SERVICES LICENSING.] Laws 1987, chapter 
403, article 5, section 1, is repealed. 
    Subd. 3.  [CHEMICAL DEPENDENCY FUND.] Section 254B.09, 
subdivision 3, is repealed effective the day following final 
enactment.  Section 254B.10 is repealed effective July 1, 1989. 
    Subd. 4.  [PERMANENCY PLANNING.] Minnesota Statutes 1988, 
section 256F.05, subdivision 1, is repealed. 
    Subd. 5.  [CHILD SUPPORT.] Minnesota Statutes 1988, section 
518.613, subdivision 5; and 256.87, subdivision 4, are 
repealed.  Laws 1988, chapter 719, article 8, section 34, is 
repealed. 
    Subd. 6.  [CHILD CARE.] Minnesota Statutes 1988, sections 
245.83; 245.84; 245.85; 245.871; 245.872; 245.873; 256H.04; 
256H.05, subdivision 4; 256H.06; 256H.07, subdivisions 2, 3, and 
4; and 256H.13, are repealed. 
    Subd. 7.  [STATE FACILITY COST OF CARE.] Minnesota 
Statutes, section 246.50, subdivisions 3a, 4a, and 9, are 
repealed. 
    Sec. 220.  [EFFECTIVE DATE.] 
    Subdivision 1.  [HEALTH DEPARTMENT 
ADMINISTRATION.] Sections 3 to 6 are effective the day following 
final enactment. 
    Subd. 2.  [HUMAN SERVICES LICENSING.] Sections 62, 82, 83, 
85, 210, and 211 are effective the day following final enactment.
    Subd. 3.  [CHEMICAL DEPENDENCY FUND.] Sections 105, 106, 
and 108 to 110 are effective the day following final enactment. 
    Subd. 4.  [HEAD START.] Sections 171 to 175 are effective 
the day following final enactment. 
    Subd. 5.  [HOSPITALITY HOST PROGRAM.] Section 176 is 
effective the day following final enactment. 
    Subd. 6.  [CHILD SUPPORT.] Section 162 is effective the day 
following final enactment and applies to actions brought after 
January 1, 1986.  Section 197 is effective the day following 
final enactment and applies to support and maintenance orders 
entered or modified before, on, or after the effective date. 
    Subd. 7.  [CHILD MORTALITY REVIEW PANELS.] Section 112 is 
effective the day following final enactment. 
    Subd. 8.  [LEAD ABATEMENT.] Section 19 is effective the day 
following final enactment. 
    Subd. 9.  [BOARD OF SOCIAL WORK.] Section 40 is effective 
the day following final enactment. 
    Subd. 10.  [MARRIAGE AND DISSOLUTION FEES.] Sections 185 to 
188 are effective the day following final enactment. 
    Subd. 11.  [MARRIAGE AND FAMILY THERAPISTS.] Section 42 is 
effective retroactively to December 28, 1988. 
    Subd. 12.  [COURT-SUPERVISED SETTLEMENT ACCOUNTS.] Section 
198 is effective the day following final enactment and applies 
to issues concerning the availability of funds that arise on and 
after the effective date. 
    Subd. 13.  [REPEALER SECTION.] Section 219, subdivisions 3 
and 5, are effective the day following final enactment. 

                                ARTICLE 3

                   HEALTH CARE AND MEDICAL ASSISTANCE 
    Section 1.  Minnesota Statutes 1988, section 62A.045, is 
amended to read: 
    62A.045 [PAYMENTS TO ON BEHALF OF WELFARE RECIPIENTS.] 
    No policy of accident and sickness insurance regulated 
under this chapter; vendor of risk management services regulated 
under section 60A.23; nonprofit health service plan corporation 
regulated under chapter 62C; health maintenance organization 
regulated under chapter 62D; or self-insured plan regulated 
under chapter 62E shall contain any provision denying or 
reducing benefits because services are rendered to an insured or 
dependent a person who is eligible for or receiving medical 
assistance benefits pursuant to chapter 256B or 256D or services 
pursuant to section 252.27; 256.936; 260.251, subdivision 1a; 
261.27; or 393.07, subdivision 1 or 2. 
    Notwithstanding any law to the contrary, when a person 
covered under a policy of accident and sickness insurance, risk 
management plan, nonprofit health service plan, health 
maintenance organization, or self-insured 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 insurer for those 
services.  If the commissioner of human services notifies the 
insurer that the commissioner has made payments to the provider, 
payment for benefits or notices of denials issued by the insurer 
must be issued directly to the commissioner.  Submission by the 
department to the insurer 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 insurer 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 
insurer to the provider or the commissioner. 
    Sec. 2.  Minnesota Statutes 1988, section 62A.046, is 
amended to read: 
    62A.046 [COORDINATION OF BENEFITS.] 
    (1) No group contract providing coverage for hospital and 
medical treatment or expenses issued or renewed after August 1, 
1984, which is responsible for secondary coverage for services 
provided, may deny coverage or payment of the amount it owes as 
a secondary payor solely on the basis of the failure of another 
group contract, which is responsible for primary coverage, to 
pay for those services.  
    (2) A group contract which provides coverage of a claimant 
as a dependent of a parent who has legal responsibility for the 
dependent's medical care pursuant to a court order under section 
518.171 must make payments directly to the provider of care.  In 
such cases, liability to the insured is satisfied to the extent 
of benefit payments made to the provider.  
    (3) This section applies to an insurer, a vendor of risk 
management services regulated under section 60A.23, a nonprofit 
health service plan corporation regulated under chapter 62C and 
a health maintenance organization regulated under chapter 62D. 
Nothing in this section shall require a secondary payor to pay 
the obligations of the primary payor nor shall it prevent the 
secondary payor from recovering from the primary payor the 
amount of any obligation of the primary payor that the secondary 
payor elects to pay. 
    (4) Payments made by an enrollee or by the commissioner on 
behalf of an enrollee in the children's health plan under 
section 256.936, or a person receiving benefits under chapter 
256B or 256D, for services that are covered by the policy or 
plan of health insurance shall, for purposes of the deductible, 
be treated as if made by the insured. 
    (5) The commissioner of human services shall recover 
payments made by the children's health plan from the responsible 
insurer, for services provided by the children's health plan and 
covered by the policy or plan of health insurance. 
    Sec. 3.  [144.0723] [CLIENT REIMBURSEMENT CLASSIFICATIONS; 
PROCEDURES FOR RECONSIDERATION.] 
    Subdivision 1.  [CLIENT REIMBURSEMENT CLASSIFICATIONS.] The 
commissioner of health shall establish reimbursement 
classifications based upon the assessment of each client in 
intermediate care facilities for the mentally retarded conducted 
after December 31, 1988, under section 256B.501, subdivision 3g, 
or under rules established by the commissioner of human services 
under section 256B.501, subdivision 3j.  The reimbursement 
classifications established by the commissioner must conform to 
the rules established by the commissioner of human services to 
set payment rates for intermediate care facilities for the 
mentally retarded beginning on or after October 1, 1990. 
    Subd. 2.  [NOTICE OF CLIENT REIMBURSEMENT 
CLASSIFICATION.] The commissioner of health shall notify each 
client and intermediate care facility for the mentally retarded 
in which the client resides of the reimbursement classification 
established under subdivision 1.  The notice must inform the 
client of the classification that was assigned, the opportunity 
to review the documentation supporting the classification, the 
opportunity to obtain clarification from the commissioner, and 
the opportunity to request a reconsideration of the 
classification.  The notice of classification must be sent by 
first-class mail.  The individual client notices may be sent to 
the client's intermediate care facility for the mentally 
retarded for distribution to the client.  The facility must 
distribute the notice to the client's case manager and to the 
client or to the client's representative.  This notice must be 
distributed within three working days after the facility 
receives the notices from the department.  For the purposes of 
this section, "representative" includes the client's legal 
representative as defined in Minnesota Rules, part 9525.0015, 
subpart 18, the person authorized to pay the client's facility 
expenses, or any other individual designated by the client. 
    Subd. 3.  [REQUEST FOR RECONSIDERATION.] The client, 
client's representative, or the intermediate care facility for 
the mentally retarded may request that the commissioner 
reconsider the assigned classification.  The request for 
reconsideration must be submitted in writing to the commissioner 
within 30 days after the receipt of the notice of client 
classification.  The request for reconsideration must include 
the name of the client, the name and address of the facility in 
which the client resides, the reasons for the reconsideration, 
the requested classification changes, and documentation 
supporting the requested classification.  The documentation 
accompanying the reconsideration request is limited to 
documentation establishing that the needs of the client at the 
time of the assessment resulting in the disputed classification 
justify a change of classification. 
    Subd. 4.  [ACCESS TO INFORMATION.] Upon written request, 
the intermediate care facility for the mentally retarded must 
give the client's case manager, the client, or the client's 
representative a copy of the assessment form and the other 
documentation that was given to the department to support the 
assessment findings.  The facility shall also provide access to 
and a copy of other information from the client's record that 
has been requested by or on behalf of the client to support a 
client's reconsideration request.  A copy of any requested 
material must be provided within three working days after the 
facility receives a written request for the information.  If the 
facility fails to provide the material within this time, it is 
subject to the issuance of a correction order and penalty 
assessment.  Notwithstanding this section, any order issued by 
the commissioner under this subdivision must require that the 
facility immediately comply with the request for information and 
that as of the date the order is issued, the facility shall 
forfeit to the state a $100 fine the first day of noncompliance, 
and an increase in the $100 fine by $50 increments for each day 
the noncompliance continues. 
    Subd. 5.  [FACILITY'S REQUEST FOR RECONSIDERATION.] (a) In 
addition to the information required in subdivision 3, a 
reconsideration request from an intermediate care facility for 
the mentally retarded must contain the following information:  
    (1) the date the reimbursement classification notices were 
received by the facility; 
    (2) the date the classification notices were distributed to 
the client's case manager and to the client or to the client's 
representative; and 
    (3) a copy of a notice sent to the client's case manager, 
and to the client or client's representative that tells the 
client or the client's representative (i) that a reconsideration 
of the client's reimbursement classification is being requested; 
(ii) the reason for the request; (iii) that the client's rate 
may change if the request is approved by the department; (iv) 
that copies of the facility's request and supporting 
documentation are available for review; and (v) that the client 
also has the right to request a reconsideration.  
    (b) If the facility fails to provide this information with 
the reconsideration request, the request must be denied, and the 
facility may not make further reconsideration requests on that 
specific reimbursement classification. 
    Subd. 6.  [RECONSIDERATION.] The commissioner's 
reconsideration must be made by individuals not involved in 
reviewing the assessment that established the disputed 
classification.  The reconsideration must be based upon the 
initial assessment and upon the information provided to the 
commissioner under subdivisions 3 and 5.  If necessary for 
evaluating the reconsideration request, the commissioner may 
conduct on-site reviews.  At the commissioner's discretion, the 
commissioner may review the reimbursement classifications 
assigned to all clients in the facility.  Within 15 working days 
after receiving the request for reconsideration, the 
commissioner shall affirm or modify the original client 
classification.  The original classification must be modified if 
the commissioner determines that the assessment resulting in the 
classification did not accurately reflect the status of the 
client at the time of the assessment.  The client and the 
intermediate care facility for the mentally retarded shall be 
notified within five working days after the decision is made.  
The commissioner's decision under this subdivision is the final 
administrative decision of the agency. 
    Subd. 7.  [AUDIT AUTHORITY.] The department of health may 
audit assessments of clients in intermediate care facilities for 
the mentally retarded.  The audits may be conducted at the 
facility, and the department may conduct the audits on an 
unannounced basis. 
    Subd. 8.  [RULEMAKING.] The commissioner of health shall 
adopt rules necessary to implement these provisions. 
    Sec. 4.  Minnesota Statutes 1988, section 144.50, is 
amended by adding a subdivision to read: 
    Subd. 7.  [RESIDENTS WITH AIDS OR HEPATITIS.] Boarding care 
homes and supervised living facilities licensed by the 
commissioner of health must accept as a resident a person who is 
infected with the human immunodeficiency virus or the hepatitis 
B virus unless the facility cannot meet the needs of the person 
under Minnesota Rules, part 4665.0200, subpart 5, or part 
4655.1500, subpart 2, or the person is otherwise not eligible 
for admission to the facility under state laws or rules. 
    Sec. 5.  Minnesota Statutes 1988, section 144.651, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
"patient" means a person who is admitted to an acute care 
inpatient facility for a continuous period longer than 24 hours, 
for the purpose of diagnosis or treatment bearing on the 
physical or mental health of that person.  "Patient" also means 
a minor who is admitted to a residential program as defined in 
section 253C.01.  For purposes of subdivisions 1, 3 to 16, 18, 
20 and 30, "patient" also means any person who is receiving 
mental health treatment on an outpatient basis or in a community 
support program or other community-based program.  "Resident" 
means a person who is admitted to a nonacute care facility 
including extended care facilities, nursing homes, and board and 
boarding care homes for care required because of prolonged 
mental or physical illness or disability, recovery from injury 
or disease, or advancing age.  
    Sec. 6.  Minnesota Statutes 1988, section 144A.01, is 
amended by adding a subdivision to read: 
    Subd. 3a.  "Certified" means certified for participation as 
a provider in the Medicare or Medicaid programs under title 
XVIII or XIX of the Social Security Act. 
    Sec. 7.  Minnesota Statutes 1988, section 144A.01, is 
amended by adding a subdivision to read: 
    Subd. 4a.  "Emergency" means a situation or physical 
condition that creates or probably will create an immediate and 
serious threat to a resident's health or safety. 
    Sec. 8.  Minnesota Statutes 1988, section 144A.04, 
subdivision 7, is amended to read: 
    Subd. 7.  [MINIMUM NURSING STAFF REQUIREMENT.] 
Notwithstanding the provisions of Minnesota Rules, part 
4655.5600, the minimum staffing standard for nursing personnel 
in certified nursing homes is as follows: 
    (a) The minimum number of hours of nursing personnel to be 
provided in a nursing home is the greater of two hours per 
resident per 24 hours or 0.95 hours per standardized resident 
day. 
    (b) For purposes of this subdivision, "hours of nursing 
personnel" means the paid, on-duty, productive nursing hours of 
all nurses and nursing assistants, calculated on the basis of 
any given 24-hour period.  "Productive nursing hours" means all 
on-duty hours during which nurses and nursing assistants are 
engaged in nursing duties.  Examples of nursing duties may be 
found in Minnesota Rules, parts 4655.5900, 4655.6100, and 
4655.6400.  Not included are vacations, holidays, sick leave, 
in-service classroom training, or lunches.  Also not included 
are the nonproductive nursing hours of the in-service training 
director.  In homes with more than 60 licensed beds, the hours 
of the director of nursing are excluded.  "Standardized resident 
day" means the sum of the number of residents in each case mix 
class multiplied by the case mix weight for that resident class, 
as found in Minnesota Rules, part 9549.0059, subpart 2, 
calculated on the basis of a facility's census for any given day.
    (c) Calculation of nursing hours per standardized resident 
day is performed by dividing total hours of nursing personnel 
for a given period by the total of standardized resident days 
for that same period. 
    (d) A nursing home that is issued a notice of noncompliance 
under section 144A.10, subdivision 5, for a violation of this 
subdivision, shall be assessed a civil fine of $300 for each day 
of noncompliance, subject to section 144A.10, subdivisions 7 and 
8. 
    Sec. 9.  Minnesota Statutes 1988, section 144A.04, is 
amended by adding a subdivision to read: 
    Subd. 8.  [RESIDENTS WITH AIDS OR HEPATITIS.] A nursing 
home must accept as a resident a person who is infected with the 
human immunodeficiency virus or the hepatitis B virus unless the 
facility cannot provide appropriate care for the person under 
Minnesota Rules, part 4655.1500, subpart 2, or the person is 
otherwise not eligible for admission under state laws and rules. 
    Sec. 10.  Minnesota Statutes 1988, section 144A.04, is 
amended by adding a subdivision to read: 
    Subd. 9.  [CARDIOPULMONARY RESUSCITATION 
TRAINING.] Effective October 1, 1989, a nursing home must have 
on duty at all times at least one staff member who is trained in 
single rescuer adult cardiopulmonary resuscitation and who has 
completed the initial training or a refresher course within the 
previous two years. 
    Sec. 11.  Minnesota Statutes 1988, section 144A.071, 
subdivision 3, is amended to read: 
    Subd. 3.  [EXCEPTIONS.] The commissioner of health, in 
coordination with the commissioner of human services, may 
approve the addition of a new certified bed or the addition of a 
new licensed nursing home bed, under the following conditions:  
    (a) to replace a bed decertified after May 23, 1983, or to 
address an extreme hardship situation, in a particular county 
that, together with all contiguous Minnesota counties, has fewer 
nursing home beds per 1,000 elderly than the number that is ten 
percent higher than the national average of nursing home beds 
per 1,000 elderly individuals.  For the purposes of this 
section, the national average of nursing home beds shall be the 
most recent figure that can be supplied by the federal health 
care financing administration and the number of elderly in the 
county or the nation shall be determined by the most recent 
federal census or the most recent estimate of the state 
demographer as of July 1, of each year of persons age 65 and 
older, whichever is the most recent at the time of the request 
for replacement.  In allowing replacement of a decertified bed, 
the commissioners shall ensure that the number of added or 
recertified beds does not exceed the total number of decertified 
beds in the state in that level of care.  An extreme hardship 
situation can only be found after the county documents the 
existence of unmet medical needs that cannot be addressed by any 
other alternatives; 
     (b) to certify a new bed in a facility that commenced 
construction before May 23, 1983.  For the purposes of this 
section, "commenced construction" means that all of the 
following conditions were met:  the final working drawings and 
specifications were approved by the commissioner of health; the 
construction contracts were let; a timely construction schedule 
was developed, stipulating dates for beginning, achieving 
various stages, and completing construction; and all zoning and 
building permits were secured; 
     (c) to certify beds in a new nursing home that is needed in 
order to meet the special dietary needs of its residents, if: 
the nursing home proves to the commissioner's satisfaction that 
the needs of its residents cannot otherwise be met; elements of 
the special diet are not available through most food 
distributors; and proper preparation of the special diet 
requires incurring various operating expenses, including extra 
food preparation or serving items, not incurred to a similar 
extent by most nursing homes; 
     (d) to license a new nursing home bed in a facility that 
meets one of the exceptions contained in clauses (a) to (c); 
     (e) to license nursing home beds in a facility that has 
submitted either a completed licensure application or a written 
request for licensure to the commissioner before March 1, 1985, 
and has either commenced any required construction as defined in 
clause (b) before May 1, 1985, or has, before May 1, 1985, 
received from the commissioner approval of plans for phased-in 
construction and written authorization to begin construction on 
a phased-in basis.  For the purpose of this clause, 
"construction" means any erection, building, alteration, 
reconstruction, modernization, or improvement necessary to 
comply with the nursing home licensure rules; 
     (f) to certify or license new beds in a new facility that 
is to be operated by the commissioner of veterans' affairs or 
when the costs of constructing and operating the new beds are to 
be reimbursed by the commissioner of veterans' affairs or the 
United States Veterans Administration; 
     (g) to license or certify beds in a new facility 
constructed to replace a facility that was destroyed after June 
30, 1987, by fire, lightning, or other hazard provided:  
     (1) destruction was not caused by the intentional act of or 
at the direction of a controlling person of the facility; 
     (2) at the time the facility was destroyed the controlling 
persons of the facility maintained insurance coverage for the 
type of hazard that occurred in an amount that a reasonable 
person would conclude was adequate; 
     (3) the net proceeds from an insurance settlement for the 
damages caused by the hazard are applied to the cost of the new 
facility; 
     (4) the new facility is constructed on the same site as the 
destroyed facility or on another site subject to the 
restrictions in section 144A.073, subdivision 5; and 
     (5) the number of licensed and certified beds in the new 
facility does not exceed the number of licensed and certified 
beds in the destroyed facility; 
     (h) to license or certify beds that are moved from one 
location to another within a nursing home facility, provided the 
total costs of remodeling performed in conjunction with the 
relocation of beds does not exceed ten percent of the appraised 
value of the facility or $200,000, whichever is less, or to 
license or certify beds in a facility for which the total costs 
of remodeling or renovation exceed ten percent of the appraised 
value of the facility or $200,000, whichever is less, if the 
facility makes a written commitment to the commissioner of human 
services that it will not seek to receive an increase in its 
property-related payment rate by reason of the remodeling or 
renovation; 
     (i) to license or certify beds in a facility that has been 
involuntarily delicensed or decertified for participation in the 
medical assistance program, provided that an application for 
relicensure or recertification is submitted to the commissioner 
within 120 days after delicensure or decertification; 
     (j) to license or certify beds in a project recommended for 
approval by the interagency board for quality assurance under 
section 144A.073; 
    (k) to license nursing home beds in a hospital facility 
that are relocated from a different hospital facility under 
common ownership or affiliation, provided: (1) the hospital in 
which the nursing home beds were originally located ceases to 
function as an acute care facility, or necessary support 
services for nursing homes as required for licensure under 
sections 144A.02 to 144A.10, such as dietary service, physical 
plant, housekeeping, physical therapy, occupational therapy, and 
administration, are no longer available from the original 
hospital site; and (2) the nursing home beds are not certified 
for participation in the medical assistance program; and (2) the 
relocation of nursing home beds under this clause should not 
exceed a radius of six miles; 
     (1) to license or certify beds that are moved from one 
location to another within an existing identifiable complex of 
hospital buildings, from a hospital-attached nursing home to the 
hospital building, or from a separate nursing home to a building 
formerly used as a hospital, provided the original nursing home 
building will no longer be operated as a nursing home and the 
building to which the beds are moved will no longer be operated 
as a hospital.  As a condition of receiving a license or 
certification under this clause, the facility must make a 
written commitment to the commissioner of human services that it 
will not seek to receive an increase in its property-related 
payment rate as a result of the relocation.  At the time of the 
licensure and certification of the nursing home beds, the 
commissioner of health shall delicense the same number of acute 
care beds within the existing complex of hospital buildings or 
building.  Relocation of nursing home beds under this clause is 
subject to the limitations in section 144A.073, subdivision 5; 
     (m) to license or certify beds that are moved from an 
existing state nursing home to a different state facility, 
provided there is no net increase in the number of state nursing 
home beds; 
     (n) to license new nursing home beds in a continuing care 
retirement community affiliated with a national referral center 
engaged in substantial programs of patient care, medical 
research, and medical education meeting state and national needs 
that receives more than 40 percent of its residents from outside 
the state for the purpose of meeting contractual obligations to 
residents of the retirement community, provided the facility 
makes a written commitment to the commissioner of human services 
that it will not seek medical assistance certification for the 
new beds; 
     (o) to certify or license new beds in a new facility on the 
Red Lake Indian reservation for which payments will be made 
under the Indian Health Care Improvement Act, Public Law Number 
94-437, at the rates specified in United States Code, title 42, 
section 1396d(b); 
     (p) to certify and license as nursing home beds boarding 
care beds in a certified boarding care facility if the beds meet 
the standards for nursing home licensure and if the cost of any 
remodeling of the facility does not exceed ten percent of the 
appraised value of the facility or $200,000, whichever is less.  
If boarding care beds are licensed as nursing home beds, the 
number of boarding care beds in the facility must not increase 
in the future.  The provisions contained in section 144A.073 
regarding the upgrading of the facilities do not apply to 
facilities that satisfy these requirements; or 
    (q) to license and certify up to 40 beds transferred from 
an existing facility owned and operated by the Amherst H. Wilder 
Foundation in the city of Saint Paul to a new unit at the same 
location as the existing facility that will serve persons with 
Alzheimer's disease and other related disorders.  The transfer 
of beds may occur gradually or in stages, provided the total 
number of beds transferred does not exceed 40.  At the time of 
licensure and certification of a bed or beds in the new unit, 
the commissioner of health shall delicense and decertify the 
same number of beds in the existing facility.  As a condition of 
receiving a license or certification under this clause, the 
facility must make a written commitment to the commissioner of 
human services that it will not seek to receive an increase in 
its property-related payment rate as a result of the transfers 
allowed under this clause; or 
     (r) to license and certify nursing home beds to replace 
currently licensed and certified boarding care beds which may be 
located either in a remodeled or renovated boarding care or 
nursing home facility or in a remodeled, renovated, newly 
constructed, or replacement nursing home facility within the 
identifiable complex of health care facilities in which the 
currently licensed boarding care beds are presently located, 
provided that the number of boarding care beds in the facility 
or complex are decreased by the number to be licensed as nursing 
home beds and further provided that, if the total costs of new 
construction, replacement, remodeling, or renovation exceed ten 
percent of the appraised value of the facility or $200,000, 
whichever is less, the facility makes a written commitment to 
the commissioner of human services that it will not seek to 
receive an increase in its property-related payment rate by 
reason of the new construction, replacement, remodeling, or 
renovation.  The provisions contained in section 144A.073 
regarding the upgrading of facilities do not apply to facilities 
that satisfy these requirements. 
    Sec. 12.  Minnesota Statutes 1988, section 144A.073, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given them: 
    (a) "Conversion" means the relocation of a nursing home bed 
from a nursing home to an attached hospital. 
    (b) "Renovation" means extensive remodeling of, or 
construction of an addition to, a facility on an existing site 
with a total cost exceeding ten percent of the appraised value 
of the facility or $200,000, whichever is less. 
    (c) "Replacement" means the demolition and or 
reconstruction of all or part of an existing facility. 
    (d) "Upgrading" means a change in the level of licensure of 
a bed from a boarding care bed to a nursing home bed in a 
certified boarding care facility. 
    Sec. 13.  Minnesota Statutes 1988, section 144A.10, is 
amended by adding a subdivision to read: 
    Subd. 6b.  [FINES FOR FEDERAL CERTIFICATION 
DEFICIENCIES.] If the commissioner determines that a nursing 
home or certified boarding care home does not meet a requirement 
of section 1919(b), (c), or (d), of the Social Security Act, or 
any regulation adopted under that section of the Social Security 
Act, the nursing home or certified boarding care home may be 
assessed a civil fine for each day of noncompliance and until a 
notice of correction is received by the commissioner under 
subdivision 7.  Money collected because of these fines must be 
applied to the protection of the health or property of residents 
of nursing facilities the commissioner finds deficient.  A fine 
for a specific deficiency may not exceed $500 for each day of 
noncompliance.  The commissioner shall adopt rules establishing 
a schedule of fines.  
    Sec. 14.  Minnesota Statutes 1988, section 144A.10, is 
amended by adding a subdivision to read: 
    Subd. 6c.  [OVERLAP OF FINES.] If a nursing home is subject 
to fines under both subdivisions 6 and 6b for the same 
requirement, condition, situation, or practice, the commissioner 
shall assess either the fine provided by subdivision 6 or the 
fine provided by subdivision 6b. 
    Sec. 15.  Minnesota Statutes 1988, section 144A.10, is 
amended by adding a subdivision to read: 
    Subd. 6d.  [SCHEDULE OF FINES.] (a) The schedule of fines 
for noncompliance with correction orders issued to nursing homes 
that was adopted under the provisions of section 144A.10, 
subdivision 6, and in effect on May 1, 1989, is effective until 
repealed, modified, or superseded by rule.  
    (b) By September 1, 1990, the commissioner shall amend the 
schedule of fines to increase to $250 the fines for violations 
of section 144.561, subdivisions 18, 20, 21, 22, 27, and 30, and 
for repeated violations.  
    (c) The commissioner shall adopt rules establishing the 
schedule of fines for deficiencies in the requirements of 
section 1919(b), (c), and (d), of the Social Security Act, or 
regulations adopted under that section of the Social Security 
Act. 
    Sec. 16.  Minnesota Statutes 1988, section 144A.10, is 
amended by adding a subdivision to read: 
    Subd. 8a.  [FINE FOR MISALLOCATION OF NURSING STAFF.] Upon 
issuing a correction order to a nursing home under subdivision 4 
for a violation of Minnesota Rules, part 4655.5600, because of 
nursing staff performing duties such as washing wheelchairs or 
beds of discharged residents, or other housekeeping or laundry 
duties not related to the direct nursing care of residents, the 
commissioner shall impose a civil fine of $500 per day.  A fine 
under this subdivision accrues in accordance with subdivision 6 
and is subject to subdivision 8 for purposes of recovery and 
hearings. 
    Sec. 17.  Minnesota Statutes 1988, section 144A.10, is 
amended by adding a subdivision to read: 
    Subd. 8b.  [RESIDENT ADVISORY COUNCIL.] Each nursing home 
or boarding care home shall establish a resident advisory 
council and a family council, unless fewer than three persons 
express an interest in participating.  If one or both councils 
do not function, the nursing home or boarding care home shall 
document its attempts to establish the council or councils at 
least once each calendar year.  This subdivision does not alter 
the rights of residents and families provided by section 
144.651, subdivision 27.  A nursing home or boarding care home 
that is issued a notice of noncompliance with a correction order 
for violation of this subdivision shall be assessed a civil fine 
of $100 for each day of noncompliance. 
    Sec. 18.  [144A.103] [PENALTY FOR DEATH OF A RESIDENT.] 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, "abuse" and "neglect" have the meanings given in 
section 626.557, subdivision 2, paragraphs (d) and (e). 
    Subd. 2.  [PENALTY.] Whenever the commissioner 
substantiates that a situation existed that constituted abuse or 
neglect by a nursing home and that could foreseeably result in 
death or injury to a resident, and the abuse or neglect 
contributed to the resident's death, the nursing home must be 
assessed a civil fine of $1,000.  The assessment of a fine under 
this section does not preclude the use of any other remedy.  
    Subd. 3.  [RECOVERY OF FINES; HEARING.] A nursing home that 
is assessed a fine under this section must pay the fine no later 
than 15 days after receipt of the notice of assessment.  The 
assessment shall be stayed if the nursing home makes a written 
request for a hearing on the assessment within 15 days after 
receipt of the notice of assessment.  After submission of a 
timely request, a hearing must be conducted as a contested case 
hearing under chapter 14 no later than 30 days after the 
request.  If a nursing home does not pay the fine as required by 
this section, the commissioner of health shall notify the 
commissioner of human services, who shall deduct the amount of 
the fine from reimbursement payments due or to be due the 
nursing home under chapter 256B. 
    Sec. 19.  [144A.105] [SUSPENSION OF ADMISSIONS.] 
    Subdivision 1.  [CIRCUMSTANCES FOR SUSPENSIONS.] The 
commissioner of health may suspend admissions to a nursing home 
or certified boarding care home when:  
    (1) the commissioner has issued a penalty assessment or the 
nursing home has a repeated violation for noncompliance with 
section 144A.04, subdivision 7, or the portion of Minnesota 
Rules, part 4655.5600, subpart 2, that establishes minimum 
nursing personnel requirements; 
    (2) the commissioner has issued a penalty assessment or the 
nursing home or certified boarding care home has repeated 
violations for not maintaining a sufficient number or type of 
nursing personnel to meet the needs of the residents, as 
required by Minnesota Rules, parts 4655.5100 to 4655.6200; 
    (3) the commissioner has determined that an emergency 
exists; 
    (4) the commissioner has initiated proceedings to suspend, 
revoke, or not renew the license of the nursing home or 
certified boarding care home; or 
     (5) the commissioner determines that the remedy of denial 
of payment, as provided by subparagraph 1919(h)(2)(A)(i) of the 
Social Security Act, is to be imposed under section 1919(h) of 
the Social Security Act, or regulations adopted under that 
section of the Social Security Act. 
     Subd. 2.  [ORDER.] If the commissioner suspends admissions 
under subdivision 1, the commissioner shall notify the nursing 
home or certified boarding care home, by written order, that 
admissions to the nursing home or certified boarding care home 
will be suspended beginning at a time specified in the order.  
The suspension is effective no earlier than 48 hours after the 
nursing home or certified boarding care home receives the order, 
unless the order is due to an emergency under subdivision 1, 
clause (3).  The order may be served on the administrator of the 
nursing home or certified boarding care home, or the designated 
agent in charge of the home, by personal service or by certified 
or registered mail with a return receipt of delivery.  The order 
shall specify the reasons for the suspension, the corrective 
action required to be taken by the nursing home or certified 
boarding care home, and the length of time the suspension will 
be in effect.  The nursing home or certified boarding care home 
shall not admit any residents after the effective time of the 
order.  In determining the length of time for the suspension, 
the commissioner shall consider the reasons for the suspension, 
the performance history of the nursing home, and the needs of 
the residents. 
    Subd. 3.  [CONFERENCE.] After receiving the order for 
suspension, the nursing home or certified boarding care home may 
request a conference with the commissioner to present reasons 
why the suspension should be modified or should not go into 
effect.  The request need not be in writing.  If a conference is 
requested within 24 hours after receipt of the order, the 
commissioner shall hold the conference before the effective time 
of the suspension, unless the order for suspension is due to an 
emergency under subdivision 1, clause (3).  If a conference is 
not requested within 24 hours after receipt of the order, the 
nursing home or certified boarding care home may request a 
conference and the commissioner shall schedule the conference as 
soon as practicable.  The conference may be held in person or by 
telephone.  After a conference, the commissioner may affirm, 
rescind, or modify the order. 
     Subd. 4.  [CORRECTION.] The nursing home or certified 
boarding care home shall notify the commissioner, in writing, 
when any required corrective action has been completed.  The 
commissioner may verify the corrective action by inspection 
under section 144A.10.  The commissioner may extend the initial 
suspension period by written notice to the nursing home or 
certified boarding care home. 
    Subd. 5.  [NOTIFICATION OF COMMISSIONER OF HUMAN SERVICES.] 
Whenever the commissioner suspends admissions to a nursing home 
or certified boarding care home, the commissioner shall notify 
the commissioner of human services of the order and of any 
modifications to the order. 
    Subd. 6.  [HEARING.] A nursing home or certified boarding 
care home may appeal from an order for suspension of admissions 
issued under subdivision 1.  To appeal, the nursing home or 
certified boarding care home shall file with the commissioner a 
written notice of appeal.  The appeal must be received by the 
commissioner within ten days after the date of receipt of the 
order for suspension by the nursing home or certified boarding 
care home.  Within 15 calendar days after receiving an appeal, 
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 of the parties.  
Regardless of any appeal, the order for suspension of admissions 
remains in effect until final resolution of the appeal. 
    Sec. 20.  Minnesota Statutes 1988, section 144A.11, is 
amended by adding a subdivision to read:  
    Subd. 2a.  [NOTICE TO RESIDENTS.] Within five working days 
after proceedings are initiated by the commissioner to revoke, 
suspend, or not renew a nursing home license, the controlling 
person of the nursing home or a designee must provide to the 
commissioner and the ombudsman for older Minnesotans the names 
of residents and the names and addresses of the residents' 
guardians, representatives, and designated family contacts.  The 
controlling person or designees must provide updated information 
each month until the proceeding is concluded.  If the 
controlling person or designee fails to provide the information 
within this time, the nursing home is subject to the issuance of 
a correction order and penalty assessment under sections 144.653 
and 144A.10.  Notwithstanding those sections, any correction 
order issued under this subdivision must require that the 
facility immediately comply with the request for information and 
that as of the date of the issuance of the correction order, the 
facility shall forfeit to the state a $100 fine the first day of 
noncompliance, and an increase in the $100 fine by $50 
increments for each day the noncompliance continues.  
Information provided under this subdivision may be used by the 
commissioner or the ombudsman only for the purpose of providing 
affected consumers information about the status of the 
proceedings.  Within ten working days after the commissioner 
initiates proceedings to revoke, suspend, or not renew a nursing 
home license, the commissioner of health shall send a written 
notice of the action and the process involved to each resident 
of the nursing home and the resident's legal guardian, 
representative, or designated family contact.  The commissioner 
shall provide the ombudsman with monthly information on the 
department's actions and the status of the proceedings.  
    Sec. 21.  Minnesota Statutes 1988, section 144A.11, 
subdivision 3, is amended to read: 
    Subd. 3.  [HEARING.] No nursing home license may be 
suspended or revoked, and renewal may not be denied, without a 
hearing held as a contested case in accordance with chapter 14.  
The hearing must commence within 60 days after the proceedings 
are initiated.  If the controlling person designated under 
section 144A.03, subdivision 2, as an agent to accept service on 
behalf of all of the controlling persons of the nursing home has 
been notified by the commissioner of health that the facility 
will not receive an initial license or that a license renewal 
has been denied, the controlling person or a legal 
representative on behalf of the nursing home may request and 
receive a hearing on the denial.  This hearing shall be held as 
a contested case in accordance with chapter 14. 
    Sec. 22.  Minnesota Statutes 1988, section 144A.12, 
subdivision 1, is amended to read: 
    Subdivision 1.  [INJUNCTIVE RELIEF.] In addition to any 
other remedy provided by law, the commissioner of health may 
bring an action in the district court in Ramsey or Hennepin 
county or in the district in which a nursing home is located to 
enjoin a controlling person or an employee of the nursing home 
from illegally engaging in activities regulated by sections 
144A.01 to 144A.16.  A temporary restraining order may be 
granted by the court in the proceeding if continued activity by 
the controlling person or employee would create an imminent risk 
of harm to a resident of the facility. 
    Sec. 23.  Minnesota Statutes 1988, section 144A.15, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PETITION, NOTICE.] In addition to any 
other remedy provided by law, the commissioner of health may 
petition the district court in Ramsey or Hennepin county or in 
the district in which a nursing home or certified boarding care 
home is located for an order directing the controlling persons 
of the nursing home or certified boarding care home to show 
cause why the commissioner of health or a designee should not be 
appointed receiver to operate the facility.  The petition to the 
district court shall contain proof by affidavit that the 
commissioner of health has either commenced license suspension 
or revocation proceedings, suspended or revoked a license, or 
decided not to renew the nursing home license, or that 
violations of section 1919(b), (c), or (d), of the Social 
Security Act, or the regulations adopted under that section, or 
violations of state law or rules, create an emergency.  The 
order to show cause shall be returnable not less than five days 
after service is completed and shall provide for personal 
service of a copy to the nursing home administrator and to the 
persons designated as agents by the controlling persons to 
accept service on their behalf pursuant to section 144A.03, 
subdivision 2. 
    Sec. 24.  Minnesota Statutes 1988, section 144A.15, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [EMERGENCY PROCEDURE.] If it appears from the 
petition filed under subdivision 1, or from an affidavit or 
affidavits filed with the petition, or from testimony of 
witnesses under oath when the court determines that this is 
necessary, that there is probable cause to believe that an 
emergency exists in a nursing home or certified boarding care 
home, the court shall issue a temporary order for appointment of 
a receiver within five days after receipt of the petition.  
Notice of the petition shall be served personally on the nursing 
home administrator and on the persons designated as agents by 
the controlling persons to accept service on their behalf 
according to section 144A.03, subdivision 2.  A hearing on the 
petition shall be held within five days after notice is served 
unless the administrator or designated agent consents to a later 
date.  After the hearing, the court may continue, modify, or 
terminate the temporary order. 
    Sec. 25.  Minnesota Statutes 1988, section 144A.15, is 
amended by adding a subdivision to read: 
    Subd. 6.  [RATE RECOMMENDATION.] The commissioner may 
recommend to the commissioner of human services a review of the 
rates for a nursing home or boarding care home that participates 
in the medical assistance program that is in involuntary 
receivership, and that has needs or deficiencies documented by 
the department of health.  If the commissioner of health 
determines that a review of the rate under section 256B.431 is 
needed, the commissioner shall provide the commissioner of human 
services with: 
    (1) a copy of the order or determination that cites the 
deficiency or need; and 
    (2) the commissioner's recommendation for additional staff 
and additional annual hours by type of employee and additional 
consultants, services, supplies, equipment, or repairs necessary 
to satisfy the need or deficiency. 
    Sec. 26.  [144A.135] [TRANSFER AND DISCHARGE APPEALS.] 
    The commissioner shall establish a mechanism for hearing 
appeals on transfers and discharges of residents by nursing 
homes or boarding care homes licensed by the commissioner.  The 
commissioner may adopt permanent rules to implement this section.
    Sec. 27.  [144A.155] [PLACEMENT OF MONITOR.] 
    Subdivision 1.  [AUTHORITY.] The commissioner may place a 
person to act as a monitor in a nursing home or certified 
boarding care home in any of the circumstances listed in clause 
(1) or (2): 
    (1) in any situation for which a receiver may be appointed 
under section 144A.15; or 
    (2) when the commissioner determines that violations of 
sections 144.651, 144A.01 to 144A.16, 626.557, or section 
1919(b), (c), or (d), of the Social Security Act, or rules or 
regulations adopted under those provisions, require extended 
surveillance to enforce compliance or protect the health, 
safety, or welfare of the residents. 
    Subd. 2.  [DUTIES OF MONITOR.] The monitor shall observe 
the operation of the home, provide advice to the home on methods 
of complying with state and federal rules and regulations, where 
documented deficiencies from the regulations exist, and 
periodically shall submit a written report to the commissioner 
on the ways in which the home meets or fails to meet state and 
federal rules and regulations. 
    Subd. 3.  [SELECTION OF MONITOR.] The commissioner may 
select as monitor an employee of the department or may contract 
with any other individual to serve as a monitor.  The 
commissioner shall publish a notice in the State Register that 
requests proposals from individuals who wish to be considered 
for placement as monitors, and that sets forth the criteria for 
selecting individuals as monitors.  The commissioner shall 
maintain a list of individuals who are not employees of the 
department who are interested in serving as monitors.  The 
commissioner may contract with those individuals determined to 
be qualified. 
    Subd. 4.  [PAYMENT OF MONITOR.] A nursing home or certified 
boarding care home in which a monitor is placed shall pay to the 
department the actual costs associated with the placement, 
unless payment would create an undue hardship for the home. 
    Sec. 28.  Minnesota Statutes 1988, section 144A.61, is 
amended to read: 
    144A.61 [NURSING ASSISTANT TRAINING.] 
    Subdivision 1.  [PURPOSE AUTHORITY.] The purpose of this 
section and section 144A.611 is to improve the quality of care 
provided to patients of nursing homes by assuring that approved 
programs for the training of nursing assistants are established 
as necessary throughout the state.  The commissioner of health, 
in consultation with the commissioner of human services, shall 
implement the provisions of Public Law Number 100-203, the 
Omnibus Budget Reconciliation Act of 1987, that relate to 
training and competency evaluation programs, testing, and the 
establishment of a registry for nursing assistants in nursing 
homes and boarding care homes certified for participation in the 
medical assistance or Medicare programs.  The commissioner of 
health may adopt permanent rules that may be necessary to 
implement Public Law Number 100-203 and provisions of this 
section.  The commissioner of health may contract with outside 
parties for the purpose of implementing the provisions of this 
section.  At the request of the commissioner, the board of 
nursing may establish training and competency evaluation 
standards; review, evaluate, and approve curricula; review and 
approve training programs; and establish a registry of nursing 
assistants. 
    Subd. 2.  [NURSING ASSISTANTS.] For the purposes of this 
section and section 144A.611 "nursing assistant" means a nursing 
home or certified boarding care home employee, including a 
nurse's aide or an orderly, who is assigned by the director of 
nursing to provide or assist in the provision of direct patient 
care nursing or nursing-related services under the supervision 
of a registered nurse.  "Nursing assistant" includes nursing 
assistants employed by nursing pool companies but does not 
include a licensed health professional.  The commissioner 
of education health may, by rule, establish categories of 
nursing assistants who are not required to comply with the 
educational requirements of this section and section 144A.611. 
    Subd. 3.  [CURRICULA; TEST.] The commissioner of state 
director of vocational technical education shall develop 
curricula and a test to be used for nursing assistant training 
programs for employees of nursing homes and boarding care 
homes.  The curricula, as reviewed, approved, and evaluated by 
the board of nursing, shall be utilized by all facilities, 
institutions, or programs offering nursing assistant training 
programs.  The test may be given by any technical institute or 
community college in accordance with instructions from the 
commissioner of education.  The commissioner of education may 
prescribe a fee for the administration of the test not to exceed 
$30.  
    Subd. 3a.  [COMPETENCY EVALUATION PROGRAM.] The 
commissioner of health shall approve the competency evaluation 
program.  A test must be administered to nursing assistants who 
complete an approved training program and desire to be listed in 
the nursing assistant registry.  The tests may only be 
administered by technical institutes and community colleges. 
    Subd. 4.  [TECHNICAL ASSISTANCE.] The commissioner of state 
director of vocational technical education shall, upon request, 
provide necessary and appropriate technical assistance in the 
development of nursing assistant training programs. 
    Subd. 6.  [TRAINING PROGRAM.] Each nursing assistant hired 
to work in a nursing home on or after January 1, 1979, shall but 
before January 1, 1990, must have successfully completed an 
approved nursing assistant training program or shall be enrolled 
in the first available approved training program which is 
scheduled to commence within 60 days of the date of the 
assistant's employment.  Approved training programs shall be 
offered at the location most reasonably accessible to the 
enrollees in each class. 
    Subd. 6a.  [NURSING ASSISTANTS HIRED IN 1990 AND 
AFTER.] Each nursing assistant hired to work in a nursing home 
or in a certified boarding care home on or after January 1, 
1990, must have successfully completed an approved nursing 
assistant training program and competency evaluation within four 
months from the date of employment. 
    Subd. 7.  [VIOLATION, PENALTY.] Violation of this section 
and section 144A.611 by a nursing home or certified boarding 
care home shall be grounds for the issuance of a correction 
order to the nursing home by the state commissioner of 
health.  Under the provisions of sections 144.653 or 144A.10, 
the failure of the nursing home or certified boarding care home 
to correct the deficiency or deficiencies specified in comply 
with the correction order shall result in the assessment of a 
fine in accordance with the schedule of fines promulgated by 
rule of the state commissioner of health the amount of $300. 
    Subd. 8.  [EXCEPTIONS.] Employees of nursing homes 
conducted in accordance with the teachings of the body known as 
the Church of Christ, Scientist, shall be exempt from the 
requirements of this section and section 144A.611. 
    Sec. 29.  Minnesota Statutes 1988, section 144A.611, is 
amended to read: 
    144A.611 [REIMBURSABLE EXPENSES PAYABLE TO NURSING 
ASSISTANTS.] 
    Subdivision 1.  [NURSING HOMES AND CERTIFIED BOARDING CARE 
HOMES.] The actual costs of tuition and reasonable expenses 
for that approved program deemed by the commissioner of 
education to be minimally necessary to protect the health and 
welfare of nursing home residents the nursing assistant training 
program approved under section 144A.61, which are paid to 
nursing home assistants pursuant to subdivision 2, shall be are 
a reimbursable expense for nursing homes and certified boarding 
care homes under the provisions of chapter 256B and the rules 
promulgated thereunder. 
    Subd. 2.  [NURSING ASSISTANTS.] A nursing assistant who has 
completed an approved training program shall be reimbursed by 
the nursing home or certified boarding care home for actual 
costs of tuition and reasonable expenses for the training 
program 90 days after the date of employment, or upon completion 
of the approved training program, whichever is later. 
    Subd. 3.  [RULES.] The commissioner of human services shall 
promulgate any rules necessary to implement the provisions of 
this section.  The rules shall include, but not be limited to: 
    (a) Provisions designed to prevent reimbursement by the 
commissioner under this section and section 144A.61 to a nursing 
home, certified boarding care home, or a nursing assistant for 
the assistant's simultaneous training in more than one approved 
program; 
    (b) Provisions designed to prevent reimbursement by the 
commissioner under this section and section 144A.61 to more than 
one nursing home or certified boarding care home for the 
training of any individual nursing assistant; and 
    (c) Provisions permitting the reimbursement by the 
commissioner to nursing homes, certified boarding care homes, 
and nursing assistants for the retraining of a nursing assistant 
after an absence from the labor market of not less than five 
years 24 months. 
    Sec. 30.  Minnesota Statutes 1988, section 145.61, 
subdivision 5, is amended to read: 
    Subd. 5.  "Review organization" means a nonprofit 
organization acting according to clause (k) or a committee whose 
membership is limited to professionals and administrative staff, 
except where otherwise provided for by state or federal law, and 
which is established by a hospital, by a clinic, by one or more 
state or local associations of professionals, by an organization 
of professionals from a particular area or medical institution, 
by a health maintenance organization as defined in chapter 62D, 
by a nonprofit health service plan corporation as defined in 
chapter 62C or, by a professional standards review organization 
established pursuant to United States Code, title 42, section 
1320c-1 et seq., or by a medical review agent established to 
meet the requirements of section 256B.04, subdivision 15, or 
256D.03, subdivision 7, paragraph (b), or by the department of 
human services, to gather and review information relating to the 
care and treatment of patients for the purposes of: 
    (a) evaluating and improving the quality of health care 
rendered in the area or medical institution; 
    (b) reducing morbidity or mortality; 
    (c) obtaining and disseminating statistics and information 
relative to the treatment and prevention of diseases, illness 
and injuries; 
    (d) developing and publishing guidelines showing the norms 
of health care in the area or medical institution; 
    (e) developing and publishing guidelines designed to keep 
within reasonable bounds the cost of health care; 
    (f) reviewing the quality or cost of health care services 
provided to enrollees of health maintenance organizations; 
    (g) acting as a professional standards review organization 
pursuant to United States Code, title 42, section 1320c-1 et 
seq.; 
     (h) determining whether a professional shall be granted 
staff privileges in a medical institution or whether a 
professional's staff privileges should be limited, suspended or 
revoked; or 
     (i) reviewing, ruling on, or advising on controversies, 
disputes or questions between: 
     (1) health insurance carriers or health maintenance 
organizations and their insureds or enrollees; 
     (2) professional licensing boards acting under their powers 
including disciplinary, license revocation or suspension 
procedures and health providers licensed by them when the matter 
is referred to a review committee by the professional licensing 
board; 
     (3) professionals and their patients concerning diagnosis, 
treatment or care, or the charges or fees therefor; 
     (4) professionals and health insurance carriers or health 
maintenance organizations concerning a charge or fee for health 
care services provided to an insured or enrollee; 
     (5) professionals or their patients and the federal, state, 
or local government, or agencies thereof; or 
    (j) providing underwriting assistance in connection with 
professional liability insurance coverage applied for or 
obtained by dentists, or providing assistance to underwriters in 
evaluating claims against dentists.; 
    (k) acting as a medical review agent under section 256B.04, 
subdivision 15, or 256D.03, subdivision 7, paragraph (b); or 
    (l) providing recommendations on the medical necessity of a 
health service, or the relevant prevailing community standard 
for a health service. 
    Sec. 31.  Minnesota Statutes 1988, section 145.63, is 
amended to read: 
    145.63 [LIMITATION ON LIABILITY FOR SPONSORING 
ORGANIZATIONS, REVIEW ORGANIZATIONS, AND MEMBERS OF REVIEW 
ORGANIZATIONS.] 
    Subdivision 1.  [MEMBERS.] No review organization and no 
person who is a member or employee of, who acts in an advisory 
capacity to or who furnishes counsel or services to, a review 
organization shall be liable for damages or other relief in any 
action brought by a person or persons whose activities have been 
or are being scrutinized or reviewed by a review organization, 
by reason of the performance by the person of any duty, 
function, or activity of such review organization, unless the 
performance of such duty, function or activity was motivated by 
malice toward the person affected thereby.  No review 
organization and no person shall be liable for damages or other 
relief in any action by reason of the performance of the review 
organization or person of any duty, function, or activity as 
a review organization or a member of a review committee or by 
reason of any recommendation or action of the review committee 
when the person acts in the reasonable belief that the action or 
recommendation is warranted by facts known to the person or the 
review organization after reasonable efforts to ascertain the 
facts upon which the review organization's action or 
recommendation is made, except that any corporation designated 
as a review organization under the Code of Federal Regulations, 
title 42, section 466 (1983) shall be subject to actions for 
damages or other relief by reason of any failure of a person, 
whose care or treatment is required to be scrutinized or 
reviewed by the review organization, to receive medical care or 
treatment as a result of a determination by the review 
organization that medical care was unnecessary or inappropriate. 
    Subd. 2.  [ORGANIZATIONS.] No state or local association of 
professionals or organization of professionals from a particular 
area shall be liable for damages or other relief in any action 
brought by a person whose activities have been or are being 
scrutinized or reviewed by a review organization established by 
the association or organization, unless the association or 
organization was motivated by malice towards the person affected 
by the review or scrutiny.  
    Sec. 32.  Minnesota Statutes 1988, section 214.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  Notwithstanding any law to the contrary, 
the commissioner of health as authorized by section 214.13, all 
health-related licensing boards and all non-health-related 
licensing boards shall by rule, with the approval of the 
commissioner of finance, adjust any fee which the commissioner 
of health or the board is empowered to assess a sufficient 
amount so that the total fees collected by each board will as 
closely as possible equal anticipated expenditures during the 
fiscal biennium, as provided in section 16A.128.  For members of 
an occupation registered after July 1, 1984 by the commissioner 
of health under the provisions of section 214.13, the fee 
established must include an amount necessary to recover, over a 
five-year period, the commissioner's direct expenditures for 
adoption of the rules providing for registration of members of 
the occupation.  All fees received shall be deposited in the 
state treasury.  Fees received by health-related licensing 
boards must be credited to the special revenue fund.  Any 
balance remaining in the special revenue fund at the end of each 
fiscal year, after payment of health-related licensing board 
expenses including salaries, attorney general fees, and indirect 
costs, must be credited to the public health fund. 
    Sec. 33.  Minnesota Statutes 1988, section 256.936, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this section 
the following terms shall have the meanings given them: 
    (a) "Eligible persons" means children who are one year of 
age or older but less than nine 18 years of age who have gross 
family incomes that are equal to or less than 185 percent of the 
federal poverty guidelines and who are not eligible for medical 
assistance under chapter 256B or general assistance medical care 
under chapter 256D and who are not otherwise insured for the 
covered services.  The period of eligibility extends from the 
first day of the month in which the child's first birthday 
occurs to the last day of the month in which the child 
becomes nine 18 years old. 
    (b) "Covered services" means children's health services. 
    (c) "Children's health services" means the health services 
reimbursed under chapter 256B, with the exception of inpatient 
hospital services, special education services, private duty 
nursing services, orthodontic services, medical transportation 
services, personal care assistant and case management services, 
hospice care services, nursing home or intermediate care 
facilities services, and mental health and chemical dependency 
services.  
    (d) "Eligible providers" means those health care providers 
who provide children's health services to medical assistance 
clients recipients under rules established by the commissioner 
for that program.  Reimbursement under this section shall be at 
the same rates and conditions established for medical assistance.
    (e) "Commissioner" means the commissioner of human services.
    (f) "Gross family income" for farm and nonfarm 
self-employed means income calculated using as the baseline the 
adjusted gross income reported on the applicant's federal income 
tax form for the previous year and adding back in reported 
depreciation, carryover loss, and net operating loss amounts 
that apply to the business in which the family is currently 
engaged.  Applicants shall report the most recent financial 
situation of the family if it has changed from the period of 
time covered by the federal income tax form.  The report may be 
in the form of percentage increase or decrease. 
    Sec. 34.  Minnesota Statutes 1988, section 256.936, 
subdivision 2, is amended to read: 
    Subd. 2.  [PLAN ADMINISTRATION.] The children's health plan 
is established to promote access to appropriate primary health 
care to assure healthy children.  The commissioner shall 
establish an office for the state administration of this plan.  
The plan shall be used to provide children's health services for 
eligible persons.  Payment for these services shall be made to 
all eligible providers.  The commissioner may adopt rules to 
administer this section.  The commissioner shall establish 
marketing efforts to encourage potentially eligible persons to 
receive information about the program and about other medical 
care programs administered or supervised by the department of 
human services.  A toll-free telephone number must be used to 
provide information about medical programs and to promote access 
to the covered services.  The commissioner must make a quarterly 
assessment of the expected expenditures for the covered services 
and the appropriation.  Based on this assessment the 
commissioner may limit enrollments and target former aid to 
families with dependent children recipients.  If sufficient 
money is not available to cover all costs incurred in one 
quarter, the commissioner may seek an additional authorization 
for funding from the legislative advisory committee. 
    Sec. 35.  Minnesota Statutes 1988, section 256.936, 
subdivision 4, is amended to read: 
    Subd. 4.  [ENROLLMENT FEE.] An annual enrollment fee of 
$25, not to exceed $150 per family, is required from eligible 
persons for children's health services.  Enrollment fees must be 
deposited in the public health fund and are appropriated 
dedicated to the commissioner for the children's health plan 
program.  The commissioner shall make an annual redetermination 
of continued eligibility and identify people who may become 
eligible for medical assistance.  
    Sec. 36.  [256.9685] [ESTABLISHMENT OF INPATIENT HOSPITAL 
PAYMENT SYSTEM.] 
    Subdivision 1.  [AUTHORITY.] The commissioner shall 
establish procedures for determining medical assistance and 
general assistance medical care payment rates under a 
prospective payment system for inpatient hospital services in 
hospitals that qualify as vendors of medical assistance.  The 
commissioner shall establish, by rule, procedures for 
implementing this section and sections 256.9686, 256.969, and 
256.9695.  The payment rates must be based on methods and 
standards that the commissioner finds are adequate to provide 
for the costs that must be incurred for the care of recipients 
in efficiently and economically operated hospitals.  Services 
must meet the requirements of section 256B.04, subdivision 15, 
or 256D.03, subdivision 7, paragraph (b), to be eligible for 
payment. 
    Subd. 2.  [FEDERAL REQUIREMENTS.] If it is determined that 
a provision of this section or section 256.9686, 256.969, or 
256.9695 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 limitations. 
    Sec. 37.  [256.9686] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] For purposes of this section and 
sections 256.9685, 256.969, and 256.9695, the following terms 
and phrases have the meanings given. 
    Subd. 2.  [BASE YEAR.] "Base year" means a hospital's 
fiscal year that is recognized by the Medicare program or a 
hospital's fiscal year specified by the commissioner if a 
hospital is not required to file information by the Medicare 
program from which cost and statistical data are used to 
establish medical assistance and general assistance medical care 
payment rates. 
    Subd. 3.  [CASE MIX INDEX.] "Case mix index" means a 
hospital's distribution of relative values among the diagnostic 
categories. 
    Subd. 4.  [CHARGES.] "Charges" means the usual and 
customary payment requested of the general public. 
    Subd. 5.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services. 
    Subd. 6.  [HOSPITAL.] "Hospital" means a facility licensed 
under sections 144.50 to 144.58 or an out-of-state facility 
licensed under the requirements of that state in which it is 
located. 
    Subd. 7.  [MEDICAL ASSISTANCE.] "Medical assistance" means 
the program established under chapter 256B and Title XIX of the 
Social Security Act.  Medical assistance includes general 
assistance medical care established under chapter 256D, unless 
otherwise specifically stated. 
    Subd. 8.  [RATE YEAR.] "Rate year" means a calendar year 
from January 1 to December 31. 
    Subd. 9.  [RELATIVE VALUE.] "Relative value" means the 
average allowable cost of inpatient services provided within a 
diagnostic category divided by the average allowable cost of 
inpatient services provided in all diagnostic categories. 
    Sec. 38.  Minnesota Statutes 1988, section 256.969, is 
amended to read: 
    256.969 [INPATIENT HOSPITALS PAYMENT RATES.] 
    Subdivision 1.  [ANNUAL HOSPITAL COST INDEX.] The 
commissioner of human services shall develop a prospective 
payment system for inpatient hospital service under the medical 
assistance and general assistance medical care programs.  Rates 
established for licensed hospitals for rate years beginning 
during the fiscal biennium ending June 30, 1987, shall not 
exceed an annual hospital cost index for the final rate allowed 
to the hospital for the preceding year not to exceed five 
percent in any event.  The annual hospital cost index shall be 
obtained from an independent source representing and shall 
represent a statewide weighted average of inflation historical 
and projected cost change estimates determined for expense 
categories to include wages and salaries, employee benefits, 
medical and professional fees, raw food, medical supplies, 
pharmaceuticals, utilities, repairs and maintenance, insurance 
other than including malpractice insurance, and other applicable 
expenses as determined by the commissioner.  The index shall 
reflect the regional differences within the state and include a 
one percent increase to reflect changes in technology.  The 
annual hospital cost index shall be published 30 days before the 
start of each calendar quarter and shall be applicable to all 
hospitals whose fiscal years start on or during the calendar 
quarter. Minnesota cost category weights.  Individual indices 
shall be specific to Minnesota if the commissioner determines 
that sufficient accuracy of the hospital cost index is 
achieved.  The hospital cost index shall be used to adjust the 
base year operating payment rate through the rate year on an 
annually compounded basis.  
    Subd. 2.  [RATES FOR INPATIENT HOSPITALS DIAGNOSTIC 
CATEGORIES.] On July 1, 1984, The commissioner shall begin to 
utilize use to the extent possible existing diagnostic 
classification systems, including the system used by the 
Medicare program to determine the relative values of inpatient 
services and case mix indices.  The commissioner may incorporate 
the grouping of hospitals with similar characteristics for 
uniform rates upon the development and implementation of the 
diagnostic classification system.  Prior to implementation of 
the diagnostic classification system, the commissioner shall 
report the proposed grouping of hospitals to the senate health 
and human services committee and the house health and welfare 
committee.  The commissioner may combine diagnostic 
classifications into diagnostic categories and may establish 
separate categories and numbers of categories based on program 
eligibility or hospital peer group.  Relative values shall be 
recalculated when the base year is changed and shall not be 
determined on a hospital specific basis.  Relative value 
determinations shall include paid claims for admissions during 
each hospital's base year.  The commissioner may extend the time 
period forward to obtain sufficiently valid information to 
establish relative values.  Relative value determinations shall 
not include property cost data, Medicare crossover data, and 
data from the transferring hospital on transfer discharges, 
except data on transfer discharges with a burn diagnostic 
classification or data on transfer discharges for the patient's 
convenience that have been reported by the hospital to the 
commissioner by the October 1 preceding the rate year.  The 
computation of the base year cost per admission and the 
computation of the relative values of the diagnostic categories 
must include identified outlier cases and their weighted costs 
up to the point that they become outlier cases, but must exclude 
costs and days recognized in outlier payments beyond that point. 
Claims paid for care provided on or after August 1, 1985, shall 
be adjusted to reflect a recomputation of rates, unless 
disapproved by the federal Health Care Financing 
Administration.  The state shall pay the state share of the 
adjustment for care provided on or after August 1, 1985, up to 
and including June 30, 1987, whether or not the adjustment is 
approved by the federal Health Care Financing Administration.  
The commissioner may reconstitute recategorize the 
diagnostic categories classifications and recalculate relative 
values and case mix indices to reflect actual hospital 
practices, the specific character of specialty hospitals, or to 
reduce variances within the diagnostic categories after notice 
in the State Register and a 30-day comment period.  After May 1, 
1986, acute care hospital billings under the medical assistance 
and general assistance medical care programs must not be 
submitted until the recipient is discharged.  However, the 
commissioner shall establish monthly interim payments with 
inpatient hospitals that have individual patient lengths of stay 
in excess of 30 days regardless of diagnosis-related group.  For 
purposes of establishing interim rates, the commissioner is 
exempt from the requirements of chapter 14.  Medical assistance 
and general assistance medical care reimbursement for treatment 
of mental illness shall be reimbursed based upon diagnosis 
classifications.  The commissioner may selectively contract with 
hospitals for services within the diagnostic classifications 
relating to mental illness and chemical dependency under 
competitive bidding when reasonable geographic access by 
recipients can be assured.  No physician shall be denied the 
privilege of treating a recipient required to utilize a hospital 
under contract with the commissioner, as long as the physician 
meets credentialing standards of the individual hospital. 
Effective July 1, 1988, the commissioner shall limit the annual 
increase in pass-through cost payments for depreciation, rents 
and leases, and interest expense to the annual growth in the 
hospital cost index described in subdivision 1.  When computing 
budgeted pass-through cost payments, the commissioner shall use 
the annual increase in the hospital cost index forecasted by 
Data Resources, Inc. consistent with the quarter of the 
hospital's fiscal year end.  In final settlement of pass-through 
cost payments, the commissioner shall use the hospital cost 
index for the month in which the hospital's fiscal year ends 
compared to the same month one year earlier. 
    Subd. 2a.  [AUDIT ADJUSTMENTS TO INPATIENT HOSPITAL RATES.] 
Inpatient hospital rates established under subdivision 2 using 
1981 historical medicare cost-report data may be adjusted based 
on the findings of audits of hospital billings and patient 
records performed by the commissioner that identify billings for 
services that were not delivered or never ordered.  The audit 
findings may be based on a statistically valid sample of 
billings of the hospital.  After the audits are complete, the 
commissioner shall adjust rates paid in subsequent years to 
reflect the audit findings and recover payments in excess of the 
adjusted rates or reimburse hospitals when audit findings 
indicate that underpayments were made to the hospital. 
    Subd. 2b.  [OPERATING PAYMENT RATES.] In determining 
operating payment rates for admissions occurring on or after the 
rate year beginning January 1, 1991, and every two years after, 
or more frequently as determined by the commissioner, the 
commissioner shall obtain operating data from an updated base 
year and establish operating payment rates per admission for 
each hospital based on the cost-finding methods and allowable 
costs of the Medicare program in effect during the base year.  
The base year operating payment rate per admission is 
standardized by the case mix index and adjusted by the hospital 
cost index, relative values, and disproportionate population 
adjustment.  The cost and charge data used to establish 
operating rates shall only reflect inpatient services covered by 
medical assistance and shall not include property cost 
information and costs recognized in outlier payments. 
    Subd. 2c.  [PROPERTY PAYMENT RATES.] For each hospital's 
first two consecutive fiscal years beginning on or after July 1, 
1988, the commissioner shall limit the annual increase in 
property payment rates for depreciation, rents and leases, and 
interest expense to the annual growth in the hospital cost index 
derived from the methodology in effect on the day before the 
effective date of this section.  When computing budgeted and 
settlement property payment rates, the commissioner shall use 
the annual increase in the hospital cost index forecasted by 
Data Resources, Inc., consistent with the quarter of the 
hospital's fiscal year end.  For admissions occurring on or 
after January 1, 1991, the commissioner shall obtain property 
data from an updated base year and establish property payment 
rates per admission for each hospital.  Property payment rates 
shall be derived from data from the same base year that is used 
to establish operating payment rates.  The property information 
shall include cost categories not subject to the hospital cost 
index and shall reflect the cost-finding methods and allowable 
costs of the Medicare program in effect during the base year.  
The property payment rate per admission shall be adjusted for 
positive percentage change differences in the net book value of 
hospital property and equipment by increasing the property 
payment rate per admission 85 percent of the percentage change 
from the base year through the most recent year ending prior to 
the rate year for which required information is available.  The 
percentage change shall be derived from equivalent audited 
information in both years and shall be adjusted to account for 
changes in generally accepted accounting principles, 
reclassification of assets, allocations to non-hospital areas, 
and fiscal years.  The cost, audit, and charge data used to 
establish property rates shall only reflect inpatient services 
covered by medical assistance and shall not include operating 
cost information.  To be eligible for the property payment rate 
per admission adjustment, the hospital must provide the 
necessary information to the commissioner, in a format specified 
by the commissioner, by the October 1 preceding the rate year.  
The commissioner shall adjust rates for the rate year beginning 
January 1, 1991, to ensure that all hospitals are subject to the 
hospital cost index limitation for two complete years. 
    Subd. 3.  [SPECIAL CONSIDERATIONS.] (a) In determining the 
rate the commissioner of human services will take into 
consideration whether the following circumstances exist:  
    (1) minimal medical assistance and general assistance 
medical care utilization; 
    (2) unusual length of stay experience; and 
    (3) disproportionate numbers of low-income patients served. 
    (b) To the extent of available appropriations, the 
commissioner shall provide supplemental grants directly to a 
hospital described in section 256B.031, subdivision 10, 
paragraph (a), that receives medical assistance payments through 
a county-managed health plan that serves only residents of the 
county.  The payments must be designed to compensate for 
actuarially demonstrated higher health care costs within the 
county, for the population served by the plan, that are not 
reflected in the plan's rates under section 256B.031, 
subdivision 4. 
    (c) The computation of each hospital's payment rate and the 
relative values of the diagnostic categories are not subject to 
the routine service cost limitation imposed under the Medicare 
program.  
    (d) Indian health service facilities are exempt from the 
rate establishment methods required by this section and section 
256D.03, subdivision 4, and shall be reimbursed at the 
facility's usual and customary charges to the general public.  
    (e) Out-of-state hospitals that are located within a 
Minnesota local trade area shall have rates established using 
the same procedures and methods that apply to Minnesota 
hospitals.  Hospitals that are not required by law to file 
information in a format necessary to establish rates shall have 
rates established based on the commissioner's estimates of the 
information.  Relative values of the diagnostic categories shall 
not be redetermined under this paragraph until required by rule 
and hospitals affected by this paragraph shall then be included 
in determining relative values.  However, hospitals that have 
rates established based upon the commissioner's estimates of 
information shall not be included in determining relative values.
This paragraph is effective for hospital fiscal years beginning 
on or after July 1, 1988.  A hospital shall provide the 
information necessary to establish rates under this paragraph at 
least 90 days before the start of the hospital's fiscal year.  
    (f) Hospitals that are not located within Minnesota or a 
Minnesota local trade area shall have rates established as 
provided in paragraph (e) or, at the commissioner's discretion, 
at an amount negotiated by the commissioner.  Relative values 
shall not be affected by negotiated rates. 
    (g) For inpatient hospital originally paid admissions, 
excluding Medicare cross-overs, provided from July 1, 1988, 
through June 30, 1989, hospitals with 100 or fewer medical 
assistance annualized paid admissions, excluding Medicare 
cross-overs, that were paid by March 1, 1988, for admissions 
paid during the period January 1, 1987, to June 30, 1987, shall 
have medical assistance inpatient payments increased 30 percent. 
Hospitals with more than 100 but fewer than 250 medical 
assistance annualized paid admissions, excluding Medicare 
cross-overs, that were paid by March 1, 1988, for admissions 
paid during the period January 1, 1987, to June 30, 1987, shall 
have medical assistance inpatient payments increased 20 percent 
for inpatient hospital originally paid admissions, excluding 
Medicare cross-overs, provided from July 1, 1988, through June 
30, 1989.  This provision applies only to hospitals that have 
100 or fewer licensed beds on March 1, 1988. 
    Subd. 3a.  [PAYMENTS.] Acute care hospital billings under 
the medical assistance program must not be submitted until the 
recipient is discharged.  However, the commissioner shall 
establish monthly interim payments for inpatient hospitals that 
have individual patient lengths of stay over 30 days regardless 
of diagnostic category.  To establish interim rates, the 
commissioner is exempt from the requirements of chapter 14.  
Medical assistance reimbursement for treatment of mental illness 
shall be reimbursed based on diagnostic classifications.  The 
commissioner may selectively contract with hospitals for 
services within the diagnostic categories relating to mental 
illness and chemical dependency under competitive bidding when 
reasonable geographic access by recipients can be assured.  No 
physician shall be denied the privilege of treating a recipient 
required to use a hospital under contract with the commissioner, 
as long as the physician meets credentialing standards of the 
individual hospital.  Individual hospital payments established 
under this section and sections 256.9685, 256.9686, and 
256.9695, in addition to third party liability, for admissions 
occurring during the rate year shall not exceed, in aggregate, 
the charges for the medical assistance covered inpatient 
services paid for the same period of time to the hospital.  This 
payment limitation is not applicable and shall not be calculated 
to include general assistance medical care services.  Services 
that have rates established under subdivision 6a, paragraph (a), 
clause (5) or (6), must be limited separately from other 
services.  After consulting with the affected hospitals, the 
commissioner may consider related hospitals one entity and may 
merge the payment rates while maintaining separate provider 
numbers.  The operating and property base rates per admission or 
per day shall be derived from the best Medicare and claims data 
available when rates are established.  The commissioner shall 
determine the best Medicare and claims data, taking into 
consideration variables of recency of the data, audit 
disposition, settlement status, and the ability to set rates in 
a timely manner.  The commissioner shall notify hospitals of 
payment rates by December 1 of the year preceding the rate 
year.  The rate setting data must reflect the admissions data 
used to establish relative values.  Base year changes from 1981 
to the base year established for the rate year beginning January 
1, 1991, and for subsequent rate years, shall not be limited to 
the limits ending June 30, 1987, on the maximum rate of increase 
under subdivision 1.  The commissioner may adjust base year 
cost, relative value, and case mix index data to exclude the 
costs of services that have been discontinued by the October 1 
of the year preceding the rate year or that are paid separately 
from inpatient services.  Inpatient stays that encompass 
portions of two or more rate years shall have payments 
established based on payment rates in effect at the time of 
admission unless the date of admission preceded the rate year in 
effect by six months or more.  In this case, operating payment 
rates for services rendered during the rate year in effect and 
established based on the date of admission shall be adjusted to 
the rate year in effect by the hospital cost index. 
    Subd. 4.  [APPEALS BOARD.] An appeals board shall be 
established for purposes of hearing reports for changes in the 
rate per admission.  The appeals board shall consist of two 
public representatives, two representatives of the hospital 
industry, and one representative of the business or consumer 
community.  The appeals board shall advise the commissioner on 
adjustments to hospital rates under this section.  
    Subd. 4a.  [REPORTS.] If, under this section or section 
256.9685, 256.9686, or 256.9695, a hospital is required to 
report information to the commissioner by a specified date, the 
hospital must report the information on time.  If the hospital 
does not report the information on time, the commissioner may 
determine the information that will be used and may disregard 
the information that is reported late.  If the Medicare program 
does not require or does not audit information that is needed to 
establish medical assistance rates, the commissioner may, after 
consulting the affected hospitals, require reports to be 
provided, in a format specified by the commissioner, that are 
based on allowable costs and cost-finding methods of the 
Medicare program in effect during the base year.  The 
commissioner may require any information that is necessary to 
implement this section and sections 256.9685, 256.9686, and 
256.9695 to be provided by a hospital within a reasonable time 
period. 
    Subd. 5.  [APPEAL RIGHTS.] Nothing in this section 
supersedes the contested case provisions of chapter 14, the 
administrative procedure act.  
    Subd. 5a.  [AUDITS AND ADJUSTMENTS.] Inpatient hospital 
rates and payments must be established under this section and 
sections 256.9685, 256.9686, and 256.9695.  The commissioner may 
adjust rates and payments based on the findings of audits of 
payments to hospitals, hospital billings, costs, statistical 
information, charges, or patient records performed by the 
commissioner or the Medicare program that identify billings, 
costs, statistical information, or charges for services that 
were not delivered, never ordered, in excess of limits, not 
covered by the medical assistance program, paid separately from 
rates established under this section and sections 256.9685, 
256.9686, and 256.9695, or for charges that are not consistent 
with other payor billings.  Charges to the medical assistance 
program must be less than or equal to charges to the general 
public.  Charges to the medical assistance program must not 
exceed the lowest charge to any other payor.  The audit findings 
may be based on a statistically valid sample of hospital 
information that is needed to complete the audit.  If the 
information the commissioner uses to establish rates or payments 
is not audited by the Medicare program, the commissioner may 
require an audit using Medicare principles and may adjust rates 
and payments to reflect any subsequent audit. 
    Subd. 6.  [RULES.] The commissioner of human services shall 
promulgate emergency and permanent rules to implement a system 
of prospective payment for inpatient hospital services pursuant 
to chapter 14, the administrative procedure act.  
Notwithstanding section 14.53, emergency rule authority 
authorized by Laws 1983, chapter 312, article 5, section 9, 
subdivision 6, shall extend to August 1, 1985.  
    Subd. 6a.  [SPECIAL CONSIDERATIONS.] (a) In determining the 
payment rates, the commissioner shall consider whether the 
following circumstances exist: 
    (1) [MINIMAL MEDICAL ASSISTANCE USE.] Minnesota hospitals 
with 30 or fewer annualized admissions of Minnesota medical 
assistance recipients in the base year, excluding Medicare 
crossover admissions, may have the base year operating rates, as 
adjusted by the case mix index, and property payment rates 
established at the 70th percentile of hospitals in the peer 
group in effect during the base year as established by the 
Minnesota department of health for use by the rate review 
program.  Rates within a peer group shall be adjusted for 
differences in fiscal years and outlier percentage payments 
before establishing the 70th percentile.  The operating payment 
rate portion of the 70th percentile shall be adjusted by the 
hospital cost index.  To have rates established under this 
paragraph, the hospital must notify the commissioner in writing 
by November 1 of the year preceding the rate year.  This 
paragraph shall be applied to all payment rates of the affected 
hospital. 
    (2) [UNUSUAL COST OR LENGTH OF STAY EXPERIENCE.] The 
commissioner shall establish day and cost outlier thresholds for 
each diagnostic category established under subdivision 2 at two 
standard deviations beyond the geometric mean length of stay or 
allowable cost.  Payment for the days and cost beyond the 
outlier threshold shall be in addition to the operating and 
property payment rates per admission established under 
subdivisions 2, 2b and 2c.  Payment for outliers shall be at 70 
percent of the allowable operating cost calculated by dividing 
the operating payment rate per admission, after adjustment by 
the case mix index, hospital cost index, relative values and the 
disproportionate population adjustment, by the arithmetic mean 
length of stay for the diagnostic category.  The outlier 
threshold for neonatal and burn diagnostic categories shall be 
established at one standard deviation beyond the geometric mean 
length of stay or allowable cost, and payment shall be at 90 
percent of allowable operating cost calculated in the same 
manner as other outliers.  A hospital may choose an alternative 
percentage outlier payment to a minimum of 60 percent and a 
maximum of 80 percent if the commissioner is notified in writing 
of the request by October 1 of the year preceding the rate 
year.  The chosen percentage applies to all diagnostic 
categories except burns and neonates.  The percentage of 
allowable cost that is unrecognized by the outlier payment shall 
be added back to the base year operating payment rate per 
admission.  Cost outliers shall be calculated using hospital 
specific allowable cost data.  If a stay is both a day and a 
cost outlier, outlier payments shall be based on the higher 
outlier payment. 
    (3) [DISPROPORTIONATE NUMBERS OF LOW-INCOME PATIENTS 
SERVED.] For admissions occurring on or after July 1, 1989, the 
medical assistance disproportionate population adjustment shall 
comply with federal law at fully implemented rates.  The 
commissioner may establish a separate disproportionate 
population operating payment rate adjustment under the general 
assistance medical care program.  For admissions occurring on or 
after January 1, 1991, the disproportionate population 
adjustment shall be derived from base year Medicare cost report 
data and may be adjusted by data reflecting actual claims paid 
by the department. 
    (4) [SEPARATE BILLING BY CERTIFIED REGISTERED NURSE 
ANESTHETISTS.] Hospitals may exclude certified registered nurse 
anesthetist costs from the operating payment rate as allowed by 
section 256B.0625, subdivision 11.  To be eligible, a hospital 
must notify the commissioner in writing by October 1 of the year 
preceding the rate year of the request to exclude certified 
registered nurse anesthetist costs.  The hospital must agree 
that all hospital claims for the cost and charges of certified 
registered nurse anesthetist services will not be included as 
part of the rates for inpatient services provided during the 
rate year.  In this case, the operating payment rate shall be 
adjusted to exclude the cost of certified registered nurse 
anesthetist services.  Payments made through separate claims for 
certified registered nurse anesthetist services shall not be 
paid directly through the hospital provider number or indirectly 
by the certified registered nurse anesthetist to the hospital or 
related organizations. 
    (5) [SPECIAL RATES.] The commissioner may establish special 
rate-setting methodologies, including a per day operating and 
property payment system, for hospice, ventilator dependent, and 
other services on a hospital and recipient specific basis taking 
into consideration such variables as federal designation, 
program size, and admission from a medical assistance waiver or 
home care program.  The data and rate calculation method shall 
conform to the requirements of paragraph (7), except that 
hospice rates shall not exceed the amount allowed under federal 
law and payment shall be secondary to any other medical 
assistance hospice program.  Rates and payments established 
under this paragraph must meet the requirements of section 
256.9685, subdivisions 1 and 2, and must not exceed payments 
that would otherwise be made to a hospital in total for rate 
year admissions under subdivisions 2, 2b, 2c, 3, 4, 5, and 6.  
The cost and charges used to establish rates shall only reflect 
inpatient medical assistance covered services.  Hospital and 
claims data that are used to establish rates under this 
paragraph shall not be used to establish payments or relative 
values under subdivisions 2, 2b, 2c, 3, 4, 5, and 6. 
    (6) [REHABILITATION DISTINCT PARTS.] Units of hospitals 
that are recognized as rehabilitation distinct parts by the 
Medicare program shall have separate provider numbers under the 
medical assistance program for rate establishment and billing 
purposes only.  These units shall also have operating and 
property payment rates and the disproportionate population 
adjustment established separately from other inpatient hospital 
services, based on the methods of subdivisions 2, 2b, 2c, 3, 4, 
5, and 6.  The commissioner may establish separate relative 
values under subdivision 2 for rehabilitation hospitals and 
distinct parts as defined by the Medicare program.  For 
individual hospitals that did not have separate medical 
assistance rehabilitation provider numbers or rehabilitation 
distinct parts in the base year, hospitals shall provide the 
information needed to separate rehabilitation distinct part cost 
and claims data from other inpatient service data.  
    (7) [NEONATAL TRANSFERS.] For admissions occurring on or 
after July 1, 1989, neonatal diagnostic category transfers shall 
have operating and property payment rates established at 
receiving hospitals which have neonatal intensive care units on 
a per day payment system that is based on the cost finding 
methods and allowable costs of the Medicare program during the 
base year.  Other neonatal diagnostic category transfers shall 
have rates established according to paragraph (8).  The rate per 
day for the neonatal service setting within the hospital shall 
be determined by dividing base year neonatal allowable costs by 
neonatal patient days.  The operating payment rate portion of 
the rate shall be adjusted by the hospital cost index and the 
disproportionate population adjustment.  The cost and charges 
used to establish rates shall only reflect inpatient services 
covered by medical assistance.  Hospital and claims data used to 
establish rates under this paragraph shall not be used to 
establish payments or relative values under subdivisions 2, 2b, 
2c, 3, 4, 5, and 6. 
    (8) [TRANSFERS.] Except as provided in paragraphs (5) and 
(7), operating and property payment rates for admissions that 
result in transfers and transfers shall be established on a per 
day payment system.  The per day payment rate shall be the sum 
of the adjusted operating and property payment rates determined 
in subdivisions 2b and 2c, divided by the arithmetic mean length 
of stay for the diagnostic category.  Each admission that 
results in a transfer and each transfer is considered a separate 
admission to each hospital, and the total of the admission and 
transfer payments to each hospital must not exceed the total per 
admission payment that would otherwise be made to each hospital 
under paragraph (2) and subdivisions 2b and 2c. 
    (b) The computation of each hospital's payment rate and the 
relative values of the diagnostic categories are not subject to 
the routine service cost limitation imposed under the Medicare 
program. 
    (c) Indian health service facilities are exempt from the 
rate establishment methods required by this section and shall be 
reimbursed at the facility's usual and customary charges to the 
general public.  This exemption is not effective for payments 
under general assistance medical care. 
    (d) Except as provided in paragraph (a), clauses (1) and 
(3), out-of-state hospitals that are located within a Minnesota 
local trade area shall have rates established using the same 
procedures and methods that apply to Minnesota hospitals.  
Hospitals that are not required by law to file information in a 
format necessary to establish rates shall have rates established 
based on the commissioner's estimates of the information.  
Relative values of the diagnostic categories shall not be 
redetermined under this paragraph until required by rule. 
Hospitals affected by this paragraph shall then be included in 
determining relative values.  However, hospitals that have rates 
established based upon the commissioner's estimates of 
information shall not be included in determining relative values.
This paragraph is effective for hospital fiscal years beginning 
on or after July 1, 1988.  A hospital shall provide the 
information necessary to establish rates under this paragraph at 
least 90 days before the start of the hospital's fiscal year. 
    (e) Hospitals that are not located within Minnesota or a 
Minnesota local trade area shall have operating and property 
rates established at the average of statewide and local trade 
area rates or, at the commissioner's discretion, at an amount 
negotiated by the commissioner.  Relative values shall not 
include data from hospitals that have rates established under 
this paragraph.  Payments, including third party liability, 
established under this paragraph may not exceed the charges on a 
claim specific basis for inpatient services that are covered by 
medical assistance.  
    (f) Medical assistance inpatient payment rates must include 
the cost incurred by hospitals to pay the department of health 
for metabolic disorder testing of newborns who are medical 
assistance recipients, if the cost is not recognized by another 
payment source. 
    (g) Medical assistance inpatient payments shall increase 20 
percent for inpatient hospital originally paid admissions, 
excluding Medicare crossovers, that occurred between July 1, 
1988, and December 31, 1990, if:  (i) the hospital had 100 or 
fewer Minnesota medical assistance annualized paid admissions, 
excluding Medicare crossovers, that were paid by March 1, 1988 
for the period January 1, 1987, to June 30, 1987; (ii) the 
hospital had 100 or fewer licensed beds on March 1, 1988; (iii) 
the hospital is located in Minnesota; and (iv) the hospital is 
not located in a city of the first class as defined in section 
410.01.  For this paragraph, medical assistance does not include 
general assistance medical care. 
    (h) Medical assistance inpatient payments shall increase 15 
percent for inpatient hospital originally paid admissions, 
excluding Medicare crossovers, that occurred between July 1, 
1988, and December 31, 1990, if:  (i) the hospital had more than 
100 but fewer than 250 Minnesota medical assistance annualized 
paid admissions, excluding Medicare crossovers, that were paid 
by March 1, 1988 for the period January 1, 1987, to June 30, 
1987; (ii) the hospital had 100 or fewer licensed beds on March 
1, 1988; (iii) the hospital is located in Minnesota; and (iv) 
the hospital is not located in a city of the first class as 
defined in section 410.01.  For this paragraph, medical 
assistance does not include general assistance medical care. 
    Sec. 39.  [256.9695] [APPEALS OF RATES; PROHIBITED 
PRACTICES FOR HOSPITALS; TRANSITION RATES.] 
    Subdivision 1.  [APPEALS.] A hospital may appeal a decision 
arising from the application of standards or methods under 
section 256.9685, 256.9686, or 256.969, if an appeal would 
result in a change to the hospital's payment rate or payments.  
Both overpayments and underpayments that result from the 
submission of appeals shall be implemented.  Regardless of any 
appeal outcome, relative values shall not be recalculated.  The 
appeal shall be heard by an administrative law judge according 
to sections 14.48 to 14.56, or upon agreement by both parties, 
according to a modified appeals procedure established by the 
commissioner and the office of administrative hearings.  In any 
proceeding under this section, the appealing party must 
demonstrate by a preponderance of the evidence that the 
commissioner's determination is incorrect or not according to 
law. 
    (a) To appeal a payment rate or payment determination or a 
determination made from base year information, the hospital 
shall file a written appeal request to the commissioner within 
60 days of the date the payment rate determination was mailed.  
The appeal request shall specify:  (i) the disputed items; (ii) 
the authority in federal or state statute or rule upon which the 
hospital relies for each disputed item; and (iii) the name and 
address of the person to contact regarding the appeal.  A change 
to a payment rate or payments that results from a successful 
appeal to the Medicare program of the base year information 
establishing rates for the rate year beginning in 1991 and after 
is a prospective adjustment to subsequent rate years.  After 
December 31, 1990, payment rates shall not be adjusted for 
appeals of base year information that affect years prior to the 
rate year beginning January 1, 1991.  Facts to be considered in 
any appeal of base year information are limited to those in 
existence at the time the payment rates of the first rate year 
were established from the base year information.  In the case of 
Medicare settled appeals, the 60-day appeal period shall begin 
on the mailing date of the notice by the Medicare program or the 
date the medical assistance payment rate determination notice is 
mailed, whichever is later. 
    (b) To appeal a payment rate or payment change that results 
from a difference in case mix between the base year and a rate 
year, the procedures and requirements of paragraph (a) apply.  
However, the appeal must be filed with the commissioner within 
60 days after the end of a rate year.  A case mix appeal must 
apply to the cost of services to all medical assistance patients 
that received inpatient services from the hospital during the 
rate year appealed.  For this paragraph, hospital means a 
facility holding the provider number as an inpatient service 
facility. 
    Subd. 2.  [PROHIBITED PRACTICES.] (a) Hospitals that have a 
provider agreement with the department may not limit medical 
assistance admissions to percentages of certified capacity or to 
quotas unless patients from all payors are limited in the same 
manner.  This requirement does not apply to certified capacity 
that is unavailable due to contracts with payors for specific 
occupancy levels. 
    (b) Hospitals may not transfer medical assistance patients 
to or cause medical assistance patients to be admitted to other 
hospitals without the explicit consent of the receiving hospital 
when service needs of the patient are available and within the 
scope of the transferring hospital.  The transferring hospital 
is liable to the receiving hospital for patient charges and 
ambulance services without regard to medical assistance payments 
plus the receiving hospital's reasonable attorney fees if found 
in violation of this prohibition. 
    Subd. 3.  [TRANSITION.] Except as provided in section 
256.969, subdivision 6a, paragraph (a), clause (3), the 
commissioner shall establish a transition period for the 
calculation of payment rates from the effective date of this 
section to December 31, 1990, as follows: 
    (a) Changes resulting from section 256.969, subdivision 6a, 
paragraph (a), clauses (1), (2), (4), (5), (6), and (8), shall 
not be implemented. 
    (b) Rates established for hospital fiscal years beginning 
on or after July 1, 1989, shall not be adjusted for the one 
percent technology factor included in the hospital cost index. 
    (c) Operating payment rates shall be indexed from the 
hospital's most recent fiscal year ending prior to January 1, 
1991, by prorating the hospital cost index methodology in effect 
on January 1, 1989.  Payments made for admissions occurring 
after July 1, 1990, shall not include the one percent technology 
factor.  
    (d) Property and pass-through payment rates shall be 
maintained at the most recent payment rate effective for June 1, 
1990.  However, all hospitals are subject to the hospital cost 
index limitation of subdivision 2c, for two complete fiscal 
years.  Property and pass-through costs shall be retroactively 
settled through December 31, 1990.  The laws in effect on the 
day before the effective date of this section apply to the 
retroactive settlement from the effective date of this section 
to December 31, 1990. 
    Subd. 4.  [STUDY.] The commissioner shall contract for an 
evaluation of the inpatient and outpatient hospital payment 
systems.  The study shall include recommendations concerning: 
    (1) more effective methods of assigning operating and 
property payment rates to specific services or diagnoses; 
    (2) effective methods of cost control and containment; 
    (3) fiscal impacts of alternative payment systems; 
    (4) the relationships of the use of and payment for 
inpatient and outpatient hospital services; 
    (5) methods to relate reimbursement levels to the efficient 
provision of services; and 
    (6) methods to adjust reimbursement levels to reflect cost 
differences between geographic areas. 
    The commissioner shall report the findings to the 
legislature by January 15, 1991, along with recommendations for 
implementation. 
    Subd. 5.  [RULES.] The commissioner of human services shall 
adopt permanent rules to implement this section and sections 
256.9685, 256.9686, and 256.969 under chapter 14, the 
administrative procedure act. 
    Sec. 40.  Minnesota Statutes 1988, section 256B.031, 
subdivision 5, is amended to read:  
    Subd. 5.  [FREE CHOICE LIMITED.] (a) The commissioner may 
require recipients of aid to families with dependent children to 
enroll in a prepaid health plan and receive services from or 
through the prepaid health plan, with the following exceptions: 
    (1) recipients who are refugees and whose health services 
are reimbursed 100 percent by the federal government for the 
first 24 months after entry into the United States; and 
    (2) recipients who are placed in a foster home or 
facility.  If placement occurs before the seventh day prior to 
the end of any month, the recipient will be disenrolled from the 
recipient's prepaid health plan effective the first day of the 
following month.  If placement occurs after the seventh day 
before the end of any month, that recipient will be disenrolled 
from the prepaid health plan on the first day of the second 
month following placement.  The prepaid health plan must provide 
all services set forth in subdivision 2 during the interim 
period. 
    Enrollment in a prepaid health plan is mandatory only when 
recipients have a choice of at least two prepaid health plans.  
    (b) Recipients who become eligible on or after December 1, 
1987, must choose a health plan within 30 days of the date 
eligibility is determined.  At the time of application, the 
local agency shall ask the recipient whether the recipient has a 
primary health care provider.  If the recipient has not chosen a 
health plan within 30 days but has provided the local agency 
with the name of a primary health care provider, the local 
agency shall determine whether the provider participates in a 
prepaid health plan available to the recipient and, if so, the 
local agency shall select that plan on the recipient's behalf.  
If the recipient has not provided the name of a primary health 
care provider who participates in an available prepaid health 
plan, commissioner shall randomly assign the recipient to a 
health plan.  
    (c) If possible, the local agency shall ask whether the 
recipient has a primary health care provider and the procedures 
under paragraph (b) shall apply.  If a recipient does not choose 
a prepaid health plan by this date, the commissioner shall 
randomly assign the recipient to a health plan.  
    (d) The commissioner shall request a waiver from the 
federal Health Care Financing Administration to limit a 
recipient's ability to change health plans to once every six or 
12 months.  If such a waiver is obtained, each recipient must be 
enrolled in the health plan for a minimum of six or 12 months.  
A recipient may change health plans once within the first 60 
days after initial enrollment. 
    (e) Women who are receiving medical assistance due to 
pregnancy and later become eligible for aid to families with 
dependent children are not required to choose a prepaid health 
plan until 60 days postpartum.  An infant born as a result of 
that pregnancy must be enrolled in a prepaid health plan at the 
same time as the mother. 
    (f) If third-party coverage is available to a recipient 
through enrollment in a prepaid health plan through employment, 
through coverage by the former spouse, or if a duty of support 
has been imposed by law, order, decree, or judgment of a court 
under section 518.551, the obligee or recipient shall 
participate in the prepaid health plan in which the obligee has 
enrolled provided that the commissioner has contracted with the 
plan. 
    Sec. 41.  Minnesota Statutes 1988, section 256B.04, 
subdivision 14, is amended to read: 
    Subd. 14.  [COMPETITIVE BIDDING.] When determined to be 
effective, economical, and feasible, the commissioner shall may 
utilize volume purchase through competitive bidding and 
negotiation under the provisions of chapter 16 16B, to 
provide the following items under the medical assistance program 
including but not limited to the following: 
    (1) eyeglasses; 
    (2) oxygen.  The commissioner shall provide for oxygen 
needed in an emergency situation on a short-term basis, until 
the vendor can obtain the necessary supply from the contract 
dealer; 
    (3) hearing aids and supplies; and 
    (4) durable medical equipment, including but not limited to:
    (a) hospital beds; 
    (b) commodes; 
    (c) glide-about chairs; 
    (d) patient lift apparatus; 
    (e) wheelchairs and accessories; 
    (f) oxygen administration equipment; 
    (g) respiratory therapy equipment; 
    (h) electronic diagnostic, therapeutic and life support 
systems; 
    (5) wheelchair special transportation services; and 
    (6) drugs. 
    Sec. 42.  Minnesota Statutes 1988, section 256B.04, is 
amended by adding a subdivision to read: 
    Subd. 17.  [PRENATAL CARE OUTREACH.] (a) The commissioner 
of human services shall award a grant to an eligible 
organization to conduct a statewide media campaign promoting 
early prenatal care.  The goals of the campaign are to increase 
public awareness of the importance of early and continuous 
prenatal care and to inform the public about public and private 
funds available for prenatal care. 
    (b) In order to receive a grant under this section, an 
applicant must: 
    (1) have experience conducting prenatal care outreach; 
    (2) have an established statewide constituency or service 
area; and 
    (3) demonstrate an ability to accomplish the purposes in 
this subdivision. 
    (c) Money received under this subdivision may be used for 
purchase of materials and supplies, staff fees and salaries, 
consulting fees, and other goods and services necessary to 
accomplish the goals of the campaign.  Money may not be used for 
capital expenditures. 
    Sec. 43.  Minnesota Statutes 1988, section 256B.055, 
subdivision 7, is amended to read: 
    Subd. 7.  [AGED, BLIND, OR DISABLED PERSONS.] Medical 
assistance may be paid for a person who meets the categorical 
eligibility requirements of the supplemental security income 
program and the other eligibility requirements of this section.  
The methodology for calculating disregards and deductions from 
income must be as specified in section 256D.37, subdivisions 6 
to 14 the same methodology used for calculating income for the 
supplemental security income program except as specified 
otherwise by state or federal law, rule or regulation. 
    Effective February 1, 1989, and to the extent allowed by 
federal law the commissioner shall deduct state and federal 
income taxes and federal insurance contributions act payments 
withheld from the individual's earned income in determining 
eligibility under this subdivision. 
    Sec. 44.  Minnesota Statutes 1988, section 256B.055, 
subdivision 8, is amended to read: 
    Subd. 8.  [MEDICALLY NEEDY PERSONS WITH EXCESS INCOME OR 
ASSETS.] Medical assistance may be paid for a person who, except 
for the amount of income or assets, would qualify for 
supplemental security income for the aged, blind and disabled, 
or aid to families with dependent children, and who meets the 
other eligibility requirements of this section.  However, in the 
case of families and children who meet the categorical 
eligibility requirements for aid to families with dependent 
children, the methodology for calculating assets shall be as 
specified in section 256.73, subdivision 2, except that the 
exclusion for an automobile shall be as in subdivision 3, clause 
(g), as long as acceptable to the health care financing 
administration, and the methodology for calculating deductions 
from earnings for child care and work expenses shall be as 
specified in section 256.74, subdivision 1. 
    Sec. 45.  Minnesota Statutes 1988, section 256B.056, 
subdivision 3, is amended to read:  
    Subd. 3.  [ASSET LIMITATIONS.] To be eligible for medical 
assistance, a person must not individually own more than $3,000 
in cash or liquid assets, or if a member of a household with two 
family members (husband and wife, or parent and child), the 
household must not own more than $6,000 in cash or liquid 
assets, plus $200 for each additional legal dependent.  In 
addition to these maximum amounts, an eligible individual or 
family may accrue interest on these amounts, but they must be 
reduced to the maximum at the time of an eligibility 
redetermination.  For residents of long-term care facilities, 
the accumulation of the clothing and personal needs allowance 
pursuant to section 256B.35 must also be reduced to the maximum 
at the time of the eligibility redetermination.  Cash and liquid 
assets may include a prepaid funeral contract and insurance 
policies with cash surrender value.  The value of the following 
shall not be included:  The value of the items in paragraphs (a) 
to (i) are not considered in determining medical assistance 
eligibility. 
    (a) The homestead, is not considered. 
    (b) Household goods and personal effects with a total 
equity value of $2,000 or less, are not considered. 
     (c) Personal property used as a regular abode by the 
applicant or recipient, is not considered.  
     (d) A lot in a burial plot for each member of the 
household, is not considered. 
     (e) Capital and operating assets of a trade or business 
that the local agency determines are necessary to the person's 
ability to earn an income, are not considered. 
     (f) For a period of six months, insurance settlements to 
repair or replace damaged, destroyed, or stolen property, are 
not considered. 
     (g) One motor vehicle that is licensed pursuant to chapter 
168 and defined as:  (1) passenger automobile, (2) station 
wagon, (3) motorcycle, (4) motorized bicycle or (5) truck of the 
weight found in categories A to E, of section 168.013, 
subdivision 1e, and that is used primarily for the person's 
benefit, and (h) other items which may be required by federal 
law or statute is not considered. 
     To be excluded, the vehicle must have a market value of 
less than $4,500; be necessary to obtain medically necessary 
health services; be necessary for employment; be modified for 
operation by or transportation of a handicapped person; or be 
necessary to perform essential daily tasks because of climate, 
terrain, distance, or similar factors.  The equity value of 
other motor vehicles is counted against the cash or liquid asset 
limit. 
    (h) Life insurance policies and assets designated as burial 
expenses, according to the standards and restrictions of the 
supplemental security income (SSI) program. 
    (i) Other items which may be excluded by federal law are 
not considered. 
    Sec. 46.  Minnesota Statutes 1988, section 256B.056, 
subdivision 4, is amended to read: 
    Subd. 4.  [INCOME.] To be eligible for medical assistance, 
a person must not have, or anticipate receiving, semiannual 
income in excess of 115 120 percent of the income standards by 
family size used in the aid to families with dependent children 
program, except that families and children may have an income up 
to 133-1/3 percent of the AFDC income standard.  Notwithstanding 
any laws or rules to the contrary, 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. 
    Sec. 47.  Minnesota Statutes 1988, section 256B.056, 
subdivision 5, is amended to read: 
    Subd. 5.  [EXCESS INCOME.] A person who has excess income 
is eligible for medical assistance if the person has expenses 
for medical care that are more than the amount of the person's 
excess income, computed by deducting incurred medical expenses 
from the excess income to reduce the excess to the income 
standard specified in subdivision 4.  The person shall elect to 
have the medical expenses deducted monthly at the beginning of a 
one-month budget period or at the beginning of the a six-month 
budget period; or who is a pregnant woman or infant up to one 
year of age who meets the requirements of section 256B.055, 
subdivisions 1 to 9, except that her anticipated income is in 
excess of the income standards by family size used in the aid to 
families with dependent children program, but is equal to or 
less than 185 percent of the federal poverty guideline for the 
same family size.  Eligibility for a pregnant woman or infant up 
to one year of age with respect to this clause shall be without 
regard to the asset standards specified in subdivisions 2 and 
4.  For persons who reside in licensed nursing homes, regional 
treatment centers, or medical institutions, the income over and 
above that required in section 256B.35 for personal needs 
allowance is to be applied to the cost of institutional care.  
In addition, income may be retained by an institutionalized 
person (a) to support dependents in the amount that, together 
with the income of the spouse and child under age 18, would 
provide net income equal to the medical assistance standard for 
the family size of the dependents excluding the person residing 
in the facility; or (b) 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 the person was not living together 
with a spouse or child under age 21 at the time the person 
entered a long-term care facility, if the person has expenses of 
maintaining a residence in the community, and if a physician 
certifies that the person is expected to reside in the long-term 
care facility on a short-term basis.  For purposes of this 
section, persons are determined to be residing in licensed 
nursing homes, regional treatment centers, or medical 
institutions if the persons are expected to remain for a period 
expected to last longer than three months.  The commissioner of 
human services may establish a schedule of contributions to be 
made by the spouse of a nursing home resident to the cost of 
care.  The commissioner shall seek applicable waivers from the 
Secretary of Health and Human Services to allow persons eligible 
for assistance on a spend-down basis under this subdivision to 
elect to pay the monthly spend-down amount to the local agency 
in order to maintain eligibility on a continuous basis for 
medical assistance and to simplify payment to health care 
providers.  If the local agency has not received payment of the 
spend-down amount by the 15th day of the month, the recipient is 
ineligible for this option for the following month.  The 
commissioner may seek a waiver of the requirement of the Social 
Security Act that all requirements be uniform statewide, to 
phase in this option over a six-month period. 
    Sec. 48.  [256B.057] [ELIGIBILITY; INCOME AND ASSET 
LIMITATIONS FOR SPECIAL CATEGORIES.] 
    Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] An infant 
less than one year of age or a pregnant woman, as certified in 
writing by a physician or nurse midwife, is eligible for medical 
assistance if countable family income is equal to or less than 
185 percent of the federal poverty guideline for the same family 
size.  Eligibility for a pregnant woman or infant less than one 
year of age under this subdivision must be determined without 
regard to asset standards established in section 256B.056, 
subdivision 3.  Adjustments in the income limits due to annual 
changes in the federal poverty guidelines shall be implemented 
the first day of July following publication of the changes.  
    Subd. 2.  [CHILDREN.] A child one through seven years of 
age in a family whose countable income is less than 100 percent 
of the federal poverty guidelines for the same family size is 
eligible for medical assistance.  Eligibility for children under 
this subdivision must be determined without regard to asset 
standards established in section 256B.056, subdivision 3.  
Adjustments in the income limits due to annual changes in the 
federal poverty guidelines shall be implemented the first day of 
July following publication of the changes.  
    Subd. 3.  [QUALIFIED MEDICARE BENEFICIARIES.] A person who 
is entitled to Part A Medicare benefits, whose income is equal 
to or less than 85 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; to 95 percent on January 1, 1991; 
and to 100 percent on January 1, 1992.  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.  Adjustments in the income limits due to annual 
changes in the federal poverty guidelines shall be implemented 
the first day of July following publication of the changes. 
    Sec. 49.  [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; 
    (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 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; and 
    (6) 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 (5), family member includes only 
minor or dependent children, dependent parents, or dependent 
siblings of the institutionalized or community spouse if the 
sibling resides with the community spouse. 
    (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. 50.  [256B.058] [TREATMENT OF INCOME OF 
INSTITUTIONALIZED SPOUSE.] 
    Subdivision 1.  [INCOME NOT AVAILABLE.] The income 
described in subdivisions 2 and 3 shall be deducted from an 
institutionalized spouse's monthly income and is not considered 
available for payment of the monthly costs of an 
institutionalized person in the institution after the person has 
been determined eligible for medical assistance. 
    Subd. 2.  [MONTHLY INCOME ALLOWANCE FOR COMMUNITY 
SPOUSE.] (a) For an institutionalized spouse with a spouse 
residing in the community, monthly income may be allocated to 
the community spouse as a monthly income allowance for the 
community spouse.  Beginning with the first full calendar month 
the institutionalized spouse is in the institution, the monthly 
income allowance is not considered available to the 
institutionalized spouse for monthly payment of costs of care in 
the institution as long as the income is made available to the 
community spouse. 
    (b) The monthly income allowance is the amount by which the 
community spouse's monthly maintenance needs allowance under 
paragraphs (c) and (d) exceeds the amount of monthly income 
otherwise available to the community spouse.  
    (c) The community spouse's monthly maintenance needs 
allowance is the lesser of $1,500 or 122 percent of the monthly 
federal poverty guideline for a family of two plus an excess 
shelter allowance.  The excess shelter allowance is for the 
amount of shelter expenses that exceed 30 percent of 122 percent 
of the federal poverty guideline line for a family of two.  
Shelter expenses are the community spouse's expenses for rent, 
mortgage payments including principal and interest, taxes, 
insurance, required maintenance charges for a cooperative or 
condominium that is the community spouse's principal residence, 
and the standard utility allowance under section 5(e) of the 
federal Food Stamp Act of 1977.  If the community spouse has a 
required maintenance charge for a cooperative or condominium, 
the standard utility allowance must be reduced by the amount of 
utility expenses included in the required maintenance charge.  
     If the community or institutionalized spouse establishes 
that the community spouse needs income greater than the monthly 
maintenance needs allowance determined in this paragraph due to 
exceptional circumstances resulting in significant financial 
duress, the monthly maintenance needs allowance may be increased 
to an amount that provides needed additional income.  
    (d) The percentage of the federal poverty guideline used to 
determine the monthly maintenance needs allowance in paragraph 
(c) is increased to 133 percent on July 1, 1991, and to 150 
percent on July 1, 1992.  Adjustments in the income limits due 
to annual changes in the federal poverty guidelines shall be 
implemented the first day of July following publication of the 
annual changes.  The $1,500 maximum must be adjusted January 1, 
1990, and every January 1 after that by the same percentage 
increase in the consumer price index for all urban consumers 
(all items; United States city average) between the two previous 
Septembers. 
    (e) If a court has entered an order against an 
institutionalized spouse for monthly income for support of the 
community spouse, the community spouse's monthly income 
allowance under this subdivision shall not be less than the 
amount of the monthly income ordered. 
    Subd. 3.  [FAMILY ALLOWANCE.] (a) A family allowance 
determined under paragraph (b) is not considered available to 
the institutionalized spouse for monthly payment of costs of 
care in the institution. 
    (b) The family allowance is equal to one-third of the 
amount by which 122 percent of the monthly federal poverty 
guideline for a family of two exceeds the monthly income for 
that family member. 
    (c) For purposes of this subdivision, the term family 
member only includes a minor or dependent child, dependent 
parent, or dependent sibling of the institutionalized or 
community spouse if the sibling resides with the community 
spouse.  
    (d) The percentage of the federal poverty guideline used to 
determine the family allowance in paragraph (b) is increased to 
133 percent on July 1, 1991, and to 150 percent on July 1, 
1992.  Adjustments in the income limits due to annual changes in 
the federal poverty guidelines shall be implemented the first 
day of July following publication of the annual changes. 
    Subd. 4.  [TREATMENT OF INCOME.] (a) No income of the 
community spouse will be considered available to an eligible 
institutionalized spouse, beginning the first full calendar 
month of institutionalization, except as provided in this 
subdivision.  
    (b) In determining the income of an institutionalized 
spouse or community spouse, after the institutionalized spouse 
has been determined eligible for medical assistance, the 
following rules apply.  
    (1) For income that is not from a trust, availability is 
determined according to items (i) to (v), unless the instrument 
providing the income otherwise specifically provides:  
    (i) if payment is made solely in the name of one spouse, 
the income is considered available only to that spouse; 
    (ii) if payment is made in the names of both spouses, 
one-half of the income is considered available to each; 
    (iii) if payment is made in the names of one or both 
spouses together with one or more other persons, the income is 
considered available to each spouse according to the spouse's 
interest, or one-half of the joint interest is considered 
available to each spouse if each spouse's interest is not 
specified; 
    (iv) if there is no instrument that establishes ownership, 
one-half of the income is considered available to each spouse; 
and 
    (v) either spouse may rebut the determination of 
availability of income by showing by a preponderance of the 
evidence that ownership interests are different than provided 
above.  
    (2) For income from a trust, income is considered available 
to each spouse as provided in the trust.  If the trust does not 
specify an amount available to either or both spouses, 
availability will be determined according to items (i) to (iii): 
    (i) if payment of income is made only to one spouse, the 
income is considered available only to that spouse; 
    (ii) if payment of income is made to both spouses, one-half 
is considered available to each; and 
    (iii) if payment is made to either or both spouses and one 
or more other persons, the income is considered available to 
each spouse in proportion to each spouse's interest, or if no 
such interest is specified, one-half of the joint interest is 
considered available to each spouse. 
    Sec. 51.  [256B.059] [TREATMENT OF ASSETS WHEN A SPOUSE IS 
INSTITUTIONALIZED.] 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the terms defined in this subdivision have the meanings 
given them. 
     (b) "Community spouse" means the spouse of an 
institutionalized person. 
    (c) "Spousal share" means one-half of the total value of 
all assets, to the extent that either the institutionalized 
spouse or the community spouse had an ownership interest at the 
time of institutionalization. 
    (d) "Assets otherwise available to the community spouse" 
means assets individually or jointly owned by the community 
spouse, other than assets excluded by subdivision 5, paragraph 
(c). 
    (e) "Community spouse asset allowance" is the value of 
assets that can be transferred under subdivision 3. 
    Subd. 2.  [ASSESSMENT OF SPOUSAL SHARE.] At the beginning 
of a continuous period of institutionalization of a person, at 
the request of either the institutionalized spouse or the 
community spouse, or upon application for medical assistance, 
the total value of assets in which either the institutionalized 
spouse or the community spouse had an interest at the time of 
institutionalization shall be assessed and documented and the 
spousal share shall be assessed and documented. 
    Subd. 3.  [COMMUNITY SPOUSE ASSET ALLOWANCE.] (a) An 
institutionalized spouse may transfer assets to the community 
spouse solely for the benefit of the community spouse.  Except 
for increased amounts allowable under subdivision 4, the maximum 
amount of assets allowed to be transferred is the amount which, 
when added to the assets otherwise available to the community 
spouse, is the greater of:  
    (1) $12,000; 
    (2) the lesser of the spousal share or $60,000; or 
    (3) the amount required by court order to be paid to the 
community spouse.  
    If the assets available to the community spouse are already 
at the limit permissible under this section, or the higher limit 
attributable to increases under subdivision 4, no assets may be 
transferred from the institutionalized spouse to the community 
spouse.  The transfer must be made as soon as practicable after 
the date the institutionalized spouse is determined eligible for 
medical assistance, or within the amount of time needed for any 
court order required for the transfer.  On January 1, 1990, and 
every January 1 thereafter, the $12,000 and $60,000 limits shall 
be adjusted by the same percentage change in the consumer price 
index for all urban consumers (all items; United States city 
average) between the two previous Septembers.  These adjustments 
shall also be applied to the $12,000 and $60,000 limits in 
subdivision 5. 
    Subd. 4.  [INCREASED COMMUNITY SPOUSE ASSET ALLOWANCE; WHEN 
ALLOWED.] (a) If either the institutionalized spouse or 
community spouse establishes that the community spouse asset 
allowance under subdivision 3 (in relation to the amount of 
income generated by such an allowance) is not sufficient to 
raise the community spouse's income to the minimum monthly 
maintenance needs allowance in section 256B.058, subdivision 2, 
paragraph (c), there shall be substituted for the amount allowed 
to be transferred an amount sufficient, when combined with the 
monthly income otherwise available to the spouse, to provide the 
minimum monthly maintenance needs allowance. 
    (b) The community spouse asset allowance under subdivision 
3 can be increased by court order or hearing that complies with 
the requirements of United States Code, title 42, section 1924. 
    Subd. 5.  [ASSET AVAILABILITY.] (a) At the time of 
application for medical assistance benefits, assets considered 
available to the institutionalized spouse shall be the total 
value of all assets in which either spouse has an ownership 
interest, reduced by the greater of: 
     (1) $12,000; or 
     (2) the lesser of the spousal share or $60,000; or 
     (3) the amount required by court order to be paid to the 
community spouse.  If the community spouse asset allowance has 
been increased under subdivision 4, then the assets considered 
available to the institutionalized spouse under this subdivision 
shall be further reduced by the value of additional amounts 
allowed under subdivision 4. 
    (b) After the month in which the institutionalized spouse 
is determined eligible for medical assistance, during the 
continuous period of institutionalization, no assets of the 
community spouse are considered available to the 
institutionalized spouse. 
    (c) For purposes of this section, assets do not include 
assets excluded under section 256B.056, without regard to the 
limitations on total value in that section. 
    Sec. 52.  [256B.0595] [PROHIBITIONS ON TRANSFER; 
EXCEPTIONS.] 
    Subdivision 1.  [PROHIBITED TRANSFERS.] If an 
institutionalized person has given away, sold, or disposed of, 
for less than fair market value, any asset or interest therein, 
except assets other than the homestead that are excluded under 
section 256B.056, subdivision 3, within 30 months of the date of 
institutionalization if the person has been determined eligible 
for medical assistance, or within 30 months of the date of the 
first approved application for medical assistance if the person 
has not yet been determined eligible for medical assistance, the 
person is ineligible for long-term care services for the period 
of time determined under subdivision 2.  For purposes of this 
section, long-term care services include nursing facility 
services, and home and community-based services provided 
pursuant to section 256B.491.  For purposes of this subdivision 
and subdivisions 2, 3, and 4, "institutionalized person" 
includes a person who is an inpatient in a nursing facility, or 
who is receiving home and community-based services under section 
256B.491. 
    Subd. 2.  [PERIOD OF INELIGIBILITY.] For any uncompensated 
transfer, the number of months of ineligibility for long-term 
care services shall be the lesser of 30 months, or the 
uncompensated transfer amount divided by the average medical 
assistance rate for nursing facility services in the state in 
effect on the date of application.  The amount used to calculate 
the average medical assistance payment rate shall be adjusted 
each July 1 to reflect payment rates for the previous calendar 
year.  The period of ineligibility begins with the month in 
which the assets were transferred.  The uncompensated transfer 
amount is the fair market value of the asset at the time it was 
given away, sold, or disposed of, less the amount of 
compensation received.  
    Subd. 3.  [HOMESTEAD EXCEPTION TO TRANSFER 
PROHIBITION.] (a) An institutionalized person is not ineligible 
for long-term care services due to a transfer of assets for less 
than fair market value if the asset transferred was a homestead 
and: 
    (1) title to the homestead was transferred to the 
individual's 
    (i) spouse; 
    (ii) child who is under age 21; 
    (iii) blind or permanently and totally disabled child as 
defined in the supplemental security income program; 
    (iv) sibling who has equity interest in the home and who 
was residing in the home for a period of at least one year 
immediately before the date of the individual's admission to the 
facility; or 
    (v) son or daughter who was residing in the individual's 
home for a period of at least two years immediately before the 
date of the individual's admission to the facility, and who 
provided care to the individual that permitted the individual to 
reside at home rather than in an institution or facility; 
    (2) a satisfactory showing is made that the individual 
intended to dispose of the homestead at fair market value or for 
other valuable consideration; or 
    (3) the local agency grants a waiver of the excess 
resources created by the uncompensated transfer because denial 
of eligibility would cause undue hardship for the individual, 
based on imminent threat to the individual's health and 
well-being.  
    (b) When a waiver is granted under paragraph (a), clause 
(3), a cause of action exists against the person to whom the 
homestead was transferred for that portion of long-term care 
services granted within 30 months of the transfer or the amount 
of the uncompensated transfer, whichever is less, together with 
the costs incurred due to the action.  The action may be brought 
by the state or the local agency responsible for providing 
medical assistance under chapter 256G.  
    Subd. 4.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] An 
institutionalized person receiving medical assistance on the 
date of institutionalization who has transferred assets for less 
than fair market value within the 30 months immediately before 
the date of institutionalization or an institutionalized person 
who was not receiving medical assistance on the date of 
institutionalization and who has transferred assets for less 
than fair market value within 30 months immediately before the 
month of application is not ineligible for long-term care 
services if one of the following conditions apply: 
    (1) the assets were transferred to the community spouse, as 
defined in section 256B.059; or 
    (2) the institutionalized spouse, prior to being 
institutionalized, transferred assets to his or her spouse, 
provided that the spouse to whom the assets were transferred 
does not then transfer those assets to another person for less 
than fair market value.  (At the time when one spouse is 
institutionalized, assets must be allocated between the spouses 
as provided under section 256B.059); or 
    (3) the assets were transferred to the individual's child 
who is blind or permanently and totally disabled as determined 
in the supplemental security income program; or 
    (4) a satisfactory showing is made that the individual 
intended to dispose of the assets either at fair market value or 
for other valuable consideration; or 
    (5) the local agency determines that denial of eligibility 
for long-term care services would work an undue hardship, and 
grants a waiver of excess assets.  When a waiver is granted, a 
cause of action exists against the person to whom the assets 
were transferred for that portion of long-term care services 
granted within 30 months of the transfer, or the amount of the 
uncompensated transfer, whichever is less, together with the 
costs incurred due to the action.  The action may be brought by 
the state or the local agency responsible for providing medical 
assistance under chapter 256B.  
    Sec. 53.  Minnesota Statutes 1988, section 256B.062, is 
amended to read: 
    256B.062 [CONTINUED ELIGIBILITY.] 
    Subdivision 1.  Any family which was eligible for aid to 
families with dependent children in at least three of the six 
months immediately preceding the month in which the family 
became ineligible for aid to families with dependent children 
because of increased income from employment shall, while a 
member of the family is employed, remain eligible for medical 
assistance for four calendar months following the month in which 
the family would otherwise be determined to be ineligible due to 
the income and resources limitations of this chapter. 
    Subd. 2.  A family whose eligibility for aid to families 
with dependent children is terminated because of the loss of the 
$30, or the $30 and one-third earned income disregard is 
eligible for medical assistance for 12 calendar months following 
the month in which the family loses medical assistance 
eligibility as an aid to families with dependent children 
recipient.  Medical assistance may be paid for persons who 
received aid to families with dependent children in at least 
three of the six months preceding the month in which the person 
became ineligible for aid to families with dependent children, 
if the ineligibility was due to an increase in hours of 
employment or employment income or due to the loss of an earned 
income disregard.  A person who is eligible for extended medical 
assistance is entitled to six months of assistance without 
reapplication, unless the assistance unit ceases to include a 
dependent child.  For a person under 21 years of age, medical 
assistance may not be discontinued within the six-month period 
of extended eligibility until it has been determined that the 
person is not otherwise eligible for medical assistance.  
Medical assistance may be continued for an additional six months 
if the person meets all requirements for the additional six 
months, according to Title XIX of the Social Security Act, as 
amended by section 303 of the Family Support Act of 1988, Public 
Law Number 100-485. 
    Sec. 54.  Minnesota Statutes 1988, section 256B.0625, 
subdivision 2, is amended to read: 
    Subd. 2.  [SKILLED AND INTERMEDIATE NURSING CARE.] Medical 
assistance covers skilled nursing home services and services of 
intermediate care facilities, including training and 
habilitation services, as defined in section 252.41, subdivision 
3, for persons with mental retardation or related conditions who 
are residing in intermediate care facilities for persons with 
mental retardation or related conditions.  Medical assistance 
must not be used to pay the costs of nursing care provided to a 
patient in a swing bed as defined in section 144.562, unless (a) 
the facility in which the swing bed is located is eligible as a 
sole community provider, as defined in Code of Federal 
Regulations, title 42, section 412.92, or the facility is a 
public hospital owned by a governmental entity with 15 or fewer 
licensed acute care beds; (b) the health care financing 
administration approves the necessary state plan amendments; (c) 
the patient was screened as provided in section 256B.091; (d) 
the patient no longer requires acute care services; and (e) no 
nursing home beds are available within 25 miles of the 
facility.  The daily medical assistance payment for nursing care 
for the patient in the swing bed is the statewide average 
medical assistance skilled nursing care per diem as computed 
annually by the commissioner on July 1 of each year. 
    Sec. 55.  Minnesota Statutes 1988, section 256B.0625, 
subdivision 13, is amended to read: 
    Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs if 
prescribed by a licensed practitioner.  The commissioner 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 commissioner shall appoint the 
formulary committee members no later than 30 days following July 
1, 1981.  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 two-year terms and shall serve 
without compensation.  The commissioner may 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.  Prior authorization may be required by the 
commissioner, with the consent of the drug formulary committee, 
before certain formulary drugs are eligible for payment.  The 
formulary shall not include:  drugs or products for which there 
is no federal funding; over-the-counter drugs, except for 
antacids, acetaminophen, family planning products, aspirin, 
insulin, prenatal vitamins, and vitamins for children under the 
age of seven and pregnant or nursing women; or any other 
over-the-counter drug identified by the commissioner, in 
consultation with the appropriate professional consultants under 
contract with or employed by the state agency, 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, the administrative procedure act; nutritional 
products, except for those products needed for treatment of 
phenylketonuria, hyperlysinemia, maple syrup urine disease, a 
combined allergy to human milk, cow 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; anorectics; and drugs for which 
medical value has not been established.  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.  Payment to drug 
vendors shall not be modified before the formulary is 
established except that the commissioner shall not permit 
payment for any drugs which may not by law be included in the 
formulary, and the commissioner's determination shall not be 
subject to chapter 14, the administrative procedure act.  The 
commissioner shall publish conditions for prohibiting payment 
for specific drugs after considering the formulary committee's 
recommendations.  
     (b) 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 established by the commissioner, 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.  Actual acquisition cost 
includes quantity and other special discounts except time and 
cash discounts.  The actual acquisition cost of a drug may be 
estimated by the commissioner.  The maximum allowable cost of a 
multisource drug may be set by the commissioner and it shall be 
comparable to, but no higher than, the maximum amount paid by 
other third party payors in this state who have maximum 
allowable cost programs.  Establishment of the amount of payment 
for drugs shall not be subject to the requirements of the 
administrative procedure act.  An additional dispensing fee of 
$.30 may be added to the dispensing fee paid to pharmacists for 
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.  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" on the prescription as required by section 151.21, 
subdivision 2.  Implementation of any change in the fixed 
dispensing fee that has not been subject to the administrative 
procedure act is limited to not more than 180 days, unless, 
during that time, the commissioner initiates rulemaking through 
the administrative procedure act. 
    Sec. 56.  Minnesota Statutes 1988, section 256B.0625, 
subdivision 17, is amended to read: 
    Subd. 17.  [TRANSPORTATION COSTS.] (a) Medical assistance 
covers transportation costs incurred solely for obtaining 
emergency medical care or transportation costs incurred by 
nonambulatory persons in obtaining emergency or nonemergency 
medical care when paid directly to an ambulance company, common 
carrier, or other recognized providers of transportation 
services.  For the purpose of this subdivision, a person who is 
incapable of transport by taxicab or bus shall be considered to 
be nonambulatory. 
    (b) Special transportation, as defined in Minnesota Rules, 
part 9505.0315, subpart 1, item F, provided to nonambulatory 
persons who do not need a wheelchair lift van or 
stretcher-equipped vehicle, may be reimbursed at a lower rate 
than special transportation provided to persons who need a 
wheelchair lift van or stretcher-equipped vehicle. 
    Sec. 57.  Minnesota Statutes 1988, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 26.  [SPECIAL EDUCATION SERVICES.] Medical assistance 
covers medical services identified in a recipient's 
individualized education plan and covered under the medical 
assistance state plan.  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.  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. 
    Sec. 58.  Minnesota Statutes 1988, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 27.  [ORGAN AND TISSUE TRANSPLANTS.] Medical 
assistance coverage for organ and tissue transplant procedures 
is limited to those procedures covered by the Medicare program, 
provided those procedures comply with all applicable laws, 
rules, and regulations governing (1) coverage by the Medicare 
program, (2) federal financial participation by the Medicaid 
program, and (3) coverage by the Minnesota medical assistance 
program. 
    Sec. 59.  [256B.0642] [FEDERAL FINANCIAL PARTICIPATION.] 
    The commissioner may, in the aggregate, prospectively 
reduce payment rates for medical assistance providers receiving 
federal funds to avoid reduced federal financial participation 
resulting from rates that are in excess of the Medicare 
limitations. 
    Sec. 60.  Minnesota Statutes 1988, section 256B.091, 
subdivision 3, is amended to read: 
    Subd. 3.  [SCREENING TEAM; DUTIES.] Local screening teams 
shall seek cooperation from other public and private agencies in 
the community which offer services to the disabled and elderly.  
The responsibilities of the agency responsible for screening 
shall include:  
    (a) Provision of information and education to the general 
public regarding availability of the screening program; 
    (b) Acceptance of referrals from individuals, families, 
human service professionals and nursing home personnel of the 
community agencies; 
    (c) Assessment of health and social needs of referred 
individuals and identification of services needed to maintain 
these persons in the least restrictive environments; 
    (d) Identification of available noninstitutional services 
to meet the needs of individuals referred; 
    (e) Recommendations for individuals screened regarding: 
    (1) Nursing home or boarding care home admission; and 
    (2) Maintenance in the community with specific service 
plans and referrals and designation of a lead agency to 
implement each individual's plan of care; 
    (f) Assessment of active treatment needs: 
    (1) in cooperation with a qualified mental health 
professional for persons with a primary or secondary diagnosis 
of mental illness; and 
    (2) in cooperation with a qualified mental retardation 
professional for persons with a primary or secondary diagnosis 
of mental retardation or related conditions.  
    For purposes of this subdivision, a qualified mental 
retardation professional must meet the standards for a qualified 
mental retardation professional in Code of Federal Regulations, 
title 42, section 483.430; 
    (g) Provision of follow up services as needed; and 
    (g) (h) Preparation of reports which may be required by the 
commissioner of human services. 
    Sec. 61.  Minnesota Statutes 1988, section 256B.092, 
subdivision 7, is amended to read: 
    Subd. 7.  [SCREENING TEAMS ESTABLISHED.] Each county agency 
shall establish a screening team which, under the direction of 
the county case manager, shall make an evaluation of need for 
home and community-based services of persons who are entitled to 
the level of care provided by an intermediate care facility for 
persons with mental retardation or related conditions or for 
whom there is a reasonable indication that they might require 
the level of care provided by an intermediate care facility.  
The screening team shall make an evaluation of need within 15 
working days of the date that the assessment is completed or 
within 60 working days of a request for service by a person with 
mental retardation or related conditions, whichever is the 
earlier, and within five working days of an emergency admission 
of an individual to an intermediate care facility for persons 
with mental retardation or related conditions.  The screening 
team shall consist of the case manager, the client, a parent or 
guardian, and a qualified mental retardation professional, as 
defined in the Code of Federal Regulations, title 42, section 
442.401 483.430, as amended through December 31, 1987. June 3, 
1988.  The case manager may also act as the qualified mental 
retardation professional if the case manager meets the federal 
definition.  County social service agencies may contract with a 
public or private agency or individual who is not a service 
provider for the person for the public guardianship 
representation required by the screening or individual service 
and habilitation planning process.  The contract shall be 
limited to public guardianship representation for the screening 
and individual service and habilitation planning activities.  
The contract shall require compliance with the commissioner's 
instructions, and may be for paid or voluntary services.  For 
individuals determined to have overriding health care needs, a 
registered nurse must be designated as either the case manager 
or the qualified mental retardation professional.  The case 
manager shall consult with the client's physician, other health 
professionals or other persons as necessary to make this 
evaluation.  The case manager, with the concurrence of the 
client or the client's legal representative, may invite other 
persons to attend meetings of the screening team.  No member of 
the screening team shall have any direct or indirect service 
provider interest in the case. 
     Sec. 62.  [256B.093] [SERVICES FOR PERSONS WITH BRAIN 
INJURIES.] 
     Subdivision 1.  [STATE COORDINATOR.] The commissioner of 
human services shall designate a full-time position within the 
long-term care management division of the department of human 
services to supervise and coordinate services for persons with 
brain injuries. 
    Subd. 2.  [ELIGIBILITY.] The commissioner may contract with 
qualified agencies or persons to provide case management 
services to medical assistance recipients who are at risk of 
institutionalization and meet one of the following criteria: 
    (a) The person has a brain injury. 
    (b) The person is receiving home care services or is in an 
institution and has a discharge plan requiring the provision of 
home care services and meets one of the following criteria: 
    (1) the person suffers from a brain abnormality or 
degenerative brain disease resulting in significant destruction 
of brain tissue and loss of brain function that requires 
extensive services over an extended period of time; 
    (2) the person is unable to direct the person's own care; 
    (3) the person has medical home care costs that exceed 
thresholds established by the commissioner under Minnesota 
Rules, parts 9505.0170 to 9505.0475; 
    (4) the person is eligible for medical assistance under the 
option for certain disabled children in section 134 of the Tax 
Equity and Fiscal Responsibility Act of 1982 (TEFRA); 
    (5) the person receives home care from two or more 
providers who are unable to effectively coordinate the services; 
or 
    (6) the person has received or will receive home care 
services for longer than six months. 
    Subd. 3.  [CASE MANAGEMENT DUTIES.] The department shall 
fund the case management contracts using medical assistance 
administrative funds.  The contractor must: 
    (1) assess the person's individual needs for services 
required to prevent institutionalization; 
    (2) assure that a care plan that meets the person's needs 
is developed by the appropriate agency or individual; 
    (3) assist the person in obtaining services necessary to 
allow the person to remain in the community; 
    (4) coordinate home care services with other medical 
assistance services under section 256B.0625; 
    (5) assure cost effectiveness of medical assistance 
services; 
    (6) make recommendations to the commissioner on the 
approval or denial of the use of medical assistance funds to pay 
for home care services when home care services exceed thresholds 
established by the commissioner under Minnesota Rules, parts 
9505.0170 to 9505.0475; 
    (7) assist the person with problems related to the 
provision of home care services; 
    (8) assure the quality of home care services; and 
    (9) reassess the person's need for and level of home care 
services at a frequency determined by the commissioner. 
    Subd. 4.  [DEFINITIONS.] For purposes of this section, the 
following definitions apply: 
    (a) "Brain injury" means a sudden insult or damage to the 
brain or its coverings, not of a degenerative nature.  The 
insult or damage may produce an altered state of consciousness 
or a decrease in mental, cognitive, behavioral, or physical 
functioning resulting in partial or total disability. 
    (b) "Home care services" means medical assistance home care 
services defined under section 256B.0625, subdivisions 6, 7, and 
19. 
    Sec. 63.  Minnesota Statutes 1988, section 256B.14, is 
amended to read: 
    256B.14 [RELATIVE'S RESPONSIBILITY.] 
    Subdivision 1.  [IN GENERAL.] Subject to the provisions of 
sections 256B.055, 256B.056, and 256B.06, responsible relative 
means the spouse of a medical assistance recipient or parent of 
a minor recipient of medical assistance.  
    Subd. 2.  [ACTIONS TO OBTAIN PAYMENT.] The state agency 
shall promulgate rules to determine the ability of responsible 
relatives to contribute partial or complete repayment of medical 
assistance furnished to recipients for whom they are 
responsible.  No resource contribution is required of a spouse 
at the time of the first approved medical assistance application.
These rules shall not require repayment when payment would cause 
undue hardship to the responsible relative or that relative's 
immediate family.  These rules shall be consistent with the 
requirements of section 252.27, subdivision 2, for parents of 
children whose eligibility for medical assistance was determined 
without deeming of the parents' resources and income.  For 
parents of children receiving services under a federal medical 
assistance waiver or under section 134 of the Tax Equity and 
Fiscal Responsibility Act of 1982, United States Code, title 42, 
section 1396a(e)(3), while living in their natural home, 
including in-home family support services, respite care, 
homemaker services, and minor adaptations to the home, the state 
agency shall take into account the room, board, and services 
provided by the parents in determining the parental contribution 
to the cost of care.  The county agency shall give the 
responsible relative notice of the amount of the repayment.  If 
the state agency or county agency finds that notice of the 
payment obligation was given to the responsible relative, but 
that the relative failed or refused to pay, a cause of action 
exists against the responsible relative for that portion of 
medical assistance granted after notice was given to the 
responsible relative, which the relative was determined to be 
able to pay.  
     The action may be brought by the state agency or the county 
agency in the county where assistance was granted, for the 
assistance, together with the costs of disbursements incurred 
due to the action.  
     In addition to granting the county or state agency a money 
judgment, the court may, upon a motion or order to show cause, 
order continuing contributions by a responsible relative found 
able to repay the county or state agency.  The order shall be 
effective only for the period of time during which the recipient 
receives medical assistance from the county or state agency. 
    Sec. 64.  Minnesota Statutes 1988, section 256B.25, is 
amended by adding a subdivision to read: 
    Subd. 4.  [PAYMENT DURING SUSPENDED ADMISSIONS.] A nursing 
home or boarding care home that has received a notice to suspend 
admissions under section 144A.10, subdivision 4a, shall be 
ineligible to receive payment for admissions that occur during 
the effective dates of the suspension.  Upon termination of the 
suspension by the commissioner of health, payments may be made 
for eligible persons, beginning with the day after the 
suspension ends. 
    Sec. 65.  Minnesota Statutes 1988, section 256B.421, 
subdivision 14, is amended to read: 
    Subd. 14.  [FRINGE BENEFITS.] "Fringe benefits" means 
workers' compensation insurance, group health or dental 
insurance, group life insurance, retirement benefits or 
plans, except for public employee retirement act contributions, 
and uniform allowances.  
    Sec. 66.  Minnesota Statutes 1988, section 256B.431, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [OPERATING COSTS, AFTER JULY 1, 1985.] (a) For 
rate years beginning on or after July 1, 1985, the commissioner 
shall establish procedures for determining per diem 
reimbursement for operating costs.  
    (b) The commissioner shall contract with an econometric 
firm with recognized expertise in and access to national 
economic change indices that can be applied to the appropriate 
cost categories when determining the operating cost payment rate.
    (c) The commissioner shall analyze and evaluate each 
nursing home's cost report of allowable operating costs incurred 
by the nursing home during the reporting year immediately 
preceding the rate year for which the payment rate becomes 
effective.  
    (d) The commissioner shall establish limits on actual 
allowable historical operating cost per diems based on cost 
reports of allowable operating costs for the reporting year that 
begins October 1, 1983, taking into consideration relevant 
factors including resident needs, geographic location, size of 
the nursing home, and the costs that must be incurred for the 
care of residents in an efficiently and economically operated 
nursing home.  In developing the geographic groups for purposes 
of reimbursement under this section, the commissioner shall 
ensure that nursing homes in any county contiguous to the 
Minneapolis-St. Paul seven-county metropolitan area are included 
in the same geographic group.  The limits established by the 
commissioner shall not be less, in the aggregate, than the 60th 
percentile of total actual allowable historical operating cost 
per diems for each group of nursing homes established under 
subdivision 1 based on cost reports of allowable operating costs 
in the previous reporting year.  For rate years beginning on or 
after July 1, 1987, or until the new base period is established, 
facilities located in geographic group I as described in 
Minnesota Rules, part 9549.0052 (Emergency), on January 1, 1987, 
may choose to have the commissioner apply either the care 
related limits or the other operating cost limits calculated for 
facilities located in geographic group II, or both, if either of 
the limits calculated for the group II facilities is higher.  
The efficiency incentive for geographic group I nursing homes 
must be calculated based on geographic group I limits.  The 
phase-in must be established utilizing the chosen limits.  For 
purposes of these exceptions to the geographic grouping 
requirements, the definitions in Minnesota Rules, parts 
9549.0050 to 9549.0059 (Emergency), and 9549.0010 to 9549.0080, 
apply.  The limits established under this paragraph remain in 
effect until the commissioner establishes a new base period.  
Until the new base period is established, the commissioner shall 
adjust the limits annually using the appropriate economic change 
indices established in paragraph (e).  In determining allowable 
historical operating cost per diems for purposes of setting 
limits and nursing home payment rates, the commissioner shall 
divide the allowable historical operating costs by the actual 
number of resident days, except that where a nursing home is 
occupied at less than 90 percent of licensed capacity days, the 
commissioner may establish procedures to adjust the computation 
of the per diem to an imputed occupancy level at or below 90 
percent.  The commissioner shall establish efficiency incentives 
as appropriate.  The commissioner may establish efficiency 
incentives for different operating cost categories.  The 
commissioner shall consider establishing efficiency incentives 
in care related cost categories.  The commissioner may combine 
one or more operating cost categories and may use different 
methods for calculating payment rates for each operating cost 
category or combination of operating cost categories.  For the 
rate year beginning on July 1, 1985, the commissioner shall: 
     (1) allow nursing homes that have an average length of stay 
of 180 days or less in their skilled nursing level of care, 125 
percent of the care related limit and 105 percent of the other 
operating cost limit established by rule; and 
     (2) exempt nursing homes licensed on July 1, 1983, by the 
commissioner to provide residential services for the physically 
handicapped under Minnesota Rules, parts 9570.2000 to 9570.3600, 
from the care related limits and allow 105 percent of the other 
operating cost limit established by rule. 
     For the purpose of calculating the other operating cost 
efficiency incentive for nursing homes referred to in clause (1) 
or (2), the commissioner shall use the other operating cost 
limit established by rule before application of the 105 percent. 
     (e) The commissioner shall establish a composite index or 
indices by determining the appropriate economic change 
indicators to be applied to specific operating cost categories 
or combination of operating cost categories.  
     (f) Each nursing home shall receive an operating cost 
payment rate equal to the sum of the nursing home's operating 
cost payment rates for each operating cost category.  The 
operating cost payment rate for an operating cost category shall 
be the lesser of the nursing home's historical operating cost in 
the category increased by the appropriate index established in 
paragraph (e) for the operating cost category plus an efficiency 
incentive established pursuant to paragraph (d) or the limit for 
the operating cost category increased by the same index.  If a 
nursing home's actual historic operating costs are greater than 
the prospective payment rate for that rate year, there shall be 
no retroactive cost settle-up.  In establishing payment rates 
for one or more operating cost categories, the commissioner may 
establish separate rates for different classes of residents 
based on their relative care needs.  
     (g) The commissioner shall include the reported actual real 
estate tax liability or payments in lieu of real estate tax of 
each nursing home as an operating cost of that nursing home.  
Allowable costs under this subdivision for payments made by a 
nonprofit nursing home that are in lieu of real estate taxes 
shall not exceed the amount which the nursing home would have 
paid to a city or township and county for fire, police, 
sanitation services, and road maintenance costs had real estate 
taxes been levied on that property for those purposes.  For rate 
years beginning on or after July 1, 1987, the reported actual 
real estate tax liability or payments in lieu of real estate tax 
of nursing homes shall be adjusted to include an amount equal to 
one-half of the dollar change in real estate taxes from the 
prior year.  The commissioner shall include a reported actual 
special assessment, and reported actual license fees required by 
the Minnesota department of health, for each nursing home as an 
operating cost of that nursing home.  For rate years beginning 
on or after July 1, 1989, the commissioner shall include a 
nursing home's reported public employee retirement act 
contribution for the reporting year as apportioned to the 
care-related operating cost categories and other operating cost 
categories multiplied by the appropriate composite index or 
indices established pursuant to paragraph (e) as costs under 
this paragraph.  Total adjusted real estate tax liability, 
payments in lieu of real estate tax, actual special assessments 
paid, the indexed public employee retirement act contribution, 
and license fees paid as required by the Minnesota department of 
health, for each nursing home (1) shall be divided by actual 
resident days in order to compute the operating cost payment 
rate for this operating cost category, (2) shall not be used to 
compute the 60th percentile care-related operating cost limits 
or other operating cost limits established by the commissioner, 
and (3) shall not be increased by the composite index or indices 
established pursuant to paragraph (e), unless otherwise 
indicated in this paragraph. 
    (h) For rate years beginning on or after July 1, 1987, the 
commissioner shall adjust the rates of a nursing home that meets 
the criteria for the special dietary needs of its residents as 
specified in section 144A.071, subdivision 3, clause (c), and 
the requirements in section 31.651.  The adjustment for raw food 
cost shall be the difference between the nursing home's 
allowable historical raw food cost per diem and 115 percent of 
the median historical allowable raw food cost per diem of the 
corresponding geographic group. 
    The rate adjustment shall be reduced by the applicable 
phase-in percentage as provided under subdivision 2h. 
    Sec. 67.  Minnesota Statutes 1988, section 256B.431, 
subdivision 2e, is amended to read: 
    Subd. 2e.  [CONTRACTS FOR SERVICES FOR VENTILATOR DEPENDENT 
PERSONS.] The commissioner may contract with a nursing home 
eligible to receive medical assistance payments to provide 
services to a ventilator dependent person identified by the 
commissioner according to criteria developed by the 
commissioner, including:  
    (1) nursing home care has been recommended for the person 
by a preadmission screening team; 
    (2) the person has been assessed at case mix classification 
K; 
    (3) the person has been hospitalized for at least six 
months and no longer requires inpatient acute care hospital 
services; and 
    (4) the commissioner has determined that necessary services 
for the person cannot be provided under existing nursing home 
rates.  
    The commissioner may issue a request for proposals to 
provide services to a ventilator dependent person to nursing 
homes eligible to receive medical assistance payments and shall 
select nursing homes from among respondents according to 
criteria developed by the commissioner, including:  
      (1) the cost effectiveness and appropriateness of services; 
      (2) the nursing home's compliance with federal and state 
licensing and certification standards; and 
      (3) the proximity of the nursing home to a ventilator 
dependent person identified by the commissioner who requires 
nursing home placement.  
    The commissioner may negotiate an adjustment to the 
operating cost payment rate for a nursing home selected by the 
commissioner from among respondents to the request for 
proposals.  The negotiated adjustment must reflect only the 
actual additional cost of meeting the specialized care needs of 
a ventilator dependent person identified by the commissioner for 
whom necessary services cannot be provided under existing 
nursing home rates and which are not otherwise covered under 
Minnesota Rules, parts 9549.0010 to 9549.0080 or 9505.0170 to 
9505.0475.  The negotiated payment rate must not exceed 200 
percent of the highest multiple bedroom payment rate for a 
Minnesota nursing home, as initially established by the 
commissioner for the rate year for case mix classification K.  
The negotiated adjustment shall not affect the payment rate 
charged to private paying residents under the provisions of 
section 256B.48, subdivision 1.  The negotiated adjustment paid 
pursuant to this paragraph is specifically exempt from the 
definition of "rule" and the rulemaking procedures required by 
chapter 14 and section 256B.502. 
    Sec. 68.  Minnesota Statutes 1988, 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. 
    (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.] For the rate period 
October 1, 1988, to June 30, 1990, the commissioner shall add 
the appropriate salary adjustment per diem calculated in clause 
(1) or (2) to the total operating cost payment rate of each 
nursing home.  The salary adjustment per diem for each nursing 
home must be determined as follows: 
     (1) for each nursing home 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 3.5 percent and then 
dividing the resulting amount by the nursing home's actual 
resident days; and 
     (2) for each nursing home 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). 
     Each nursing home that receives a salary adjustment per 
diem pursuant to this subdivision shall adjust nursing home 
employee salaries by a minimum of the amount determined in 
clause (1) or (2).  The commissioner shall review allowable 
salary costs, including payroll taxes and fringe benefits, for 
the reporting year ending September 30, 1989, to determine 
whether or not each nursing home complied with this 
requirement.  The commissioner shall report the extent to which 
each nursing home complied with the legislative commission on 
long-term care by August 1, 1990.  
    (d)  [PENSION CONTRIBUTIONS.] For rate years beginning on 
or after July 1, 1989, the commissioner shall exempt allowable 
employee pension contributions separately reported by a nursing 
home on its annual cost report from the care-related operating 
cost limits and the other operating cost limits.  
Hospital-attached homes that provide allowable employee pension 
contributions may report the costs that are allocated to nursing 
home operations independently for verification by the 
commissioner.  For rate years beginning on or after July 1, 
1989, amounts verified as allowable employee pension 
contributions are exempt from care-related operating cost limits 
and other operating cost limits.  For purposes of this 
paragraph, "employee pension contributions" means contributions 
required under the Public Employee Retirement Act and 
contributions to other employee pension plans if the pension 
plan existed on March 1, 1988.  
    (e)  [NEW BASE YEAR.] The commissioner shall establish the 
reporting year ending September 30, 1989, as a 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. 
    Sec. 69.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 2j.  [HOSPITAL-ATTACHED NURSING HOME STATUS.] (a) For 
the purpose of setting rates under Minnesota Rules, parts 
9549.0010 to 9549.0080, for rate years beginning after June 30, 
1989, a hospital-attached nursing home means a nursing home 
recognized by the federal Medicare program to be a 
hospital-based nursing facility for purposes of being subject to 
higher cost limits accorded hospital-based nursing facilities 
under the Medicare program, or, prior to June 30, 1983, was 
classified as a hospital-attached nursing home under Minnesota 
Rules, parts 9510.0010 to 9510.0480, provided that the nursing 
home's cost report filed under Minnesota Rules, parts 9549.0010 
to 9549.0080, shall use the same cost allocation principles and 
methods used in the reports filed for the Medicare program. 
    (b) For rate years beginning after June 30, 1989, a nursing 
home and hospital, which have applied for hospital-based nursing 
facility status under the federal Medicare program during the 
reporting year or the nine-month period following the nursing 
home's reporting year, shall be considered a hospital-attached 
nursing home for purposes of setting payment rates under 
Minnesota Rules, parts 9549.0010 to 9549.0080, for the rate year 
following the reporting year or the nine-month period in which 
the facility made its Medicare application.  The nursing home 
must file its cost report or an amended cost report for that 
reporting year before the following rate year using Medicare 
principles and Medicare's recommended cost allocation methods 
had the Medicare program's hospital-based nursing facility 
status been granted to the nursing home.  For each subsequent 
rate year, the nursing home must meet the definition 
requirements in paragraph (a).  If the nursing home is denied 
hospital-based nursing facility status under the Medicare 
program, the nursing home's payment rates for the rate years the 
nursing home was considered to be a hospital-attached nursing 
home pursuant to this paragraph shall be recalculated treating 
the nursing home as a non-hospital-attached nursing home. 
    Sec. 70.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 2k.  [OPERATING COSTS AFTER JULY 1, 1989.] For rate 
years beginning on or after July 1, 1989, a nursing home that is 
exempt under subdivision 2b, paragraph (d), clause (2); whose 
total number of licensed beds are licensed under Minnesota 
Rules, parts 9570.2000 to 9570.3600; and that maintains an 
average length of stay of less than 365 days during each 
reporting year, is limited to 140 percent of the 
other-operating-cost limit for hospital-attached nursing homes 
as established by Minnesota Rules, part 9549.0055, subpart 2, 
item E, subitem (2), as modified by subdivision 2i, paragraph 
(a).  For purposes of this subdivision, the nursing home's 
average length of stay must be computed by dividing the nursing 
home's actual resident days for the reporting year by the 
nursing home's total discharges for that reporting year. 
    Sec. 71.  Minnesota Statutes 1988, section 256B.431, 
subdivision 3a, is amended to read: 
    Subd. 3a.  [PROPERTY-RELATED COSTS AFTER JULY 1, 1985.] (a) 
For rate years beginning on or after July 1, 1985, the 
commissioner, by permanent rule, shall reimburse nursing home 
providers that are vendors in the medical assistance program for 
the rental use of real estate and depreciable equipment.  "Real 
estate" means land improvements, buildings, and attached 
fixtures used directly for resident care.  "Depreciable 
equipment" means the standard movable resident care equipment 
and support service equipment generally used in long-term care 
facilities.  
    (b) In developing the method for determining payment rates 
for the rental use of nursing homes, the commissioner shall 
consider factors designed to:  
    (1) simplify the administrative procedures for determining 
payment rates for property-related costs; 
    (2) minimize discretionary or appealable decisions; 
    (3) eliminate any incentives to sell nursing homes; 
    (4) recognize legitimate costs of preserving and replacing 
property; 
     (5) recognize the existing costs of outstanding 
indebtedness allowable under the statutes and rules in effect on 
May 1, 1983; 
     (6) address the current value of, if used directly for 
patient care, land improvements, buildings, attached fixtures, 
and equipment; 
     (7) establish an investment per bed limitation; 
     (8) reward efficient management of capital assets; 
     (9) provide equitable treatment of facilities; 
     (10) consider a variable rate; and 
     (11) phase-in implementation of the rental reimbursement 
method.  
     (c) No later than January 1, 1984, the commissioner shall 
report to the legislature on any further action necessary or 
desirable in order to implement the purposes and provisions of 
this subdivision.  
      (d) For rate years beginning on or after July 1, 1987, a 
nursing home which has reduced licensed bed capacity after 
January 1, 1986, shall be allowed to: 
      (1) aggregate the applicable investment per bed limits 
based on the number of beds licensed prior to the reduction; and 
      (2) establish capacity days for each rate year following 
the licensure reduction based on the number of beds licensed on 
the previous April 1 if the commissioner is notified of the 
change by April 4.  The notification must include a copy of the 
delicensure request that has been submitted to the commissioner 
of health. 
      (e) Until the rental reimbursement method is fully phased 
in, a nursing home whose final property-related payment rate is 
the rental rate shall continue to have its property-related 
payment rates established based on the rental reimbursement 
method. 
    (f) For rate years beginning on or after July 1, 1989, the 
interest expense that results from a refinancing of a nursing 
home's demand call loan, when the loan that must be refinanced 
was incurred before May 22, 1983, is an allowable interest 
expense if: 
    (1) the demand call loan or any part of it was in the form 
of a loan that was callable at the demand of the lender; 
    (2) the demand call loan or any part of it was called by 
the lender through no fault of the nursing home; 
    (3) the demand call loan or any part of it was made by a 
government agency operating under a statutory or regulatory loan 
program; 
    (4) the refinanced debt does not exceed the sum of the 
allowable remaining balance of the demand call loan at the time 
of payment on the demand call loan and refinancing costs; 
    (5) the term of the refinanced debt does not exceed the 
remaining term of the demand call loan, had the debt not been 
subject to an on-call payment demand; and 
    (6) the refinanced debt is not a debt between related 
organizations as defined in Minnesota Rules, part 9549.0020, 
subpart 38. 
    Sec. 72.  Minnesota Statutes 1988, section 256B.431, 
subdivision 3f, is amended to read: 
    Subd. 3f.  [PROPERTY COSTS AFTER JULY 1, 1988.] (a) 
[INVESTMENT PER BED LIMIT.] For the rate year beginning July 1, 
1988, the replacement-cost-new per bed limit must be $32,571 per 
licensed bed in multiple bedrooms and $48,857 per licensed bed 
in a single bedroom.  For the rate year beginning July 1, 1989, 
the replacement-cost-new per bed limit for a single bedroom must 
be $49,907 adjusted according to Minnesota Rules, part 
9549.0060, subpart 4, item A, subitem (1).  Beginning January 1, 
1989 1990, the replacement-cost-new per bed limits must be 
adjusted annually as specified in Minnesota Rules, part 
9549.0060, subpart 4, item A, subitem (1). 
    (b)  [RENTAL FACTOR.] For the rate year beginning July 1, 
1988, the commissioner shall increase the rental factor as 
established in Minnesota Rules, part 9549.0060, subpart 8, item 
A, by 6.2 percent rounded to the nearest 100th percent for the 
purpose of reimbursing nursing homes for soft costs and 
entrepreneurial profits not included in the cost valuation 
services used by the state's contracted appraisers.  For rate 
years beginning on or after July 1, 1989, the rental factor is 
the amount determined under this paragraph for the rate year 
beginning July 1, 1988. 
    (c)  [OCCUPANCY FACTOR.] For rate years beginning on or 
after July 1, 1988, in order to determine property-related 
payment rates under Minnesota Rules, part 9549.0060, for all 
nursing homes except those whose average length of stay in a 
skilled level of care within a nursing home is 180 days or less, 
the commissioner shall use 95 percent of capacity days.  For a 
nursing home whose average length of stay in a skilled level of 
care within a nursing home is 180 days or less, the commissioner 
shall use the greater of resident days or 80 percent of capacity 
days but in no event shall the divisor exceed 95 percent of 
capacity days. 
    (d)  [EQUIPMENT ALLOWANCE.] For rate years beginning on 
July 1, 1988, and July 1, 1989, the commissioner shall add ten 
cents per resident per day to each nursing home's 
property-related payment rate.  The ten-cent property-related 
payment rate increase is not cumulative from rate year to rate 
year.  For the rate year beginning July 1, 1990, the 
commissioner shall increase each nursing home's equipment 
allowance as established in Minnesota Rules, part 9549.0060, 
subpart 10, by ten cents per resident per day.  For rate years 
beginning on or after July 1, 1991, the adjusted equipment 
allowance must be adjusted annually for inflation as in 
Minnesota Rules, part 9549.0060, subpart 10, item E.  
    (e)  [REFINANCING.] If a nursing home is refinanced, the 
commissioner shall adjust the nursing home's property-related 
payment rate for the savings that result from refinancing.  The 
adjustment to the property-related payment rate must be as 
follows: 
    (1) The commissioner shall recalculate the nursing home's 
rental per diem by substituting the new allowable annual 
principle and interest payments for those of the refinanced debt.
    (2) The nursing home's property-related payment rate must 
be decreased by the difference between the nursing home's 
current rental per diem and the rental per diem determined under 
clause (1). 
    If a nursing home payment rate is adjusted according to 
this paragraph, the adjusted payment rate is effective the first 
of the month following the date of the refinancing for both 
medical assistance and private paying residents.  The nursing 
home's adjusted property-related payment rate is effective until 
June 30, 1990. 
   (e) [POST CHAPTER 199 RELATED-ORGANIZATION DEBTS AND 
INTEREST EXPENSE.] For rate years beginning on or after July 1, 
1990, Minnesota Rules, part 9549.0060, subpart 5, item E, shall 
not apply to outstanding related organization debt incurred 
prior to May 23, 1983, provided that the debt was an allowable 
debt under Minnesota Rules, parts 9510.0010 to 9510.0480, the 
debt is subject to repayment through annual principal payments, 
and the nursing home demonstrates to the commissioner's 
satisfaction that the interest rate on the debt was less than 
market interest rates for similar arms-length transactions at 
the time the debt was incurred.  If the debt was incurred due to 
a sale between family members, the nursing home must also 
demonstrate that the seller no longer participates in the 
management or operation of the nursing home.  Debts meeting the 
conditions of this paragraph are subject to all other provisions 
of Minnesota Rules, parts 9549.0010 to 9549.0080. 
    (f)  [BUILDING CAPITAL ALLOWANCE FOR NURSING HOMES WITH 
OPERATING LEASES.] For rate years beginning on or after July 1, 
1990, a nursing home with operating lease costs incurred for the 
nursing home's buildings shall receive its building capital 
allowance computed in accordance with Minnesota Rules, part 
9549.0060, subpart 8. 
    Sec. 73.  Minnesota Statutes 1988, section 256B.431, 
subdivision 3g, is amended to read: 
    Subd. 3g.  [PROPERTY COSTS AFTER JULY 1, 1990, FOR CERTAIN 
FACILITIES.] For rate years beginning on or after July 1, 
1990, non-hospital-attached nursing homes that, on or after 
January 1, 1976, but prior to December 31, 1985 January 1, 1987, 
were newly licensed after new construction, or increased their 
licensed beds by a minimum of 35 percent through new 
construction, and whose building capital allowance is less than 
their allowable annual principal and interest on allowable debt 
prior to the application of the replacement-cost-new per bed 
limit and whose remaining weighted average debt amortization 
schedule as of January 1, 1988, exceeded 15 years, must receive 
a property-related payment rate equal to the greater of their 
rental per diem or their annual allowable principal and 
allowable interest without application of the 
replacement-cost-new per bed limit divided by their capacity 
days as determined under Minnesota Rules, part 9549.0060, 
subpart 11, as modified by subdivision 3f, paragraph (c), from 
the preceding reporting year, plus their equipment allowance.  A 
nursing home that is eligible for a property-related payment 
rate under this subdivision and whose property-related payment 
rate in a subsequent rate year is its rental per diem must 
continue to have its property-related payment rates established 
for all future rate years based on the rental reimbursement 
method in Minnesota Rules, part 9549.0060.  
The commissioner may require the nursing home to apply for 
refinancing as a condition of receiving special rate treatment 
under this subdivision. 
    Sec. 74.  Minnesota Statutes 1988, section 256B.431, 
subdivision 4, is amended to read: 
    Subd. 4.  [SPECIAL RATES.] (a) For the rate years beginning 
July 1, 1983, and July 1, 1984, a newly constructed nursing home 
or one with a capacity increase of 50 percent or more may, upon 
written application to the commissioner, receive an interim 
payment rate for reimbursement for property-related costs 
calculated pursuant to the statutes and rules in effect on May 
1, 1983, and for operating costs negotiated by the commissioner 
based upon the 60th percentile established for the appropriate 
group under subdivision 2a, to be effective from the first day a 
medical assistance recipient resides in the home or for the 
added beds.  For newly constructed nursing homes which are not 
included in the calculation of the 60th percentile for any 
group, subdivision 2f, the commissioner shall establish by rule 
procedures for determining interim operating cost payment rates 
and interim property-related cost payment rates.  The interim 
payment rate shall not be in effect for more than 17 months.  
The commissioner shall establish, by emergency and permanent 
rules, procedures for determining the interim rate and for 
making a retroactive cost settle-up after the first year of 
operation; the cost settled operating cost per diem shall not 
exceed 110 percent of the 60th percentile established for the 
appropriate group.  Until procedures determining operating cost 
payment rates according to mix of resident needs are 
established, the commissioner shall establish by rule procedures 
for determining payment rates for nursing homes which provide 
care under a lesser care level than the level for which the 
nursing home is certified.  
      (b) For the rate years beginning on or after July 1, 1985, 
a newly constructed nursing home or one with a capacity increase 
of 50 percent or more may, upon written application to the 
commissioner, receive an interim payment rate for reimbursement 
for property related costs, operating costs, and real estate 
taxes and special assessments calculated under rules promulgated 
by the commissioner. 
      (c) For rate years beginning on or after July 1, 1983, the 
commissioner may exclude from a provision of 12 MCAR S 2.050 any 
facility that is licensed by the commissioner of health only as 
a boarding care home, certified by the commissioner of health as 
an intermediate care facility, is licensed by the commissioner 
of human services under Minnesota Rules, parts 9520.0500 to 
9520.0690, and has less than five percent of its licensed 
boarding care capacity reimbursed by the medical assistance 
program.  Until a permanent rule to establish the payment rates 
for facilities meeting these criteria is promulgated, the 
commissioner shall establish the medical assistance payment rate 
as follows:  
     (1) The desk audited payment rate in effect on June 30, 
1983, remains in effect until the end of the facility's fiscal 
year.  The commissioner shall not allow any amendments to the 
cost report on which this desk audited payment rate is based.  
     (2) For each fiscal year beginning between July 1, 1983, 
and June 30, 1985, the facility's payment rate shall be 
established by increasing the desk audited operating cost 
payment rate determined in clause (1) at an annual rate of five 
percent.  
     (3) For fiscal years beginning on or after July 1, 1985, 
but before January 1, 1988, the facility's payment rate shall be 
established by increasing the facility's payment rate in the 
facility's prior fiscal year by the increase indicated by the 
consumer price index for Minneapolis and St. Paul.  
      (4) For the fiscal year beginning on January 1, 1988, the 
facility's payment rate must be established using the following 
method:  The commissioner shall divide the real estate taxes and 
special assessments payable as stated in the facility's current 
property tax statement by actual resident days to compute a real 
estate tax and special assessment per diem.  Next, the prior 
year's payment rate must be adjusted by the higher of (1) the 
percentage change in the consumer price index (CPI-U U.S. city 
average) as published by the Bureau of Labor Statistics between 
the previous two Septembers, new series index (1967-100), or (2) 
2.5 percent, to determine an adjusted payment rate.  The 
facility's payment rate is the adjusted prior year's payment 
rate plus the real estate tax and special assessment per diem. 
     (5) For fiscal years beginning on or after January 1, 1989, 
the facility's payment rate must be established using the 
following method:  The commissioner shall divide the real estate 
taxes and special assessments payable as stated in the 
facility's current property tax statement by actual resident 
days to compute a real estate tax and special assessment per 
diem.  Next, the prior year's payment rate less the real estate 
tax and special assessment per diem must be adjusted by the 
higher of (1) the percentage change in the consumer price index 
(CPI-U U.S. city average) as published by the Bureau of Labor 
Statistics between the previous two Septembers, new series index 
(1967-100), or (2) 2.5 percent, to determine an adjusted payment 
rate.  The facility's payment rate is the adjusted payment rate 
plus the real estate tax and special assessment per diem. 
      (6) For the purpose of establishing payment rates under 
this paragraph, the facility's rate and reporting years coincide 
with the facility's fiscal year.  
    (d) A facility that meets the criteria of paragraph (c) 
shall submit annual cost reports on forms prescribed by the 
commissioner.  
    (e) For the rate year beginning July 1, 1985, each nursing 
home total payment rate must be effective two calendar months 
from the first day of the month after the commissioner issues 
the rate notice to the nursing home.  From July 1, 1985, until 
the total payment rate becomes effective, the commissioner shall 
make payments to each nursing home at a temporary rate that is 
the prior rate year's operating cost payment rate increased by 
2.6 percent plus the prior rate year's property-related payment 
rate and the prior rate year's real estate taxes and special 
assessments payment rate.  The commissioner shall retroactively 
adjust the property-related payment rate and the real estate 
taxes and special assessments payment rate to July 1, 1985, but 
must not retroactively adjust the operating cost payment rate. 
    (f) For the purposes of Minnesota Rules, part 9549.0060, 
subpart 13, item F, the following types of transactions shall 
not be considered a sale or reorganization of a provider entity: 
      (1) the sale or transfer of a nursing home upon death of an 
owner; 
      (2) the sale or transfer of a nursing home due to serious 
illness or disability of an owner as defined under the social 
security act; 
      (3) the sale or transfer of the nursing home upon 
retirement of an owner at 62 years of age or older; 
      (4) any transaction in which a partner, owner, or 
shareholder acquires an interest or share of another partner, 
owner, or shareholder in a nursing home business provided the 
acquiring partner, owner, or shareholder has less than 50 
percent ownership after the acquisition; 
      (5) a sale and leaseback to the same licensee which does 
not constitute a change in facility license; 
      (6) a transfer of an interest to a trust; 
      (7) gifts or other transfers for no consideration; 
    (8) a merger of two or more related organizations; 
    (9) a transfer of interest in a facility held in 
receivership; 
    (10) a change in the legal form of doing business other 
than a publicly held organization which becomes privately held 
or vice versa; 
    (11) the addition of a new partner, owner, or shareholder 
who owns less than 20 percent of the nursing home or the 
issuance of stock; or 
    (12) an involuntary transfer including foreclosure, 
bankruptcy, or assignment for the benefit of creditors. 
    Any increase in allowable debt or allowable interest 
expense or other cost incurred as a result of the foregoing 
transactions shall be a nonallowable cost for purposes of 
reimbursement under Minnesota Rules, parts 9549.0010 to 
9549.0080. 
    (g) For rate years beginning on or after July 1, 1986, the 
commissioner may exclude from a provision of Minnesota Rules, 
parts 9549.0010 to 9549.0080, any facility that is certified by 
the commissioner of health as an intermediate care facility, 
licensed by the commissioner of human services as a chemical 
dependency treatment program, and enrolled in the medical 
assistance program as an institution for mental disease.  The 
commissioner of human services shall establish a medical 
assistance payment rate for these facilities.  Chapter 14 does 
not apply to the procedures and criteria used to establish the 
ratesetting structure.  The ratesetting method is not appealable.
Upon receiving a recommendation from the commissioner of health 
for a review of rates under section 144A.15, subdivision 6, the 
commissioner may grant an adjustment to the nursing home's 
payment rate.  The commissioner shall review the recommendation 
of the commissioner of health, together with the nursing home's 
cost report to determine whether or not the deficiency or need 
can be corrected or met by reallocating nursing home staff, 
costs, revenues, or other resources including any investments, 
efficiency incentives, or allowances.  If the commissioner 
determines that the deficiency cannot be corrected or the need 
cannot be met, the commissioner shall determine the payment rate 
adjustment by dividing the additional annual costs established 
during the commissioner's review by the nursing home's actual 
resident days from the most recent desk-audited cost report.  
The payment rate adjustment must meet the conditions in section 
256B.47, subdivision 2, and shall remain in effect until the 
receivership under section 144A.15 ends, or until another date 
the commissioner sets. 
    Upon the subsequent sale or transfer of the nursing home, 
the commissioner may recover amounts paid through payment rate 
adjustments under this paragraph.  The buyer or transferee shall 
repay this amount to the commissioner within 60 days after the 
commissioner notifies the buyer or transferee of the obligation 
to repay.  The buyer or transferee must also repay the 
private-pay resident the amount the private-pay resident paid 
through payment rate adjustment.  
    Sec. 75.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 7.  [ONE-TIME ADJUSTMENT TO NURSING HOME PAYMENT 
RATES TO COMPLY WITH OMNIBUS BUDGET RECONCILIATION ACT.] The 
commissioner shall determine a one-time nursing staff adjustment 
to the payment rate to adjust payment rates to upgrade certain 
nursing homes' professional nursing staff complement to meet the 
minimum standards of 1987 Public Law Number 100-203.  The 
adjustments to the payment rates determined under this 
subdivision cover cost increases to meet minimum standards for 
professional nursing staff.  For a nursing home to be eligible 
for the payment rate adjustment, a nursing home must have all of 
its current licensed beds certified solely for the intermediate 
level of care.  When the commissioner establishes that it is not 
cost effective to upgrade an eligible nursing home to the new 
minimum staff standards, the commissioner may exclude the 
nursing home if it is either an institution for mental disease 
or a nursing home that would have been determined to be an 
institution for mental disease, but for the fact that it has 16 
or fewer licensed beds. 
    (a) The increased cost of professional nursing for an 
eligible nursing home shall be determined according to clauses 
(1) to (4): 
    (1) subtract from the number 8760 the compensated hours for 
professional nurses, both employed and contracted, and, if the 
result is greater than zero, then multiply the result by $4.55; 
    (2) subtract from the number 2920 the compensated hours for 
registered nurses, both employed and contracted, and, if the 
result is greater than zero, then multiply the result by $9.30; 
    (3) if an eligible nursing home has less than 61 licensed 
beds, the director of nurses' compensated hours must be included 
in the compensated hours for professional nurses in clause (1).  
If the director of nurses is also a registered nurse, the 
director of nurses' hours must be included in the compensated 
hours for registered nurses in clause (2); and 
    (4) the one-time nursing staff adjustment to the payment 
rate shall be the sum of clauses (1) and (2) as adjusted by 
clause (3), if appropriate, and then divided by the nursing 
home's actual resident days for the reporting year ending 
September 30, 1988. 
    (b) The one-time nursing staff adjustment to the payment 
rate is effective from January 1, 1990, to June 30, 1991. 
    (c) If a nursing home is granted a waiver to the minimum 
professional nursing staff standards under Public Law Number 
100-203 for either the professional nurse adjustment referred to 
in clause (1), or the registered nurse adjustment in clause (2), 
the commissioner must recover the portion of the nursing home's 
payment rate that relates to a one-time nursing staff adjustment 
granted under this subdivision.  The amount to be recovered 
shall be based on the type and extent of the waiver granted. 
    Sec. 76.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read:  
    Subd. 8.  [ONETIME PER DIEM RATE ADJUSTMENT FOR INCREASED 
COSTS UNDER THE OMNIBUS BUDGET RECONCILIATION ACT.] For the rate 
period January 1, 1990, through June 30, 1991, the commissioner 
shall add 30 cents per resident per day to the nursing home's 
payment rate.  The adjustment must not be paid to freestanding 
boarding care homes.  
    Sec. 77.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 9.  [ONETIME ADJUSTMENT FOR FREESTANDING BOARDING 
CARE HOMES TO COVER INCREASED COSTS UNDER THE OMNIBUS BUDGET 
RECONCILIATION ACT.] (a) The commissioner shall determine a 
onetime adjustment to the payment rate of a freestanding 
boarding care home necessary for that home to comply with the 
provisions of Public Law Number 100-203 except those 
requirements outlined in subdivision 7.  The adjustment to the 
payment rate determined under this subdivision covers increased 
costs for a medical director, nurse aide training for newly 
hired aides, ongoing in-service training for nurses aides, and 
other requirements identified by the commissioner that are 
required because of the Omnibus Budget Reconciliation Act of 
1987.  These costs will only be reimbursed if they are required 
in the final regulations pertaining to Public Law Number 100-203.
    (b) Each facility eligible for this adjustment shall submit 
to the commissioner a detailed estimate of the cost increases 
the facility will incur for these costs.  
    (c) The costs that are determined by the commissioner to be 
reasonable and necessary for a freestanding boarding care home 
to comply with Public Law Number 100-203, except those costs 
outlined in subdivision 7, must be included in the calculation 
of the adjustment.  
    (d) The maximum allowable annual adjustment per bed is $300.
    (e) The onetime adjustment is the cost allowed in paragraph 
(c), subject to the limits in paragraph (d), divided by the 
nursing home's actual resident days for the reporting year that 
ended September 30, 1988.  
    (f) The onetime adjustment determined is effective from 
January 1, 1990, to June 30, 1991. 
    Sec. 78.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 10.  [APPRAISAL SAMPLE STABILIZATION AND SPECIAL 
REAPPRAISALS.] (a) The percentage change in appraised values for 
nursing homes in the sample used for routine updating of 
appraised values under Minnesota Rules, part 9549.0060, subpart 
2, shall be stabilized by eliminating from the sample of nursing 
home those appraisals that represent the five highest and the 
five lowest deviations from those nursing homes' previously 
established appraised values. 
    (b) A special reappraisal request must be submitted to the 
commissioner within 60 days after the project's completion date 
to be considered eligible for a special reappraisal.  If a 
project has multiple completion dates or involves multiple 
projects, only projects or parts of projects with completion 
dates within one year of the completion date associated with a 
special reappraisal request can be included for the purpose of 
establishing the nursing home's eligibility for a special 
reappraisal.  A facility which is eligible to request, has 
requested, or has received a special reappraisal during the 
calendar year must not be included in the random sample process 
used to determine the average percentage change in appraised 
value of nursing homes in the sample. 
    Sec. 79.  Minnesota Statutes 1988, section 256B.47, 
subdivision 3, is amended to read: 
    Subd. 3.  [ALLOCATION OF COSTS.] To ensure the avoidance of 
double payments as required by section 256B.433, the direct and 
indirect reporting year costs of providing residents of nursing 
homes that are not hospital attached with therapy services that 
are billed separately from the nursing home payment rate or 
according to Minnesota Rules, parts 9500.0750 to 9500.1080, must 
be determined and deducted from the appropriate cost categories 
of the annual cost report as follows: 
    (a) The costs of wages and salaries for employees providing 
or participating in providing and consultants providing services 
shall be allocated to the therapy service based on direct 
identification.  
    (b) The costs of fringe benefits and payroll taxes relating 
to the costs in paragraph (a) must be allocated to the therapy 
service based on direct identification or the ratio of total 
costs in paragraph (a) to the sum of total allowable salaries 
and the costs in paragraph (a).  
    (c) The costs of housekeeping, plant operations and 
maintenance, real estate taxes, special assessments, property 
and insurance, other than the amounts classified as a fringe 
benefit, must be allocated to the therapy service based on the 
ratio of service area square footage to total facility square 
footage.  
    (d) The costs of bookkeeping and medical records must be 
allocated to the therapy service either by the method in 
paragraph (e) or based on direct identification.  Direct 
identification may be used if adequate documentation is provided 
to, and accepted by, the commissioner.  
    (e) The costs of administrators, bookkeeping, and medical 
records salaries, except as provided in paragraph (d), must be 
allocated to the therapy service based on the ratio of the total 
costs in paragraphs (a) to (d) to the sum of total allowable 
nursing home costs and the costs in paragraphs (a) to (d).  
    (f) The cost of property must be allocated to the therapy 
service and removed from the rental per diem, based on the ratio 
of service area square footage to total facility square footage 
multiplied by the building capital allowance. 
    Sec. 80.  Minnesota Statutes 1988, section 256B.48, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PROHIBITED PRACTICES.] A nursing home 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 home 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 offered available to all residents in all areas 
of the nursing home 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 home in order to comply with licensure 
or certification standards and that if not provided would result 
in a deficiency or violation by the nursing home.  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 home 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 home 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 home 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 home, 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 home, or promise to leave all or part of 
the applicant's estate to the home.  
    (c) Requiring any resident of the nursing home to utilize a 
vendor of health care services who is a licensed physician or 
pharmacist chosen by the nursing home.  
    (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 home, or the applicant's guardian or 
conservator, that the applicant is neither eligible for nor will 
seek public assistance for payment of nursing home 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 home of financial 
information of any applicant pursuant to the preadmission 
screening program established by section 256B.091 shall not 
raise an inference that the nursing home 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 home except as payment for renting 
or leasing space or equipment or purchasing support services 
from the nursing home as limited by section 256B.433.  All 
agreements must be disclosed to the commissioner upon request of 
the commissioner.  Nursing homes 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 home with more than 325 beds including at least 150 
licensed nursing home 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 home 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 home 
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 home 
to permit the applicant to withdraw from the home 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 home 
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 home 
to correct the violation.  The nursing home 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 home 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 
home 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 home is not eligible for reimbursement for a resident 
who is eligible for medical assistance, the commissioner may 
authorize the nursing home to receive reimbursement on a 
temporary basis until the resident can be relocated to a 
participating nursing home. 
    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. 81.  Minnesota Statutes 1988, 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 
home that is certified as a skilled nursing facility or, after 
September 30, 1990, a nursing home licensed under chapter 144A 
that is certified as a nursing facility.  
    (b) [FULL MEDICARE PARTICIPATION REQUIRED.] All nursing 
homes certified as skilled nursing facilities under the medical 
assistance program shall fully 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.  
    Until September 30, 1987, the commissioner of health may 
grant exceptions from this requirement when a nursing home 
submits a written request for exception and it is determined 
that there is sufficient participation in the Medicare program 
to meet the needs of Medicare beneficiaries in that region of 
the state.  For the purposes of this section, the relevant 
region is the county in which the nursing home is located 
together with contiguous Minnesota counties.  There is 
sufficient participation in the Medicare program in a particular 
region when the proportion of skilled resident days paid by the 
Medicare program is at least equal to the national average based 
on the most recent figure that can be supplied by the federal 
health care financing administration.  A nursing home that is 
granted an exception under this subdivision must give 
appropriate notice to all applicants for admission that Medicare 
coverage is not available in the nursing home and publish this 
fact in all literature and advertisement related to the nursing 
home. 
    (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) [OCTOBER 1, 1990, TO JUNE 30, 1991.] After September 
30, 1990, and until June 30, 1991, 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) [AFTER JUNE 30, 1991.] After June 30, 1991, a nursing 
facility satisfies the requirements of paragraph (b) if 100 
percent of the facility's beds that are certified as nursing 
facility beds under the medical assistance program are Medicare 
certified. 
    (f) [PROHIBITED TRANSFERS.] A resident in a skilled nursing 
bed or, after September 30, 1990, a resident in any nursing 
facility bed, who is eligible for medical assistance and who 
becomes eligible for Medicare has the right to refuse an 
intrafacility skilled nursing bed transfer if the commissioner 
approves the exception request based on written documentation 
submitted by a physician that the transfer would create or 
contribute to a health problem for the resident.  A resident who 
is occupying a skilled nursing bed or, after September 30, 1990, 
a nursing facility bed certified by the medical assistance and 
Medicare programs, has the right to refuse a transfer if the 
resident's bed is needed for a Medicare-eligible patient or 
private-pay patient and if the commissioner approves the 
exception based on written documentation submitted by a 
physician that the transfer would create or contribute to a 
health problem for the resident. 
    (g) [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. 
    (h) [NOTICE OF RIGHTS.] The commissioner shall inform 
recipients of their rights under this subdivision and section 
144.651, subdivision 29. 
    Sec. 82.  Minnesota Statutes 1988, section 256B.48, 
subdivision 8, is amended to read: 
    Subd. 8.  [NOTIFICATION TO A SPOUSE.] When a private pay 
resident who has not yet been screened by the preadmission 
screening team is admitted to a nursing home or boarding care 
facility, the nursing home or boarding care facility must notify 
the resident and the resident's spouse of the following:  
    (1) their right to retain certain resources under sections 
256B.14, subdivision 2, and 256B.17; and 
    (2) that the federal Medicare hospital insurance benefits 
program covers posthospital extended care services in a 
qualified skilled nursing facility for up to 100 150 days and 
that there are several limitations on this benefit.  The 
resident and the resident's family must be informed about all 
mechanisms to appeal limitations imposed under this federal 
benefit program.  
    This notice may be included in the nursing home's or 
boarding care facility's admission agreement and must clearly 
explain what resources the resident and spouse may retain if the 
resident applies for medical assistance.  The department of 
human services must notify nursing homes and boarding care 
facilities of changes in the determination of medical assistance 
eligibility that relate to resources retained by a resident and 
the resident's spouse. 
    The preadmission screening team has primary responsibility 
for informing all private pay applicants to a nursing home or 
boarding care facility of the resources the resident and spouse 
may retain. 
    Sec. 83.  [256B.495] [LONG-TERM CARE RECEIVERSHIP FEES.] 
    Subdivision 1.  [PAYMENT OF RECEIVERSHIP FEES.] The 
commissioner in consultation with the commissioner of health may 
establish a receivership fee payment that exceeds a long-term 
care facility payment rate when the commissioner of health 
determines a long-term care facility is subject to the 
receivership provisions under section 144A.14 or 144A.15 or the 
commissioner of human services determines that a facility is 
subject to the receivership under section 245A.12 or 245A.13.  
In establishing the receivership fee payment, the commissioner 
must reduce the receiver's requested receivership fee by amounts 
that the commissioner determines are included in the long-term 
care facility's payment rate and that can be used to cover part 
or all of the receivership fee.  Amounts that can be used to 
reduce the receivership fee shall be determined by reallocating 
facility staff or costs that were formerly paid by the long-term 
care facility before the receivership and are no longer required 
to be paid.  The amounts may include any efficiency incentive, 
allowance, and other amounts not specifically required to be 
paid for expenditures of the long-term care facility. 
    If the receivership fee cannot be covered by amounts in the 
long-term care facility's payment rate, a receivership fee 
payment shall be set according to paragraphs (a) and (b) and 
payment shall be according to paragraphs (c) to (e). 
    (a) The receivership fee per diem shall be determined by 
dividing the annual receivership fee payment by the long-term 
care facility's resident days from the most recent cost report 
for which the commissioner has established a payment rate or the 
estimated resident days in the projected receivership fee period.
    (b) The receivership fee per diem shall be added to the 
long-term care facility's payment rate. 
    (c) Notification of the payment rate increase must meet the 
requirements of section 256B.47, subdivision 2. 
    (d) The payment rate in paragraph (b) for a nursing home 
shall be effective the first day of the month following the 
receiver's compliance with the notice conditions in paragraph 
(c).  The payment rate in paragraph (b) for an intermediate care 
facility for the mentally retarded shall be effective on the 
first day of the rate year in which the receivership fee per 
diem is determined. 
    (e) The commissioner may elect to make a lump sum payment 
of a portion of the receivership fee to the receiver.  In this 
case, the commissioner and the receiver shall agree to a 
repayment plan.  Regardless of whether the commissioner makes a 
lump sum payment under this paragraph, the provisions of 
paragraphs (a) to (d) and subdivision 2 also apply. 
    Subd. 2.  [DEDUCTION OF RECEIVERSHIP FEE PAYMENTS UPON 
TERMINATION OF RECEIVERSHIP.] If the commissioner has 
established a receivership fee per diem for a long-term care 
facility in receivership, the commissioner must deduct the 
receivership fee payments according to paragraphs (a) to (c). 
    (a) The total receivership fee payments shall be the 
receivership fee per diem multiplied by the number of resident 
days for the period of the receivership fee payments.  If actual 
resident days for the receivership fee payment period are not 
made available within two weeks of the commissioner's written 
request, the commissioner shall compute the resident days by 
prorating the facility's resident days based on the number of 
calendar days from each portion of the long-term care facility's 
reporting years covered by the receivership period. 
    (b) The amount determined in paragraph (a) must be divided 
by the long-term care facility's resident days for the reporting 
year in which the receivership period ends. 
    (c) The per diem amount in paragraph (b) shall be 
subtracted from the long-term care facility's operating cost 
payment rate for the rate year following the reporting year in 
which the receivership period ends. 
    Subd. 3.  [REESTABLISHMENT OF RECEIVERSHIP FEE 
PAYMENT.] The commissioner of health may request the 
commissioner to reestablish the receivership fee payment when 
the original terms of the receivership fee payment have 
significantly changed with regard to the cost or duration of the 
receivership agreement.  The commissioner, in consultation with 
the commissioner of health, may reestablish the receivership fee 
payment when the commissioner determines the cost or duration of 
the receivership agreement has significantly changed.  The 
provisions of developing a receivership fee payment in 
subdivisions 1 and 2 apply to the reestablishment process. 
    Sec. 84.  Minnesota Statutes 1988, section 256B.501, 
subdivision 3, is amended to read: 
    Subd. 3.  [RATES FOR INTERMEDIATE CARE FACILITIES FOR 
PERSONS WITH MENTAL RETARDATION OR RELATED CONDITIONS.] The 
commissioner shall establish, by rule, procedures for 
determining rates for care of residents of intermediate care 
facilities for persons with mental retardation or related 
conditions.  The procedures shall be based on methods and 
standards that the commissioner finds are adequate to provide 
for the costs that must be incurred for the care of residents in 
efficiently and economically operated facilities.  In developing 
the procedures, the commissioner shall include: 
    (a) cost containment measures that assure efficient and 
prudent management of capital assets and operating cost 
increases which do not exceed increases in other sections of the 
economy; 
    (b) limits on the amounts of reimbursement for property, 
general and administration, and new facilities; 
    (c) requirements to ensure that the accounting practices of 
the facilities conform to generally accepted accounting 
principles; 
    (d) incentives to reward accumulation of equity; 
    (e) a revaluation on sale between unrelated organizations 
for a facility that, for at least three years before its use as 
an intermediate care facility, has been used by the seller as a 
single family home and been claimed by the seller as a 
homestead, and was not revalued immediately prior to or upon 
entering the medical assistance program, provided that the 
facility revaluation not exceed the amount permitted by the 
Social Security Act, section 1902(a)(13); and 
    (f) appeals procedures that satisfy the requirements of 
section 256B.50 for appeals of decisions arising from the 
application of standards or methods pursuant to Minnesota Rules, 
parts 9510.0500 to 9510.0890, 9553.0010 to 9553.0080, and 12 
MCAR 2.05301 to 2.05315 (temporary).  
    In establishing rules and procedures for setting rates for 
care of residents in intermediate care facilities for persons 
with mental retardation or related conditions, the commissioner 
shall consider the recommendations contained in the February 11, 
1983, Report of the Legislative Auditor on Community Residential 
Programs for the Mentally Retarded and the recommendations 
contained in the 1982 Report of the Department of Public Welfare 
Rule 52 Task Force.  Rates paid to supervised living facilities 
for rate years beginning during the fiscal biennium ending June 
30, 1985, shall not exceed the final rate allowed the facility 
for the previous rate year by more than five percent. 
    Sec. 85.  Minnesota Statutes 1988, section 256B.501, 
subdivision 3g, is amended to read: 
    Subd. 3g.  [ASSESSMENT OF RESIDENTS.] For rate years 
beginning on or after October 1, 1990, the commissioner shall 
establish program operating cost rates for care of residents in 
facilities that take into consideration service characteristics 
of residents in those facilities.  To establish the service 
characteristics of residents, the quality assurance and review 
teams in the department of health shall assess all residents 
annually beginning January 1, 1989, using a uniform assessment 
instrument developed by the commissioner.  This instrument shall 
include assessment of the client's behavioral needs, integration 
into the community, ability to perform activities of daily 
living, medical and therapeutic needs, and other relevant 
factors determined by the commissioner.  The commissioner may 
establish procedures to adjust the program operating costs of 
facilities based on a comparison of client services 
characteristics, resource needs, and costs. adjust the program 
operating cost rates of facilities based on a comparison of 
client service characteristics, resource needs, and costs.  The 
commissioner may adjust a facility's payment rate during the 
rate year when accumulated changes in the facility's average 
service units exceed the minimums established in the rules 
required by subdivision 3j. 
    Sec. 86.  Minnesota Statutes 1988, section 256B.501, is 
amended by adding a subdivision to read: 
    Subd. 3k.  [EXPERIMENTAL PROJECT.] The commissioner of 
human services may conduct and administer experimental projects 
to determine the effects of competency-based wage adjustments 
for direct-care staff on the quality of care and active 
treatment for persons with mental retardation or related 
conditions.  The commissioner shall authorize one project under 
the following conditions: 
    (a) One service provider will participate in the project. 
    (b) The vendor must have an existing competency-based 
training curriculum and a proposed salary schedule that is 
coordinated with the training package. 
    (c) The University of Minnesota affiliated programs must 
approve the content of the training package and assist the 
vendor in studying the impact on service delivery and outcomes 
for residents under a competency-based salary structure.  The 
study and its conclusions must be presented to the commissioner 
at the conclusion of the project. 
    (d) The project will last no more than 21 months from its 
inception. 
    (e) The project will be funded by Title XIX, medical 
assistance and the costs incurred shall be allowable program 
operating costs for future rate years under Minnesota Rules, 
parts 9553.0010 to 9553.0080.  The project's total annual cost 
must not exceed $49,500.  The commissioner shall establish an 
adjustment to the selected facility's per diem by dividing the 
$49,500 by the facility's actual resident days for the reporting 
year ending December 31, 1988.  The facility's experimental 
training project per diem shall be effective on October 1, 1989, 
and shall remain in effect for the 21-month period ending June 
30, 1991. 
    (f) Only service vendors who have submitted a determination 
of need pursuant to Minnesota Rules, parts 9525.0015 to 
9525.0165, and Minnesota Statutes, section 252.28, requesting 
the competency-based training program cost increase are eligible.
Furthermore, they are only eligible if their determination of 
need was approved prior to January 1, 1989, and funds were not 
available to implement the plan. 
    Sec. 87.  Minnesota Statutes 1988, section 256B.69, 
subdivision 4, is amended to read: 
    Subd. 4.  [LIMITATION OF CHOICE.] The commissioner shall 
develop criteria to determine when limitation of choice may be 
implemented in the experimental counties.  The criteria shall 
ensure that all eligible individuals in the county have 
continuing access to the full range of medical assistance 
services as specified in subdivision 6.  The commissioner shall 
exempt the following persons from participation in the project, 
in addition to those who do not meet the criteria for limitation 
of choice:  (1) persons eligible for medical assistance 
according to section 256B.055, subdivision 1, or who are in 
foster placement; and (2) persons eligible for medical 
assistance due to blindness or disability as determined by the 
social security administration or the state medical review team, 
unless they are 65 years of age or older; (3) recipients who 
currently have private coverage through a health maintenance 
organization; and (4) recipients who are eligible for medical 
assistance by spending down excess income for medical expenses 
other than the nursing facility per diem expense.  Before 
limitation of choice is implemented, eligible individuals shall 
be notified and after notification, shall be allowed to choose 
only among demonstration providers.  After initially choosing a 
provider, the recipient is allowed to change that choice only at 
specified times as allowed by the commissioner.  If a 
demonstration provider ends participation in the project for any 
reason, a recipient enrolled with that provider must select a 
new provider but may change providers without cause once more 
within the first 60 days after enrollment with the second 
provider. 
    Sec. 88.  Minnesota Statutes 1988, section 256B.69, 
subdivision 5, is amended to read: 
    Subd. 5.  [PROSPECTIVE PER CAPITA PAYMENT.] The project 
advisory committees with the commissioner shall establish the 
method and amount of payments for services.  The commissioner 
shall annually contract with demonstration providers to provide 
services consistent with these established methods and amounts 
for payment.  Notwithstanding section 62D.02, subdivision 1, 
payments for services rendered as part of the project may be 
made to providers that are not licensed health maintenance 
organizations on a risk-based, prepaid capitation basis.  
    If allowed by the commissioner, a demonstration provider 
may contract with an insurer, health care provider, nonprofit 
health service plan corporation, or the commissioner, to provide 
insurance or similar protection against the cost of care 
provided by the demonstration provider or to provide coverage 
against the risks incurred by demonstration providers under this 
section.  The recipients enrolled with a demonstration provider 
are a permissible group under group insurance laws and chapter 
62C, the Nonprofit Health Service Plan Corporations Act.  Under 
this type of contract, the insurer or corporation may make 
benefit payments to a demonstration provider for services 
rendered or to be rendered to a recipient.  Any insurer or 
nonprofit health service plan corporation licensed to do 
business in this state is authorized to provide this insurance 
or similar protection.  
    Payments to providers participating in the project are 
exempt from the requirements of sections 256.966 and 256B.03, 
subdivision 2.  The commissioner shall complete development of 
capitation rates for payments before delivery of services under 
this section is begun.  For payments made during calendar year 
1990 and later years, the commissioner shall contract with an 
independent actuary to establish prepayment rates. 
    Sec. 89.  Minnesota Statutes 1988, section 256B.69, 
subdivision 11, is amended to read: 
    Subd. 11.  [APPEALS.] A recipient may appeal to the 
commissioner a demonstration provider's delay or refusal to 
provide services, according to section 256.045.  The 
commissioner shall appoint a panel of health practitioners, 
including social service practitioners, as necessary to 
determine the necessity of services provided or refused to a 
recipient.  The deliberations and decisions of the panel replace 
the administrative review process otherwise available under 
chapter 256.  The panel shall follow the time requirements and 
other provisions of the Code of Federal Regulations, title 42, 
sections 431.200 to 431.246.  The time requirements shall be 
expedited based on request by the individual who is appealing 
for emergency services.  If a service is determined to be 
necessary and is included among the benefits for which a 
recipient is enrolled, the service must be provided by the 
demonstration provider as specified in subdivision 5.  The 
panel's decision is a final agency action.  
    Sec. 90.  Minnesota Statutes 1988, section 256B.69, is 
amended by adding a subdivision to read: 
    Subd. 17.  [CONTINUATION OF PREPAID MEDICAL 
ASSISTANCE.] The commissioner may continue the provisions of 
this section after June 30, 1990, in any or all of the 
participating counties if necessary federal authority is 
granted.  The commissioner may adopt permanent rules to continue 
prepaid medical assistance in these areas. 
    Sec. 91.  Minnesota Statutes 1988, 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: 
    (1) who is eligible for assistance under section 256D.05 or 
256D.051 and is not eligible for medical assistance under 
chapter 256B; or 
    (2) (i) who is a resident of Minnesota; whose income as 
calculated under chapter 256B is not in excess of the medical 
assistance standards or whose excess income is spent down 
pursuant to chapter 256B; and whose equity in resources assets 
is not in excess of $1,000 per assistance unit.  Exempt real and 
liquid assets, the reduction of excess assets, and the waiver of 
excess assets must conform to the medical assistance program in 
chapter 256B.; and 
    (ii) who has countable income not in excess of the 
assistance standards established in section 256B.056, 
subdivision 4, or whose excess income is spent down pursuant to 
section 256B.056, subdivision 5.  The method for calculating 
earned income disregards and deductions for a person who resides 
with a dependent child under age 21 shall be as specified in 
section 256.74, subdivision 1.  The earned income 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 for 
the disregard of the first $50 of earned income; or 
     (3) who is over age 18 and who would be eligible for 
medical assistance except that the person resides in a facility 
that is determined by the commissioner or the federal health 
care financing administration to be an institution for mental 
diseases. 
    (b) Eligibility is available for the month of application 
and for three months prior to application if the person was 
eligible in those prior months.  A redetermination of 
eligibility must occur every 12 months. 
    (c) General assistance medical care may be paid for a 
person, regardless of age, who 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, if the person 
is a recipient of general assistance medical care at the time 
the person is detained by law or admitted on a criminal hold 
order and as long as the person continues to meet other 
eligibility requirements of this subdivision.  
    (d) General assistance medical care is not available for 
applicants or recipients who do not cooperate with the local 
agency to meet the requirements of medical assistance. 
    (e) In determining the amount of assets of an individual, 
there shall be included any asset or interest in an asset, 
including an asset excluded under paragraph (a), that was given 
away, sold, or disposed of for less than fair market value 
within the 30 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 
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. 
    Sec. 92.  Minnesota Statutes 1988, section 256D.03, 
subdivision 4, is amended to read: 
    Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
Reimbursement under the general assistance medical care program 
shall be limited to the following categories of service: 
inpatient hospital care, outpatient hospital care, services 
provided by Medicare certified rehabilitation agencies, 
prescription drugs, equipment necessary to administer insulin 
and diagnostic supplies and equipment for diabetics to monitor 
blood sugar level, eyeglasses and eye examinations provided by a 
physician or optometrist, hearing aids, prosthetic devices, 
laboratory and X-ray services, physician's services, medical 
transportation, chiropractic services as covered under the 
medical assistance program, podiatric services, and dental 
care.  In addition, payments of state aid shall be made for: 
    (1) outpatient services provided by a mental health center 
or clinic that is under contract with the county board and is 
certified under Minnesota Rules, parts 9520.0750 9520.0010 to 
9520.0870 9520.0230; 
    (2) day treatment services for mental illness provided 
under contract with the county board; and 
    (3) prescribed medications for persons who have been 
diagnosed as mentally ill as necessary to prevent more 
restrictive institutionalization.; 
    (4) case management services for a person with serious and 
persistent mental illness who would be eligible for medical 
assistance except that the person resides in an institution for 
mental diseases; 
    (5) psychological services, medical supplies and equipment, 
and Medicare premiums, coinsurance and deductible payments for a 
person who would be eligible for medical assistance except that 
the person resides in an institution for mental diseases; and 
    (6) 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. 
    (b) 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.  The rates payable under this 
section must be calculated according to section 256B.031, 
subdivision 4 For payments made during fiscal year 1990 and 
later years, the commissioner shall contract with an independent 
actuary to establish prepayment rates. 
    (c) 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. 
    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. 
    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. 
       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.  
     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. 
     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. 
    There shall be no copayment required of any recipient of 
benefits for any services provided under this subdivision.  A 
hospital receiving a reduced payment as a result of this section 
may apply the unpaid balance toward satisfaction of the 
hospital's bad debts. 
    (d) Any county may, from its own resources, provide medical 
5 payments for which state payments are not made. 
    (e) Chemical dependency services that are reimbursed under 
Laws 1986, chapter 394, sections 8 to 20, must not be reimbursed 
under general assistance medical care. 
    (f) 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. 
    (g) 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. 93.  Minnesota Statutes 1988, section 297.13, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CIGARETTE TAX APPORTIONMENT.] Revenues 
received from taxes, penalties, and interest under sections 
297.01 to 297.13 and from license fees and miscellaneous sources 
of revenue shall be deposited by the commissioner of revenue in 
a separate and special fund, designated as the tobacco tax 
revenue fund, in the state treasury and credited as follows:  
    (a) first to the general obligation special tax bond debt 
service account in each fiscal year the amount required to 
increase the balance on hand in the account on each December 1 
to an amount equal to the full amount of principal and interest 
to come due on all outstanding bonds whose debt service is 
payable primarily from the proceeds of the tax to and including 
the second following July 1; and 
    (b) after the requirements of paragraph (a) have been met: 
    (1) the revenue produced by one mill of the tax on 
cigarettes weighing not more than three pounds a thousand and 
two mills of the tax on cigarettes weighing more than three 
pounds a thousand must be credited to the Minnesota future 
resources account; 
    (2) the revenue produced by two mills of the tax on 
cigarettes weighing not more than three pounds a thousand and 
four mills of the tax on cigarettes weighing more than three 
pounds a thousand must be credited to the Minnesota state water 
pollution control fund created in section 116.16, provided that, 
if the tax on cigarettes imposed by United States Code, title 
26, section 5701, as amended, is reduced after June 1, 1985, an 
additional one mill of the tax on cigarettes weighing not more 
than three pounds a thousand and two mills of the tax on 
cigarettes weighing more than three pounds a thousand must be 
credited to the Minnesota state water pollution control fund 
created in section 116.16 less any amount credited to the 
general obligation special tax debt service account under 
paragraph (a), with respect to bonds issued for the prevention, 
control, and abatement of water pollution; 
    (3) the revenue produced by one mill of the tax on 
cigarettes weighing not more than three pounds a thousand and 
two mills of the tax on cigarettes weighing more than three 
pounds a thousand must be credited to a public health fund, 
provided that if the tax on cigarettes imposed by United States 
Code, title 26, section 5701, as amended, is reduced after June 
1, 1985, an additional two-tenths of one mill of the tax on 
cigarettes weighing not more than three pounds a thousand and an 
additional four-tenths of one mill of the tax on cigarettes 
weighing more than three pounds a thousand must be credited to 
the public health fund; 
    (4) the balance of the revenues derived from taxes, 
penalties, and interest under sections 297.01 to 297.13 and from 
license fees and miscellaneous sources of revenue shall be 
credited to the general fund. 
    Sec. 94.  [STUDY AND REPORT ON NURSING HOME PROPERTY 
PAYMENTS VERSUS COSTS.] (a) If a nursing home has rental per 
diem established by the commissioner under Minnesota Rules, part 
9549.0060, for the rate year beginning July 1, 1989, that is 
inadequate to minimally cover their annual principle and 
interest payments, that nursing home must submit copies of their 
amortization schedules to the commissioner by June 30, 1989, for 
all debts except working capital debt.  The term "inadequate to 
minimally cover their annual principle and interest" means the 
annual principle and interest payments on the nursing home's 
debt for its land, land improvements, buildings, attached 
fixtures, and depreciable equipment used directly for resident 
care are more than the July 1, 1989, rental per diem multiplied 
by the nursing home's resident days for the reporting year 
ending September 30, 1988.  The information regarding the 
nursing home's amortization schedules which must be submitted to 
the commissioner for each debt shall include: 
    (1) a monthly amortization schedule starting the later of 
October 1, 1983, or the date the debt was incurred, through the 
remaining term of the debt; 
    (2) the interest rate, if fixed; 
    (3) if the interest rate is variable, the current variable 
interest rate and the method by which the interest rate may be 
changed; 
    (4) the original amount borrowed; 
    (5) the assets or other collateral pledged as security for 
the debt; 
    (6) the cost of the assets purchased or the amount of the 
debt refinanced; 
    (7) a copy of the loan, bond, or mortgage agreement may be 
supplied or made available for inspection by the commissioner; 
    (8) sinking fund requirements and balances, if any; 
    (9) the lender's name and relationship to the nursing 
home's owners, if any; and 
    (10) other information that may be requested by the 
commissioner regarding the nursing home's debt upon review of 
the information provided in clauses (1) to (9). 
    (b) The commissioner shall contract with an independent 
financial consultant to review and analyze the financial data in 
paragraph (a) and to study the concept of a capital asset 
replacement fund, and the consultant shall assist the 
commissioner in the development of a report which must be 
submitted to the legislative commission on long-term care by 
January 1, 1990. 
    (c) The report shall identify the underlying reasons why 
each nursing home in paragraph (a) is unable to meet its annual 
debt obligations, possible actions or resources available to the 
nursing home that could be used to address its debt obligations 
such as the nursing home's efficiency incentive, investments, or 
related organization transactions or investments.  The report 
shall include suggested solutions and recommendations for each 
nursing home.  The report must also address the need for a 
capital asset replacement fund and the relative need for such a 
fund given the provision for capital reimbursement under the 
rental reimbursement system, the varying levels of property 
reimbursement among nursing homes, the various debt and 
financial structures of nursing homes, their actual property 
costs in terms of their annual principal and interest 
requirements, the cost of replacing or repairing capital assets 
under the reimbursement system, and the adequacy of the 
equipment allowance. 
    Sec. 95.  [STUDY OF NURSING HOME WORKERS' COMPENSATION 
COSTS.] 
    The commissioner of human services, in consultation with an 
advisory committee, shall study workers' compensation costs of 
nursing homes and make recommendations to the legislature by 
January 1, 1990, regarding changes to the nursing home rate 
system that will ensure adequate reimbursement to cover workers' 
compensation costs without reducing incentives for nursing homes 
to control costs by taking action to reduce the risk of 
work-related injuries to employees. 
    Sec. 96.  [STUDY.] 
    The commissioner of health shall review the provisions of 
Minnesota Statutes, chapter 144A, regarding the revocation, 
suspension, and nonrenewal of nursing home licenses and 
provisions relating to controlling persons and managerial 
employees.  The results of the commissioner's review and any 
recommendations for change must be submitted to the legislature 
by February 15, 1990.  The commissioner shall consult with 
consumer and nursing home provider organizations during this 
review. 
    Sec. 97.  [TEMPORARY PROVISIONS RELATING TO INSTITUTIONS 
FOR MENTAL DISEASES.] 
    Subdivision 1.  [ELIGIBILITY FOR GENERAL ASSISTANCE MEDICAL 
CARE AND MINNESOTA SUPPLEMENTAL AID.] For the period beginning 
January 1, 1989 and ending June 30, 1989, general assistance 
medical care and Minnesota supplemental aid may be paid for any 
person who is over age 18 and would be eligible for medical 
assistance except that the person resides in a facility that is 
determined by the commissioner of human services or the federal 
health care financing administration to be an institution for 
mental diseases.  
    Subd. 2.  [COVERED SERVICES.] For the period beginning 
January 1, 1989 and ending June 30, 1989, reimbursement under 
general assistance medical care includes, in addition to 
services covered under Minnesota Statutes 1988, section 256D.03, 
subdivision 4, the following services for a person who would be 
eligible for medical assistance except that the person resides 
in a facility that is determined by the commissioner of human 
services or the federal health care financing administration to 
be an institution for mental diseases: 
    (1) case management services for a person with serious and 
persistent mental illness; 
    (2) medical supplies and equipment; and 
    (3) psychological services.  
    Subd. 3.  [EXCEPTION TO RESIDENTIAL FACILITY LIMITS.] For 
the period beginning January 1, 1989 and ending June 30, 1989, a 
residential facility certified to participate in the medical 
assistance program, licensed as a boarding care home or nursing 
home, and determined by the commissioner of human services or 
the federal health care financing administration to be an 
institution for mental diseases is exempt from the maximum 
negotiated rate in Minnesota Statutes, section 256D.37.  The 
rate for eligible individuals residing in these facilities is 
the individual's medical assistance rate using the individual's 
assigned case mix classification.  Counties must be reimbursed 
for payments made between January 1, 1989 and June 30, 1989, to 
certified nursing homes and boarding care homes declared 
institutions for mental diseases by January 1, 1989, on behalf 
of persons otherwise eligible for medical assistance.  The 
reimbursement must not exceed the state share of supplemental 
aid funds expended for each person at the appropriate medical 
assistance rate. 
    Sec. 98.  [REPEALER.] 
    Subdivision 1.  [NURSING HOMES.] Minnesota Statutes 1988, 
section 144A.10, subdivision 4a, is repealed.  Laws 1988, 
chapter 689, article 2, section 269, subdivision 4, is 
repealed.  Minnesota Statutes 1988, section 144A.61, subdivision 
6, is repealed effective January 1, 1990. 
    Subd. 2.  [BRAIN INJURIES.] Minnesota Statutes 1988, 
section 256B.0625, subdivision 21, is repealed. 
    Subd. 3.  [HEALTH CARE PROGRAMS.] Minnesota Statutes 1988, 
sections 256.969, subdivisions 2a, 3, 4, 5, and 6; and 256B.69, 
subdivisions 12, 13, 14, and 15, are repealed. 
    Subd. 4.  Minnesota Statutes 1988, section 256B.17, 
subdivisions 1, 2, 3, 4, 5, 6, and 8, are repealed. 
    Subd. 5.  Minnesota Statutes 1988, section 256B.17, 
subdivision 7, is repealed effective October 1, 1989. 
    Sec. 99.  [EFFECTIVE DATE.] 
    Sections 33, 34, and 35 are effective the day after final 
enactment, except that the amendment in section 33, to Minnesota 
Statutes, section 256.936, subdivision 1, paragraph (a), is not 
effective until January 1, 1991 and the amendment in section 33, 
to Minnesota Statutes, section 256.936, subdivision 1, paragraph 
(c), striking "mental health and" is effective July 1, 1990.  
However, a child enrolled in the children's health plan who 
reached or will reach age nine between the date of initial 
implementation of the children's health plan and January 1, 
1991, remains eligible for the plan after the child's ninth 
birth date until January 1, 1991, if the child meets all other 
program requirements. 
    Section 61 is effective the day after final enactment. 
    Section 46 is effective July 1, 1990.  
    Section 48, subdivision 2, is effective June 30, 1989. 
    Section 50 is effective October 1, 1989, for spousal income 
calculations for anyone who resides in an institution on or 
after that date. 
    Section 51 is effective October 1, 1989, for anyone who 
enters an institution on or after that date. 
    Section 1 is effective for claims filed with the insurer 
after June 30, 1989. 
    Section 52 is effective July 1, 1988, for all assets 
transferred on or after that date except for interspousal 
transfers under section 256B.17, subdivision 7. 
    Section 53 is effective April 1, 1990, for families who 
become ineligible for AFDC on or after that date. 
    Section 57 is effective September 1, 1989. 
    Section 89 is effective for all appeals that are filed 
after June 30, 1989. 
    Section 54 is effective July 1, 1990. 
    Section 81, except paragraph (f), is effective 30 days 
following final enactment.  Section 81, paragraph (f), is 
effective the day following final enactment. 
    Section 89 is effective for all appeals that are filed 
after June 30, 1989.  
     Section 13 is effective the day following final enactment. 

                                ARTICLE 4

                             MENTAL HEALTH
    Section 1.  Minnesota Statutes 1988, section 245.461, is 
amended to read: 
    245.461 [POLICY AND CITATION.] 
    Subdivision 1.  [CITATION.] Sections 245.461 to 245.486 may 
be cited as the "Minnesota comprehensive adult mental health 
act." 
    Subd. 2.  [MISSION STATEMENT.] The commissioner shall 
create and ensure a unified, accountable, comprehensive adult 
mental health service system that: 
    (1) recognizes the right of people adults with mental 
illness to control their own lives as fully as possible; 
    (2) promotes the independence and safety of people adults 
with mental illness; 
    (3) reduces chronicity of mental illness; 
    (4) reduces eliminates abuse of people adults with mental 
illness; 
    (5) provides services designed to: 
    (i) increase the level of functioning of people adults with 
mental illness or restore them to a previously held higher level 
of functioning; 
    (ii) stabilize individuals adults with mental illness; 
    (iii) prevent the development and deepening of mental 
illness; 
    (iv) support and assist individuals adults in 
resolving emotional mental health problems that impede their 
functioning; 
    (v) promote higher and more satisfying levels of emotional 
functioning; and 
    (vi) promote sound mental health; and 
    (6) provides a quality of service that is effective, 
efficient, appropriate, and consistent with contemporary 
professional standards in the field of mental health. 
     Subd. 3.  [REPORT.] By February 15, 1988, and annually 
after that until February 15, 1990, the commissioner shall 
report to the legislature on all steps taken and recommendations 
for full implementation of sections 245.461 to 245.486 and on 
additional resources needed to further implement those sections. 
    Subd. 4.  [HOUSING MISSION STATEMENT.] The commissioner 
shall ensure that the housing services provided as part of a 
comprehensive mental health service system: 
     (1) allow all persons with mental illness to live in 
stable, affordable housing, in settings that maximize community 
integration and opportunities for acceptance; 
     (2) allow persons with mental illness to actively 
participate in the selection of their housing from those living 
environments available to the general public; and 
     (3) provide necessary support regardless of where persons 
with mental illness choose to live. 
    Sec. 2.  Minnesota Statutes 1988, section 245.462, is 
amended to read: 
    245.462 [DEFINITIONS.] 
    Subdivision 1.  [DEFINITIONS.] The definitions in this 
section apply to sections 245.461 to 245.486. 
    Subd. 2.  [ACUTE CARE HOSPITAL INPATIENT TREATMENT.] "Acute 
care hospital inpatient treatment" means short-term medical, 
nursing, and psychosocial services provided in an acute care 
hospital licensed under chapter 144.  
    Subd. 3.  [CASE MANAGEMENT ACTIVITIES SERVICES.] "Case 
management activities services" means activities that are 
coordinated with the community support services program as 
defined in subdivision 6 and are designed to help people adults 
with serious and persistent mental illness in gaining access to 
needed medical, social, educational, vocational, and other 
necessary services as they relate to the client's mental health 
needs.  Case management activities services include developing a 
functional assessment, an individual community support plan, 
referring and assisting the person to obtain needed mental 
health and other services, ensuring coordination of services, 
and monitoring the delivery of services. 
    Subd. 4.  [CASE MANAGER.] "Case manager" means an 
individual employed by the county or other entity authorized by 
the county board to provide the case management activities 
services specified in subdivision 3 and sections 245.471 and 
245.475.  A case manager must have a bachelor's degree in one of 
the behavioral sciences or related fields from an accredited 
college or university and have at least 2,000 hours of 
supervised experience in the delivery of services to persons 
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 persons 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 persons 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.  Clinical supervision must be 
documented in the client record. 
    Until June 30, 1991, a refugee who does not have the 
qualifications specified in this subdivision may provide case 
management services to adult refugees with serious and 
persistent mental illness who are members of the same ethnic 
group as the case manager if the person:  (1) is actively 
pursuing credits toward the completion of a bachelor's degree in 
one of the behavioral sciences or a related field 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 obtaining a bachelor's degree and 2,000 hours of supervised 
experience are met. 
    Subd. 4a.  [CLINICAL SUPERVISION.] "Clinical supervision" 
means the oversight responsibility for individual treatment 
plans and individual mental health service delivery, including 
that provided by the case manager.  Clinical supervision must be 
accomplished by full or part-time employment of or contracts 
with mental health professionals.  Clinical supervision must be 
documented by the mental health professional cosigning 
individual treatment plans and by entries in the client's record 
regarding supervisory activities. 
    Subd. 5.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services.  
    Subd. 6.  [COMMUNITY SUPPORT SERVICES PROGRAM.] "Community 
support services program" means services, other than inpatient 
or residential treatment services, provided or coordinated by an 
identified program and staff under the clinical supervision of a 
mental health professional designed to help people adults with 
serious and persistent mental illness to function and remain in 
the community.  A community support services program includes: 
    (1) client outreach, 
    (2) medication management monitoring, 
    (3) assistance in independent living skills, 
    (4) development of employability and supportive work 
related opportunities, 
    (5) crisis assistance, 
    (6) psychosocial rehabilitation, 
    (7) help in applying for government benefits, and 
    (8) the development, identification, and monitoring of 
living arrangements.  
    The community support services program must be coordinated 
with the case management activities services specified 
in subdivision 3 and sections 245.471 and 245.475 section 
245.4711. 
    Subd. 7.  [COUNTY BOARD.] "County board" means the county 
board of commissioners or board established pursuant to the 
joint powers act, section 471.59, or the human services board 
act, sections 402.01 to 402.10.  
    Subd. 8.  [DAY TREATMENT SERVICES.] "Day treatment," "day 
treatment services," means a structured program of intensive 
therapeutic and rehabilitative services at least one day a week 
for a minimum three-hour time block that is provided within a 
group setting by a multidisciplinary staff under the clinical 
supervision of a mental health professional.  Day treatment 
services are not a part of inpatient or residential treatment 
services, but may be part of a community support services 
program. or "day treatment program" means a structured program 
of treatment and care provided to an adult in:  (1) a hospital 
accredited by the joint commission on accreditation of health 
organizations and licensed under sections 144.50 to 144.55; (2) 
a community mental health center under section 245.62; or (3) an 
entity that is under contract with the county board to operate a 
program that meets the requirements of section 245.4711, 
subdivision 7, and Minnesota Rules, parts 9505.0170 to 
9505.0475.  Day treatment consists of group psychotherapy and 
other intensive therapeutic services that are provided at least 
one day a week for a minimum three-hour time block by a 
multidisciplinary staff under the clinical supervision of a 
mental health professional.  The services are aimed at 
stabilizing the adult's mental health status, providing mental 
health services, and developing and improving the adult's 
independent living and socialization skills.  The goal of day 
treatment is to reduce or relieve mental illness and to enable 
the adult to live in the community.  Day treatment services are 
not a part of inpatient or residential treatment services.  Day 
treatment services are distinguished from day care by their 
structured therapeutic program of psychotherapy services. 
    Subd. 9.  [DIAGNOSTIC ASSESSMENT.] "Diagnostic assessment" 
means a written summary of the history, diagnosis, strengths, 
vulnerabilities, and general service needs of a person an adult 
with a mental illness using diagnostic, interview, and other 
relevant mental health techniques provided by a mental health 
professional used in developing an individual treatment plan or 
individual community support plan.  
    Subd. 10.  [EDUCATION AND PREVENTION SERVICES.] "Education 
and prevention services" means services designed to educate the 
general public or special high-risk target populations about 
mental illness, to increase the understanding and acceptance of 
problems associated with mental illness, to increase people's 
awareness of the availability of resources and services, and to 
improve people's skills in dealing with high-risk situations 
known to affect people's mental health and functioning.  The 
services include the distribution of information to individuals 
and agencies identified by the county board and the local mental 
health advisory council, on predictors and symptoms of mental 
disorders, where mental health services are available in the 
county, and how to access the services. 
    Subd. 11.  [EMERGENCY SERVICES.] "Emergency services" means 
an immediate response service available on a 24-hour, 
seven-day-a-week basis for persons having a psychiatric crisis, 
a mental health crisis, or emergency.  
    Subd. 11a.  [FUNCTIONAL ASSESSMENT.] "Functional assessment"
means an assessment by the case manager of the adult's:  
    (1) mental health symptoms as presented in the adult's 
diagnostic assessment; 
    (2) mental health needs as presented in the adult's 
diagnostic assessment; 
    (3) use of drugs and alcohol; 
    (4) vocational and educational functioning; 
    (5) social functioning, including the use of leisure time; 
    (6) interpersonal functioning, including relationships with 
the adult's family; 
    (7) self-care and independent living capacity; 
    (8) medical and dental health; 
    (9) financial assistance needs; 
    (10) housing and transportation needs; and 
    (11) other needs and problems. 
    Subd. 12.  [INDIVIDUAL COMMUNITY SUPPORT PLAN.] "Individual 
community support plan" means a written plan developed by a case 
manager on the basis of a diagnostic assessment and functional 
assessment.  The plan identifies specific services needed by a 
person an adult with serious and persistent mental illness to 
develop independence or improved functioning in daily living, 
health and medication management, social functioning, 
interpersonal relationships, financial management, housing, 
transportation, and employment.  
    Subd. 13.  [INDIVIDUAL PLACEMENT AGREEMENT.] "Individual 
placement agreement" means a written agreement or supplement to 
a service contract entered into between the county board and a 
service provider on behalf of an individual client adult to 
provide residential treatment services.  
    Subd. 14.  [INDIVIDUAL TREATMENT PLAN.] "Individual 
treatment plan" means a written plan of intervention, treatment, 
and services for a person an adult with mental illness that is 
developed by a service provider under the clinical supervision 
of a mental health professional on the basis of a diagnostic 
assessment.  The plan identifies goals and objectives of 
treatment, treatment strategy, a schedule for accomplishing 
treatment goals and objectives, and the individual responsible 
for providing treatment to the person adult with mental illness. 
    Subd. 15.  [LOCAL MENTAL HEALTH PROPOSAL.] "Local mental 
health proposal" means the proposal developed by the county 
board, reviewed by the commissioner, and described in section 
245.463.  
    Subd. 16.  [MENTAL HEALTH FUNDS.] "Mental health funds" are 
funds expended under sections 245.73 and 256E.12, federal mental 
health block grant funds, and funds expended under sections 
256D.06 and 256D.37 to facilities licensed under Minnesota 
Rules, parts 9520.0500 to 9520.0690. 
    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 has at least 2,000 hours of supervised experience 
in the delivery of services to persons with mental illness; 
    (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. 
    Subd. 18.  [MENTAL HEALTH PROFESSIONAL.] "Mental health 
professional" means a person providing clinical services in the 
treatment of mental illness who is qualified in at least one of 
the following ways:  
    (1) in psychiatric nursing:  a registered nurse with a 
master's degree in one of the behavioral sciences or related 
fields from an accredited college or university or its 
equivalent, who is licensed under sections 148.171 to 148.285, 
with at least 4,000 hours of post-master's supervised experience 
in the delivery of clinical services in the treatment of mental 
illness and who is certified as a clinical specialist by the 
American nurses association; 
    (2) in clinical social work:  a person licensed as an 
independent clinical social worker under section 148B.21, 
subdivision 6, or a person with a master's degree in social work 
from an accredited college or university, with at least 4,000 
hours of post-master's supervised experience in the delivery of 
clinical services in the treatment of mental illness; 
    (3) in psychology:  a psychologist licensed under sections 
148.88 to 148.98 who has stated to the board of psychology 
competencies in the diagnosis and treatment of mental illness; 
    (4) in psychiatry:  a physician licensed under chapter 147 
and certified by the American board of psychiatry and neurology 
or eligible for board certification in psychiatry; or 
    (5) in allied fields:  a person with a master's degree from 
an accredited college or university in one of the behavioral 
sciences or related fields, with at least 4,000 hours of 
post-master's supervised experience in the delivery of clinical 
services in the treatment of mental illness.  
    Subd. 19.  [MENTAL HEALTH SERVICES.] "Mental health 
services" means at least all of the treatment services and case 
management activities that are provided to persons adults with 
mental illness and are described in sections 245.461 to 245.486. 
    Subd. 20.  [MENTAL ILLNESS.] (a) "Mental illness" means an 
organic disorder of the brain or a clinically significant 
disorder of thought, mood, perception, orientation, memory, or 
behavior that is listed in the clinical manual of the 
International Classification of Diseases (ICD-9-CM), current 
edition, code range 290.0 to 302.99 or 306.0 to 316.0 or the 
corresponding code in the American Psychiatric Association's 
Diagnostic and Statistical Manual of Mental Disorders (DSM-MD), 
current edition, Axes I, II, or III, and that seriously limits a 
person's capacity to function in primary aspects of daily living 
such as personal relations, living arrangements, work, and 
recreation.  
    (b) A "person An "adult with acute mental illness" means a 
person an adult who has a mental illness that is serious enough 
to require prompt intervention.  
    (c) For purposes of case management and community support 
services, a "person with serious and persistent mental illness" 
means a person an adult who has a mental illness and meets at 
least one of the following criteria: 
    (1) the person adult has undergone two or more episodes of 
inpatient care for a mental illness within the preceding 24 
months; 
    (2) the person adult has experienced a continuous 
psychiatric hospitalization or residential treatment exceeding 
six months' duration within the preceding 12 months; 
    (3) the person adult: 
    (i) has a diagnosis of schizophrenia, bipolar disorder, 
major depression, or borderline personality disorder; 
    (ii) indicates a significant impairment in functioning; and 
    (iii) has a written opinion from a mental health 
professional stating that the person adult is reasonably likely 
to have future episodes requiring inpatient or residential 
treatment, of a frequency described in clause (1) or (2), unless 
an ongoing community support services program is provided; or 
    (4) the person adult has been committed by a court as a 
mentally ill person under chapter 253B, or the person's adult's 
commitment has been stayed or continued. 
    Subd. 21.  [OUTPATIENT SERVICES.] "Outpatient services" 
means mental health services, excluding day treatment and 
community support services programs, provided by or under the 
clinical supervision of a mental health professional to persons 
adults with a mental illness who live outside a hospital.  
Outpatient services include clinical activities such as 
individual, group, and family therapy; individual treatment 
planning; diagnostic assessments; medication management; and 
psychological testing.  
    Subd. 22.  [REGIONAL TREATMENT CENTER INPATIENT SERVICES.] 
"Regional treatment center inpatient services" means the 
24-hour-a-day comprehensive medical, nursing, or psychosocial 
services provided in a regional treatment center operated by the 
state.  
    Subd. 23.  [RESIDENTIAL TREATMENT.] "Residential treatment" 
means a 24-hour-a-day program under the clinical supervision of 
a mental health professional, in a community residential setting 
other than an acute care hospital or regional treatment 
center inpatient unit, that must be licensed as a residential 
treatment facility program for persons adults with mental 
illness under Minnesota Rules, parts 9520.0500 to 9520.0690 for 
adults, 9545.0900 to 9545.1090 for children, or other rule rules 
adopted by the commissioner. 
    Subd. 24.  [SERVICE PROVIDER.] "Service provider" means 
either a county board or an individual or agency including a 
regional treatment center under contract with the county board 
that provides adult mental health services funded by sections 
245.461 to 245.486. 
    Subd. 25.  [CLINICAL SUPERVISION.] "Clinical supervision" 
means the oversight responsibility for individual treatment 
plans and individual service delivery, including that provided 
by the case manager.  Clinical supervision must be accomplished 
by full or part-time employment of or contracts with mental 
health professionals.  Clinical supervision must be documented 
by the mental health professional cosigning individual treatment 
plans and by entries in the client's record regarding 
supervisory activities. 
    Sec. 3.  Minnesota Statutes 1988, section 245.463, 
subdivision 2, is amended to read: 
    Subd. 2.  [TECHNICAL ASSISTANCE.] The commissioner shall 
provide ongoing technical assistance to county boards to develop 
local mental health proposals as specified in section 
245.479 245.478, to improve system capacity and quality.  The 
commissioner and county boards shall exchange information as 
needed about the numbers of persons adults with mental illness 
residing in the county and extent of existing treatment 
components locally available to serve the needs of those 
persons.  County boards shall cooperate with the commissioner in 
obtaining necessary planning information upon request.  
    Sec. 4.  Minnesota Statutes 1988, section 245.463, is 
amended by adding a subdivision to read: 
    Subd. 3.  The commissioner of human services shall, in 
cooperation with the commissioner of health, study and submit to 
the legislature by February 15, 1991, a report and 
recommendations regarding (1) plans and fiscal projections for 
increasing the number of community-based beds, small 
community-based residential programs, and support services for 
persons with mental illness, including persons for whom nursing 
home services are inappropriate, to serve all persons in need of 
those programs; and (2) the projected fiscal impact of 
maximizing the availability of medical assistance coverage for 
persons with mental illness. 
    Sec. 5.  Minnesota Statutes 1988, section 245.464, is 
amended to read: 
    245.464 [COORDINATION OF MENTAL HEALTH SYSTEM.] 
    Subdivision 1.  [SUPERVISION COORDINATION.] The 
commissioner shall supervise the development and coordination of 
locally available adult mental health services by the county 
boards in a manner consistent with sections 245.461 to 245.486.  
The commissioner shall coordinate locally available services 
with those services available from the regional treatment center 
serving the area.  The commissioner shall review local mental 
health service proposals developed by county boards as specified 
in section 245.463 and provide technical assistance to county 
boards in developing and maintaining locally available mental 
health services.  The commissioner shall monitor the county 
board's progress in developing its full system capacity and 
quality through ongoing review of the county board's adult 
mental health proposals, quarterly reports, and other 
information as required by sections 245.461 to 245.486.  
    Subd. 2.  [PRIORITIES.] By January 1, 1990, the 
commissioner shall require that each of the treatment services 
and management activities described in sections 245.469 to 
245.477 are developed for persons adults with mental illness 
within available resources based on the following ranked 
priorities:  
    (1) the provision of locally available emergency services; 
    (2) the provision of locally available services to all 
persons adults with serious and persistent mental illness and 
all persons adults with acute mental illness; 
    (3) the provision of specialized services regionally 
available to meet the special needs of all persons adults with 
serious and persistent mental illness and all persons adults 
with acute mental illness; 
    (4) the provision of locally available services to persons 
adults with other mental illness; and 
    (5) the provision of education and preventive mental health 
services targeted at high-risk populations. 
    Sec. 6.  Minnesota Statutes 1988, section 245.465, is 
amended to read: 
    245.465 [DUTIES OF COUNTY BOARD.] 
    The county board in each county shall use its share of 
mental health and community social service act funds allocated 
by the commissioner according to a biennial local mental health 
service proposal approved by the commissioner.  The county board 
must: 
    (1) develop and coordinate a system of affordable and 
locally available adult mental health services in accordance 
with sections 245.461 to 245.486; 
    (2) provide for case management services to persons adults 
with serious and persistent mental illness in accordance with 
sections 245.462, subdivisions 3 and 4; 245.471; 245.475 
245.4711; and 245.486; 
    (3) provide for screening of persons adults specified in 
section 245.476 upon admission to a residential treatment 
facility or acute care hospital inpatient, or informal admission 
to a regional treatment center; and 
    (4) prudently administer grants and purchase-of-service 
contracts that the county board determines are necessary to 
fulfill its responsibilities under sections 245.461 to 245.486; 
and 
    (5) assure that mental health professionals, mental health 
practitioners, and case managers employed by or under contract 
with the county to provide mental health services have 
experience and training in working with adults with mental 
illness. 
    Sec. 7.  Minnesota Statutes 1988, section 245.466, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEVELOPMENT OF SERVICES.] The county board 
in each county is responsible for using all available resources 
to develop and coordinate a system of locally available and 
affordable adult mental health services.  The county board may 
provide some or all of the mental health services and activities 
specified in subdivision 2 directly through a county agency or 
under contracts with other individuals or agencies.  A county or 
counties may enter into an agreement with a regional treatment 
center under section 246.57 to enable the county or counties to 
provide the treatment services in subdivision 2.  Services 
provided through an agreement between a county and a regional 
treatment center must meet the same requirements as services 
from other service providers.  County boards shall demonstrate 
their continuous progress toward full implementation of sections 
245.461 to 245.486 during the period July 1, 1987, to January 1, 
1990.  County boards must develop fully each of the treatment 
services and management activities prescribed by sections 
245.461 to 245.486 by January 1, 1990, according to the 
priorities established in section 245.464 and the local mental 
health services proposal approved by the commissioner under 
section 245.478. 
    Sec. 8.  Minnesota Statutes 1988, section 245.466, 
subdivision 2, is amended to read: 
    Subd. 2.  [ADULT MENTAL HEALTH SERVICES.] The adult mental 
health service system developed by each county board must 
include the following services:  
    (1) education and prevention services in accordance with 
section 245.468; 
    (2) emergency services in accordance with section 245.469; 
    (3) outpatient services in accordance with section 245.470; 
    (4) community support program services in accordance with 
sections 245.471 and 245.475 section 245.4711; 
    (5) residential treatment services in accordance with 
section 245.472; 
    (6) acute care hospital inpatient treatment services in 
accordance with section 245.473; 
    (7) regional treatment center inpatient services in 
accordance with section 245.474; 
    (8) screening in accordance with section 245.476; and 
    (9) case management in accordance with sections 245.462, 
subdivision 3; 245.471; and 245.475 245.4711. 
    Sec. 9.  Minnesota Statutes 1988, section 245.466, 
subdivision 5, is amended to read: 
    Subd. 5.  [LOCAL ADVISORY COUNCIL.] The county board, 
individually or in conjunction with other county boards, shall 
establish a local adult mental health advisory council or mental 
health subcommittee of an existing advisory council.  The 
council's members must reflect a broad range of community 
interests.  They must include at least one consumer, one family 
member of a person an adult with mental illness, one mental 
health professional, and one community support services program 
representative.  The local adult mental health advisory council 
or mental health subcommittee of an existing advisory council 
shall meet at least quarterly to review, evaluate, and make 
recommendations regarding the local mental health system.  
Annually, the local adult mental health advisory council or 
mental health subcommittee of an existing advisory council shall:
    (1) arrange for input from the regional treatment center's 
mental illness program unit regarding coordination of care 
between the regional treatment center and community-based 
services; 
    (2) identify for the county board the individuals, 
providers, agencies, and associations as specified in section 
245.462, subdivision 10; and 
    (3) coordinate its review, evaluation, and recommendations 
regarding the local mental health system with the state advisory 
council on mental health.  
    The county board shall consider the advice of its local 
mental health advisory council or mental health subcommittee of 
an existing advisory council in carrying out its authorities and 
responsibilities.  
    Sec. 10.  Minnesota Statutes 1988, section 245.466, 
subdivision 6, is amended to read: 
    Subd. 6.  [OTHER LOCAL AUTHORITY.] The county board may 
establish procedures and policies that are not contrary to those 
of the commissioner or sections 245.461 to 245.486 regarding 
local adult mental health services and facilities.  The county 
board shall perform other acts necessary to carry out sections 
245.461 to 245.486.  
    Sec. 11.  Minnesota Statutes 1988, section 245.467, 
subdivision 3, is amended to read: 
    Subd. 3.  [INDIVIDUAL TREATMENT PLANS.] All providers of 
outpatient services, day treatment services, residential 
treatment, acute care hospital inpatient treatment, and all 
regional treatment centers must develop an individual treatment 
plan for each of their adult clients.  The individual treatment 
plan must be based on a diagnostic assessment.  To the extent 
possible, the adult client shall be involved in all phases of 
developing and implementing the individual treatment plan.  The 
individual treatment plan must be developed within ten days of 
client intake and reviewed every 90 days thereafter.  
    Sec. 12.  Minnesota Statutes 1988, section 245.467, 
subdivision 4, is amended to read: 
    Subd. 4.  [REFERRAL FOR CASE MANAGEMENT.] Each provider of 
emergency services, day treatment services, outpatient 
treatment, community support services, residential treatment, 
acute care hospital inpatient treatment, or regional treatment 
center inpatient treatment must inform each of its clients with 
serious and persistent mental illness of the availability and 
potential benefits to the client of case management.  If the 
client consents, the provider must refer the client by notifying 
the county employee designated by the county board to coordinate 
case management activities of the client's name and address and 
by informing the client of whom to contact to request case 
management.  The provider must document compliance with this 
subdivision in the client's record. 
    Sec. 13.  Minnesota Statutes 1988, section 245.467, 
subdivision 5, is amended to read: 
    Subd. 5.  [INFORMATION FOR BILLING.] Each provider of 
outpatient treatment, community support services, day treatment 
services, emergency services, residential treatment, or acute 
care hospital inpatient treatment must include the name and home 
address of each client for whom services are included on a bill 
submitted to a county, if the client has consented to the 
release of that information and if the county requests the 
information.  Each provider shall attempt to obtain each 
client's consent and must explain to the client that the 
information can only be released with the client's consent and 
may be used only for purposes of payment and maintaining 
provider accountability.  The provider shall document the 
attempt in the client's record. 
    Sec. 14.  Minnesota Statutes 1988, section 245.468, is 
amended to read: 
    245.468 [EDUCATION AND PREVENTION SERVICES.] 
    By July 1, 1988, county boards must provide or contract for 
education and prevention services to persons adults residing in 
the county.  Education and prevention services must be designed 
to: 
    (1) convey information regarding mental illness and 
treatment resources to the general public or and special 
high-risk target groups; 
    (2) increase understanding and acceptance of problems 
associated with mental illness; 
    (3) improve people's skills in dealing with high-risk 
situations known to have an impact on people's adults' mental 
health functioning; and 
    (4) prevent development or deepening of mental illness; and 
     (5) refer adults with additional mental health needs to 
appropriate mental health services.  
    Sec. 15.  Minnesota Statutes 1988, section 245.469, is 
amended to read: 
    245.469 [EMERGENCY SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF EMERGENCY SERVICES.] By 
July 1, 1988, county boards must provide or contract for enough 
emergency services within the county to meet the needs of 
persons adults in the county who are experiencing an emotional 
crisis or mental illness.  Clients may be required to pay a 
fee based on their ability to pay according to section 245.481.  
Emergency services must include assessment, intervention, and 
appropriate case disposition.  Emergency services must:  
    (1) promote the safety and emotional stability of people 
adults with mental illness or emotional crises; 
    (2) minimize further deterioration of people adults with 
mental illness or emotional crises; 
    (3) help people adults with mental illness or emotional 
crises to obtain ongoing care and treatment; and 
    (4) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
client needs.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] The county board shall 
require that all service providers of emergency services to 
adults with mental illness provide immediate direct access to a 
mental health professional during regular business hours.  For 
evenings, weekends, and holidays, the service may be by direct 
toll free telephone access to a mental health professional, a 
mental health practitioner, or until January 1, 1991, a 
designated person with training in human services who receives 
clinical supervision from a mental health professional.  
Whenever emergency service during nonbusiness hours is provided 
by anyone other than a mental health professional, a mental 
health professional must be available for at least telephone 
consultation within 30 minutes. 
    Sec. 16.  Minnesota Statutes 1988, section 245.470, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AVAILABILITY OF OUTPATIENT SERVICES.] (a) 
By July 1, 1988, county boards must provide or contract for 
enough outpatient services within the county to meet the needs 
of persons adults with mental illness residing in the county.  
Clients may be required to pay a fee based on their ability to 
pay according to section 245.481.  Outpatient services include:  
    (1) conducting diagnostic assessments; 
    (2) conducting psychological testing; 
    (3) developing or modifying individual treatment plans; 
    (4) making referrals and recommending placements as 
appropriate; 
    (5) treating a person's an adult's mental health needs 
through therapy; 
    (6) prescribing and managing medication and evaluating the 
effectiveness of prescribed medication; and 
    (7) preventing placement in settings that are more 
intensive, costly, or restrictive than necessary and appropriate 
to meet client needs.  
    (b) County boards may request a waiver allowing outpatient 
services to be provided in a nearby trade area if it is 
determined that the client can best be served outside the county.
    Sec. 17.  [245.4711] [CASE MANAGEMENT AND COMMUNITY SUPPORT 
SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT 
SERVICES.] (a) By January 1, 1989, the county board shall 
provide case management activities for all adults with serious 
and persistent mental illness residing in the county 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. 
    Subd. 2.  [NOTIFICATION OF CASE MANAGEMENT 
ELIGIBILITY.] The county board shall notify the client of the 
person's potential eligibility for case management services 
within five working days after receiving a request from an 
individual or a referral from a provider under section 245.467, 
subdivision 4.  The county board shall send a written notice to 
the client and the client's representative, if any, that 
identifies the designated case management providers. 
    Subd. 3.  [DUTIES OF CASE MANAGER.] (a) The case manager 
shall promptly arrange for a diagnostic assessment of the 
applicant when one is not available as described in section 
245.467, subdivision 2, to determine the applicant's eligibility 
as an adult with serious and persistent mental illness for 
community support services.  The county board shall notify in 
writing the applicant and the applicant's representative, if 
any, if the applicant is determined ineligible for community 
support services. 
    (b) Upon a determination of eligibility for community 
support services, the case manager shall develop an individual 
community support plan for an adult according to subdivision 4, 
paragraph (a), review the client's progress, and monitor the 
provision of services.  If services are to be provided in a host 
county that is not the county of financial responsibility, the 
case manager shall consult with the host county and obtain a 
letter demonstrating the concurrence of the host county 
regarding the provision of services. 
    Subd. 4.  [INDIVIDUAL COMMUNITY SUPPORT PLAN.] (a) The case 
manager must develop an individual community support plan for 
each adult that incorporates the client's individual treatment 
plan.  The individual treatment plan may not be a substitute for 
the development of an individual community support plan.  The 
individual community support plan must be developed within 30 
days of client intake and reviewed every 90 days after it is 
developed.  The case manager is responsible for developing the 
individual community support plan based on a diagnostic 
assessment and a functional assessment and for implementing and 
monitoring the delivery of services according to the individual 
community support plan.  To the extent possible, the adult with 
serious and persistent mental illness, the person's family, 
advocates, service providers, and significant others must be 
involved in all phases of development and implementation of the 
individual or family community support plan.  
    (b) The client's individual community support plan must 
state: 
    (1) the goals of each service; 
    (2) the activities for accomplishing each goal; 
    (3) a schedule for each activity; and 
    (4) the frequency of face-to-face contacts by the case 
manager, as appropriate to client need and the implementation of 
the individual community support plan. 
    Subd. 5.  [COORDINATION BETWEEN CASE MANAGER AND COMMUNITY 
SUPPORT SERVICES.] The county board must establish procedures 
that ensure ongoing contact and coordination between the case 
manager and the community support services program as well as 
other mental health services. 
    Subd. 6.  [AVAILABILITY OF COMMUNITY SUPPORT SERVICES.] 
County boards must provide or contract for sufficient community 
support services within the county to meet the needs of adults 
with serious and persistent mental illness residing in the 
county.  Clients may be required to pay a fee according to 
section 245.481.  The community support services program must be 
designed to improve the ability of adults with serious and 
persistent mental illness to:  
    (1) work in a regular or supported work environment; 
    (2) handle basic activities of daily living; 
    (3) participate in leisure time activities; 
    (4) set goals and plans; 
    (5) obtain and maintain appropriate living arrangements; 
and 
    (6) reduce the use of more intensive, costly, or 
restrictive placements both in number of admissions and lengths 
of stay as determined by client need. 
    Subd. 7.  [DAY TREATMENT SERVICES PROVIDED.] (a) By July 1, 
1989, 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.  Clients 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 community support; 
    (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) 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. 
    Subd. 8.  [BENEFITS ASSISTANCE.] The county board must 
offer help to adults with serious and persistent mental illness 
in applying for federal benefits, including supplemental 
security income, medical assistance, and Medicare.  The help 
must be offered as a part of the community support program 
available to adults with serious and persistent mental illness 
for whom the county is financially responsible and who may 
qualify for these benefits.  
    Sec. 18.  Minnesota Statutes 1988, section 245.472, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AVAILABILITY OF RESIDENTIAL TREATMENT 
SERVICES.] By July 1, 1988, county boards must provide or 
contract for enough residential treatment services to meet the 
needs of all persons adults with mental illness residing in the 
county and needing this level of care.  Residential treatment 
services include both intensive and structured residential 
treatment with length of stay based on client residential 
treatment need.  Services must be as close to the county as 
possible.  Residential treatment must be designed to:  
    (1) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
client needs; 
    (2) help clients achieve the highest level of independent 
living; 
    (3) help clients gain the necessary skills to be referred 
to a community support services program or outpatient 
services function in a less structured setting; and 
    (4) stabilize crisis admissions.  
    Sec. 19.  Minnesota Statutes 1988, section 245.472, is 
amended by adding a subdivision to read: 
    Subd. 3.  [TRANSITION TO COMMUNITY.] Residential treatment 
programs must plan for and assist clients in making a transition 
from residential treatment facilities to other community-based 
services.  In coordination with the client's case manager, if 
any, residential treatment facilities must also arrange for 
appropriate follow-up care in the community during the 
transition period.  Before a client is discharged, the 
residential treatment facility must notify the client's case 
manager, so that the case manager can monitor and coordinate the 
transition and arrangements for the client's appropriate 
follow-up care in the community. 
    Sec. 20.  Minnesota Statutes 1988, section 245.473, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AVAILABILITY OF ACUTE CARE INPATIENT 
SERVICES.] By July 1, 1988, county boards must make available 
through contract or direct provision enough acute care hospital 
inpatient treatment services as close to the county as possible 
to meet the needs of persons for adults with mental illness 
residing in the county.  Acute care hospital inpatient treatment 
services must be designed to:  
    (1) stabilize the medical and mental health condition of 
people with acute or serious and persistent mental illness for 
which admission is required; 
    (2) improve functioning to the point where discharge to 
residential treatment or community-based mental health services 
is possible; and 
    (3) facilitate appropriate referrals, for follow-up, and 
placements mental health care in the community.  
    Sec. 21.  Minnesota Statutes 1988, section 245.474, is 
amended to read: 
    245.474 [REGIONAL TREATMENT CENTER INPATIENT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF REGIONAL TREATMENT CENTER 
INPATIENT SERVICES.] By July 1, 1987, the commissioner shall 
make sufficient regional treatment center inpatient services 
available to people adults with mental illness throughout the 
state who need this level of care.  Regional treatment centers 
are responsible to:  
    (1) stabilize the medical and mental health condition of 
the person with mental illness adult requiring the admission; 
    (2) improve functioning to the point where discharge to 
community-based mental health services is possible; 
    (3) strengthen family and community support; and 
    (4) facilitate appropriate discharge, aftercare, and 
referrals for follow-up placements mental health care in the 
community.  
    Subd. 2.  [QUALITY OF SERVICE.] The commissioner shall 
biennially determine the needs of all mentally ill patients 
adults with mental illness who are served by regional treatment 
centers by administering a client-based evaluation system.  The 
client-based evaluation system must include at least the 
following independent measurements:  behavioral development 
assessment; habilitation program assessment; medical needs 
assessment; maladaptive behavioral assessment; and vocational 
behavior assessment.  The commissioner shall propose staff 
ratios to the legislature for the mental health and support 
units in regional treatment centers as indicated by the results 
of the client-based evaluation system.  The proposed staffing 
ratios shall include professional, nursing, direct care, 
medical, clerical, and support staff based on the client-based 
evaluation system.  The commissioner shall recompute staffing 
ratios and recommendations on a biennial basis.  
    Subd. 3.  [TRANSITION TO COMMUNITY.] Regional treatment 
centers must plan for and assist clients in making a transition 
from regional treatment centers to other community-based 
services.  In coordination with the client's case manager, if 
any, regional treatment centers must also arrange for 
appropriate follow-up care in the community during the 
transition period.  Before a client is discharged, the regional 
treatment center must notify the client's case manager, so that 
the case manager can monitor and coordinate the transition and 
arrangements for the client's appropriate follow-up care in the 
community. 
    Sec. 22.  Minnesota Statutes 1988, section 245.476, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SCREENING REQUIRED.] No later than January 
1, 1991 1992, the county board shall screen all persons adults 
before they may be admitted for treatment of mental illness to a 
residential treatment facility, an acute care hospital, or 
informally admitted to a regional treatment center if public 
funds are used to pay for the services.  Screening prior to 
admission must occur within ten days.  If a person an adult is 
admitted for treatment of mental illness on an emergency basis 
to a residential facility or acute care hospital or held for 
emergency care by a regional treatment center under section 
253B.05, subdivision 1, screening must occur within five days of 
the admission.  Persons Adults must be screened within ten days 
before or within five days after admission to ensure that:  
    (1) an admission is necessary, 
    (2) the length of stay is as short as possible consistent 
with individual client need, and 
    (3) the case manager, if assigned, is developing an 
individual community support plan.  
    The screening process and placement decision must be 
documented in the client's record.  
    An alternate review process may be approved by the 
commissioner if the county board demonstrates that an alternate 
review process has been established by the county board and the 
times of review, persons responsible for the review, and review 
criteria are comparable to the standards specified in clauses 
(1) to (3). 
    Sec. 23.  Minnesota Statutes 1988, section 245.476, 
subdivision 3, is amended to read: 
    Subd. 3.  [INDIVIDUAL PLACEMENT AGREEMENT.] The county 
board shall enter into an individual placement agreement with a 
provider of residential treatment services to a person an adult 
eligible for services under this section.  The agreement must 
specify the payment rate and terms and conditions of county 
payment for the placement. 
    Sec. 24.  Minnesota Statutes 1988, section 245.476, is 
amended by adding a subdivision to read: 
    Subd. 4.  [TASK FORCE ON RESIDENTIAL AND INPATIENT 
TREATMENT SERVICES FOR ADULTS.] The commissioner of human 
services shall appoint a task force on residential and inpatient 
treatment services for adults.  The task force must include 
representatives from each of the mental health professional 
categories defined in section 245.462, subdivision 18, the 
Minnesota mental health association, the Minnesota alliance for 
the mentally ill, the Minnesota mental health law project, the 
Minnesota association of mental health residential facilities, 
the Minnesota hospital association, department of human services 
staff, the department of education, the department of 
corrections, the ombudsman for mental health and mental 
retardation, and counties.  The task force shall examine and 
evaluate existing mechanisms that have as their purpose review 
of appropriate admission and need for continued care for clients 
admitted to residential treatment, acute care hospital inpatient 
treatment, and regional treatment center inpatient treatment.  
These mechanisms shall include at least the following:  
precommitment screening, licensure and reimbursement rules, 
county monitoring, technical assistance, nursing home 
preadmission screening, hospital preadmission certification, and 
hospital retrospective reviews.  The task force shall report to 
the legislature by February 15, 1990, on how existing mechanisms 
may be changed to accomplish the goals of screening as described 
in subdivision 1.  
    Sec. 25.  Minnesota Statutes 1988, section 245.477, is 
amended to read: 
    245.477 [APPEALS.] 
    Any person adult who requests mental health services under 
sections 245.461 to 245.486 must be advised of services 
available and the right to appeal at the time of the request and 
each time the individual community service support plan or 
individual treatment plan is reviewed.  Any person adult whose 
request for mental health services under sections 245.461 to 
245.486 is denied, not acted upon with reasonable promptness, or 
whose services are suspended, reduced, or terminated by action 
or inaction for which the county board is responsible under 
sections 245.461 to 245.486 may contest that action or inaction 
before the state agency as specified in section 256.045.  The 
commissioner shall monitor the nature and frequency of 
administrative appeals under this section. 
    Sec. 26.  Minnesota Statutes 1988, section 245.478, 
subdivision 2, is amended to read: 
    Subd. 2.  [PROPOSAL CONTENT.] The local adult mental health 
proposal must include: 
    (1) the local adult mental health advisory council's or 
adult mental health subcommittee of an existing advisory 
council's report on unmet needs of adults and any other needs 
assessment used by the county board in preparing the local adult 
mental health proposal; 
    (2) a description of the local adult mental health advisory 
council's or the adult mental health subcommittee of an existing 
advisory council's involvement in preparing the local adult 
mental health proposal and methods used by the county board 
to obtain ensure adequate and timely participation of citizens, 
mental health professionals, and providers in development of the 
local mental health proposal; 
    (3) information for the preceding year, including the 
actual number of clients who received each of the mental health 
services listed in sections 245.468 to 245.476, and actual 
expenditures for each mental health service and service waiting 
lists; and 
    (4) for the first proposal period only, information for the 
year during which the proposal is being prepared: 
    (i) a description of the current mental health system 
identifying each mental health service listed in sections 
245.468 to 245.476; 
    (ii) a description of each service provider, including a 
listing of the professional qualifications of the staff involved 
in service delivery, that is either the sole provider of one of 
the mental health services described in sections 245.468 to 
245.476 or that provides over $10,000 of mental health services 
per year for the county; 
    (iii) a description of how the mental health services in 
the county are unified and coordinated; 
    (iv) the estimated number of clients receiving each mental 
health service; 
    (v) estimated expenditures for each mental health service; 
and 
    (5) the following information describing how the county 
board intends to meet the requirements of sections 245.461 to 
245.486 during the proposal period: 
    (i) specific objectives and outcome goals for each adult 
mental health service listed in sections 245.468 245.461 
to 245.476 245.486; 
    (ii) a description of each service provider, including 
county agencies, contractors, and subcontractors, that is 
expected to either be the sole provider of one of the adult 
mental health services described in sections 245.468 245.461 
to 245.476 245.486 or to provide over $10,000 of adult mental 
health services per year, including a listing of the 
professional qualifications of the staff involved in service 
delivery for the county; 
    (iii) a description of how the adult mental health services 
in the county will be unified and coordinated; 
    (iv) the estimated number of clients who will receive each 
adult mental health service; and 
    (v) estimated expenditures for each adult mental health 
service and revenues for the entire proposal. 
    Sec. 27.  Minnesota Statutes 1988, section 245.478, 
subdivision 3, is amended to read: 
    Subd. 3.  [PROPOSAL FORMAT.] The local adult mental health 
proposal must be made in a format prescribed by the commissioner.
    Sec. 28.  Minnesota Statutes 1988, section 245.479, is 
amended to read: 
    245.479 [COUNTY OF FINANCIAL RESPONSIBILITY.] 
    For purposes of sections 245.461 to 245.486 and 245.487 to 
245.4887, the county of financial responsibility is determined 
under section 256G.02, subdivision 4.  Disputes between counties 
regarding financial responsibility must be resolved by the 
commissioner in accordance with section 256G.09. 
    Sec. 29.  Minnesota Statutes 1988, section 245.48, is 
amended to read: 
    245.48 [MAINTENANCE OF EFFORT.] 
    Counties must continue to spend for mental health services 
specified in sections 245.461 to 245.486 and 245.487 to 
245.4887, according to generally accepted budgeting and 
accounting principles, an amount equal to the total expenditures 
shown in the county's approved 1987 Community Social Services 
Act plan under "State CSSA, Title XX and County Tax" for 
services to persons with mental illness plus the comparable 
figure for Rule 5 facilities under target populations other than 
mental illness in the approved 1987 CSSA plan.  
    Sec. 30.  [245.481] [FEES FOR MENTAL HEALTH SERVICES.] 
    A client or, in the case of a child, the child or the 
child's parent may be required to pay a fee for mental health 
services provided under sections 245.461 to 245.486 and 245.487 
to 245.4887.  The fee must be based on the person's ability to 
pay according to the fee schedule adopted by the county board.  
In adopting the fee schedule for mental health services, the 
county board may adopt the fee schedule provided by the 
commissioner or adopt a fee schedule recommended by the county 
board and approved by the commissioner.  Agencies or individuals 
under contract with a county board to provide mental health 
services under sections 245.461 to 245.486 and 245.487 to 
245.4887 must not charge clients whose mental health services 
are paid wholly or in part from public funds fees which exceed 
the county board's adopted fee schedule.  This section does not 
apply to regional treatment center fees, which are governed by 
sections 246.50 to 246.55. 
    Sec. 31.  Minnesota Statutes 1988, section 245.482, is 
amended to read: 
    245.482 [REPORTING AND EVALUATION.] 
    Subdivision 1.  [FISCAL REPORTS.] The commissioner shall 
develop a unified format for quarterly fiscal reports that will 
include information that the commissioner determines necessary 
to carry out sections 245.461 to 245.486, 245.487 to 245.4887, 
and section 256E.08.  The county board shall submit a completed 
fiscal report in the required format no later than 15 30 days 
after the end of each quarter. 
    Subd. 2.  [PROGRAM REPORTS.] The commissioner shall develop 
a unified format formats for an annual program report 
that reporting, which will include information that the 
commissioner determines necessary to carry out sections 245.461 
to 245.486, 245.487 to 245.4887, and section 256E.10.  The 
county board shall submit a completed program report reports in 
the required format by March 15 of each year according to the 
reporting schedule developed by the commissioner. 
    Subd. 3.  [PROVIDER REPORTS.] The commissioner may 
develop a format formats and procedures for direct reporting 
from providers to the commissioner to include information that 
the commissioner determines necessary to carry out sections 
245.461 to 245.486 and 245.487 to 245.4887.  In particular, the 
provider reports must include aggregate information by county of 
residence about mental health services paid for by funding 
sources other than counties. 
    Subd. 4.  [COMMISSIONER'S CONSOLIDATED REPORTING 
RECOMMENDATIONS.] The commissioner's reports of February 15, 
1990, required under sections 245.461, subdivision 3, and 
245.487, subdivision 4, shall include recommended measures to 
provide coordinated, interdepartmental efforts to ensure early 
identification and intervention for children with, or at risk of 
developing, emotional disturbance, to improve the efficiency of 
the mental health funding mechanisms, and to standardize and 
consolidate fiscal and program reporting.  The recommended 
measures must provide that client needs are met in an effective 
and accountable manner and that state and county resources are 
used as efficiently as possible.  The commissioner shall 
consider the advice of the state advisory council and the 
children's subcommittee in developing these recommendations. 
    Subd. 4 5.  [INACCURATE OR INCOMPLETE REPORTS.] The 
commissioner shall promptly notify a county or provider if a 
required report is clearly inaccurate or incomplete.  The 
commissioner may delay all or part of a mental health fund 
payment if an appropriately completed report is not received as 
required by this section. 
    Subd. 5 6.  [STATEWIDE EVALUATION.] The commissioner shall 
use the county and provider reports required by this section to 
complete the statewide report required in section sections 
245.461 and 245.487. 
    Sec. 32.  Minnesota Statutes 1988, section 245.483, is 
amended to read: 
    245.483 [TERMINATION OR RETURN OF AN ALLOCATION.] 
    Subdivision 1.  [FUNDS NOT PROPERLY USED.] If the 
commissioner determines that a county is not meeting the 
requirements of sections 245.461 to 245.486 and 245.487 to 
245.4887, or that funds are not being used according to the 
approved local proposal, all or part of the mental health and 
community social service act funds may be terminated upon 30 
days notice to the county board.  The commissioner may require 
repayment of any funds not used according to the approved local 
proposal.  If the commissioner receives a written appeal from 
the county board within the 30-day period, opportunity for a 
hearing under the Minnesota administrative procedure act, 
chapter 14, must be provided before the allocation is terminated 
or is required to be repaid.  The 30-day period begins when the 
county board receives the commissioner's notice by certified 
mail. 
    Subd. 2.  [USE OF RETURNED FUNDS.] The commissioner may 
reallocate the funds returned. 
    Subd. 3.  [DELAYED PAYMENTS.] If the commissioner finds 
that a county board or its contractors are not in compliance 
with the approved local proposal or sections 245.461 to 
245.486 and 245.487 to 245.4887, the commissioner may delay 
payment of all or part of the quarterly mental health and 
community social service act funds until the county board and 
its contractors meet the requirements.  The commissioner shall 
not delay a payment longer than three months without first 
issuing a notice under subdivision 2 that all or part of the 
allocation will be terminated or required to be repaid.  After 
this notice is issued, the commissioner may continue to delay 
the payment until completion of the hearing in subdivision 2. 
    Subd. 4.  [STATE ASSUMPTION OF RESPONSIBILITY.] If the 
commissioner determines that services required by sections 
245.461 to 245.486 and 245.487 to 245.4887 will not be provided 
by the county board in the manner or to the extent required by 
sections 245.461 to 245.486 and 245.487 to 245.4887, the 
commissioner shall contract directly with providers to ensure 
that clients receive appropriate services.  In this case, the 
commissioner shall use the county's community social service act 
and mental health funds to the extent necessary to carry out the 
county's responsibilities under sections 245.461 to 245.486 and 
245.487 to 245.4887.  The commissioner shall work with the 
county board to allow for a return of authority and 
responsibility to the county board as soon as compliance with 
sections 245.461 to 245.486 and 245.487 to 245.4887 can be 
assured. 
    Sec. 33.  Minnesota Statutes 1988, section 245.484, is 
amended to read: 
    245.484 [RULES.] 
    The commissioner shall adopt permanent rules as necessary 
to carry out Laws 1987, chapter 403 sections 245.461 to 245.486 
and sections 1 to 53.  
    Sec. 34.  Minnesota Statutes 1988, section 245.485, is 
amended to read: 
    245.485 [NO RIGHT OF ACTION.] 
    Sections 245.461 to 245.484 and 245.487 to 245.4887 do not 
independently establish a right of action on behalf of 
recipients of services or service providers against a county 
board or the commissioner.  A claim for monetary damages must be 
brought under section 3.736 or 3.751. 
    Sec. 35.  Minnesota Statutes 1988, section 245.486, is 
amended to read: 
    245.486 [LIMITED APPROPRIATIONS.] 
    Nothing in sections 245.461 to 245.485 and 245.487 to 
245.4887 shall be construed to require the commissioner or 
county boards to fund services beyond the limits of legislative 
appropriations. 
    Sec. 36.  [245.4861] [PUBLIC/ACADEMIC LIAISON INITIATIVE.] 
    Subdivision 1.  [ESTABLISHMENT OF LIAISON INITIATIVE.] The 
commissioner of human services, in consultation with the 
appropriate post-secondary institutions, shall establish a 
public/academic liaison initiative to coordinate and develop 
brain research and education and training opportunities for 
mental health professionals in order to improve the quality of 
staffing and provide state-of-the-art services to residents in 
regional treatment centers and other state facilities.  
    Subd. 2.  [CONSULTATION.] The commissioner of human 
services shall consult with the Minnesota department of health, 
the regional treatment centers, the post-secondary educational 
system, mental health professionals, and citizen and advisory 
groups.  
    Subd. 3.  [LIAISON INITIATIVE PROGRAMS.] The liaison 
initiative, within the extent of available funding, shall plan, 
implement, and administer programs which accomplish the 
objectives of subdivision 1.  These shall include but are not 
limited to: 
    (1) encourage and coordinate joint research efforts between 
academic research institutions throughout the state and regional 
treatment centers, community mental health centers, and other 
organizations conducting research on mental illness or working 
with individuals who are mentally ill; 
    (2) sponsor and conduct basic research on mental illness 
and applied research on existing treatment models and community 
support programs; 
    (3) seek to obtain grants for research on mental illness 
from the National Institute of Mental Health and other funding 
sources; 
    (4) develop and provide grants for training, internship, 
scholarship, and fellowship programs for mental health 
professionals, in an effort to combine academic education with 
practical experience obtained at regional treatment centers and 
other state facilities, and to increase the number of mental 
health professionals working in the state. 
    Subd. 4.  [PRIVATE AND FEDERAL FUNDING.] The liaison 
initiative shall seek private and federal funds to supplement 
the appropriation provided by the state.  Individuals, 
businesses, and other organizations may contribute to the 
liaison initiative.  All money received shall be administered by 
the commissioner of human services to implement and administer 
the programs listed in subdivision 3. 
    Subd. 5.  [REPORT.] By February 15 of each year, the 
commissioner of human services shall submit to the legislature a 
liaison initiative report.  The annual report shall be part of 
the commissioner's February 15 report to the legislature 
required by section 245.487, subdivision 4. 
    Sec. 37.  [245.487] [CITATION; DECLARATION OF POLICY; 
MISSION.] 
    Subdivision 1.  [CITATION.] Sections 245.487 to 245.4887 
may be cited as the "Minnesota comprehensive children's mental 
health act."  
    Subd. 2.  [FINDINGS.] The legislature finds there is a need 
for further development of existing clinical services for 
emotionally disturbed children and their families and the 
creation of new services for this population.  Although the 
services specified in sections 245.487 to 245.4887 are mental 
health services, sections 245.487 to 245.4887 emphasize the need 
for a child-oriented and family-oriented approach of therapeutic 
programming and the need for continuity of care with other 
community agencies.  At the same time, sections 245.487 to 
245.4887 emphasize the importance of developing special mental 
health expertise in children's mental health services because of 
the unique needs of this population.  
Nothing in this act shall be construed to abridge the authority 
of the court to make dispositions under chapter 260. 
    Subd. 3.  [MISSION OF CHILDREN'S MENTAL HEALTH SERVICE 
SYSTEM.] As part of the comprehensive children's mental health 
system established under sections 245.487 to 245.4887, the 
commissioner of human services shall create and ensure a 
unified, accountable, comprehensive children's mental health 
service system that is consistent with the provision of public 
social services for children as specified in section 256F.01 and 
that: 
    (1) identifies children who are eligible for mental health 
services; 
    (2) makes preventive services available to all children; 
    (3) assures access to a continuum of services that: 
    (i) educate the community about the mental health needs of 
children; 
    (ii) address the unique physical, emotional, social, and 
educational needs of children; 
    (iii) are coordinated with the range of social and human 
services provided to children and their families by the 
departments of education, human services, health, and 
corrections; 
    (iv) are appropriate to the developmental needs of 
children; and 
    (v) are sensitive to cultural differences and special 
needs; 
    (4) includes early screening and prompt intervention to: 
    (i) identify and treat the mental health needs of children 
in the least restrictive setting appropriate to their needs; and 
    (ii) prevent further deterioration; 
    (5) provides mental health services to children and their 
families in the context in which the children live and go to 
school; 
    (6) addresses the unique problems of paying for mental 
health services for children, including: 
    (i) access to private insurance coverage; and 
    (ii) public funding; 
    (7) includes the child and the child's family in planning 
the child's program of mental health services, unless clinically 
inappropriate to the child's needs; and 
    (8) when necessary, assures a smooth transition from mental 
health services appropriate for a child to mental health 
services needed by a person who is at least 18 years of age. 
    Subd. 4.  [IMPLEMENTATION.] (a) The commissioner shall 
begin implementing sections 245.487 to 245.4887 by February 15, 
1990, and shall fully implement sections 245.487 to 245.4887 by 
January 1, 1992. 
    (b) Annually until February 15, 1992, the commissioner 
shall report to the legislature on all steps taken and 
recommendations for full implementation of sections 245.487 to 
245.4887 and on additional resources needed to further implement 
those sections. 
    Subd. 5.  [CONTINUATION OF EXISTING MENTAL HEALTH SERVICES 
FOR CHILDREN.] Counties shall make available case management, 
community support services, and day treatment to children 
eligible to receive these services under Minnesota Statutes 
1988, section 245.471.  No later than August 1, 1989, the county 
board shall notify providers in the local system of care of 
their obligations to refer children eligible for case management 
and community support services as of January 1, 1989.  The 
notice shall indicate which children are eligible, a description 
of the services, and the name of the county employee designated 
to coordinate case management activities. 
    Sec. 38.  [245.4871] [DEFINITIONS.] 
    Subdivision 1.  [DEFINITIONS.] The definitions in this 
section apply to sections 245.487 to 245.4887. 
    Subd. 2.  [ACUTE CARE HOSPITAL INPATIENT TREATMENT.] "Acute 
care hospital inpatient treatment" means short-term medical, 
nursing, and psychosocial services provided in an acute care 
hospital licensed under chapter 144.  
    Subd. 3.  [CASE MANAGEMENT SERVICES.] "Case management 
services" means activities designed to help the child with 
severe emotional disturbance and the child's family obtain 
needed mental health services, social services, educational 
services, health services, vocational services, recreational 
services, and related services in the areas of volunteer 
services, advocacy, transportation, and legal services.  Case 
management services include obtaining a comprehensive diagnostic 
assessment, developing a functional assessment, developing an 
individual family community support plan, and assisting the 
child and the child's family in obtaining needed services by 
coordination with other agencies and assuring continuity of 
care.  Case managers must assess and reassess the delivery, 
appropriateness, and effectiveness of these services over time.  
    Subd. 4.  [CASE MANAGER.] (a) "Case manager" means an 
individual 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 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. 
    (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 
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) Until June 30, 1991, a refugee who does not have the 
qualifications specified in this subdivision may provide case 
management services to child refugees with severe emotional 
disturbance of the same ethnic group as the refugee if the 
person:  
    (1) 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. 
    Subd. 5.  [CHILD.] "Child" means a person under 18 years of 
age.  
    Subd. 6.  [CHILD WITH SEVERE EMOTIONAL DISTURBANCE.] For 
purposes of eligibility for case management and family community 
support services, "child with severe emotional disturbance" 
means a child who has an emotional disturbance and who meets one 
of the following criteria: 
    (1) the child has been admitted within the last three years 
or is at risk of being admitted to inpatient treatment or 
residential treatment for an emotional disturbance; or 
    (2) the child is a Minnesota resident and is receiving 
inpatient treatment or residential treatment for an emotional 
disturbance through the interstate compact; or 
    (3) the child has one of the following as determined by a 
mental health professional:  
    (i) psychosis or a clinical depression; or 
    (ii) risk of harming self or others as a result of an 
emotional disturbance; or 
    (iii) psychopathological symptoms as a result of being a 
victim of physical or sexual abuse or of psychic trauma within 
the past year; or 
    (4) the child, as a result of an emotional disturbance, has 
significantly impaired home, school, or community functioning 
that has lasted at least one year or that, in the written 
opinion of a mental health professional, presents substantial 
risk of lasting at least one year.  
    The term "child with severe emotional disturbance" shall be 
used only for purposes of county eligibility determinations.  In 
all other written and oral communications, case managers, mental 
health professionals, mental health practitioners, and all other 
providers of mental health services shall use the term "child 
eligible for mental health case management" in place of "child 
with severe emotional disturbance." 
    Subd. 7.  [CLINICAL SUPERVISION.] "Clinical supervision" 
means the oversight responsibility for individual treatment 
plans and individual mental health service delivery, including 
that provided by the case manager.  Clinical supervision does 
not include authority to make or terminate court-ordered 
placements of the child.  Clinical supervision must be 
accomplished by full-time or part-time employment of or 
contracts with mental health professionals.  The mental health 
professional must document the clinical supervision by cosigning 
individual treatment plans and by making entries in the client's 
record on supervisory activities. 
    Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services.  
    Subd. 9.  [COUNTY BOARD.] "County board" means the county 
board of commissioners or board established under the joint 
powers act, section 471.59, or the human services board act, 
sections 402.01 to 402.10.  
    Subd. 10.  [DAY TREATMENT SERVICES.] "Day treatment," "day 
treatment services," or "day treatment program" means a 
structured program of treatment and care provided to a child in: 
     (1) an outpatient hospital accredited by the joint 
commission on accreditation of health organizations and licensed 
under sections 144.50 to 144.55; 
    (2) a community mental health center under section 245.62; 
     (3) an entity that is under contract with the county board 
to operate a program that meets the requirements of section 
245.4881, subdivision 7, and Minnesota Rules, parts 9505.0170 to 
9505.0475; or 
    (4) an entity that operates a program that meets the 
requirements of section 245.4881, subdivision 7, and Minnesota 
Rules, parts 9505.0170 to 9505.0475, that is under contract with 
an entity that is under contract with a county board. 
    Day treatment consists of group psychotherapy and other 
intensive therapeutic services that are provided for a minimum 
three-hour time block by a multidisciplinary staff under the 
clinical supervision of a mental health professional.  The 
services are aimed at stabilizing the child's mental health 
status, and developing and improving the child's daily 
independent living and socialization skills.  Day treatment 
services are distinguished from day care by their structured 
therapeutic program of psychotherapy services.  Day treatment 
services are not a part of inpatient hospital or residential 
treatment services.  Day treatment services for a child are an 
integrated set of education, therapy, and family interventions. 
    A day treatment service must be available to a child at 
least five days a week throughout the year and must be 
coordinated with, integrated with, or part of an education 
program offered by the child's school. 
    Subd. 11.  [DIAGNOSTIC ASSESSMENT.] "Diagnostic assessment" 
means a written evaluation by a mental health professional of: 
    (1) a child's current life situation and sources of stress, 
including reasons for referral; 
    (2) the history of the child's current mental health 
problem or problems, including important developmental 
incidents, strengths, and vulnerabilities; 
    (3) the child's current functioning and symptoms; 
    (4) the child's diagnosis including a determination of 
whether the child meets the criteria of severely emotionally 
disturbed as specified in subdivision 6; and 
    (5) the mental health services needed by the child. 
    Subd. 12.  [EARLY IDENTIFICATION AND INTERVENTION 
SERVICES.] "Early identification and intervention services" 
means services that are designed to identify children who are at 
risk of needing or who need mental health services and that 
arrange for intervention and treatment. 
    Subd. 13.  [EDUCATION AND PREVENTION SERVICES.] (a) 
"Education and prevention services" means services designed to: 
    (1) educate the general public and groups identified as at 
risk of developing emotional disturbance under section 245.4872, 
subdivision 3; 
     (2) increase the understanding and acceptance of problems 
associated with emotional disturbances; 
     (3) improve people's skills in dealing with high-risk 
situations known to affect children's mental health and 
functioning; and 
     (4) refer specific children or their families with mental 
health needs to mental health services.  
    (b) The services include distribution to individuals and 
agencies identified by the county board and the local children's 
mental health advisory council of information on predictors and 
symptoms of emotional disturbances, where mental health services 
are available in the county, and how to access the services. 
    Subd. 14.  [EMERGENCY SERVICES.] "Emergency services" means 
an immediate response service available on a 24-hour, 
seven-day-a-week basis for each child having a psychiatric 
crisis, a mental health crisis, or a mental health emergency.  
    Subd. 15.  [EMOTIONAL DISTURBANCE.] "Emotional disturbance" 
means an organic disorder of the brain or a clinically 
significant disorder of thought, mood, perception, orientation, 
memory, or behavior that: 
    (1) is listed in the clinical manual of the International 
Classification of Diseases (ICD-9-CM), current edition, code 
range 290.0 to 302.99 or 306.0 to 316.0 or the corresponding 
code in the American Psychiatric Association's Diagnostic and 
Statistical Manual of Mental Disorders (DSM-MD), current 
edition, Axes I, II, or III; and 
    (2) seriously limits a child's capacity to function in 
primary aspects of daily living such as personal relations, 
living arrangements, work, school, and recreation.  
     "Emotional disturbance" is a generic term and is intended 
to reflect all categories of disorder described in DSM-MD, 
current edition as "usually first evident in childhood or 
adolescence." 
    Subd. 16.  [FAMILY.] "Family" means a child and one or more 
of the following persons whose participation is necessary to 
accomplish the child's treatment goals:  (1) a person related to 
the child by blood, marriage, or adoption; (2) a person who is 
the child's foster parent or significant other; (3) a person who 
is the child's legal representative.  
    Subd. 17.  [FAMILY COMMUNITY SUPPORT SERVICES.] "Family 
community support services" means services provided under the 
clinical supervision of a mental health professional and 
designed to help each child with severe emotional disturbance to 
function and remain with the child's family in the community.  
Family community support services do not include acute care 
hospital inpatient treatment, residential treatment services, or 
regional treatment center services.  Family community support 
services include:  
    (1) client outreach to each child with severe emotional 
disturbance and the child's family; 
    (2) medication monitoring where necessary; 
    (3) assistance in developing independent living skills; 
    (4) assistance in developing parenting skills necessary to 
address the needs of the child with severe emotional 
disturbance; 
    (5) assistance with leisure and recreational activities; 
    (6) crisis assistance, including crisis placement and 
respite care; 
    (7) professional home-based family treatment; 
    (8) foster care with therapeutic supports; 
    (9) day treatment; 
    (10) assistance in locating respite care and special needs 
day care; and 
    (11) assistance in obtaining potential financial resources, 
including those benefits listed in section 245.4881, subdivision 
10. 
    Subd. 18.  [FUNCTIONAL ASSESSMENT.] "Functional assessment" 
means an assessment by the case manager of the child's:  
    (1) mental health symptoms as presented in the child's 
diagnostic assessment; 
    (2) mental health needs as presented in the child's 
diagnostic assessment; 
    (3) use of drugs and alcohol; 
    (4) vocational and educational functioning; 
    (5) social functioning, including the use of leisure time; 
    (6) interpersonal functioning, including relationships with 
the child's family; 
    (7) self-care and independent living capacity; 
    (8) medical and dental health; 
    (9) financial assistance needs; 
    (10) housing and transportation needs; and 
    (11) other needs and problems.  
    Subd. 19.  [INDIVIDUAL FAMILY COMMUNITY SUPPORT 
PLAN.] "Individual family community support plan" means a 
written plan developed by a case manager in conjunction with the 
family and the child with severe emotional disturbance on the 
basis of a diagnostic assessment and a functional assessment.  
The plan identifies specific services needed by a child and the 
child's family to: 
    (1) treat the symptoms and dysfunctions determined in the 
diagnostic assessment; 
    (2) relieve conditions leading to emotional disturbance and 
improve the personal well-being of the child; 
    (3) improve family functioning; 
    (4) enhance daily living skills; 
    (5) improve functioning in education and recreation 
settings; 
    (6) improve interpersonal and family relationships; 
    (7) enhance vocational development; and 
    (8) assist in obtaining transportation, housing, health 
services, and employment.  
    Subd. 20.  [INDIVIDUAL PLACEMENT AGREEMENT.] "Individual 
placement agreement" means a written agreement or supplement to 
a service contract entered into between the county board and a 
service provider on behalf of a child to provide residential 
treatment services.  
    Subd. 21.  [INDIVIDUAL TREATMENT PLAN.] "Individual 
treatment plan" means a written plan of intervention, treatment, 
and services for a child with an emotional disturbance that is 
developed by a service provider under the clinical supervision 
of a mental health professional on the basis of a diagnostic 
assessment.  An individual treatment plan for a child must be 
developed in conjunction with the family unless clinically 
inappropriate.  The plan identifies goals and objectives of 
treatment, treatment strategy, a schedule for accomplishing 
treatment goals and objectives, and the individuals responsible 
for providing treatment to the child with an emotional 
disturbance. 
    Subd. 22.  [LEGAL REPRESENTATIVE.] "Legal representative" 
means a guardian, conservator, or guardian ad litem of a child 
with an emotional disturbance authorized by the court to make 
decisions about mental health services for the child.  
    Subd. 23.  [LOCAL MENTAL HEALTH PROPOSAL.] "Local mental 
health proposal" means the proposal developed by the county 
board, reviewed by the commissioner, and described in section 
245.4872. 
    Subd. 24.  [LOCAL SYSTEM OF CARE.] "Local system of care" 
means services that are locally available to the child and the 
child's family.  The services are mental health, social 
services, correctional services, education services, health 
services, and vocational services.  
    Subd. 25.  [MENTAL HEALTH FUNDS.] "Mental health funds" are 
funds expended under sections 245.73 and 256E.12, federal mental 
health block grant funds, and funds expended under sections 
256D.06 and 256D.37 to facilities licensed under Minnesota 
Rules, parts 9520.0500 to 9520.0690. 
    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 has at least 2,000 hours of supervised experience 
in the delivery of mental health services to children with 
emotional disturbances; 
    (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. 
    Subd. 27.  [MENTAL HEALTH PROFESSIONAL.] "Mental health 
professional" means a person providing clinical services in the 
diagnosis and treatment of children's emotional disorders.  A 
mental health professional must have training and experience in 
working with children consistent with the age group to which the 
mental health professional is assigned.  A mental health 
professional must be qualified in at least one of the following 
ways:  
    (1) in psychiatric nursing, the mental health professional 
must be a registered nurse who is licensed under sections 
148.171 to 148.285 and who is certified as a clinical specialist 
in psychiatric or mental health nursing by the American nurses 
association; 
    (2) in clinical social work, the mental health professional 
must be a person licensed as an independent clinical social 
worker under section 148B.21, subdivision 6, or a person with a 
master's degree in social work from an accredited college or 
university, with at least 4,000 hours of post-master's 
supervised experience in the delivery of clinical services in 
the treatment of mental disorders; 
    (3) in psychology, the mental health professional must be a 
psychologist licensed under sections 148.88 to 148.98 who has 
stated to the board of psychology competencies in the diagnosis 
and treatment of mental disorders; 
    (4) in psychiatry, the mental health professional must be a 
physician licensed under chapter 147 and certified by the 
American board of psychiatry and neurology or eligible for board 
certification in psychiatry; or 
    (5) in allied fields, the mental health professional must 
be a person with a master's degree from an accredited college or 
university in one of the behavioral sciences or related fields, 
with at least 4,000 hours of post-master's supervised experience 
in the delivery of clinical services in the treatment of 
emotional disturbances. 
    Subd. 28.  [MENTAL HEALTH SERVICES.] "Mental health 
services" means at least all of the treatment services and case 
management activities that are provided to children with 
emotional disturbances and are described in sections 245.487 to 
245.4887. 
    Subd. 29.  [OUTPATIENT SERVICES.] "Outpatient services" 
means mental health services, excluding day treatment and 
community support services programs, provided by or under the 
clinical supervision of a mental health professional to children 
with emotional disturbances who live outside a hospital.  
Outpatient services include clinical activities such as 
individual, group, and family therapy; individual treatment 
planning; diagnostic assessments; medication management; and 
psychological testing.  
    Subd. 30.  [PARENT.] "Parent" means the birth or adoptive 
mother or father of a child.  This definition does not apply to 
a person whose parental rights have been terminated in relation 
to the child. 
    Subd. 31.  [PROFESSIONAL HOME-BASED FAMILY TREATMENT.] 
"Professional home-based family treatment" means intensive 
mental health services provided to children (1) who are at risk 
of out-of-home placement; (2) who are in out-of-home placement; 
or (3) who are returning from out-of-home placement because of 
an emotional disturbance.  Services are provided to the child 
and the child's family primarily in the child's home environment 
or other location appropriate to the child.  Examples of 
appropriate locations include, but are not limited to, the 
child's school, day care center, home, and any other living 
arrangement of the child.  Services must be provided on an 
individual family basis, must be child-oriented and 
family-oriented, and must be designed to meet the specific 
mental health needs of the child and the child's family.  
Services include family and individual therapy and family living 
skills training and must be coordinated with other service 
providers.  
    Subd. 32.  [RESIDENTIAL TREATMENT.] "Residential treatment" 
means a 24-hour-a-day program under the clinical supervision of 
a mental health professional, in a community residential setting 
other than an acute care hospital or regional treatment center 
inpatient unit, that must be licensed as a residential treatment 
program for children with emotional disturbances under Minnesota 
Rules, parts 9545.0900 to 9545.1090, or other rules adopted by 
the commissioner. 
    Subd. 33.  [SERVICE PROVIDER.] "Service provider" means 
either a county board or an individual or agency including a 
regional treatment center under contract with the county board 
that provides children's mental health services funded under 
sections 245.487 to 245.4887. 
    Subd. 34.  [THERAPEUTIC SUPPORT OF FOSTER CARE.] 
"Therapeutic support of foster care" means the mental health 
training and mental health support services and clinical 
supervision provided by a mental health professional to foster 
families caring for children with severe emotional disturbance 
to provide a therapeutic family environment and support for the 
child's improved functioning. 
    Sec. 39.  [245.4872] [PLANNING FOR A CHILDREN'S MENTAL 
HEALTH SYSTEM.] 
    Subdivision 1.  [PLANNING EFFORT.] Starting on the 
effective date of sections 245.487 to 245.4887 and ending 
January 1, 1992, the commissioner and the county agencies shall 
plan for the development of a unified, accountable, and 
comprehensive statewide children's mental health system.  The 
system must be planned and developed by stages until it is 
operating at full capacity. 
    Subd. 2.  [TECHNICAL ASSISTANCE.] The commissioner shall 
provide ongoing technical assistance to county boards to develop 
local mental health proposals as specified in section 245.4887, 
to improve system capacity and quality.  The commissioner and 
county boards shall exchange information as needed about the 
numbers of children with emotional disturbances residing in the 
county and the extent of existing treatment components locally 
available to serve the needs of those persons.  County boards 
shall cooperate with the commissioner in obtaining necessary 
planning information upon request.  
    Subd. 3.  [INFORMATION TO COUNTIES.] By January 1, 1990, 
the commissioner shall provide each county with information 
about the predictors and symptoms of children's emotional 
disturbances and information about groups identified as at risk 
of developing emotional disturbance. 
    Sec. 40.  [245.4873] [COORDINATION OF CHILDREN'S MENTAL 
HEALTH SYSTEM.] 
    Subdivision 1.  [STATE AND LOCAL COORDINATION.] 
Coordination of the development and delivery of mental health 
services for children shall occur on the state and local levels 
to assure the availability of services to meet the mental health 
needs of children in a cost-effective manner. 
    Subd. 2.  [STATE LEVEL; COORDINATION.] The commissioners or 
designees of commissioners of the departments of human services, 
health, education, state planning, and corrections, and a 
representative of the Minnesota district judges association 
juvenile committee, in conjunction with the commissioner of 
commerce or a designee of the commissioner shall meet at least 
quarterly through 1992 to: 
    (1) educate each agency about the policies, procedures, 
funding, and services for children with emotional disturbances 
of all agencies represented; 
    (2) develop mechanisms for interagency coordination on 
behalf of children with emotional disturbances; 
    (3) identify barriers including policies and procedures 
within all agencies represented that interfere with delivery of 
mental health services for children; 
    (4) recommend policy and procedural changes needed to 
improve development and delivery of mental health services for 
children in the agency or agencies they represent; 
    (5) identify mechanisms for better use of federal and state 
funding in the delivery of mental health services for children; 
and 
    (6) prepare an annual report on the policy and procedural 
changes needed to implement a coordinated, effective, and 
cost-efficient children's mental health delivery system. 
    This report shall be submitted to the legislature and the 
state mental health advisory council annually until February 15, 
1992, as part of the report required under section 245.487, 
subdivision 4.  The report shall include information from each 
department represented on: 
    (1) the number of children in each department's system who 
require mental health services; 
    (2) the number of children in each system who receive 
mental health services; 
    (3) how mental health services for children are funded 
within each system; 
    (4) how mental health services for children could be 
coordinated to provide more effectively appropriate mental 
health services for children; and 
    (5) recommendations for the provision of early screening 
and identification of mental illness in each system. 
    Subd. 3.  [LOCAL LEVEL COORDINATION.] (a) Each agency 
represented in the local system of care coordinating council, 
including mental health, social services, education, health, 
corrections, and vocational services as specified in section 
245.4875, subdivision 6, is responsible for local coordination 
and delivery of mental health services for children.  The county 
board shall establish a coordinating council that provides at 
least: 
    (1) written interagency agreements with the providers of 
the local system of care to coordinate the delivery of services 
to children; and 
    (2) an annual report of the council to the local county 
board and the children's mental health advisory council about 
the unmet children's needs and service priorities.  
     (b) Each coordinating council shall collect information 
about the local system of care and report annually to the 
commissioner of human services on forms and in the manner 
provided by the commissioner.  The report must include a 
description of the services provided through each of the service 
systems represented on the council, the various sources of 
funding for services and the amounts actually expended, a 
description of the numbers and characteristics of the children 
and families served during the previous year, and an estimate of 
unmet needs.  Each service system represented on the council 
shall provide information to the council as necessary to compile 
the report. 
    Subd. 4.  [INDIVIDUAL CASE COORDINATION.] The case manager 
designated under section 245.4881 is responsible for ongoing 
coordination with any other person responsible for planning, 
development, and delivery of social services, education, 
corrections, health, or vocational services for the individual 
child.  The family community support plan developed by the case 
manager shall reflect the coordination among the local service 
system providers. 
    Subd. 5.  [DUTIES OF THE COMMISSIONER.] The commissioner 
shall supervise the development and coordination of locally 
available children's mental health services by the county boards 
in a manner consistent with sections 245.487 to 245.4887.  The 
commissioner shall review local mental health service proposals 
developed by county boards as specified in section 245.4872 and 
provide technical assistance to county boards in developing and 
maintaining locally available and coordinated children's mental 
health services.  The commissioner shall monitor the county 
board's progress in developing its full system capacity and 
quality through ongoing review of the county board's children's 
mental health proposals and other information as required by 
sections 245.487 to 245.4887. 
    Subd. 6.  [PRIORITIES.] By January 1, 1992, the 
commissioner shall require that each of the treatment services 
and management activities described in sections 245.487 to 
245.4887 be developed for children with emotional disturbances 
within available resources based on the following ranked 
priorities:  
    (1) the provision of locally available mental health 
emergency services; 
    (2) the provision of locally available mental health 
services to all children with severe emotional disturbance; 
    (3) the provision of early identification and intervention 
services to children who are at risk of needing or who need 
mental health services; 
    (4) the provision of specialized mental health services 
regionally available to meet the special needs of all children 
with severe emotional disturbance, and all children with 
emotional disturbances; 
    (5) the provision of locally available services to children 
with emotional disturbances; and 
    (6) the provision of education and preventive mental health 
services. 
    Sec. 41.  [245.4874] [DUTIES OF COUNTY BOARD.] 
    The county board in each county shall use its share of 
mental health and community social service act funds allocated 
by the commissioner according to a biennial local children's 
mental health service proposal required under section 245.4887, 
and approved by the commissioner.  The county board must: 
    (1) develop a system of affordable and locally available 
children's mental health services according to sections 245.487 
to 245.4887; 
    (2) coordinate the delivery of children's mental health 
services with services provided by social services, education, 
corrections, health, and vocational agencies to improve the 
availability of mental health services to children and the cost 
effectiveness of their delivery; 
    (3) assure that mental health services delivered according 
to sections 245.487 to 245.4887 are appropriate to the child's 
diagnostic assessment and individual treatment plan; 
    (4) provide the community with information about predictors 
and symptoms of emotional disturbances and how to access 
children's mental health services according to sections 245.4877 
and 245.4878; 
    (5) provide for case management services to each child with 
severe emotional disturbance according to sections 245.486; 
245.4871, subdivisions 3 and 4; and 245.4881, subdivisions 1, 3, 
and 5; 
    (6) provide for screening of each child under section 
245.4885 upon admission to a residential treatment facility, 
acute care hospital inpatient treatment, or informal admission 
to a regional treatment center; 
    (7) prudently administer grants and purchase-of-service 
contracts that the county board determines are necessary to 
fulfill its responsibilities under sections 245.487 to 245.4887; 
    (8) assure that mental health professionals, mental health 
practitioners, and case managers employed by or under contract 
to the county to provide mental health services are qualified 
under section 245.4871; and 
    (9) assure that children's mental health services are 
coordinated with adult mental health services specified in 
sections 245.461 to 245.486 so that a continuum of mental health 
services is available to serve persons with mental illness, 
regardless of the person's age.  
    Sec. 42.  [245.4875] [LOCAL SERVICE DELIVERY SYSTEM.] 
    Subdivision 1.  [DEVELOPMENT OF CHILDREN'S SERVICES.] The 
county board in each county is responsible for using all 
available resources to develop and coordinate a system of 
locally available and affordable children's mental health 
services.  The county board may provide some or all of the 
children's mental health services and activities specified in 
subdivision 2 directly through a county agency or under 
contracts with other individuals or agencies.  A county or 
counties may enter into an agreement with a regional treatment 
center under section 246.57 to enable the county or counties to 
provide the treatment services in subdivision 2.  Services 
provided through an agreement between a county and a regional 
treatment center must meet the same requirements as services 
from other service providers.  County boards shall demonstrate 
their continuous progress toward fully implementing sections 
245.487 to 245.4887 during the period July 1, 1989, to January 
1, 1992.  County boards must develop fully each of the treatment 
services prescribed by sections 245.487 to 245.4887 by January 
1, 1992, according to the priorities established in section 
245.4873 and the local children's mental health services 
proposal approved by the commissioner under section 245.4887. 
    Subd. 2.  [CHILDREN'S MENTAL HEALTH SERVICES.] The 
children's mental health service system developed by each county 
board must include the following services:  
    (1) education and prevention services according to section 
245.4877; 
    (2) early identification and intervention services 
according to section 245.4878; 
    (3) emergency services according to section 245.4879; 
    (4) outpatient services according to section 245.488; 
    (5) family community support services according to section 
245.4881; 
    (6) day treatment services according to section 245.4881, 
subdivision 7; 
    (7) residential treatment services according to section 
245.4882; 
    (8) acute care hospital inpatient treatment services 
according to section 245.4883; 
    (9) screening according to section 245.4885; 
    (10) case management according to section 245.4881; 
    (11) therapeutic support of foster care according to 
section 245.4881, subdivision 9; and 
    (12) professional home-based family treatment according to 
section 245.4881, subdivision 9. 
    Subd. 3.  [LOCAL CONTRACTS.] The county board shall review 
all proposed county agreements, grants, or other contracts 
related to children's mental health services from any local, 
state, or federal governmental sources.  Contracts with service 
providers must:  
    (1) name the commissioner as a third party beneficiary; 
    (2) identify monitoring and evaluation procedures not in 
violation of the Minnesota government data practices act, 
chapter 13, which are necessary to ensure effective delivery of 
quality services; 
    (3) include a provision that makes payments conditional on 
compliance by the contractor and all subcontractors with 
sections 245.487 to 245.4887 and all other applicable laws, 
rules, and standards; and 
    (4) require financial controls and auditing procedures.  
    Subd. 4.  [JOINT COUNTY MENTAL HEALTH AGREEMENTS.] To 
efficiently provide the children's mental health services 
required by sections 245.487 to 245.4887, counties are 
encouraged to join with one or more county boards to establish a 
multicounty local children's mental health authority under the 
joint powers act, section 471.59, the human service board act, 
sections 402.01 to 402.10, community mental health center 
provisions, section 245.62, or enter into multicounty mental 
health agreements.  Participating county boards shall establish 
acceptable ways of apportioning the cost of the services. 
    Subd. 5.  [LOCAL CHILDREN'S ADVISORY COUNCIL.] (a) By 
October 1, 1989, the county board, individually or in 
conjunction with other county boards, shall establish a local 
children's mental health advisory council or children's mental 
health subcommittee of the existing local mental health advisory 
council or shall include persons on its existing mental health 
advisory council who are representatives of children's mental 
health interests.  The following individuals must serve on the 
local children's mental health advisory council, the children's 
mental health subcommittee of an existing local mental health 
advisory council, or be included on an existing mental health 
advisory council:  (1) at least one person who was in a mental 
health program as a child or adolescent; (2) at least one parent 
of a child or adolescent with severe emotional disturbance; (3) 
one children's mental health professional; (4) representatives 
of minority populations of significant size residing in the 
county; (5) a representative of the children's mental health 
local coordinating council; and (6) one family community support 
services program representative. 
    (b) The local children's mental health advisory council or 
children's mental health subcommittee of an existing advisory 
council shall meet at least quarterly to review, evaluate, and 
make recommendations regarding the local children's mental 
health system.  Annually, the local children's mental health 
advisory council or children's mental health subcommittee of the 
existing local mental health advisory council shall: 
    (1) arrange for input from the local system of care 
providers regarding coordination of care between the services; 
and 
    (2) identify for the county board the individuals, 
providers, agencies, and associations as specified in section 
245.4877, clause (2). 
    (c) The county board shall consider the advice of its local 
children's mental health advisory council or children's mental 
health subcommittee of the existing local mental health advisory 
council in carrying out its authorities and responsibilities.  
    Subd. 6.  [LOCAL SYSTEM OF CARE; COORDINATING COUNCIL.] The 
county board shall establish, by January 1, 1990, a council 
representing all members of the local system of care including 
mental health services, social services, correctional services, 
education services, health services, and vocational services.  
The council shall include a representative of an Indian 
reservation authority where a reservation exists within the 
county.  When possible, the council must also include a 
representative of juvenile court or the court responsible for 
juvenile issues and law enforcement.  The members of the 
coordinating council shall meet at least quarterly to develop 
recommendations to improve coordination and funding of services 
to children with severe emotional disturbances.  A county may 
use an existing child-focused interagency task force to fulfill 
the requirements of this subdivision if the representatives and 
duties of the existing task force are expanded to include those 
specified in this subdivision and section 245.4873, subdivision 
3. 
    Subd. 7.  [OTHER LOCAL AUTHORITY.] The county board may 
establish procedures and policies that are not contrary to those 
of the commissioner or sections 245.487 to 245.4887 regarding 
local children's mental health services and facilities.  The 
county board shall perform other acts necessary to carry out 
sections 245.487 to 245.4887.  
    Sec. 43.  [245.4876] [QUALITY OF SERVICES.] 
    Subdivision 1.  [CRITERIA.] Children's mental health 
services required by sections 245.487 to 245.4887 must be:  
    (1) based, when feasible, on research findings; 
    (2) based on individual clinical, cultural, and ethnic 
needs, and other special needs of the children being served; 
    (3) delivered in a manner that improves family functioning 
when clinically appropriate; 
    (4) provided in the most appropriate, least restrictive 
setting available to the county board to meet the child's 
treatment needs; 
    (5) accessible to all age groups of children; 
    (6) appropriate to the developmental age of the child being 
served; 
    (7) delivered in a manner that provides accountability to 
the child for the quality of service delivered and continuity of 
services to the child during the years the child needs services 
from the local system of care; 
    (8) provided by qualified individuals as required in 
sections 245.487 to 245.4887; 
    (9) coordinated with children's mental health services 
offered by other providers; 
    (10) provided under conditions that protect the rights and 
dignity of the individuals being served; and 
    (11) provided in a manner and setting most likely to 
facilitate progress toward treatment goals. 
    Subd. 2.  [DIAGNOSTIC ASSESSMENT.] All residential 
treatment facilities and acute care hospital inpatient treatment 
services that provide mental health services for children must 
complete a diagnostic assessment for each of their child clients 
within five working days of admission.  Providers of outpatient 
and day treatment services for children must complete a 
diagnostic assessment within ten working days of admission.  In 
cases where a diagnostic assessment is available and has been 
completed within 90 days preceding admission, only updating is 
necessary. 
    Subd. 3.  [INDIVIDUAL TREATMENT PLANS.] All outpatient 
services, day treatment services, family community support 
services, professional home-based family treatment, residential 
treatment facilities, acute care hospital inpatient treatment 
facilities, and regional treatment centers that provide mental 
health facilities for children must develop an individual 
treatment plan for each child client.  The individual treatment 
plan must be based on a diagnostic assessment.  To the extent 
appropriate, the child shall be involved in all phases of 
developing and implementing the individual treatment plan.  The 
individual treatment plan must be developed within ten working 
days of client intake or admission and reviewed every 90 days 
after that date, except that the administrative review of the 
treatment plan of a child placed in a residential facility shall 
be as specified in section 257.071, subdivisions 2 and 4.  
    Subd. 4.  [REFERRAL FOR CASE MANAGEMENT.] Each provider of 
emergency services, outpatient treatment, community support 
services, family community support services, day treatment 
services, screening under section 245.4885, professional 
home-based family treatment services, residential treatment 
facilities, acute care hospital inpatient treatment facilities, 
or regional treatment center services must inform each child 
with severe emotional disturbance, and the child's parent or 
legal representative, of the availability and potential benefits 
to the child of case management.  The information shall be 
provided as specified in subdivision 5.  If consent is obtained 
according to subdivision 5, the provider must refer the child by 
notifying the county employee designated by the county board to 
coordinate case management activities of the child's name and 
address and by informing the child's family of whom to contact 
to request case management.  The provider must document 
compliance with this subdivision in the child's record. 
    Subd. 5.  [CONSENT FOR SERVICES OR FOR RELEASE OF 
INFORMATION.] (a) Although sections 245.487 to 245.4887 require 
each county board, within the limits of available resources, to 
make the mental health services listed in those sections 
available to each child residing in the county who needs them, 
the county board shall not provide any services, either directly 
or by contract, unless consent to the services is obtained under 
this subdivision.  The case manager assigned to a child with a 
severe emotional disturbance shall not disclose to any person 
other than the case manager's immediate supervisor and the 
mental health professional providing clinical supervision of the 
case manager information on the child, the child's family, or 
services provided to the child or the child's family without 
informed written consent unless required to do so by statute or 
under the Minnesota government data practices act.  Informed 
written consent must comply with section 13.05, subdivision 4, 
paragraph (d), and specify the purpose and use for which the 
case manager may disclose the information. 
    (b) The consent or authorization must be obtained from the 
child's parent unless:  (1) the parental rights are terminated; 
or (2) consent is otherwise provided under sections 144.341 to 
144.347; 253B.04, subdivision 1; 260.133; 260.135; and 260.191, 
subdivision 1, the terms of appointment of a court-appointed 
guardian or conservator, or federal regulations governing 
chemical dependency services. 
    Subd. 6.  [INFORMATION FOR BILLING.] Each provider of 
outpatient treatment, family community support services, day 
treatment services, emergency services, professional home-based 
family treatment services, residential treatment, or acute care 
hospital inpatient treatment must include the name and home 
address of each child for whom services are included on a bill 
submitted to a county, if the release of that information under 
subdivision 5 has been obtained and if the county requests the 
information.  Each provider must try to obtain the consent of 
the child's family.  Each provider must explain to the child's 
family that the information can only be released with the 
consent of the child's family and may be used only for purposes 
of payment and maintaining provider accountability.  The 
provider shall document the attempt in the child's record. 
    Subd. 7.  [RESTRICTED ACCESS TO DATA.] The county board 
shall establish procedures to ensure that the names and 
addresses of children receiving mental health services and their 
families are disclosed only to:  
    (1) county employees who are specifically responsible for 
determining county of financial responsibility or making 
payments to providers; and 
    (2) staff who provide treatment services or case management 
and their clinical supervisors.  
    Release of mental health data on individuals submitted 
under subdivisions 5 and 6, to persons other than those 
specified in this subdivision, or use of this data for purposes 
other than those stated in subdivisions 5 and 6, results in 
civil or criminal liability under section 13.08 or 13.09.  
    Sec. 44.  [245.4877] [EDUCATION AND PREVENTION SERVICES.] 
    Education and prevention services must be available to all 
children residing in the county.  Education and prevention 
services must be designed to: 
    (1) convey information regarding emotional disturbances, 
mental health needs, and treatment resources to the general 
public and groups identified as at high risk of developing 
emotional disturbance under section 245.4872, subdivision 3; 
    (2) at least annually, distribute to individuals and 
agencies identified by the county board and the local children's 
mental health advisory council information on predictors and 
symptoms of emotional disturbances, where mental health services 
are available in the county, and how to access the services; 
    (3) increase understanding and acceptance of problems 
associated with emotional disturbances; 
    (4) improve people's skills in dealing with high-risk 
situations known to affect children's mental health and 
functioning; 
    (5) prevent development or deepening of emotional 
disturbances; and 
    (6) refer each child with emotional disturbance or the 
child's family with additional mental health needs to 
appropriate mental health services.  
    Sec. 45.  [245.4878] [EARLY IDENTIFICATION AND 
INTERVENTION.] 
    By January 1, 1991, early identification and intervention 
services must be available to meet the needs of all children and 
their families residing in the county, consistent with section 
245.4873.  Early identification and intervention services must 
be designed to identify children who are at risk of needing or 
who need mental health services.  The county board must provide 
intervention and offer treatment services to each child who is 
identified as needing mental health services.  The county board 
must offer intervention services to each child who is identified 
as being at risk of needing mental health services. 
    Sec. 46.  [245.4879] [EMERGENCY SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF EMERGENCY SERVICES.] 
County boards must provide or contract for enough mental health 
emergency services within the county to meet the needs of 
children in the county who are experiencing an emotional crisis 
or emotional disturbance.  A child or the child's parent may be 
required to pay a fee according to section 245.481.  Emergency 
service providers shall not delay the timely provision of 
emergency service because of delays in determining this fee or 
because of the unwillingness or inability of the parent to pay 
the fee.  Emergency services must include assessment, 
intervention, and appropriate case disposition.  Emergency 
services must:  
    (1) promote the safety and emotional stability of children 
with emotional disturbances or emotional crises; 
    (2) minimize further deterioration of the child with 
emotional disturbance or emotional crisis; 
    (3) help each child with an emotional disturbance or 
emotional crisis to obtain ongoing care and treatment; and 
    (4) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
the child's needs.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] The county board shall 
require that all service providers of emergency services to the 
child with an emotional disturbance provide immediate direct 
access to a mental health professional during regular business 
hours.  For evenings, weekends, and holidays, the service may be 
by direct toll-free telephone access to a mental health 
professional, a mental health practitioner, or until January 1, 
1991, a designated person with training in human services who 
receives clinical supervision from a mental health 
professional.  When emergency service during nonbusiness hours 
is provided by anyone other than a mental health professional, a 
mental health professional must be available for at least 
telephone consultation within 30 minutes. 
    Sec. 47.  [245.488] [OUTPATIENT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF OUTPATIENT SERVICES.] (a) 
County boards must provide or contract for enough outpatient 
services within the county to meet the needs of each child with 
emotional disturbance residing in the county and the child's 
family.  A child or a child's parent may be required to pay a 
fee based in accordance with section 245.481.  Outpatient 
services include: 
    (1) conducting diagnostic assessments; 
    (2) conducting psychological testing; 
    (3) developing or modifying individual treatment plans; 
    (4) making referrals and recommending placements as 
appropriate; 
    (5) treating the child's mental health needs through 
therapy; and 
    (6) prescribing and managing medication and evaluating the 
effectiveness of prescribed medication. 
    (b) County boards may request a waiver allowing outpatient 
services to be provided in a nearby trade area if it is 
determined that the child requires necessary and appropriate 
services that are only available outside the county. 
    (c) Outpatient services offered by the county board to 
prevent placement must be at the level of treatment appropriate 
to the child's diagnostic assessment. 
    Subd. 2.  [SPECIFIC REQUIREMENTS.] The county board shall 
require that a service provider of outpatient services to 
children:  
    (1) meets the professional qualifications contained in 
sections 245.487 to 245.4887; 
    (2) uses a multidisciplinary mental health professional 
staff including, at a minimum, arrangements for psychiatric 
consultation, licensed consulting psychologist consultation, and 
other necessary multidisciplinary mental health professionals; 
    (3) develops individual treatment plans; and 
    (4) provides initial appointments within three weeks, 
except in emergencies where there must be immediate access as 
described in section 245.4879. 
    Sec. 48.  [245.4881] [CASE MANAGEMENT AND FAMILY COMMUNITY 
SUPPORT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT 
SERVICES.] (a) By July 1, 1991, the county board shall provide 
case management activities for each child with severe emotional 
disturbance residing in 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) 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. 
    Subd. 2.  [NOTIFICATION OF CASE MANAGEMENT ELIGIBILITY.] 
The county board shall notify, as appropriate, the child, 
child's parent, or legal representative of the child's potential 
eligibility for case management services within five working 
days after receiving a request from an individual or a referral 
from a provider under section 245.4876, subdivision 4. 
    The county board shall send a written notice that 
identifies the designated case management providers.  The county 
board shall send the notice, as appropriate, to the child, the 
child's parent, or the child's legal representative, if any. 
    Subd. 3.  [DUTIES OF CASE MANAGER.] (a) The case manager 
shall promptly arrange for a diagnostic assessment of the child 
when one is not available as described in section 245.4876, 
subdivision 2, to determine the child's eligibility as a child 
with severe emotional disturbance for family community support 
services.  The county board shall notify in writing, as 
appropriate, the child, the child's parent, or the child's legal 
representative, if any, if the child is determined ineligible 
for family community support services. 
    (b) Upon a determination of eligibility for family support 
services, the case manager shall develop an individual family 
community support plan for a child as specified in subdivision 
4, review the child's progress, and monitor the provision of 
services.  If services are to be provided in a host county that 
is not the county of financial responsibility, the case manager 
shall consult with the host county and obtain a letter 
demonstrating the concurrence of the host county regarding the 
provision of services. 
    The case manager shall perform a functional assessment and 
note in the client's record the services needed by the child and 
the child's family, the services requested by the family, 
services that are not available, and the child and family's 
unmet needs.  The information required under section 245.4886 
shall be provided in writing to the child and the child's 
family.  The case manager shall note this provision in the 
client record. 
    Subd. 4.  [INDIVIDUAL FAMILY COMMUNITY SUPPORT PLAN.] (a) 
For each child, the case manager must develop an individual 
family community support plan that incorporates the child's 
individual treatment plan.  The individual treatment plan may 
not be a substitute for the development of an individual family 
community support plan.  The case manager is responsible for 
developing the individual family community support plan within 
30 days of intake based on a diagnostic assessment and a 
functional assessment and for implementing and monitoring the 
delivery of services according to the individual family 
community support plan.  The case manager must review the plan 
every 90 calendar days after it is developed.  To the extent 
appropriate, the child with severe emotional disturbance, the 
child's family, advocates, service providers, and significant 
others must be involved in all phases of development and 
implementation of the individual family community support plan.  
Notwithstanding the lack of a community support plan, the case 
manager shall assist the child and family in accessing the 
needed services listed in subdivision 6. 
    (b) The child's individual family community support plan 
must state: 
    (1) the goals and expected outcomes of each service and 
criteria for evaluating the effectiveness and appropriateness of 
the service; 
    (2) the activities for accomplishing each goal; 
    (3) a schedule for each activity; and 
    (4) the frequency of face-to-face contacts by the case 
manager, as appropriate to client need and the implementation of 
the individual family community support plan. 
    Subd. 5.  [COORDINATION BETWEEN CASE MANAGER AND FAMILY 
COMMUNITY SUPPORT SERVICES.] The county board must establish 
procedures that ensure ongoing contact and coordination between 
the case manager and the family community support services as 
well as other mental health services for each child. 
    Subd. 6.  [AVAILABILITY OF FAMILY COMMUNITY SUPPORT 
SERVICES.] By July 1, 1991, county boards must provide or 
contract for sufficient family community support services within 
the county to meet the needs of each child with severe emotional 
disturbance who resides in the county and the child's family.  
Children or their parents may be required to pay a fee in 
accordance with section 245.481. 
    Family community support services must be designed to 
improve the ability of children with severe emotional 
disturbance to:  
    (1) handle basic activities of daily living; 
    (2) improve functioning in school settings; 
    (3) participate in leisure time or community youth 
activities; 
    (4) set goals and plans; 
    (5) reside with the family in the community; 
    (6) participate in after school and summer activities; 
    (7) make a smooth transition between mental health services 
provided to children; and 
    (8) make a smooth transition into the adult mental health 
system as appropriate.  
    In addition, family community support services must be 
designed to improve overall family functioning if clinically 
appropriate to the child's needs, and to reduce the use of 
placements more intensive, costly, or restrictive both in number 
of admissions and lengths of stay than indicated by the child's 
diagnostic assessment. 
    Subd. 7.  [DAY TREATMENT SERVICES PROVIDED.] (a) Day 
treatment services must be part of the family community support 
services available to each child with severe emotional 
disturbance residing in the county.  A child or the child's 
parent 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 family and community support; 
    (3) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
the child's need; 
    (4) coordinate with or be offered in conjunction with the 
school's education program; 
    (5) provide therapy and family intervention for children 
that are coordinated with education services provided and funded 
by schools; and 
    (6) operate during all 12 months of the year.  
    (b) County boards may request a waiver from including day 
treatment services if they can document that:  
    (1) alternative services exist through the county's family 
community support services for each child who would otherwise 
need day treatment services; and 
    (2) county demographics and geography make the provision of 
day treatment services cost ineffective and unfeasible. 
    Subd. 8.  [PROFESSIONAL HOME-BASED FAMILY TREATMENT 
PROVIDED.] (a) By January 1, 1991, county boards must provide or 
contract for sufficient professional home-based family treatment 
within the county to meet the needs of each child with severe 
emotional disturbance who is at risk of out-of-home placement 
due to the child's emotional disturbance or who is returning to 
the home from out-of-home placement.  The child or the child's 
parent may be required to pay a fee according to section 
245.481.  The county board shall require that all service 
providers of professional home-based family treatment set fee 
schedules approved by the county board that are based on the 
child's or family's ability to pay.  The professional home-based 
family treatment must be designed to assist each child with 
severe emotional disturbance who is at risk of or who is 
returning from out-of-home placement and the child's family to:  
    (1) improve overall family functioning in all areas of 
life; 
    (2) treat the child's symptoms of emotional disturbance 
that contribute to a risk of out-of-home placement; 
    (3) provide a positive change in the emotional, behavioral, 
and mental well-being of children and their families; and 
    (4) reduce risk of out-of-home placement for the identified 
child with severe emotional disturbance and other siblings or 
successfully reunify and reintegrate into the family a child 
returning from out-of-home placement due to emotional 
disturbance. 
    (b) Professional home-based family treatment must be 
provided by a team consisting of a mental health professional 
and others who are skilled in the delivery of mental health 
services to children and families in conjunction with other 
human service providers.  The professional home-based family 
treatment team must maintain flexible hours of service 
availability and must provide or arrange for crisis services for 
each family, 24 hours a day, seven days a week.  Case loads for 
each professional home-based family treatment team must be small 
enough to permit the delivery of intensive services and to meet 
the needs of the family.  Professional home-based family 
treatment providers shall coordinate services and service needs 
with case managers assigned to children and their families.  
Individual treatment plans must be developed that identify the 
specific treatment objectives for both the child and the family. 
    Subd. 9.  [THERAPEUTIC SUPPORT OF FOSTER CARE.] By January 
1, 1992, county boards must provide or contract for foster care 
with therapeutic support as defined in section 245.4871, 
subdivision 34.  Foster families caring for children with severe 
emotional disturbance must receive training and supportive 
services, as necessary, at no cost to the foster families within 
the limits of available resources.  
    Subd. 10.  [BENEFITS ASSISTANCE.] The county board must 
offer help to a child with severe emotional disturbance and the 
child's family in applying for federal benefits, including 
supplemental security income, medical assistance, and Medicare.  
    Sec. 49.  [245.4882] [RESIDENTIAL TREATMENT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF RESIDENTIAL TREATMENT 
SERVICES.] County boards must provide or contract for enough 
residential treatment services to meet the needs of each child 
with emotional disturbance residing in the county and needing 
this level of care.  Length of stay is based on the child's 
residential treatment need and shall be subject to the six-month 
review process established in section 257.071, subdivisions 2 
and 4.  Services must be made available as close to the county 
as possible.  Residential treatment must be designed to:  
    (1) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
the child's needs; 
    (2) help the child improve family living and social 
interaction skills; 
    (3) help the child gain the necessary skills to return to 
the community; 
    (4) stabilize crisis admissions; and 
    (5) work with families throughout the placement to improve 
the ability of the families to care for children with emotional 
disturbance in the home. 
    Subd. 2.  [SPECIFIC REQUIREMENTS.] A provider of 
residential services to children must be licensed under 
applicable rules adopted by the commissioner and must be 
clinically supervised by a mental health professional. 
    Subd. 3.  [TRANSITION TO COMMUNITY.] Residential treatment 
facilities and regional treatment centers serving children must 
plan for and assist those children and their families in making 
a transition to less restrictive community-based services.  
Residential treatment facilities must also arrange for 
appropriate follow-up care in the community.  Before a child is 
discharged, the residential treatment facility or regional 
treatment center shall provide notification to the child's case 
manager, if any, so that the case manager can monitor and 
coordinate the transition and make timely arrangements for the 
child's appropriate follow-up care in the community.  
    Sec. 50.  [245.4883] [ACUTE CARE HOSPITAL INPATIENT 
SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF ACUTE CARE HOSPITAL 
INPATIENT SERVICES.] County boards must make available through 
contract or direct provision enough acute care hospital 
inpatient treatment services as close to the county as possible 
for children with emotional disturbances residing in the county 
needing this level of care.  Acute care hospital inpatient 
treatment services must be designed to:  
    (1) stabilize the medical and mental health condition for 
which admission is required; 
    (2) improve functioning to the point where discharge to 
residential treatment or community-based mental health services 
is possible; 
    (3) facilitate appropriate referrals for follow-up mental 
health care in the community; 
    (4) work with families to improve the ability of the 
families to care for those children with emotional disturbances 
at home; and 
    (5) assist families and children in the transition from 
inpatient services to community-based services or home setting, 
and provide notification to the child's case manager, if any, so 
that the case manager can monitor the transition and make timely 
arrangements for the child's appropriate follow-up care in the 
community.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] Providers of acute care 
hospital inpatient services for children must meet applicable 
standards established by the commissioners of health and human 
services.  
    Sec. 51.  [245.4885] [SCREENING FOR INPATIENT AND 
RESIDENTIAL TREATMENT.] 
    Subdivision 1.  [SCREENING REQUIRED.] The county board 
shall ensure that all children are screened upon admission for 
treatment of emotional disturbance to a residential treatment 
facility, an acute care hospital, or informally admitted to a 
regional treatment center if public funds are used to pay for 
the services.  If a child is admitted to a residential treatment 
facility or acute care hospital for emergency treatment of 
emotional disturbance or held for emergency care by a regional 
treatment center under section 253B.05, subdivision 1, screening 
must occur within five working days of admission.  Screening 
shall determine whether the proposed treatment: 
    (1) is necessary; 
    (2) is appropriate to the child's individual treatment 
needs; 
    (3) cannot be effectively provided in the child's home; 
    (4) the length of stay is as short as possible consistent 
with the individual child's need; and 
    (5) the case manager, if assigned, is developing an 
individual family community support plan.  
    Screening shall be in compliance with section 256F.07 or 
257.071, whichever applies.  Wherever possible, the parent shall 
be consulted in the screening process, unless clinically 
inappropriate. 
    The screening process and placement decision must be 
documented in the child's record.  
    An alternate review process may be approved by the 
commissioner if the county board demonstrates that an alternate 
review process has been established by the county board and the 
times of review, persons responsible for the review, and review 
criteria are comparable to the standards in clauses (1) to (3). 
    Subd. 2.  [QUALIFICATIONS.] No later than January 1, 1992, 
screening of children for residential and inpatient services 
must be conducted by a mental health professional.  Mental 
health professionals providing screening for inpatient and 
residential services must not be financially affiliated with any 
acute care inpatient hospital, residential treatment facility, 
or regional treatment center.  The commissioner may waive this 
requirement for mental health professional participation in 
sparsely populated areas.  
    Subd. 3.  [INDIVIDUAL PLACEMENT AGREEMENT.] The county 
board shall enter into an individual placement agreement with a 
provider of residential treatment services to a child eligible 
for county-paid services under this section.  The agreement must 
specify the payment rate and terms and conditions of county 
payment for the placement. 
    Subd. 4.  [TASK FORCE ON RESIDENTIAL AND INPATIENT 
TREATMENT SERVICES FOR CHILDREN.] The commissioner of human 
services shall appoint a task force on residential and inpatient 
treatment services for children that includes representatives 
from each of the mental health professional categories defined 
in section 245.4871, subdivision 27, the Minnesota mental health 
association, the Minnesota alliance for the mentally ill, the 
children's mental health initiative, the Minnesota mental health 
law project, the Minnesota district judges association juvenile 
committee, department of human services staff, the department of 
education, local community-based corrections, the department of 
corrections, the ombudsman for mental health and mental 
retardation, residential treatment facilities for children, 
inpatient hospital facilities for children, and counties.  The 
task force shall examine and evaluate existing and available 
mechanisms that have as their purpose determination of and 
review of appropriate admission and need for continued care for 
all children with emotional disturbances who are admitted to 
residential treatment facilities or acute care hospital 
inpatient treatment.  These mechanisms shall include at least 
the following:  precommitment screening, preplacement screening 
for children, licensure and reimbursement rules, county 
monitoring, technical assistance, hospital preadmission 
certification, and hospital retrospective reviews.  The task 
force shall report to the legislature by February 15, 1990, on 
how existing mechanisms may be changed to accomplish the goals 
of screening as described in section 245.4885, subdivision 1.  
    Sec. 52.  [245.4886] [APPEALS.] 
    A child or a child's family, as appropriate, who requests 
mental health services under sections 245.487 to 245.4887 must 
be advised of services available and the right to appeal as 
described in this section at the time of the request and each 
time the individual family community support plan or individual 
treatment plan is reviewed.  A child whose request for mental 
health services under sections 245.487 to 245.4887 is denied, 
not acted upon with reasonable promptness, or whose services are 
suspended, reduced, or terminated by action or inaction for 
which the county board is responsible under sections 245.487 to 
245.4887 may contest that action or inaction before the state 
agency according to section 256.045.  The commissioner shall 
monitor the nature and frequency of administrative appeals under 
this section. 
    Sec. 53.  [245.4887] [CHILDREN'S SECTION OF LOCAL MENTAL 
HEALTH PROPOSAL.] 
    Subdivision 1.  [TIME PERIOD.] The county board shall 
submit its first complete children's section of its local mental 
health proposal to the commissioner by November 15, 1989.  
Subsequent proposals must be on the same two-year cycle as 
community social service plans.  If a proposal complies with 
sections 245.487 to 245.4887, it satisfies the requirement of 
the community social service plan for the emotionally disturbed 
target population as required by section 256E.09.  The proposal 
must be made available upon request to all residents of the 
county at the same time it is submitted to the commissioner. 
    Subd. 2.  [PROPOSAL CONTENT.] The children's section of the 
local mental health proposal must include: 
    (1) a report of the local children's mental health advisory 
council or children's mental health subcommittee of the existing 
local mental health advisory council on unmet needs of children 
and any other needs assessment used by the county board in 
preparing the local mental health proposal, including the report 
of the local coordinating council or local interagency task 
force specified in section 245.4875, subdivision 6; 
    (2) a description of the involvement of the local 
children's mental health advisory council or the children's 
mental health subcommittee of the existing local mental health 
advisory council in preparing the local mental health proposal 
and methods used by the county board to ensure adequate and 
timely participation of citizens, mental health professionals, 
and providers in development of the local mental health 
proposal; 
    (3) information for the preceding year, including the 
actual number of children who received each of the mental health 
services listed in sections 245.487 to 245.4887, and actual 
expenditures for each mental health service and service waiting 
lists; and 
    (4) the following information describing how the county 
board intends to meet the requirements of sections 245.487 to 
245.4887 during the proposal period: 
    (i) specific objectives and outcome goals for each mental 
health service listed in sections 245.487 to 245.4887; 
    (ii) a description of each service provider, including 
county agencies, contractors, and subcontractors, that is 
expected to either be the sole provider of one of the mental 
health services described in sections 245.487 to 245.4887 or to 
provide over $10,000 of mental health services per year, 
including a listing of the professional qualifications of the 
staff involved in service delivery for the county; 
    (iii) a description of how the mental health services in 
the county will be unified and coordinated, including the 
mechanism established by the county board providing for 
interagency coordination as specified in section 245.4875, 
subdivision 6; 
    (iv) the estimated number of children who will receive each 
mental health service; and 
    (v) estimated expenditures for each mental health service 
and revenues for the entire proposal. 
    Subd. 3.  [PROPOSAL FORMAT.] The children's section of the 
local mental health proposal must be made in a format prescribed 
by the commissioner.  
    Subd. 4.  [PROVIDER APPROVAL.] The commissioner's review of 
the children's section of the local mental health proposal must 
include a review of the qualifications of each service provider 
required to be identified in the children's section of the local 
mental health proposal under subdivision 2.  The commissioner 
may reject a county board's proposal for a particular provider 
if:  
    (1) the provider does not meet the professional 
qualifications contained in sections 245.487 to 245.4887; 
    (2) the provider does not have adequate fiscal stability or 
controls to provide the proposed services as determined by the 
commissioner; or 
    (3) the provider is not in compliance with other applicable 
state laws or rules. 
    Subd. 5.  [SERVICE APPROVAL.] The commissioner's review of 
the children's section of the local mental health proposal must 
include a review of the appropriateness of the amounts and types 
of children's mental health services in the children's section 
of the local mental health proposal.  The commissioner may 
reject the county board's proposal if the commissioner 
determines that the amount and types of services proposed are 
not cost effective, do not meet the child's needs, or do not 
comply with sections 245.487 to 245.4887. 
    Subd. 6.  [PROPOSAL APPROVAL.] The commissioner shall 
review each children's section of the local mental health 
proposal within 90 days and work with the county board to make 
any necessary modifications to comply with sections 245.487 to 
245.4887.  After the commissioner has approved the proposal, the 
county board is eligible to receive an allocation of mental 
health and community social service act funds.  
    Subd. 7.  [PARTIAL OR CONDITIONAL APPROVAL.] If the 
children's section of the local mental health proposal is in 
substantial compliance, but not in full compliance with sections 
245.487 to 245.4887, and necessary modifications cannot be made 
before the proposal period begins, the commissioner may grant 
partial or conditional approval and withhold a proportional 
share of the county board's mental health and community social 
service act funds until full compliance is achieved. 
    Subd. 8.  [AWARD NOTICE.] Upon approval of the county board 
proposal, the commissioner shall send a notice of approval for 
funding.  The notice must specify any conditions of funding and 
is binding on the county board.  Failure of the county board to 
comply with the approved proposal and funding conditions may 
result in withholding or repayment of funds according to section 
245.483.  
    Subd. 9.  [PLAN AMENDMENT.] If the county board finds it 
necessary to make significant changes in the approved children's 
section of the local mental health proposal, it must present the 
proposed changes to the commissioner for approval at least 30 
days before the changes take effect.  "Significant changes" 
means:  
    (1) the county board proposes to provide a children's 
mental health service through a provider other than the provider 
listed for that service in the approved local proposal; 
    (2) the county board expects the total annual expenditures 
for any single children's mental health service to vary more 
than ten percent or $5,000, whichever is greater, from the 
amount in the approved local proposal; 
    (3) the county board expects a combination of changes in 
expenditures per children's mental health service to exceed more 
than ten percent of the total children's mental health services 
expenditures; or 
    (4) the county board proposes a major change in the 
specific objectives and outcome goals listed in the approved 
local children's mental health proposal. 
    Sec. 54.  Minnesota Statutes 1988, section 245.62, 
subdivision 3, is amended to read: 
    Subd. 3.  [CLINICAL DIRECTOR SUPERVISOR.] All community 
mental health center services shall be provided under the 
clinical direction supervision of a licensed consulting 
psychologist licensed under sections 148.88 to 148.98, or a 
physician who is board certified or eligible for board 
certification in psychiatry, and who is licensed under section 
147.02.  
    Sec. 55.  Minnesota Statutes 1988, section 245.696, 
subdivision 2, is amended to read: 
    Subd. 2.  [SPECIFIC DUTIES.] In addition to the powers and 
duties already conferred by law, the commissioner of human 
services shall: 
    (1) review and evaluate local programs and the performance 
of administrative and mental health personnel and make 
recommendations to county boards and program administrators; 
    (2) provide consultative staff service to communities and 
advocacy groups to assist in ascertaining local needs and in 
planning and establishing community mental health programs; 
    (3) employ qualified personnel to implement this chapter; 
    (4) as part of the biennial budget process, report to the 
legislature on staff use and staff performance, including in the 
report a description of duties performed by each person in the 
mental health division; 
    (5) adopt rules for minimum standards in community mental 
health services as directed by the legislature; 
    (6) (5) cooperate with the commissioners of health and jobs 
and training to coordinate services and programs for people with 
mental illness; 
    (7) (6) convene meetings with the commissioners of 
corrections, health, education, and commerce at least four times 
each year for the purpose of coordinating services and programs 
for children with mental illness and children with emotional or 
behavioral disorders; 
    (8) (7) evaluate the needs of people with mental illness as 
they relate to assistance payments, medical benefits, nursing 
home care, and other state and federally funded services; 
    (9) (8) provide data and other information, as requested, 
to the advisory council on mental health; 
    (10) (9) develop and maintain a data collection system to 
provide information on the prevalence of mental illness, the 
need for specific mental health services and other services 
needed by people with mental illness, funding sources for those 
services, and the extent to which state and local areas are 
meeting the need for services; 
    (11) (10) apply for grants and develop pilot programs to 
test and demonstrate new methods of assessing mental health 
needs and delivering mental health services; 
    (12) (11) study alternative reimbursement systems and make 
waiver requests that are deemed necessary by the commissioner; 
    (13) (12) provide technical assistance to county boards to 
improve fiscal management and accountability and quality of 
mental health services, and consult regularly with county 
boards, public and private mental health agencies, and client 
advocacy organizations for purposes of implementing this 
chapter; 
    (14) (13) promote coordination between the mental health 
system and other human service systems in the planning, funding, 
and delivery of services; entering into cooperative agreements 
with other state and local agencies for that purpose as deemed 
necessary by the commissioner; 
    (15) (14) conduct research regarding the relative 
effectiveness of mental health treatment methods as the 
commissioner deems appropriate, and for this purpose, enter 
treatment facilities, observe clients, and review records in a 
manner consistent with the Minnesota government data practices 
act, chapter 13; and 
    (16) (15) enter into contracts and promulgate rules the 
commissioner deems necessary to carry out the purposes of this 
chapter. 
    Sec. 56.  Minnesota Statutes 1988, section 245.697, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CREATION.] A state advisory council on 
mental health is created.  The council must have 25 30 members 
appointed by the governor in accordance with federal 
requirements.  The council must be composed of:  
    (1) the assistant commissioner of mental health for the 
department of human services; 
    (2) a representative of the department of human services 
responsible for the medical assistance program; 
    (3) one member of each of the four core mental health 
professional disciplines (psychiatry, psychology, social work, 
nursing); 
    (4) one representative from each of the following advocacy 
groups:  mental health association of Minnesota, Minnesota 
alliance for the mentally ill, and Minnesota mental health law 
project; 
    (5) providers of mental health services; 
    (6) consumers of mental health services; 
    (7) family members of persons with mental illnesses; 
    (8) legislators; 
    (9) social service agency directors; 
    (10) county commissioners; and 
    (11) other members reflecting a broad range of community 
interests, as the United States Secretary of Health and Human 
Services may prescribe by regulation or as may be selected by 
the governor. 
    Terms, compensation, and removal of members and filling of 
vacancies are governed by section 15.059, except that members 
shall not receive a per diem.  The council expires does not 
expire as provided in section 15.059. 
    Sec. 57.  Minnesota Statutes 1988, section 245.697, 
subdivision 2, is amended to read: 
    Subd. 2.  [DUTIES.] The state advisory council on mental 
health shall:  
    (1) advise the governor, the legislature, and heads of 
state departments and agencies about policy, programs, and 
services affecting people with mental illness; 
    (2) advise the commissioner of human services on all phases 
of the development of mental health aspects of the biennial 
budget; 
    (3) advise the governor and the legislature about the 
development of innovative mechanisms for providing and financing 
services to people with mental illness; 
    (4) encourage state departments and other agencies to 
conduct needed research in the field of mental health; 
    (5) review recommendations of the subcommittee on 
children's mental health; 
    (6) educate the public about mental illness and the needs 
and potential of people with mental illness; and 
    (7) review and comment on all grants dealing with mental 
health and on the development and implementation of state and 
local mental health plans; and 
     (8) coordinate the work of local children's and adult 
mental health advisory councils and subcommittees. 
    Sec. 58.  Minnesota Statutes 1988, section 245.697, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [SUBCOMMITTEE ON CHILDREN'S MENTAL HEALTH.] The 
state advisory council on mental health (the "advisory council") 
must have a subcommittee on children's mental health.  The 
subcommittee must make recommendations to the advisory council 
on policies, laws, regulations, and services relating to 
children's mental health.  Members of the subcommittee must 
include: 
    (1) the commissioners or designees of the commissioners of 
the departments of human services, health, education, state 
planning, and corrections; 
    (2) the commissioner of commerce or a designee of the 
commissioner who is knowledgeable about medical insurance 
issues; 
    (3) at least one representative of an advocacy group for 
children with mental illness emotional disturbances; 
    (4) providers of children's mental health services, 
including at least one provider of services to preadolescent 
children, one provider of services to adolescents, and one 
hospital-based provider; 
    (5) parents of children who have mental illness or 
emotional or behavioral disorders disturbances; 
    (6) a present or former consumer of adolescent mental 
health services; 
    (7) educators experienced in currently working with 
emotionally disturbed children; 
    (8) people knowledgeable about the needs of emotionally 
disturbed children of minority races and cultures; 
    (9) people experienced in working with emotionally 
disturbed children who have committed status offenses; 
    (10) members of the advisory council; and 
    (11) one person from the local corrections department and 
one representative of the Minnesota district judges association 
juvenile committee; and 
    (12) county commissioners and social services agency 
representatives. 
    The chair of the advisory council shall appoint 
subcommittee members described in clauses (3) to (11) through 
the process established in section 15.0597.  The chair shall 
appoint members to ensure a geographical balance on the 
subcommittee.  Terms, compensation, removal, and filling of 
vacancies are governed by subdivision 1, except that terms of 
subcommittee members who are also members of the advisory 
council are coterminous with their terms on the advisory 
council.  The subcommittee shall meet at the call of the 
subcommittee chair who is elected by the subcommittee from among 
its members.  The subcommittee expires with the expiration of 
the advisory council. 
    Sec. 59.  Minnesota Statutes 1988, section 245.713, 
subdivision 2, is amended to read: 
    Subd. 2.  [TOTAL FUNDS AVAILABLE; ALLOCATION.] Funds 
granted to the state by the federal government under United 
States Code, title 42, sections 300X to 300X-9 each federal 
fiscal year for mental health services must be allocated as 
follows:  
    (a) Any amount set aside by the commissioner of human 
services for American Indian organizations within the state, 
which funds shall not duplicate any direct federal funding of 
American Indian organizations and which funds shall be at least 
25 percent of the total federal allocation to the state for 
mental health services; provided that sufficient applications 
for funding are received by the commissioner which meet the 
specifications contained in requests for proposals.  Money from 
this source may be used for special committees to advise the 
commissioner on mental health programs and services for American 
Indians and other minorities or underserved groups.  For 
purposes of this subdivision, "American Indian organization" 
means an American Indian tribe or band or an organization 
providing mental health services that is legally incorporated as 
a nonprofit organization registered with the secretary of state 
and governed by a board of directors having at least a majority 
of American Indian directors. 
    (b) An amount not to exceed ten five percent of the federal 
block grant allocation for mental health services to be retained 
by the commissioner for administration.  
    (c) Any amount permitted under federal law which the 
commissioner approves for demonstration or research projects for 
severely disturbed children and adolescents, the underserved, 
special populations or multiply disabled mentally ill persons. 
The groups to be served, the extent and nature of services to be 
provided, the amount and duration of any grant awards are to be 
based on criteria set forth in the Alcohol, Drug Abuse and 
Mental Health Block Grant Law, United States Code, title 42, 
sections 300X to 300X-9, and on state policies and procedures 
determined necessary by the commissioner.  Grant recipients must 
comply with applicable state and federal requirements and 
demonstrate fiscal and program management capabilities that will 
result in provision of quality, cost-effective services.  
    (d) The amount required under federal law, for federally 
mandated expenditures. 
    (e) An amount not to exceed ten 15 percent of the federal 
block grant allocation for mental health services to be retained 
by the commissioner for planning and evaluation. 
    Sec. 60.  Minnesota Statutes 1988, section 245.73, 
subdivision 4, is amended to read: 
    Subd. 4.  [RULES; REPORTS.] The commissioner shall 
promulgate an emergency and permanent rule to govern grant 
applications, approval of applications, allocation of grants, 
and maintenance of service and financial records by grant 
recipients.  The commissioner shall require collection of data 
for compliance, monitoring and evaluation purposes and shall 
require periodic reports to demonstrate the effectiveness of the 
services in helping adult mentally ill persons remain and 
function in their own communities.  As a part of the report 
required by section 245.461, the commissioner shall report to 
the legislature no later than December 31 of each even-numbered 
year as to the effectiveness of this program and recommendations 
regarding continued funding.  
    Sec. 61.  Minnesota Statutes 1988, section 245A.095, is 
amended to read: 
    245A.095 [REVIEW OF RULES FOR PROGRAMS SERVING PERSONS WITH 
MENTAL ILLNESSES.] 
    Subdivision 1.  [LICENSE REQUIRED.] Residential programs 
for with five or more persons with a mental illness must be 
licensed under sections 245A.01 to 245A.16.  To assure that this 
requirement is met, the commissioner of health, in cooperation 
with the commissioner of human services, shall monitor licensed 
boarding care homes, board and lodging houses, and supervised 
living facilities. 
    By January 1, 1989, the commissioner of health shall 
recommend to the legislature an appropriate method for enforcing 
this requirement. 
    Subd. 1a.  [RULES.] In developing rules for serving persons 
with mental illness, the commissioner of human services shall 
assure that persons with mental illness are provided with needed 
treatment or support in the least restrictive, most appropriate 
environment, that supportive residential care in small homelike 
settings is available for persons needing that care, and that a 
mechanism is developed to ensure that no person is placed in a 
care or treatment setting inappropriate for meeting the person's 
needs.  To the maximum extent possible, the rule shall assure 
that length of stay is governed solely by client need and shall 
allow for a variety of innovative and flexible approaches in 
meeting residential and support needs of persons with mental 
illness.  
    Subd. 2.  [SPECIFIC REVIEW OF RULES.] The commissioner 
shall: 
    (1) provide in rule for various levels of care additional 
types of programs and services, including but not limited to 
supportive small group residential care, semi-independent and 
apartment living services, and crisis and respite services, to 
address the residential treatment and support needs of persons 
with mental illness; 
    (2) review category I and II programs established in 
Minnesota Rules, parts 9520.0500 to 9520.0690 to ensure that the 
categories of programs provide a continuum of residential 
service programs for persons with mental illness, including but 
not limited to programs meeting needs for intensive treatment, 
crisis and respite care, and rehabilitation and training; 
    (3) provide in rule for a definition of the term 
"treatment" as used in relation to persons with mental illness; 
    (4) adjust funding mechanisms by rule as needed to reflect 
the requirements established by rule for services being 
provided; 
    (5) review and recommend staff educational requirements and 
staff training as needed; and 
    (6) review and make changes in rules relating to 
residential care and service programs for persons with mental 
illness as the commissioner may determine necessary; and 
    (7) the commissioner shall report to the legislature by 
February 15, 1990, on the status of rulemaking with respect to 
clauses (1) to (6).  
    Subd. 3.  [HOUSING SERVICES FOR PERSONS WITH MENTAL 
ILLNESS.] The commissioner of human services shall study the 
housing needs of people with mental illness and shall articulate 
a continuum of services from residential treatment as the most 
intensive service through housing programs as the least 
intensive.  The commissioner shall develop recommendations for 
implementing the continuum of services and shall present the 
recommendations to the legislature by January 31, 1988.  
    Sec. 62.  [246.018] [OFFICE OF MEDICAL DIRECTOR.] 
    Subdivision 1.  [ESTABLISHED.] The office of medical 
director within the department of human services is established. 
    Subd. 2.  [MEDICAL DIRECTOR.] The commissioner of human 
services shall appoint a medical director.  The medical director 
must be a psychiatrist certified by the board of psychiatry. 
    Subd. 3.  [DUTIES.] The medical director shall: 
     (1) oversee the clinical provision of inpatient mental 
health services provided in the state's regional treatment 
centers; 
     (2) recruit and retain psychiatrists to serve on the state 
medical staff established in subdivision 4; 
    (3) consult with the commissioner of human services, the 
assistant commissioner of mental health, community mental health 
center directors, and the regional treatment center governing 
bodies to develop standards for treatment and care of patients 
in regional treatment centers and outpatient programs; 
    (4) develop and oversee a continuing education program for 
members of the regional treatment center medical staff; 
    (5) consult with the commissioner on the appointment of the 
chief executive officers for regional treatment centers; and 
    (6) participate and cooperate in the development and 
maintenance of a quality assurance program for regional 
treatment centers that assures that residents receive quality 
inpatient care and continuous quality care once they are 
discharged or transferred to an outpatient setting. 
    Subd. 4.  [REGIONAL TREATMENT CENTER MEDICAL STAFF.] (a) 
The commissioner of human services shall establish a regional 
treatment center medical staff which shall be under the clinical 
direction of the office of medical director. 
    (b) The medical director, in conjunction with the regional 
treatment center medical staff, shall: 
    (1) establish standards and define qualifications for 
physicians who care for residents in regional treatment centers; 
    (2) monitor the performance of physicians who care for 
residents in regional treatment centers; and 
    (3) recommend to the commissioner changes in procedures for 
operating regional treatment centers that are needed to improve 
the provision of medical care in those facilities. 
    Sec. 63.  [STUDY.] 
     The commissioner of human services shall, in cooperation 
with the commissioner of health, study and submit to the 
legislature by February 15, 1991, a report and recommendations 
regarding:  (1) plans and fiscal projections for increasing the 
number of community-based beds, small community-based 
residential programs, and support services for persons with 
mental illness, including persons for whom nursing home services 
are inappropriate, to serve all persons in need of those 
programs; and (2) the projected fiscal impact of maximizing the 
availability of medical assistance coverage for persons with 
mental illness. 
    Sec. 64.  [REPEALER.] 
    Minnesota Statutes 1988, sections 245.462, subdivision 25; 
245.471; 245.475; 245.64; 245.698; and 245A.095, subdivision 3, 
are repealed. 
    Sec. 65.  [EFFECTIVE DATE.] 
    Section 37, subdivision 5, is effective the day following 
final enactment. 

                                ARTICLE 5

                 INCOME MAINTENANCE AND WELFARE REFORM 
    Section 1.  Minnesota Statutes 1988, section 13.46, 
subdivision 2, is amended to read: 
    Subd. 2.  [GENERAL.] (a) Unless the data is summary data or 
a statute specifically provides a different classification, data 
on individuals collected, maintained, used, or disseminated by 
the welfare system is private data on individuals, and shall not 
be disclosed except:  
    (1) pursuant to section 13.05; 
    (2) pursuant to court order; 
    (3) pursuant to a statute specifically authorizing access 
to the private data; 
    (4) to an agent of the welfare system, including a law 
enforcement person, attorney, or investigator acting for it in 
the investigation, prosecution, criminal or civil proceeding 
relating to the administration of a program; 
    (5) to personnel of the welfare system who require the data 
to determine eligibility, amount of assistance, and the need to 
provide services of additional programs to the individual; 
    (6) to administer federal funds or programs; 
    (7) between personnel of the welfare system working in the 
same program; 
    (8) the amounts of cash public assistance and relief paid 
to welfare recipients in this state, including their names and 
social security numbers, upon request by the department of 
revenue to administer the property tax refund law, supplemental 
housing allowance, and the income tax; 
    (9) to the Minnesota department of jobs and training for 
the purpose of monitoring the eligibility of the data subject 
for unemployment compensation, for any employment or training 
program administered, supervised, or certified by that agency, 
or for the purpose of administering any rehabilitation program, 
whether alone or in conjunction with the welfare system;, and to 
verify receipt of energy assistance for the telephone assistance 
plan; 
    (10) to appropriate parties in connection with an emergency 
if knowledge of the information is necessary to protect the 
health or safety of the individual or other individuals or 
persons; or 
    (11) data maintained by residential facilities as defined 
in section 245A.02, subdivision 6, may be disclosed to the 
protection and advocacy system established in this state 
pursuant to Part C of Public Law Number 98-527 to protect the 
legal and human rights of persons with mental retardation or 
other related conditions who live in residential facilities for 
these persons if the protection and advocacy system receives a 
complaint by or on behalf of that person and the person does not 
have a legal guardian or the state or a designee of the state is 
the legal guardian of the person. 
    (b) Mental health data shall be treated as provided in 
subdivisions 7, 8, and 9, but is not subject to the access 
provisions of subdivision 10, paragraph (b).  
    Sec. 2.  Minnesota Statutes 1988, section 237.70, 
subdivision 7, is amended to read: 
    Subd. 7.  [ADMINISTRATION.] The telephone assistance plan 
must be administered jointly by the commission, the department 
of human services, and the telephone companies in accordance 
with the following guidelines: 
     (a) The commission and the department of human services 
shall develop an application form that must be completed by the 
subscriber for the purpose of certifying eligibility for 
telephone assistance plan credits to the telephone companies.  
The application must contain the applicant's social security 
number.  Applications without a social security number will be 
denied.  Each telephone company shall annually mail a notice of 
the availability of the telephone assistance plan to each 
residential subscriber in a regular billing and shall mail the 
application form to customers when requested.  
     The notice must state the following: 
     YOU MAY BE ELIGIBLE FOR ASSISTANCE IN PAYING YOUR TELEPHONE 
BILL IF YOU MEET CERTAIN HOUSEHOLD INCOME LIMITS, AND YOU ARE 65 
YEARS OF AGE OR OLDER OR ARE DISABLED.  FOR MORE INFORMATION OR 
AN APPLICATION FORM PLEASE CONTACT ......... 
     (b) The department of human services shall determine the 
eligibility for telephone assistance plan credits at least 
annually according to the criteria contained in subdivision 4a.  
     (c) Each telephone company shall provide telephone 
assistance plan credits against monthly charges in the earliest 
possible month following receipt of an application form and 
shall continue to provide credits unless notified that the 
subscriber is ineligible.  The company shall cease granting 
credits at the earliest possible billing cycle when notified by 
the department of human services that the subscriber is 
ineligible.  
     (d) The commission shall serve as the coordinator of the 
telephone assistance plan and be reimbursed for its 
administrative expenses from the surcharge revenue pool.  As the 
coordinator, the commission shall: 
     (1) establish a uniform statewide surcharge in accordance 
with subdivision 6; 
     (2) establish a uniform statewide level of telephone 
assistance plan credit that each telephone company shall extend 
to each eligible household in its service area; 
     (3) require each telephone company to account to the 
commission on a periodic basis for surcharge revenues collected 
by the company, expenses incurred by the company, not to include 
expenses of collecting surcharges, and credits extended by the 
company under the telephone assistance plan; 
     (4) require each telephone company to remit surcharge 
revenues to the department of administration for deposit in the 
fund; and 
     (5) remit to each telephone company from the surcharge 
revenue pool the amount necessary to compensate the company for 
expenses, not including expenses of collecting the surcharges, 
and telephone assistance plan credits.  When it appears that the 
revenue generated by the maximum surcharge permitted under 
subdivision 6 will be inadequate to fund any particular 
established level of telephone assistance plan credits, the 
commission shall reduce the credits to a level that can be 
adequately funded by the maximum surcharge.  Similarly, the 
commission may increase the level of the telephone assistance 
plan credit that is available or reduce the surcharge to a level 
and for a period of time that will prevent an unreasonable 
overcollection of surcharge revenues. 
    (e) Each telephone company shall maintain adequate records 
of surcharge revenues, expenses, and credits related to the 
telephone assistance plan and shall, as part of its annual 
report or separately, provide the commission and the department 
of public service with a financial report of its experience 
under the telephone assistance plan for the previous year.  That 
report must also be adequate to satisfy the reporting 
requirements of the federal matching plan.  
    (f) The department of public service shall investigate 
complaints against telephone companies with regard to the 
telephone assistance plan and shall report the results of its 
investigation to the commission. 
    Sec. 3.  Minnesota Statutes 1988, section 237.701, 
subdivision 1, is amended to read: 
    Subdivision 1.  [TELEPHONE ASSISTANCE FUND.] The telephone 
assistance fund is created as a separate account in the state 
treasury to consist of amounts received by the department of 
administration representing the surcharge authorized by section 
237.70, subdivision 6, and amounts earned on the fund assets.  
Money in the fund may be used only for: 
    (1) reimbursement to telephone companies for expenses and 
credits allowed in section 237.70, subdivision 7, paragraph (d), 
clause (5); 
    (2) reimbursement of the administrative expenses of the 
department of human services from January 1, 1988, to June 30, 
1989, to implement sections 237.69 to 237.71, not to 
exceed $90,000 $180,000 annually; and 
    (3) reimbursement of the administrative expenses of the 
commission not to exceed $25,000 annually. 
    Sec. 4.  Minnesota Statutes 1988, section 245.771, 
subdivision 3, is amended to read: 
    Subd. 3.  [EMPLOYMENT AND TRAINING PROGRAMS.] The 
commissioner of human services, in consultation with the 
commissioner of jobs and training, is authorized to implement 
and allocate money to food stamp employment and training 
programs in as many counties as is necessary to meet federal 
participation requirements and comply with federal laws and 
regulations.  The commissioner of human services may contract 
with the commissioner of jobs and training to implement and 
supervise employment and training programs for food stamp 
recipients that are required by federal regulations. 
    Sec. 5.  Minnesota Statutes 1988, section 256.014, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ESTABLISHMENT OF SYSTEMS.] The 
commissioner of human services shall establish and enhance 
computer systems necessary for the efficient operation of the 
programs the commissioner supervises, including: 
    (1) management and administration of the food stamp and 
income maintenance programs; 
    (2) the central clearinghouse project for management and 
administration of the child support enforcement program; and 
    (3) administration of medical assistance and general 
assistance medical care. 
    The commissioner shall distribute the nonfederal share of 
the costs of operating and maintaining the systems to the 
commissioner and to the counties participating in the system in 
a manner that reflects actual system usage, except that the 
nonfederal share of the costs of the MAXIS computer system and 
child support enforcement systems shall be born entirely by the 
commissioner.  Development costs must not be assessed against 
local agencies. 
    Sec. 6.  [256.031] [MINNESOTA FAMILY INVESTMENT PLAN.] 
    Subdivision 1.  [CITATION.] Sections 256.031 to 256.036 may 
be cited as the Minnesota family investment plan. 
    Subd. 2.  [LEGISLATIVE FINDINGS.] The legislature 
recognizes the need to fundamentally change the way government 
supports families.  The legislature finds that many features of 
the current system of public assistance do not help families 
carry out their two basic functions:  the economic support of 
the family unit and the care and nurturing of children.  The 
legislature recognizes that the Minnesota family investment plan 
is an investment strategy that will support and strengthen the 
family's social and financial functions.  This investment in 
families will provide long-term benefits through stronger and 
more independent families. 
    Subd. 3.  [AUTHORIZATION FOR THE DEMONSTRATION.] The 
commissioner of human services, in consultation with the 
commissioners of education, finance, jobs and training, health, 
and planning, and the directors of the higher education 
coordinating board and the office of jobs policy, is authorized 
to proceed with the planning and designing of the Minnesota 
family investment plan and test policies, methods, and cost 
impact on an experimental basis by using field trials.  Sections 
256.031 to 256.033 describe the basic principles of the program. 
Sections 256.034 to 256.036 provide a basis for congressional 
action.  Using sections 256.031 to 256.036, the commissioner 
shall seek congressional authority to implement the program in 
field trials.  After obtaining congressional authority to 
implement the Minnesota family investment plan in field trials, 
the commissioner shall request specific appropriations from the 
legislature to implement field trials.  The field trials must be 
conducted for as many years as necessary, and in different 
geographical settings, to provide reliable instruction about the 
desirability of expanding the program statewide. 
    Subd. 4.  [GOALS OF THE MINNESOTA FAMILY INVESTMENT PLAN.] 
The commissioner shall design the program to meet the following 
goals: 
    (1) to support families' transition to financial 
independence by emphasizing options, removing barriers to work 
and education, providing necessary support services, and 
building a supportive network of education, employment and 
training, health, social, counseling, and family-based services; 
    (2) to allow resources to be more effectively and 
efficiently focused on investing in families by removing the 
complexity of current rules and procedures and consolidating 
public assistance programs; 
    (3) to prevent long-term dependence on public assistance 
through paternity establishment, child support enforcement, 
emphasis on education and training, and early intervention with 
minor parents; and 
    (4) to provide families with an opportunity to increase 
their living standard by rewarding efforts aimed at transition 
to employment and by allowing families to keep a greater portion 
of earnings when they become employed. 
    Subd. 5.  [FEDERAL WAIVERS.] The commissioner of human 
services shall seek authority from Congress to implement the 
Minnesota family investment plan on a demonstration basis.  If 
necessary, the commissioner shall seek waivers of compliance 
with requirements for:  aid to families with dependent children 
under United States Code, title 42, sections 601 to 679a, as 
amended; medical assistance under United States Code, title 42, 
sections 1396 to 1396s, as amended; food stamps under United 
States Code, title 7, sections 2011 to 2030, as amended; and 
other federal requirements that would inhibit implementation of 
the Minnesota family investment plan.  The commissioner shall 
seek terms from the federal government that are consistent with 
the goals of the Minnesota family investment plan.  The 
commissioner shall also seek terms from the federal government 
that will maximize federal financial participation so that the 
extra costs to the state of implementing the program are 
minimized, to the extent that those terms are consistent with 
the goals of the Minnesota family investment plan.  An agreement 
with the federal government under this section shall provide 
that the agreements may be canceled by the state or federal 
government upon six months' notice or immediately upon mutual 
agreement.  If the agreements are canceled, families receiving 
assistance under the Minnesota family investment plan who are 
eligible for the aid to families with dependent children, 
general assistance, medical assistance, general assistance 
medical care, and the food stamp programs must be placed on 
those programs. 
    Sec. 7.  [256.032] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE OF DEFINITIONS.] The terms used in 
sections 256.031 to 256.036 have the meanings given them unless 
otherwise provided or indicated by the context. 
    Subd. 2.  [CAREGIVER.] "Caregiver" means a minor child's 
natural or adoptive parent or parents 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 who live with and provide care and support to a 
minor child when the minor child's natural or adoptive parent or 
parents do not reside in the same home:  grandfather, 
grandmother, brother, sister, stepfather, stepmother, 
stepbrother, stepsister, uncle, aunt, first cousin, nephew, 
niece, persons of preceding generations as denoted by prefixes 
of "great" or "great-great," or a spouse of any person named in 
the above groups even after the marriage ends by death or 
divorce. 
    Subd. 3.  [CASE MANAGEMENT.] "Case management" means the 
assessment of family needs and coordination of services 
necessary to support the family in its social and economic 
roles, in addition to the services described in section 256.736, 
subdivision 11. 
    Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services or a designee. 
    Subd. 5.  [CONTRACT.] "Contract" means a family 
self-sufficiency plan, described in section 256.035, subdivision 
7, based on the case manager's assessment of the family's needs 
and abilities and developed, together with a parental caregiver, 
by a county agency or its designee.  
    Subd. 6.  [DEPARTMENT.] "Department" means the department 
of human services. 
    Subd. 7.  [FAMILY.] For purposes of determining eligibility 
for this program, "family" includes the following individuals 
who live together:  a minor child or a group of minor children 
related to each other as siblings, half siblings, stepsiblings, 
or adopted siblings, together with their natural or adoptive 
parents, or their caregiver as defined in subdivision 2.  
"Family" also includes a pregnant woman in the third trimester 
of pregnancy with no children. 
    Subd. 8.  [FAMILY WAGE LEVEL.] "Family wage level" means 
120 percent of the transitional standard, as defined in 
subdivision 13. 
    Subd. 9.  [ORIENTATION.] "Orientation" means a presentation 
that meets the requirements of section 256.736, subdivision 10a, 
provides information to caregivers about the Minnesota family 
investment plan, and encourages parental caregivers to engage in 
activities that will stabilize the family and lead to 
self-sufficiency. 
    Subd. 10.  [PROGRAM.] "Program" means the Minnesota family 
investment plan.  
    Subd. 11.  [SIGNIFICANT CHANGE.] "Significant change" means 
a change of ten percent or $50, whichever is less, in monthly 
gross family earned income, or a change in family composition. 
    Subd. 12.  [TRANSITIONAL STATUS.] "Transitional status" 
means the status of caregivers who are independently pursuing 
self-sufficiency or caregivers who are complying with the terms 
of a contract with a county agency or its designee. 
    Subd. 13.  [TRANSITIONAL STANDARD.] "Transitional standard" 
means the sum of the AFDC standard of assistance and the full 
cash value of food stamps for a family of the same size and 
composition in effect when implementation of the Minnesota 
family investment plan begins.  This standard applies to 
families in which the parental caregiver is in transitional 
status and to families in which the caregiver is exempt from 
having a contract or is exempt from complying with the terms of 
the contract.  Full cash value of food stamps is the amount of 
the cash value of food stamps to which a family of a given size 
would be entitled for a month, determined by assuming unearned 
income equal to the AFDC standard for a family of that size and 
composition and subtracting the standard deduction and maximum 
shelter deduction from gross family income, as allowed under the 
Food Stamp Act of 1977, as amended, and Public Law Number 
100-435.  The assistance standard for a family consisting of a 
pregnant woman in the third trimester of pregnancy with no 
children must equal the assistance standard for one adult and 
one child. 
    Sec. 8.  [256.033] [ELIGIBILITY FOR THE MINNESOTA FAMILY 
INVESTMENT PLAN.] 
    Subdivision 1.  [ELIGIBILITY CONDITIONS.] A family is 
eligible for and entitled to assistance under the Minnesota 
family investment plan if: 
    (1) the family's net income, after deducting an amount to 
cover taxes and actual dependent care costs up to the maximum 
disregarded under United States Code, title 42, section 
602(a)(8)(A)(iii), does not exceed the applicable standard of 
assistance for that family as defined under section 256.032, 
subdivision 13; and 
    (2) the family's nonexcluded resources do not exceed $2,000.
    Subd. 2.  [DETERMINATION OF FAMILY INCOME.] The aid to 
families with dependent children income exclusions listed in 
Code of Federal Regulations, title 45, sections 233.20(a)(3) and 
233.20(a)(4), must be used when determining a family's available 
income, except that:  
    (1) the disregard of the first $75 of gross earned income 
is replaced with a single disregard described in section 
256.035, subdivision 4, paragraph (a); 
     (2) all earned income of a minor child receiving assistance 
through the Minnesota family investment plan is excluded when 
the child is attending school at least half-time; 
     (3) all earned income tax credit payments received by the 
family as a refund of federal income taxes or made as advance 
payments are excluded in accordance with 42 United States Code, 
section 602(a)(8)(A)(viii); 
     (4) educational grants and loans as provided in section 
256.74, subdivision 1, clause (2), are excluded; and 
     (5) all other income listed in Minnesota Rules, part 
9500.2380, subpart 2, is excluded. 
    Subd. 3.  [DETERMINATION OF FAMILY RESOURCES.] When 
determining a family's resources, the following are excluded:  
    (1) the family's home, together with the surrounding 
property not separated from the home by intervening property 
owned by others; 
    (2) one burial plot for each family member; 
    (3) one prepaid burial contract with an equity value of no 
more than $1,500 for each member of the family; 
    (4) licensed automobiles, trucks, or vans up to a total 
equity value of $4,500; 
    (5) the value of personal property needed to produce earned 
income, including tools, implements, farm animals, and 
inventory; 
    (6) the entire equity value of a motor vehicle determined 
to be necessary for the operation of a self-employment business; 
and 
    (7) clothing, necessary household furniture, equipment, and 
other basic maintenance items essential for daily living. 
    Subd. 4.  [TREATMENT OF SSI AND MSA.] The monthly benefits 
and any other income received through the supplemental security 
income or Minnesota supplemental aid programs and any real or 
personal property of a person receiving supplemental security 
income or Minnesota supplemental aid must be excluded in 
determining the family's eligibility for the Minnesota family 
investment plan and the amount of assistance.  In determining 
the amount of assistance to be paid to the family, the needs of 
the person receiving supplemental security income or Minnesota 
supplemental aid must not be taken into account. 
     Subd. 5.  [ABILITY TO APPLY FOR FOOD STAMPS.] A family that 
is ineligible for assistance through the Minnesota family 
investment plan due to income or resources may apply for, and if 
eligible receive, benefits under the food stamp program. 
    Sec. 9.  [256.034] [PROGRAM SIMPLIFICATION.] 
    Subdivision 1.  [CONSOLIDATION OF TYPES OF ASSISTANCE.] 
Under the Minnesota family investment plan, assistance 
previously provided to families through the AFDC, food stamp, 
and general assistance programs must be combined into a single 
cash assistance program.  If authorized by Congress, families 
receiving assistance through the Minnesota family investment 
plan are automatically eligible for and entitled to medical 
assistance under chapter 256B.  Federal, state, and local funds 
that would otherwise be allocated for assistance to families 
under the AFDC, food stamp, and general assistance programs must 
be transferred to the Minnesota family investment plan.  The 
provisions of the Minnesota family investment plan prevail over 
any provisions of sections 256.72 to 256.87 or 256D.01 to 
256D.21 with which they are irreconcilable.  The food stamp, 
general assistance, and work readiness programs for single 
persons and couples who are not responsible for the care of 
children are not replaced by the Minnesota family investment 
plan. 
    Subd. 2.  [COUPON OPTION.] Families have the option to 
receive a portion of their assistance, designated by the 
commissioner, in the form of food coupons or vendor payments. 
    Subd. 3.  [MODIFICATION OF ELIGIBILITY TESTS.] (a) A needy 
family is eligible and entitled to receive assistance under the 
program even if its children are not found to be deprived of 
parental support or care by reason of death, continued absence 
from the home, physical or mental incapacity of a parent, or 
unemployment of a parent, provided the family's income and 
resources do not exceed the eligibility requirements in section 
256.033.  In addition, a family member who is physically and 
mentally fit, who is between the ages of 18 and 60 years, who is 
enrolled at least half time in an institution of higher 
education, and whose family income and resources do not exceed 
the eligibility requirements in section 256.033, is eligible for 
assistance under the Minnesota family investment plan even if 
the conditions for eligibility as prescribed under the federal 
Food Stamp Act of 1977, as amended, are not met. 
    (b) An applicant for, or a person receiving, assistance 
under the Minnesota family investment plan is considered to have 
assigned to the public agency responsible for child support 
enforcement at the time of application all rights to child 
support and maintenance from any other person the applicant may 
have in the applicant's own behalf or on behalf of any other 
family member for whom application is made under the Minnesota 
family investment plan.  The provisions of section 256.74, 
subdivision 5, govern the assignment.  An applicant for, or a 
person receiving, assistance under the Minnesota family 
investment plan shall cooperate with the efforts of the county 
agency to collect child and spousal support.  The county agency 
is entitled to any child support and maintenance received by or 
on behalf of the person receiving assistance or another member 
of the family for which the person receiving assistance is 
responsible.  Failure by an applicant or a person receiving 
assistance to cooperate with the efforts of the county agency to 
collect child and spousal support without good cause must be 
sanctioned according to section 256.035, subdivision 3.  
    (c) An applicant for, or a person receiving, assistance 
under the Minnesota family investment plan is not required to 
comply with the employment and training requirements prescribed 
under sections 256.736, subdivisions 3, 3a, and 14; and 256D.05, 
subdivision 1; section 402(a)(19) of the Social Security Act; 
the federal Food Stamp Act of 1977, as amended; Public Law 
Number 100-485; or any other state or federal employment and 
training program, unless compliance is specifically required in 
a contract with the county agency. 
    Subd. 4.  [SIMPLIFICATION OF BUDGETING PROCEDURES.] The 
monthly amount of assistance provided by the Minnesota family 
investment plan must be calculated on a prospective basis taking 
into account actual income or circumstances that existed in a 
previous month and other relevant information to predict income 
and circumstances for the next month or months.  When a family 
has a significant change in circumstances, the budgeting cycle 
must be interrupted and the amount of assistance for the payment 
month must be based on the county agency's best estimate of the 
family's income and circumstances for that month.  Families may 
be required to report their income monthly, but income may be 
averaged over a period of more than one month.  
    Subd. 5.  [SIMPLIFICATION OF VERIFICATION PROCEDURES.] 
Verification procedures must be reduced to the minimum that is 
workable and consistent with the goals and requirements of the 
Minnesota family investment plan. 
    Sec. 10.  [256.035] [INCOME SUPPORT AND TRANSITION.] 
    Subdivision 1.  [EXPECTATIONS.] All families eligible for 
assistance under the family investment plan are expected to be 
in transitional status as defined in section 256.032, 
subdivision 12.  To be considered in transitional status, 
families must meet the following expectations: 
    (a) For a family headed by a single adult parent, the 
expectation is that the parent will independently pursue 
self-sufficiency until the family has received assistance