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

                            CHAPTER 288-H.F.No. 2277 
                  An act relating to human services; making changes to 
                  licensing provisions; regulating child protection 
                  dispositions; clarifying a mental health case 
                  management provision; changing a provision under child 
                  welfare targeted case management; regulating child 
                  care, long-term care, and health care; amending 
                  Minnesota Statutes 2002, sections 13.3806, by adding a 
                  subdivision; 13.43, subdivision 2, by adding a 
                  subdivision; 62A.042; 62A.28; 62A.30, subdivision 2, 
                  by adding a subdivision; 62C.14, subdivision 14; 
                  62H.01; 62H.02; 62H.04; 62J.23, subdivision 2; 62T.02, 
                  by adding a subdivision; 72A.20, by adding a 
                  subdivision; 119B.011, by adding a subdivision; 
                  119B.02, subdivision 4; 119B.03, subdivisions 3, 6a, 
                  by adding a subdivision; 144.2215; 145C.01, 
                  subdivision 7; 147.03, subdivision 1; 198.261; 243.55, 
                  subdivision 1; 245.462, subdivision 18; 245.464, by 
                  adding a subdivision; 245.4881, subdivision 1; 
                  245.814, subdivision 1; 245A.02, subdivisions 2a, 5a, 
                  7, 10, 14, by adding a subdivision; 245A.03, 
                  subdivision 3; 245A.04, subdivisions 5, 6, 7, by 
                  adding a subdivision; 245A.05; 245A.06, subdivisions 
                  2, 4; 245A.07, subdivisions 2, 2a, 3; 245A.08, 
                  subdivision 5; 245A.14, subdivision 4; 245A.16, 
                  subdivision 4; 245A.22, subdivision 2; 245B.02, by 
                  adding a subdivision; 245B.05, subdivision 2; 245B.07, 
                  subdivisions 8, 12; 252.28, subdivision 1; 253B.02, by 
                  adding subdivisions; 253B.03, by adding a subdivision; 
                  253B.185, by adding a subdivision; 256.01, by adding 
                  subdivisions; 256.955, subdivisions 2, 2b; 256B.055, 
                  by adding a subdivision; 256B.0625, by adding a 
                  subdivision; 256B.0911, subdivision 4a; 256B.0916, 
                  subdivision 2; 256B.431, by adding a subdivision; 
                  256B.49, by adding a subdivision; 256D.051, 
                  subdivision 6c; 256F.10, subdivision 5; 256J.01, 
                  subdivision 1; 256J.08, subdivisions 73, 82a; 256J.21, 
                  subdivision 3; 256J.415; 256J.425, subdivision 5; 
                  260C.007, subdivision 18; 260C.201, subdivision 11; 
                  260C.212, subdivision 5; Minnesota Statutes 2003 
                  Supplement, sections 119B.011, subdivisions 6, 8, 10, 
                  15, 20; 119B.03, subdivision 4; 119B.05, subdivision 
                  1; 119B.09, subdivision 7; 119B.12, subdivision 2; 
                  119B.125, subdivisions 1, 2; 119B.13, subdivisions 1, 
                  1a; 119B.189, subdivisions 2, 4; 119B.19, subdivision 
                  1; 119B.24; 119B.25, subdivision 2; 128C.05, 
                  subdivision 1a; 241.021, subdivision 6; 245.4874; 
                  245A.03, subdivision 2; 245A.04, subdivision 1; 
                  245A.08, subdivisions 1, 2a; 245A.085; 245A.11, 
                  subdivisions 2a, 2b; 245A.16, subdivision 1; 245A.22, 
                  subdivision 3; 245B.03, subdivision 2; 245C.02, 
                  subdivision 18; 245C.03, subdivision 1, by adding a 
                  subdivision; 245C.05, subdivisions 1, 2, 5, 6; 
                  245C.08, subdivisions 2, 3, 4; 245C.09, subdivision 1; 
                  245C.13, subdivision 1; 245C.14, subdivision 1; 
                  245C.15, subdivisions 2, 3, 4; 245C.16, subdivision 1; 
                  245C.17, subdivisions 1, 3; 245C.18; 245C.20; 245C.21, 
                  subdivision 3, by adding a subdivision; 245C.22, 
                  subdivisions 3, 4, 5, 6; 245C.23, subdivisions 1, 2; 
                  245C.25; 245C.26; 245C.27, subdivisions 1, 2; 245C.28, 
                  subdivisions 1, 2, 3; 245C.29, subdivision 2; 246.15, 
                  by adding a subdivision; 252.27, subdivision 2a; 
                  256.01, subdivision 2; 256.045, subdivisions 3, 3b; 
                  256.046, subdivision 1; 256.955, subdivision 2a; 
                  256.98, subdivision 8; 256B.0596; 256B.06, subdivision 
                  4; 256B.0622, subdivision 8; 256B.0625, subdivision 9; 
                  256B.0915, subdivisions 3a, 3b; 256B.431, subdivision 
                  32; 256B.69, subdivisions 4, 6b; 256D.03, subdivisions 
                  3, 4; 256J.09, subdivision 3b; 256J.21, subdivision 2; 
                  256J.24, subdivision 5; 256J.32, subdivisions 2, 8; 
                  256J.37, subdivision 9; 256J.425, subdivisions 1, 4, 
                  6; 256J.46, subdivision 1; 256J.49, subdivision 4; 
                  256J.515; 256J.521, subdivisions 1, 2; 256J.53, 
                  subdivision 2; 256J.56; 256J.57, subdivision 1; 
                  256J.626, subdivisions 2, 6, 7; 256J.751, subdivision 
                  2; 256J.95, subdivisions 1, 3, 11, 12, 19; 295.50, 
                  subdivision 9b; 295.53, subdivision 1; 626.556, 
                  subdivisions 10, 10i; 626.557, subdivision 9d; Laws 
                  1997, chapter 245, article 2, section 11, as amended; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 62J; 62Q; 119B; 144; 151; 245A; 245B; 246B; 
                  253B; 256B; repealing Minnesota Statutes 2002, 
                  sections 62A.309; 62H.07; 119B.211; 256D.051, 
                  subdivision 17; Minnesota Statutes 2003 Supplement, 
                  section 245C.02, subdivision 17; Laws 2000, chapter 
                  489, article 1, section 36; Laws 2003, First Special 
                  Session chapter 14, article 3, section 56; Minnesota 
                  Rules, parts 9525.1600; 9543.0040, subpart 3; 
                  9543.1000; 9543.1010; 9543.1020; 9543.1030; 9543.1040; 
                  9543.1050; 9543.1060. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                                 HUMAN SERVICES 
           Section 1.  Minnesota Statutes 2002, section 245.814, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INSURANCE FOR FOSTER HOME PROVIDERS.] The 
        commissioner of human services shall within the appropriation 
        provided purchase and provide insurance to individuals licensed 
        as foster home providers to cover their liability for: 
           (1) injuries or property damage caused or sustained by 
        persons in foster care in their home; and 
           (2) actions arising out of alienation of affections 
        sustained by the birth parents of a foster child or birth 
        parents or children of a foster adult.  
           For purposes of this subdivision, insurance for homes 
        licensed to provide adult foster care shall be limited to family 
        adult foster care homes as defined in section 144D.01, 
        subdivision 7, and family adult day services licensed under 
        section 245A.143. 
           Sec. 2.  Minnesota Statutes 2002, section 245A.02, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ADULT DAY CARE OR FAMILY ADULT DAY SERVICES.] 
        "Adult day care," means "adult day services," and "family adult 
        day services" mean a program operating less than 24 hours per 
        day that provides functionally impaired adults with an 
        individualized and coordinated set of services including health 
        services, social services, and nutritional services that are 
        directed at maintaining or improving the participants' 
        capabilities for self-care.  Adult day care does, adult day 
        services, and family adult day services do not include programs 
        where adults gather or congregate primarily for purposes of 
        socialization, education, supervision, caregiver respite, 
        religious expression, exercise, or nutritious meals. 
           Sec. 3.  Minnesota Statutes 2002, section 245A.02, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [CONTROLLING INDIVIDUAL.] "Controlling 
        individual" means a public body, governmental agency, business 
        entity, officer, program administrator, or director owner, or 
        managerial official 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 For 
        purposes of this subdivision, owner means an individual who has 
        direct or indirect ownership interest in a corporation, 
        partnership, or other business association issued a license 
        under this chapter.  For purposes of this subdivision, 
        managerial official means those individuals who have the 
        decision-making authority related to the operation of the 
        program, and the responsibility for the ongoing management of or 
        direction of the policies, services, or employees of the 
        program.  Controlling individual does not include: 
           (1) a bank, savings bank, trust company, savings 
        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, owner, or director managerial 
        official 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, owner, or director managerial official 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. 4.  Minnesota Statutes 2002, section 245A.02, is 
        amended by adding a subdivision to read: 
           Subd. 6c.  [FOSTER CARE FOR ADULTS.] "Foster care for 
        adults" means a program operating 24 hours a day that provides 
        functionally impaired adults with food, lodging, protection, 
        supervision, and household services in a residence, in addition 
        to services according to the individual service plans under 
        Minnesota Rules, part 9555.5105, subpart 18. 
           Sec. 5.  Minnesota Statutes 2002, section 245A.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FUNCTIONAL IMPAIRMENT.] For the purposes of 
        adult day care, adult day services, family adult day services, 
        or adult foster care, "functional impairment" means: 
           (1) a condition that is characterized by substantial 
        difficulty in carrying out one or more of the essential major 
        activities of daily living, such as caring for oneself, 
        performing manual tasks, walking, seeing, hearing, speaking, 
        breathing, learning, working; or 
           (2) a disorder of thought or mood that significantly 
        impairs judgment, behavior, capacity to recognize reality, or 
        ability to cope with the ordinary demands of life and that 
        requires support to maintain independence in the community. 
           Sec. 6.  Minnesota Statutes 2002, 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. 7.  Minnesota Statutes 2002, 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 for persons with mental retardation 
        or a related condition that are provided in or outside of a 
        person's own home. 
           Sec. 8.  Minnesota Statutes 2003 Supplement, section 
        245A.03, subdivision 2, is amended to read: 
           Subd. 2.  [EXCLUSION FROM LICENSURE.] (a) This chapter does 
        not apply to: 
           (1) residential or nonresidential programs that are 
        provided to a person by an individual who is related unless the 
        residential program is a child foster care placement made by a 
        local social services agency or a licensed child-placing agency, 
        except as provided in subdivision 2a; 
           (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 economic security; 
           (5) programs operated by a public school for children 
        enrolled in kindergarten to the 12th grade and prekindergarten 
        special education in a school as defined in section 120A.22, 
        subdivision 4, and programs serving children in combined special 
        education and regular prekindergarten programs that are operated 
        or assisted by the commissioner of education 33 months or older; 
           (6) nonresidential programs primarily for children that 
        provide care or supervision, without charge for ten or fewer 
        days a year, and for periods of less than three hours a day 
        while the child's parent or legal guardian is in the same 
        building as the nonresidential program or present within another 
        building that is directly contiguous to the building in which 
        the nonresidential program is located; 
           (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 that 
        do not provide intensive residential treatment; 
           (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 or 
        programs operated are operated or approved by a park and 
        recreation board of a city of the first class whose primary 
        purpose is to provide social and recreational activities to 
        school age children, provided the program is approved by the 
        park and recreation board; 
           (12) programs operated by a school as defined in section 
        120A.22, subdivision 4, whose primary purpose is to provide 
        child care to school-age children, provided the program 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; 
           (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) mental health outpatient services for adults with 
        mental illness or children with emotional disturbance; 
           (20) residential programs serving school-age children whose 
        sole purpose is cultural or educational exchange, until the 
        commissioner adopts appropriate rules; 
           (21) unrelated individuals who provide out-of-home respite 
        care services to persons with mental retardation or related 
        conditions from a single related family for no more than 90 days 
        in a 12-month period and the respite care services are for the 
        temporary relief of the person's family or legal representative; 
           (22) respite care services provided as a home and 
        community-based service to a person with mental retardation or a 
        related condition, in the person's primary residence; 
           (23) community support services programs as defined in 
        section 245.462, subdivision 6, and family community support 
        services as defined in section 245.4871, subdivision 17; 
           (24) the placement of a child by a birth parent or legal 
        guardian in a preadoptive home for purposes of adoption as 
        authorized by section 259.47; 
           (25) settings registered under chapter 144D which provide 
        home care services licensed by the commissioner of health to 
        fewer than seven adults; or 
           (26) consumer-directed community support service funded 
        under the Medicaid waiver for persons with mental retardation 
        and related conditions when the individual who provided the 
        service is:  
           (i) the same individual who is the direct payee of these 
        specific waiver funds or paid by a fiscal agent, fiscal 
        intermediary, or employer of record; and 
           (ii) not otherwise under the control of a residential or 
        nonresidential program that is required to be licensed under 
        this chapter when providing the service. 
           (b) For purposes of paragraph (a), clause (6), a building 
        is directly contiguous to a building in which a nonresidential 
        program is located if it shares a common wall with the building 
        in which the nonresidential program is located or is attached to 
        that building by skyway, tunnel, atrium, or common roof. 
           (c) Nothing in this chapter shall be construed to require 
        licensure for any services provided and funded according to an 
        approved federal waiver plan where licensure is specifically 
        identified as not being a condition for the services and funding.
           Sec. 9.  Minnesota Statutes 2002, 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, other organization, or a controlling individual to 
        provide a residential or nonresidential program without a 
        license and in willful disregard of this chapter 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, 
        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, if an individual, corporation, partnership, voluntary 
        association, other organization, or controlling individual has:  
           (1) failed to apply for a license after receiving notice 
        that a license is required; 
           (2) continued to operate without a license after the 
        license has been revoked or suspended under section 245A.07, and 
        the commissioner has issued a final order affirming the 
        revocation or suspension, or the license holder did not timely 
        appeal the sanction; or 
           (3) continued to operate without a license after the 
        license has been temporarily suspended under section 245A.07.  
        The county attorney and the attorney general have a duty to 
        cooperate with the commissioner.  
           Sec. 10.  Minnesota Statutes 2003 Supplement, section 
        245A.04, subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION FOR LICENSURE.] (a) An 
        individual, corporation, partnership, voluntary association, 
        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.  An applicant seeking 
        licensure in Minnesota with headquarters outside of Minnesota 
        must have a program office located within the state.  
           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.  The commissioner shall not consider an 
        application to be complete until the commissioner receives all 
        of the information required under section 245C.05. 
           (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. 
           (c) An applicant or license holder must have a policy that 
        prohibits license holders, employees, subcontractors, and 
        volunteers, when directly responsible for persons served by the 
        program, from abusing prescription medication or being in any 
        manner under the influence of a chemical that impairs the 
        individual's ability to provide services or care.  The license 
        holder must train employees, subcontractors, and volunteers 
        about the program's drug and alcohol policy. 
           (d) An applicant and license holder must have a program 
        grievance procedure that permits persons served by the program 
        and their authorized representatives to bring a grievance to the 
        highest level of authority in the program. 
           Sec. 11.  Minnesota Statutes 2002, 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 this 
        chapter and section 245.69, 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 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. 12.  Minnesota Statutes 2002, section 245A.04, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMMISSIONER'S EVALUATION.] Before issuing, 
        denying, suspending, revoking, or making conditional 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, available 
        consumer evaluations of the program, and information about the 
        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 245C.  
           Sec. 13.  Minnesota Statutes 2002, section 245A.04, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ISSUANCE OF A LICENSE; EXTENSION OF A 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 an initial license for a 
        period not to exceed two years 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.  
           (c) A decision by the commissioner to issue a license does 
        not guarantee that any person or persons will be placed or cared 
        for in the licensed program.  A license shall not be 
        transferable to another individual, corporation, partnership, 
        voluntary association, other organization, or controlling or to 
        another location. 
           (d) A license holder must notify the commissioner and 
        obtain the commissioner's approval before making any changes 
        that would alter the license information listed under paragraph 
        (a). 
           (e) The commissioner shall not issue a license if the 
        applicant, license holder, or controlling individual has:  
           (1) been disqualified and the disqualification was not set 
        aside; 
           (2) has been denied a license within the past two years; or 
           (3) had a license revoked within the past five years. 
           For purposes of reimbursement for meals only, under the 
        Child and Adult Care Food Program, Code of Federal Regulations, 
        title 7, subtitle B, chapter II, subchapter A, part 226, 
        relocation within the same county by a licensed family day care 
        provider, shall be considered an extension of the license for a 
        period of no more than 30 calendar days or until the new license 
        is issued, whichever occurs first, provided the county agency 
        has determined the family day care provider meets licensure 
        requirements at the new location. 
           Unless otherwise specified by statute, 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. 14.  Minnesota Statutes 2002, section 245A.04, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [RESIDENTIAL PROGRAMS HANDLING RESIDENT FUNDS 
        AND PROPERTY; ADDITIONAL REQUIREMENTS.] (a) A license holder 
        must ensure that residents retain the use and availability of 
        personal funds or property unless restrictions are justified in 
        the resident's individual plan. 
           (b) The license holder must ensure separation of resident 
        funds from funds of the license holder, the residential program, 
        or program staff. 
           (c) Whenever the license holder assists a resident with the 
        safekeeping of funds or other property, the license holder must: 
           (1) immediately document receipt and disbursement of the 
        resident's funds or other property at the time of receipt or 
        disbursement, including the signature of the resident, 
        conservator, or payee; 
           (2) provide a statement, at least quarterly, itemizing 
        receipts and disbursements of resident funds or other property; 
        and 
           (3) return to the resident upon the resident's request, 
        funds and property in the license holder's possession subject to 
        restrictions in the resident's treatment plan, as soon as 
        possible, but no later than three working days after the date of 
        request. 
           (d) License holders and program staff must not: 
           (1) borrow money from a resident; 
           (2) purchase personal items from a resident; 
           (3) sell merchandise or personal services to a resident; 
           (4) require a resident to purchase items for which the 
        license holder is eligible for reimbursement; or 
           (5) use resident funds to purchase items for which the 
        facility is already receiving public or private payments. 
           Sec. 15.  Minnesota Statutes 2002, section 245A.05, is 
        amended to read: 
           245A.05 [DENIAL OF APPLICATION.] 
           The commissioner may deny a license if an applicant fails 
        to comply with applicable laws or rules, or knowingly withholds 
        relevant information from or gives false or misleading 
        information to the commissioner in connection with an 
        application for a license or during an investigation.  An 
        applicant whose application has been denied by the commissioner 
        must be given notice of the denial.  Notice must be given by 
        certified mail or personal service.  The notice must state the 
        reasons the application was denied and must inform the applicant 
        of the right to a contested case hearing under chapter 14 and 
        Minnesota Rules, parts 1400.8510 1400.8505 to 1400.8612 and 
        successor rules.  The applicant may appeal the denial by 
        notifying the commissioner in writing by certified mail or 
        personal service within 20 calendar days after receiving notice 
        that the application was denied.  Section 245A.08 applies to 
        hearings held to appeal the commissioner's denial of an 
        application. 
           Sec. 16.  Minnesota Statutes 2002, section 245A.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RECONSIDERATION OF CORRECTION ORDERS.] If the 
        applicant or license holder believes that the contents of the 
        commissioner's correction order are in error, the applicant or 
        license holder may ask the Department of Human Services to 
        reconsider the parts of the correction order that are alleged to 
        be in error.  The request for reconsideration must be made in 
        writing and received by must be postmarked and sent to the 
        commissioner within 20 calendar days after receipt of the 
        correction order by the applicant or license holder, and: 
           (1) specify the parts of the correction order that are 
        alleged to be in error; 
           (2) explain why they are in error; and 
           (3) include documentation to support the allegation of 
        error. 
           A request for reconsideration does not stay any provisions 
        or requirements of the correction order.  The commissioner's 
        disposition of a request for reconsideration is final and not 
        subject to appeal under chapter 14. 
           Sec. 17.  Minnesota Statutes 2002, section 245A.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NOTICE OF CONDITIONAL LICENSE; RECONSIDERATION 
        OF CONDITIONAL LICENSE.] If a license is made conditional, the 
        license holder must be notified of the order by certified 
        mail or personal service.  If mailed, the notice must be mailed 
        to the address shown on the application or the last known 
        address of the license holder.  The notice must state the 
        reasons the conditional license was ordered and must inform the 
        license holder of the right to request reconsideration of the 
        conditional license by the commissioner.  The license holder may 
        request reconsideration of the order of conditional license by 
        notifying the commissioner by certified mail or personal 
        service.  The request must be made in writing and.  If sent by 
        certified mail, the request must be received by postmarked and 
        sent to the commissioner within ten calendar days after the 
        license holder received the order.  If a request is made by 
        personal service, it must be received by the commissioner within 
        ten calendar days after the license holder received the order.  
        The license holder may submit with the request for 
        reconsideration written argument or evidence in support of the 
        request for reconsideration.  A timely request for 
        reconsideration shall stay imposition of the terms of the 
        conditional license until the commissioner issues a decision on 
        the request for reconsideration.  If the commissioner issues a 
        dual order of conditional license under this section and an 
        order to pay a fine under section 245A.07, subdivision 3, the 
        license holder has a right to a contested case hearing under 
        chapter 14 and Minnesota Rules, parts 1400.8505 to 1400.8612.  
        The scope of the contested case hearing shall include the fine 
        and the conditional license.  In this case, a reconsideration of 
        the conditional license will not be conducted under this section.
           The commissioner's disposition of a request for 
        reconsideration is final and not subject to appeal under chapter 
        14. 
           Sec. 18.  Minnesota Statutes 2002, section 245A.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEMPORARY IMMEDIATE SUSPENSION.] If the license 
        holder's actions or failure to comply with applicable law or 
        rule poses, or the actions of other individuals or conditions in 
        the program pose an imminent risk of harm to the health, safety, 
        or rights of persons served by the program, the commissioner 
        shall act immediately to temporarily 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 this chapter 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 an expedited hearing under chapter 14 and Minnesota 
        Rules, parts 1400.8510 1400.8505 to 1400.8612 and successor 
        rules, 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.  The appeal of an order 
        immediately suspending a license must be made in writing by 
        certified mail and or personal service.  If mailed, the appeal 
        must be postmarked and sent to the commissioner within five 
        calendar days after the license holder receives notice that the 
        license has been immediately suspended.  If a request is made by 
        personal service, it must be received by the commissioner within 
        five calendar days after the license holder received the order.  
        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. 19.  Minnesota Statutes 2002, section 245A.07, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [IMMEDIATE SUSPENSION EXPEDITED HEARING.] (a) 
        Within five working days of receipt of the license holder's 
        timely appeal, the commissioner shall request assignment of an 
        administrative law judge.  The request must include a proposed 
        date, time, and place of a hearing.  A hearing must be conducted 
        by an administrative law judge within 30 calendar days of the 
        request for assignment, unless an extension is requested by 
        either party and granted by the administrative law judge for 
        good cause.  The commissioner shall issue a notice of hearing by 
        certified mail or personal service at least ten working days 
        before the hearing.  The scope of the hearing shall be limited 
        solely to the issue of whether the temporary immediate 
        suspension should remain in effect pending the commissioner's 
        final order under section 245A.08, regarding a licensing 
        sanction issued under subdivision 3 following the immediate 
        suspension.  The burden of proof in expedited hearings under 
        this subdivision shall be limited to the commissioner's 
        demonstration that reasonable cause exists to believe that the 
        license holder's actions or failure to comply with applicable 
        law or rule poses an imminent risk of harm to the health, 
        safety, or rights of persons served by the program.  
           (b) The administrative law judge shall issue findings of 
        fact, conclusions, and a recommendation within ten working days 
        from the date of hearing.  The parties shall have ten calendar 
        days to submit exceptions to the administrative law judge's 
        report.  The record shall close at the end of the ten-day period 
        for submission of exceptions.  The commissioner's final order 
        shall be issued within ten working days from receipt of the 
        recommendation of the administrative law judge the close of the 
        record.  Within 90 calendar days after a final order affirming 
        an immediate suspension, the commissioner shall make a 
        determination regarding whether a final licensing sanction shall 
        be issued under subdivision 3.  The license holder shall 
        continue to be prohibited from operation of the program during 
        this 90-day period.  
           (c) When the final order under paragraph (b) affirms an 
        immediate suspension, and a final licensing sanction is issued 
        under subdivision 3 and the license holder appeals that 
        sanction, the license holder continues to be prohibited from 
        operation of the program pending a final commissioner's order 
        under section 245A.08, subdivision 5, regarding the final 
        licensing sanction. 
           Sec. 20.  Minnesota Statutes 2002, section 245A.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LICENSE SUSPENSION, REVOCATION, OR FINE.] The 
        commissioner may suspend or revoke a license, or impose a fine 
        if a license holder fails to comply fully with applicable laws 
        or rules, has a disqualification which has not been set aside 
        under section 245C.22, or knowingly withholds relevant 
        information from or gives false or misleading information to the 
        commissioner in connection with an application for a license, in 
        connection with the background study status of an individual, or 
        during an investigation.  A license holder who has had a license 
        suspended, revoked, or has been ordered to pay a fine must be 
        given notice of the action by certified mail or personal 
        service.  If mailed, the notice must be mailed to the address 
        shown on the application or the last known address of the 
        license holder.  The notice must state the reasons the license 
        was suspended, revoked, or a fine was ordered. 
           (a) If the license was suspended or revoked, the notice 
        must inform the license holder of the right to a contested case 
        hearing under chapter 14 and Minnesota Rules, parts 1400.8510 
        1400.8505 to 1400.8612 and successor rules.  The license holder 
        may appeal an order suspending or revoking a license.  The 
        appeal of an order suspending or revoking a license must be made 
        in writing by certified mail and or personal service.  If 
        mailed, the appeal must be postmarked and sent to the 
        commissioner within ten calendar days after the license holder 
        receives notice that the license has been suspended or revoked.  
        If a request is made by personal service, it must be received by 
        the commissioner within ten calendar days after the license 
        holder received the order.  Except as provided in subdivision 
        2a, paragraph (c), a timely appeal of an order suspending or 
        revoking a license shall stay the suspension or revocation until 
        the commissioner issues a final order.  
           (b)(1) If the license holder was ordered to pay a fine, the 
        notice must inform the license holder of the responsibility for 
        payment of fines and the right to a contested case hearing under 
        chapter 14 and Minnesota Rules, parts 1400.8510 1400.8505 to 
        1400.8612 and successor rules.  The appeal of an order to pay a 
        fine must be made in writing by certified mail and or personal 
        service.  If mailed, the appeal must be postmarked and sent to 
        the commissioner within ten calendar days after the license 
        holder receives notice that the fine has been ordered.  If a 
        request is made by personal service, it must be received by the 
        commissioner within ten calendar days after the license holder 
        received the order.  
           (2) The license holder shall pay the fines assessed on or 
        before the payment date specified.  If the license holder fails 
        to fully comply with the order, the commissioner may issue a 
        second fine or 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.  A timely appeal shall stay payment of the fine 
        until the commissioner issues a final order.  
           (3) A license holder shall promptly notify the commissioner 
        of human services, in writing, when a violation specified in the 
        order to forfeit a fine is corrected.  If upon reinspection the 
        commissioner determines that a violation has not been corrected 
        as indicated by the order to forfeit a fine, the commissioner 
        may issue a second fine.  The commissioner shall notify the 
        license holder by certified mail or personal service that a 
        second fine has been assessed.  The license holder may appeal 
        the second fine as provided under this subdivision. 
           (4) Fines shall be assessed as follows:  the license holder 
        shall forfeit $1,000 for each determination of maltreatment of a 
        child under section 626.556 or the maltreatment of a vulnerable 
        adult under section 626.557; the license holder shall forfeit 
        $200 for each occurrence of a violation of law or rule governing 
        matters of health, safety, or supervision, including but not 
        limited to the provision of adequate staff-to-child or adult 
        ratios, and failure to submit a background study; and the 
        license holder shall forfeit $100 for each occurrence of a 
        violation of law or rule other than those subject to a $1,000 or 
        $200 fine above.  For purposes of this section, "occurrence" 
        means each violation identified in the commissioner's fine order.
           (5) When a fine has been assessed, the license holder may 
        not avoid payment by closing, selling, or otherwise transferring 
        the licensed program to a third party.  In such an event, the 
        license holder will be personally liable for payment.  In the 
        case of a corporation, each controlling individual is personally 
        and jointly liable for payment.  
           Sec. 21.  Minnesota Statutes 2003 Supplement, section 
        245A.08, subdivision 1, is amended to read: 
           Subdivision 1.  [RECEIPT OF APPEAL; CONDUCT OF HEARING.] 
        Upon receiving a timely appeal or petition pursuant to section 
        245A.05, 245A.07, subdivision 3, or 245C.28, the commissioner 
        shall issue a notice of and order for hearing to the appellant 
        under chapter 14 and Minnesota Rules, parts 1400.8510 1400.8505 
        to 1400.8612 and successor rules. 
           Sec. 22.  Minnesota Statutes 2003 Supplement, section 
        245A.08, subdivision 2a, is amended to read: 
           Subd. 2a.  [CONSOLIDATED CONTESTED CASE HEARINGS FOR 
        SANCTIONS BASED ON MALTREATMENT DETERMINATIONS AND 
        DISQUALIFICATIONS.] (a) When a denial of a license under section 
        245A.05 or a licensing sanction under section 245A.07, 
        subdivision 3, is based on a disqualification for which 
        reconsideration was requested and which was not set aside or was 
        not rescinded under sections 245C.21 to 245C.27 section 245C.22, 
        the scope of the contested case hearing shall include the 
        disqualification and the licensing sanction or denial of a 
        license.  When the licensing sanction or denial of a license is 
        based on a determination of maltreatment under section 626.556 
        or 626.557, or a disqualification for serious or recurring 
        maltreatment which was not set aside or was not rescinded, the 
        scope of the contested case hearing shall include the 
        maltreatment determination, disqualification, and the licensing 
        sanction or denial of a license.  In such cases, a fair hearing 
        under section 256.045 shall not be conducted as provided for in 
        sections 626.556, subdivision 10i, and 626.557, subdivision 9d. 
           (b) In consolidated contested case hearings regarding 
        sanctions issued in family child care, child foster care, and 
        adult foster care, the county attorney shall defend the 
        commissioner's orders in accordance with section 245A.16, 
        subdivision 4. 
           (c) The commissioner's final order under subdivision 5 is 
        the final agency action on the issue of maltreatment and 
        disqualification, including for purposes of subsequent 
        background studies under chapter 245C and is the only 
        administrative appeal of the final agency determination, 
        specifically, including a challenge to the accuracy and 
        completeness of data under section 13.04. 
           (d) When consolidated hearings under this subdivision 
        involve a licensing sanction based on a previous maltreatment 
        determination for which the commissioner has issued a final 
        order in an appeal of that determination under section 256.045, 
        or the individual failed to exercise the right to appeal the 
        previous maltreatment determination under section 626.556, 
        subdivision 10i, or 626.557, subdivision 9d, the commissioner's 
        order is conclusive on the issue of maltreatment.  In such 
        cases, the scope of the administrative law judge's review shall 
        be limited to the disqualification and the licensing sanction or 
        denial of a license.  In the case of a denial of a license or a 
        licensing sanction issued to a facility based on a maltreatment 
        determination regarding an individual who is not the license 
        holder or a household member, the scope of the administrative 
        law judge's review includes the maltreatment determination. 
           (e) If a maltreatment determination or disqualification, 
        which was not set aside or was not rescinded under sections 
        245C.21 to 245C.27 section 245C.22, is the basis for a denial of 
        a license under section 245A.05 or a licensing sanction under 
        section 245A.07, and the disqualified subject is an individual 
        other than the license holder and upon whom a background study 
        must be conducted under section 245C.03, the hearings of all 
        parties may be consolidated into a single contested case hearing 
        upon consent of all parties and the administrative law judge.  
           Sec. 23.  Minnesota Statutes 2002, 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 and 
        Minnesota Rules, parts 1400.8510 1400.8505 to 1400.8612 and 
        successor rules.  The notice must also contain information about 
        the appellant's rights under chapter 14 and Minnesota Rules, 
        parts 1400.8510 1400.8505 to 1400.8612 and successor rules.  The 
        institution of proceedings for judicial review of the 
        commissioner's final order shall not stay the enforcement of the 
        final order except as provided in section 14.65.  A license 
        holder and each controlling individual of a license holder whose 
        license has been revoked because of noncompliance with 
        applicable law or rule must not be granted a license for five 
        years following the revocation.  An applicant whose application 
        was denied must not be granted a license for two years following 
        a denial, unless the applicant's subsequent application contains 
        new information which constitutes a substantial change in the 
        conditions that caused the previous denial. 
           Sec. 24.  Minnesota Statutes 2003 Supplement, section 
        245A.085, is amended to read: 
           245A.085 [CONSOLIDATION OF HEARINGS; RECONSIDERATION.] 
           Hearings authorized under this chapter, chapter 245C, and 
        sections 256.045, 626.556, and 626.557, shall be consolidated if 
        feasible and in accordance with other applicable statutes and 
        rules.  Reconsideration under sections 245C.28; 626.556, 
        subdivision 10i; and 626.557, subdivision 9d, shall also be 
        consolidated if feasible. 
           Sec. 25.  Minnesota Statutes 2003 Supplement, section 
        245A.11, subdivision 2b, is amended to read: 
           Subd. 2b.  [ADULT FOSTER CARE; FAMILY ADULT DAY CARE 
        SERVICES.] An adult foster care license holder licensed under 
        the conditions in subdivision 2a may also provide family adult 
        day care for adults age 55 or over if no persons in the adult 
        foster or adult family adult day care services program have a 
        serious and persistent mental illness or a developmental 
        disability.  The maximum combined capacity for adult foster care 
        and family adult day care is five adults, except that the 
        commissioner may grant a variance for a family adult day care 
        provider to admit up to seven individuals for day care services 
        and one individual for respite care services, if all of the 
        following requirements are met:  (1) the variance complies with 
        section 245A.04, subdivision 9; (2) a second caregiver is 
        present whenever six or more clients are being served; and (3) 
        the variance is recommended by the county social service agency 
        in the county where the provider is located.  A separate license 
        is not required to provide family adult day care under this 
        subdivision.  Family adult day services provided in a licensed 
        adult foster care setting must be provided as specified under 
        section 245A.143.  Authorization to provide family adult day 
        services in the adult foster care setting shall be printed on 
        the license certificate by the commissioner.  Adult foster care 
        homes providing services to five adults licensed under this 
        section and family adult day services licensed under section 
        245A.143 shall not be subject to licensure by the commissioner 
        of health under the provisions of chapter 144, 144A, 157, or any 
        other law requiring facility licensure by the commissioner of 
        health. 
           Sec. 26.  Minnesota Statutes 2002, section 245A.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SPECIAL FAMILY DAY CARE HOMES.] Nonresidential 
        child care programs serving 14 or fewer children that are 
        conducted at a location other than the license holder's own 
        residence shall be licensed under this section and the rules 
        governing family day care or group family day care if:  
           (a) the license holder is the primary provider of care and 
        the nonresidential child care program is conducted in a dwelling 
        that is located on a residential lot; 
           (b) the license holder is an employer who may or may not be 
        the primary provider of care, and the purpose for the child care 
        program is to provide child care services to children of the 
        license holder's employees; or 
           (c) the license holder is a church or religious 
        organization; or 
           (d) the license holder is a community collaborative child 
        care provider.  For purposes of this subdivision, a community 
        collaborative child care provider is a provider participating in 
        a cooperative agreement with a community action agency as 
        defined in section 119A.375. 
           Sec. 27.  [245A.143] [FAMILY ADULT DAY SERVICES.] 
           Subdivision 1.  [SCOPE.] (a) The licensing standards in 
        this section must be met to obtain and maintain a license to 
        provide family adult day services.  For the purposes of this 
        section, family adult day services means a program operating 
        fewer than 24 hours per day that provides functionally impaired 
        adults, none of which are under age 55, have serious or 
        persistent mental illness, or have mental retardation or a 
        related condition, with an individualized and coordinated set of 
        services including health services, social services, and 
        nutritional services that are directed at maintaining or 
        improving the participants' capabilities for self-care. 
           (b) A family adult day services license shall only be 
        issued when the services are provided in the license holder's 
        primary residence, and the license holder is the primary 
        provider of care.  The license holder may not serve more than 
        eight adults at one time, including residents, if any, served 
        under a license issued under Minnesota Rules, parts 9555.5105 to 
        9555.6265. 
           (c) An adult foster care license holder may provide family 
        adult day services if the license holder meets the requirements 
        of this section. 
           (d) When an applicant or license holder submits an 
        application for initial licensure or relicensure for both adult 
        foster care and family adult day services, the county agency 
        shall process the request as a single application and shall 
        conduct concurrent routine licensing inspections. 
           (e) Adult foster care license holders providing family 
        adult day services under their foster care license on March 30, 
        2004, shall be permitted to continue providing these services 
        with no additional requirements until their adult foster care 
        license is due for renewal.  At the time of relicensure, an 
        adult foster care license holder may continue to provide family 
        adult day services upon demonstration of compliance with this 
        section.  Adult foster care license holders who provide only 
        family adult day services on August 1, 2004, may apply for a 
        license under this section instead of an adult foster care 
        license. 
           Subd. 2.  [DEFINITIONS.] (a) For the purposes of this 
        section, the terms defined in this subdivision have the 
        following meanings unless otherwise provided for by text. 
           (b) [CAREGIVER.] "Caregiver" means a spouse, adult child, 
        parent, relative, friend, or others who normally provide unpaid 
        support or care to the individual needing assistance.  For the 
        purpose of this section, the caregiver may or may not have legal 
        or financial responsibility for the participant. 
           (c) [PARTICIPANT.] "Participant" means a functionally 
        impaired adult receiving family adult day services. 
           (d) [CONSULTATION BY A HEALTH CARE 
        PROFESSIONAL.] "Consultation by a health care professional" 
        means the review and oversight of the participant's 
        health-related services by a registered nurse, physician, or 
        mental health professional. 
           Subd. 3.  [POLICY AND PROGRAM INFORMATION 
        REQUIREMENTS.] (a) The license holder shall have available for 
        review, and shall distribute to participants and their 
        caregivers upon admission, written information about: 
           (1) the scope of the programs, services, and care offered 
        by the license holder; 
           (2) a description of the population to be served by the 
        license holder; 
           (3) a description of individual conditions which the 
        license holder is not prepared to accept, such as a communicable 
        disease requiring isolation, a history of violence to self or 
        others, unmanageable incontinence, or uncontrollable wandering; 
           (4) the participants' rights and procedure for presenting 
        grievances, including the name, address, and telephone number of 
        the Office of Ombudsman for Older Minnesotans and the county 
        licensing department, to which a participant or participant's 
        caregiver may submit an oral or written complaint; 
           (5) the license holder's policy on and arrangements for 
        providing transportation; 
           (6) the license holder's policy on providing meals and 
        snacks; 
           (7) the license holder's fees, billing arrangements, and 
        plans for payment; 
           (8) the license holder's policy governing the presence of 
        pets in the home; 
           (9) the license holder's policy on smoking in the home; 
           (10) types of insurance coverage carried by the license 
        holder; 
           (11) information on orientation requirements under section 
        245A.65, subdivisions 1, paragraph (c), and 2, paragraph (a), 
        clause (4); 
           (12) the terms and conditions of the license holder's 
        license issued by the department; 
           (13) the license holder's plan for emergency evacuation of 
        participants involving fire, weather, and other disasters.  The 
        plan must include instructions for evacuation or rescue of 
        participants, identification of an emergency shelter area, 
        quarterly fire drill schedule, and staff responsibilities; and 
           (14) the license holder's policy for handling harmful 
        objects, materials, or equipment including the storage of 
        poisonous chemicals, use of appliances, sharp instruments, 
        matches, or any other potentially harmful materials. 
           (b) The information in paragraph (a) must be provided in 
        writing to the commissioner's representative upon request and 
        must be available for inspection by the commissioner's 
        representative at the home. 
           Subd. 4.  [ADMISSION SCREENING AND EVALUATION.] (a) Before 
        admitting an individual into the family adult day services 
        program, the license holder shall screen the individual to 
        determine how or whether the license holder can serve the 
        individual, based on the license holder's policies, services, 
        expertise, and the individual's needs and condition.  If 
        possible, the screening shall include an interview with the 
        individual and with the individual's caregiver. 
           (b) The screening required under paragraph (a) shall 
        include an evaluation of the health, nutritional, and social 
        services needs of the individual. 
           Subd. 5.  [SERVICE DELIVERY PLAN.] Before providing family 
        adult day services, an individual, the individual's caregiver, 
        the legal representative if there is one, the county or private 
        case manager, if applicable, and the license holder shall 
        develop a service delivery plan.  At a minimum, the service 
        delivery plan shall include: 
           (1) a description of the health services, nutritional 
        services, and social services to be arranged or provided by the 
        license holder and the frequency of those services and that the 
        services will be based on the needs of the individual; 
           (2) scheduled days and hours of participant's attendance at 
        the license holder's home; 
           (3) transportation arrangements for getting the participant 
        to and from the license holder's home; 
           (4) contingency plans if scheduled services cannot be 
        provided by the license holder; 
           (5) identification of responsibilities of the participant 
        and the license holder with respect to payment for the services; 
           (6) circumstances when emergency services will be called; 
        and 
           (7) identification of the license holder's discharge policy 
        when services are no longer needed or when the participant's 
        needs can no longer be met by the license holder. 
           Subd. 6.  [INDIVIDUAL SERVICE PLAN.] (a) The service plan 
        must be coordinated with other plans of services for the 
        participant, as appropriate. 
           (b) The service plan must be dated and revised when there 
        is a change in the needs of the participant or annually, 
        whichever occurs sooner. 
           Subd. 7.  [HEALTH SERVICES.] (a) The license holder shall 
        provide health services as specified in the service delivery 
        plan under the direction of the designated caregiver or county 
        or private case manager.  Health services must include: 
           (1) monitoring the participant's level of function and 
        health while participating; taking appropriate action for a 
        change in condition including immediately reporting changes to 
        the participant's caregiver, physician, mental health 
        professional, or registered nurse; and seeking consultation; 
           (2) offering information to participants and caregivers on 
        good health and safety practices; and 
           (3) maintaining a listing of health resources available for 
        referrals as needed by participants and caregivers. 
           (b) Unless the person is a licensed health care 
        practitioner qualified to administer medications, the person 
        responsible for medication administration or assistance shall 
        provide a certificate verifying successful completion of a 
        trained medication aid program for unlicensed personnel approved 
        by the Minnesota Department of Health or comparable program, or 
        biennially provide evidence of competency as demonstrated to a 
        registered nurse or physician. 
           (c) The license holder must have secure storage and 
        safeguarding of all medications with storage of medications in 
        their original container, know what information regarding 
        medication administration must be reported to a health care 
        professional, and must maintain a record of all medications 
        administered. 
           Subd. 8.  [NUTRITIONAL SERVICES.] (a) The license holder 
        shall ensure that food served is nutritious and meets any 
        special dietary needs of the participants as prescribed by the 
        participant's physician or dietitian as specified in the service 
        delivery plan.  
           (b) Food and beverages must be obtained, handled, and 
        properly stored to prevent contamination, spoilage, or a threat 
        to the health of a resident. 
           Subd. 9.  [SOCIAL SERVICES.] The license holder, in 
        consultation with the county or private case manager, when 
        appropriate, shall actively assist the participant in 
        identifying and achieving personal goals, support the 
        participant in maintaining personal support networks and 
        socially valued roles, provide assistance to the participant to 
        enable community participation, and refer participants to the 
        Office of Ombudsman for Older Minnesotans and other advocacy 
        organizations for assistance when there is a potential conflict 
        of interest between the license holder and the participant. 
           Subd. 10.  [PARTICIPANT RIGHTS.] (a) The license holder 
        shall adopt and comply with a participant bill of rights.  The 
        rights shall include the participants' right to: 
           (1) participate in the development of the service plan; 
           (2) refuse services or participation; 
           (3) privacy; 
           (4) confidentiality of participant information; and 
           (5) present grievances regarding treatment or services to 
        the Office of Ombudsman for Older Minnesotans or the county 
        licensing department.  The license holder's policies shall 
        include a procedure for addressing participant grievances, 
        including the name, address, and telephone number of the county 
        licensing department, to which a participant or participant 
        caregiver may submit an oral or written complaint. 
           (b) The license holder shall post the participant rights in 
        the home and shall provide a copy to the participant and the 
        participant's primary caregiver and legal representative if the 
        participant has one. 
           Subd. 11.  [STAFFING.] Whenever participants are in the 
        home, there must be present at least one individual who is 
        trained in basic first aid and certified in cardiopulmonary 
        resuscitation and the treatment of obstructed airways.  Whenever 
        there are six, seven, or eight participants present, there must 
        be a second staff person present. 
           Subd. 12.  [TRAINING.] The license holder and license 
        holder's staff must annually complete 12 hours of training 
        related to the health, nutritional, and social needs of the 
        license holder's target population.  License holders with six or 
        more years of licensure under this section or as an adult foster 
        care provider must annually complete six hours of training.  The 
        annual training must include training on the reporting of 
        maltreatment of vulnerable adults under sections 626.557 and 
        626.5572; license holder requirements governing maltreatment of 
        vulnerable adults under section 245A.65; and, when a license 
        holder serves participants who rely on medical monitoring 
        equipment to sustain life or monitor a medical condition, 
        training on medical equipment as required under section 245A.155 
        for foster care providers.  A record of all training must be 
        maintained in the home. 
           Subd. 13.  [RESIDENTIAL REQUIREMENTS.] (a) The home where 
        family adult day services are to be provided shall be classified 
        as a residential group R-3 occupancy under the State Building 
        Code and State Fire Code for purposes of building code and fire 
        code inspections.  A building code inspection is not required 
        for licensure under this section.  The state or local fire 
        marshal must inspect the family adult day services home 
        operating in the residence for compliance with the residential 
        group R-3 occupancy provisions of the State Fire Code. 
           (b) The licensed capacity of the home shall be limited by 
        the amount of indoor space available for use by participants.  
        The total indoor space available for use by participants must 
        equal at least 35 square feet for each participant, the license 
        holder, and each staff member present in the home.  In 
        determining the square footage of usable indoor space available, 
        the following must not be counted:  hallways, stairways, 
        closets, offices, restrooms, and utility and storage areas.  The 
        usable indoor space available must include a room or an area 
        that can be used as private space for providing personal hygiene 
        services or social services to participants. 
           (c) The residence must comply with all applicable local 
        ordinances.  
           Subd. 14.  [VARIANCES.] The commissioner may grant a 
        variance to any of the requirements in this section if the 
        conditions in section 245A.04, subdivision 9, are met. 
           Sec. 28.  Minnesota Statutes 2003 Supplement, section 
        245A.16, subdivision 1, is amended to read: 
           Subdivision 1.  [DELEGATION OF AUTHORITY TO AGENCIES.] (a) 
        County agencies and private agencies that have been designated 
        or licensed by the commissioner to perform licensing functions 
        and activities under section 245A.04 and chapter 245C, to 
        recommend denial of applicants under section 245A.05, to issue 
        correction orders, to issue variances, and recommend a 
        conditional license under section 245A.06, or to recommend 
        suspending or revoking a license or issuing a fine under section 
        245A.07, shall comply with rules and directives of the 
        commissioner governing those functions and with this section.  
        The following variances are excluded from the delegation of 
        variance authority and may be issued only by the commissioner: 
           (1) dual licensure of family child care and child foster 
        care, dual licensure of child and adult foster care, and adult 
        foster care and family child care; 
           (2) adult foster care maximum capacity; 
           (3) adult foster care minimum age requirement; 
           (4) child foster care maximum age requirement; 
           (5) variances regarding disqualified individuals except 
        that county agencies may issue variances under section 245C.30 
        regarding disqualified individuals when the county is 
        responsible for conducting a consolidated reconsideration 
        according to sections 245C.25 and 245C.27, subdivision 2, 
        clauses (a) and (b), of a county maltreatment determination and 
        a disqualification based on serious or recurring maltreatment; 
        and 
           (6) the required presence of a caregiver in the adult 
        foster care residence during normal sleeping hours. 
           (b) County agencies must report information about 
        disqualification reconsiderations under sections 245C.25 and 
        245C.27, subdivision 2, clauses (a) and (b), and variances 
        granted under paragraph (a), clause (5), to the commissioner at 
        least monthly in a format prescribed by the commissioner. 
           (c) For family day care programs, the commissioner may 
        authorize licensing reviews every two years after a licensee has 
        had at least one annual review. 
           (d) For family adult day services programs, the 
        commissioner may authorize licensing reviews every two years 
        after a licensee has had at least one annual review. 
           (e) A license issued under this section may be issued for 
        up to two years. 
           Sec. 29.  Minnesota Statutes 2002, section 245A.16, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ENFORCEMENT OF THE COMMISSIONER'S ORDERS.] The 
        county or private agency shall enforce the commissioner's orders 
        under sections 245A.07 and, 245A.08, subdivision 5, and chapter 
        245C, according to the instructions of the commissioner.  The 
        county attorney shall assist the county agency in the 
        enforcement and defense of the commissioner's orders under 
        sections 245A.07 and, 245A.08, and chapter 245C, according to 
        the instructions of the commissioner, unless a conflict of 
        interest exists between the county attorney and the commissioner.
           Sec. 30.  Minnesota Statutes 2002, section 245A.22, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADMISSION.] (a) The license holder shall accept 
        as clients in the independent living assistance program only 
        individuals specified under section 256E.115 youth ages 16 to 21 
        who are in out-of-home placement, leaving out-of-home placement, 
        at risk of becoming homeless, or homeless. 
           (b) Youth who have current drug or alcohol problems, a 
        recent history of violent behaviors, or a mental health disorder 
        or issue that is not being resolved through counseling or 
        treatment are not eligible to receive the services described in 
        subdivision 1. 
           (c) Youth who are not employed, participating in employment 
        training, or enrolled in an academic program are not eligible to 
        receive transitional housing or independent living assistance. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 31.  Minnesota Statutes 2003 Supplement, section 
        245A.22, subdivision 3, is amended to read: 
           Subd. 3.  [INDEPENDENT LIVING PLAN.] (a) Unless an 
        independent living plan has been developed by the local agency, 
        the license holder shall develop a plan based on the client's 
        individual needs that specifies objectives for the client.  The 
        services provided shall include those specified in this section. 
        The plan shall identify the persons responsible for 
        implementation of each part of the plan.  The plan shall be 
        reviewed as necessary, but at least annually. 
           (b) The following services, or adequate access to referrals 
        for the following services, must be made available to the 
        targeted youth participating in the programs described in 
        subdivision 1: 
           (1) counseling services for the youth and their families, 
        if appropriate, on site, to help with problems that contributed 
        to the homelessness or could impede making the transition to 
        independent living; 
           (2) educational, vocational, or employment services; 
           (3) health care; 
           (4) transportation services including, where appropriate, 
        assisting the child in obtaining a driver's license; 
           (5) money management skills training; 
           (6) planning for ongoing housing; 
           (7) social and recreational skills training; and 
           (8) assistance establishing and maintaining connections 
        with the child's family and community. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 32.  Minnesota Statutes 2002, section 245B.02, is 
        amended by adding a subdivision to read: 
           Subd. 12a.  [INTERDISCIPLINARY TEAM.] "Interdisciplinary 
        team" means a team composed of the case manager, the person, the 
        person's legal representative and advocate, if any, and 
        representatives of providers of the service areas relevant to 
        the needs of the person as described in the individual service 
        plan. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 33.  Minnesota Statutes 2003 Supplement, section 
        245B.03, subdivision 2, is amended to read: 
           Subd. 2.  [RELATIONSHIP TO OTHER STANDARDS GOVERNING 
        SERVICES FOR PERSONS WITH MENTAL RETARDATION OR RELATED 
        CONDITIONS.] (a) ICFs/MR are exempt from: 
           (1) section 245B.04; 
           (2) section 245B.06, subdivisions 4 and 6; and 
           (3) section 245B.07, subdivisions 4, paragraphs (b) and 
        (c); 7; and 8, paragraphs (1), clause (iv), and (2). 
           (b) License holders also licensed under chapter 144 as a 
        supervised living facility are exempt from section 245B.04. 
           (c) Residential service sites controlled by license holders 
        licensed under this chapter for home and community-based 
        waivered services for four or fewer adults are exempt from 
        compliance with Minnesota Rules, parts 9543.0040, subpart 2, 
        item C; 9555.5505; 9555.5515, items B and G; 9555.5605; 
        9555.5705; 9555.6125, subparts 3, item C, subitem (2), and 4 to 
        6; 9555.6185; 9555.6225, subpart 8; 9555.6245; 9555.6255; and 
        9555.6265; and as provided under section 245B.06, subdivision 2, 
        the license holder is exempt from the program abuse prevention 
        plans and individual abuse prevention plans otherwise required 
        under sections 245A.65, subdivision 2, and 626.557, subdivision 
        14.  The commissioner may approve alternative methods of 
        providing overnight supervision using the process and criteria 
        for granting a variance in section 245A.04, subdivision 9.  This 
        chapter does not apply to foster care homes that do not provide 
        residential habilitation services funded under the home and 
        community-based waiver programs defined in section 256B.092. 
           (d) Residential service sites controlled by license holders 
        licensed under this chapter for home and community-based 
        waivered services for four or fewer children are exempt from 
        compliance with Minnesota Rules, parts 9545.0130; 9545.0140; 
        9545.0150; 9545.0170; 9545.0220, subparts 1, items C, F, and I, 
        and 3; and 9545.0230 2960.3060, subpart 3, items B and C; 
        2960.3070; 2960.3100, subpart 1, items C, F, and I; and 
        2960.3210. 
           (e) The commissioner may exempt license holders from 
        applicable standards of this chapter when the license holder 
        meets the standards under section 245A.09, subdivision 7.  
        License holders that are accredited by an independent 
        accreditation body shall continue to be licensed under this 
        chapter. 
           (f) License holders governed by sections 245B.02 to 245B.07 
        must also meet the licensure requirements in chapter 245A.  
           (g) Nothing in this chapter prohibits license holders from 
        concurrently serving consumers with and without mental 
        retardation or related conditions provided this chapter's 
        standards are met as well as other relevant standards. 
           (h) The documentation that sections 245B.02 to 245B.07 
        require of the license holder meets the individual program plan 
        required in section 256B.092 or successor provisions. 
           Sec. 34.  Minnesota Statutes 2002, section 245B.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSED CAPACITY FOR FACILITY-BASED DAY 
        TRAINING AND HABILITATION SERVICES.] The licensed capacity of 
        each day training and habilitation service sites site must be 
        determined by the amount of primary space available, the 
        scheduling of activities at other service sites, and the space 
        requirements of consumers receiving services at the site.  
        Primary space does not include hallways, stairways, closets, 
        utility areas, bathrooms, kitchens, and floor areas beneath 
        stationary equipment.  A facility-based day training and 
        habilitation site must have a minimum of 40 square feet of 
        primary space must be available for each consumer who is engaged 
        in a day training and habilitation activity at the site for 
        which the licensed capacity must be determined present at the 
        site at any one time.  Licensed capacity under this subdivision 
        does not apply to:  (1) consumers receiving community-based day 
        training and habilitation services; and (2) the temporary use of 
        a facility-based training and habilitation service site for the 
        limited purpose of providing transportation to consumers 
        receiving community-based day training and habilitation services 
        from the license holder.  The license holder must comply at all 
        times with all applicable fire and safety codes under 
        subdivision 4 and adequate supervision requirements under 
        section 245B.055 for all persons receiving day training and 
        habilitation services. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 35.  [245B.055] [MINIMUM LEVEL OF STAFFING REQUIRED 
        FOR DAY TRAINING AND HABILITATION SERVICES.] 
           Subdivision 1.  [SCOPE.] This section applies only to 
        license holders that provide day training and habilitation 
        services. 
           Subd. 2.  [FACTORS.] (a) The number of direct service staff 
        members that a license holder must have on duty at a given time 
        to meet the minimum staffing requirements established in this 
        section varies according to: 
           (1) the number of persons who are enrolled and receiving 
        direct services at that given time; 
           (2) the staff ratio requirement established under 
        subdivision 3 for each of the persons who is present; and 
           (3) whether the conditions described in subdivision 8 exist 
        and warrant additional staffing beyond the number determined to 
        be needed under subdivision 7. 
           (b) The commissioner shall consider the factors in 
        paragraph (a) in determining a license holder's compliance with 
        the staffing requirements and shall further consider whether the 
        staff ratio requirement established under subdivision 3 for each 
        person receiving services accurately reflects the person's need 
        for staff time. 
           Subd. 3.  [DETERMINING AND DOCUMENTING THE STAFF RATIO 
        REQUIREMENT FOR EACH PERSON RECEIVING SERVICES.] The case 
        manager, in consultation with the interdisciplinary team shall 
        determine at least once each year which of the ratios in 
        subdivisions 4, 5, and 6 is appropriate for each person 
        receiving services on the basis of the characteristics described 
        in subdivisions 4, 5, and 6.  The ratio assigned each person and 
        the documentation of how the ratio was arrived at must be kept 
        in each person's individual service plan.  Documentation must 
        include an assessment of the person with respect to the 
        characteristics in subdivisions 4, 5, and 6 recorded on a 
        standard assessment form required by the commissioner. 
           Subd. 4.  [PERSON REQUIRING STAFF RATIO OF ONE TO FOUR.] A 
        person who has one or more of the following characteristics must 
        be assigned a staff ratio requirement of one to four: 
           (1) on a daily basis the person requires total care and 
        monitoring or constant hand-over-hand physical guidance to 
        successfully complete at least three of the following activities:
        toileting, communicating basic needs, eating, or ambulating; or 
           (2) the person assaults others, is self-injurious, or 
        manifests severe dysfunctional behaviors at a documented level 
        of frequency, intensity, or duration requiring frequent daily 
        ongoing intervention and monitoring as established in an 
        approved behavior management program. 
           Subd. 5.  [PERSON REQUIRING STAFF RATIO OF ONE TO EIGHT.] A 
        person who has all of the following characteristics must be 
        assigned a staff ratio requirement of one to eight: 
           (1) the person does not meet the requirements in 
        subdivision 4; and 
           (2) on a daily basis the person requires verbal prompts or 
        spot checks and minimal or no physical assistance to 
        successfully complete at least three of the following 
        activities:  toileting, communicating basic needs, eating, or 
        ambulating. 
           Subd. 6.  [PERSON REQUIRING STAFF RATIO OF ONE TO SIX.] A 
        person who does not have any of the characteristics described in 
        subdivision 4 or 5 must be assigned a staff ratio requirement of 
        one to six. 
           Subd. 7.  [DETERMINING NUMBER OF DIRECT SERVICE STAFF 
        REQUIRED.] The minimum number of direct service staff members 
        required at any one time to meet the combined staff ratio 
        requirements of the persons present at that time can be 
        determined by following the steps in clauses (1) through (4): 
           (1) assign each person in attendance the three-digit 
        decimal below that corresponds to the staff ratio requirement 
        assigned to that person.  A staff ratio requirement of one to 
        four equals 0.250.  A staff ratio requirement of one to eight 
        equals 0.125.  A staff ratio requirement of one to six equals 
        0.166; 
           (2) add all of the three-digit decimals (one three-digit 
        decimal for every person in attendance) assigned in clause (1); 
           (3) when the sum in clause (2) falls between two whole 
        numbers, round off the sum to the larger of the two whole 
        numbers; and 
           (4) the larger of the two whole numbers in clause (3) 
        equals the number of direct service staff members needed to meet 
        the staff ratio requirements of the persons in attendance. 
           Subd. 8.  [CONDITIONS REQUIRING ADDITIONAL DIRECT SERVICE 
        STAFF.] The license holder shall increase the number of direct 
        service staff members present at any one time beyond the number 
        arrived at in subdivision 4 if necessary when any one or 
        combination of the following circumstances can be documented by 
        the commissioner as existing: 
           (1) the health and safety needs of the persons receiving 
        services cannot be met by the number of staff members available 
        under the staffing pattern in effect even though the number has 
        been accurately calculated under subdivision 7; or 
           (2) the behavior of a person presents an immediate danger 
        and the person is not eligible for a special needs rate 
        exception under Minnesota Rules, parts 9510.1020 to 9510.1140. 
           Subd. 9.  [SUPERVISION REQUIREMENTS.] At no time shall one 
        direct service staff member be assigned responsibility for 
        supervision and training of more than ten persons receiving 
        supervision and training, except as otherwise stated in each 
        person's risk management plan. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 36.  Minnesota Statutes 2002, section 245B.07, 
        subdivision 8, is amended to read: 
           Subd. 8.  [POLICIES AND PROCEDURES.] The license holder 
        must develop and implement the policies and procedures in 
        paragraphs (1) to (3). 
           (1) policies and procedures that promote consumer health 
        and safety by ensuring: 
           (i) consumer safety in emergency situations as identified 
        in section 245B.05, subdivision 7; 
           (ii) consumer health through sanitary practices; 
           (iii) safe transportation, when the license holder is 
        responsible for transportation of consumers, with provisions for 
        handling emergency situations; 
           (iv) a system of record keeping for both individuals and 
        the organization, for review of incidents and emergencies, and 
        corrective action if needed; 
           (v) a plan for responding to and reporting all emergencies, 
        including deaths, medical emergencies, illnesses, accidents, 
        missing consumers, all incidents, as defined in section 245B.02, 
        subdivision 10, fires, severe weather and natural disasters, 
        bomb threats, and other threats and reporting all incidents 
        required to be reported under section 245B.05, subdivision 7; 
           (vi) safe medication administration as identified in 
        section 245B.05, subdivision 5, incorporating an observed skill 
        assessment to ensure that staff demonstrate the ability to 
        administer medications consistent with the license holder's 
        policy and procedures; 
           (vii) psychotropic medication monitoring when the consumer 
        is prescribed a psychotropic medication, including the use of 
        the psychotropic medication use checklist.  If the 
        responsibility for implementing the psychotropic medication use 
        checklist has not been assigned in the individual service plan 
        and the consumer lives in a licensed site, the residential 
        license holder shall be designated; and 
           (viii) criteria for admission or service initiation 
        developed by the license holder; 
           (2) policies and procedures that protect consumer rights 
        and privacy by ensuring: 
           (i) consumer data privacy, in compliance with the Minnesota 
        Data Practices Act, chapter 13; and 
           (ii) that complaint procedures provide consumers with a 
        simple process to bring grievances and consumers receive a 
        response to the grievance within a reasonable time period.  The 
        license holder must provide a copy of the program's grievance 
        procedure and time lines for addressing grievances.  The 
        program's grievance procedure must permit consumers served by 
        the program and the authorized representatives to bring a 
        grievance to the highest level of authority in the program; and 
           (3) policies and procedures that promote continuity and 
        quality of consumer supports by ensuring: 
           (i) continuity of care and service coordination, including 
        provisions for service termination, temporary service 
        suspension, and efforts made by the license holder to coordinate 
        services with other vendors who also provide support to the 
        consumer.  The policy must include the following requirements: 
           (A) the license holder must notify the consumer or 
        consumer's legal representative and the consumer's case manager 
        in writing of the intended termination or temporary service 
        suspension and the consumer's right to seek a temporary order 
        staying the termination or suspension of service according to 
        the procedures in section 256.045, subdivision 4a or subdivision 
        6, paragraph (c); 
           (B) notice of the proposed termination of services, 
        including those situations that began with a temporary service 
        suspension, must be given at least 60 days before the proposed 
        termination is to become effective; 
           (C) the license holder must provide information requested 
        by the consumer or consumer's legal representative or case 
        manager when services are temporarily suspended or upon notice 
        of termination; 
           (D) use of temporary service suspension procedures are 
        restricted to situations in which the consumer's behavior causes 
        immediate and serious danger to the health and safety of the 
        individual or others; 
           (E) prior to giving notice of service termination or 
        temporary service suspension, the license holder must document 
        actions taken to minimize or eliminate the need for service 
        termination or temporary service suspension; and 
           (F) during the period of temporary service suspension, the 
        license holder will work with the appropriate county agency to 
        develop reasonable alternatives to protect the individual and 
        others; and 
           (ii) quality services measured through a program evaluation 
        process including regular evaluations of consumer satisfaction 
        and sharing the results of the evaluations with the consumers 
        and legal representatives. 
           Sec. 37.  Minnesota Statutes 2002, section 245B.07, 
        subdivision 12, is amended to read: 
           Subd. 12.  [SEPARATE LICENSE REQUIRED FOR SEPARATE SITES.] 
        The license holder shall apply for separate licenses for each 
        day training and habilitation service site owned or leased by 
        the license holder at which persons receiving services and the 
        provider's employees who provide training and habilitation 
        services are present for a cumulative total of more than 30 days 
        within any 12-month period, and for each residential service 
        site.  Notwithstanding this subdivision, a separate license is 
        not required for a day training and habilitation service site 
        used only for the limited purpose of providing transportation to 
        consumers receiving community-based day training and 
        habilitation services from a license holder. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 38.  Minnesota Statutes 2003 Supplement, section 
        245C.02, subdivision 18, is amended to read: 
           Subd. 18.  [SERIOUS MALTREATMENT.] (a) "Serious 
        maltreatment" means sexual abuse, maltreatment resulting in 
        death, maltreatment resulting in serious injury which reasonably 
        requires the care of a physician whether or not the care of a 
        physician was sought, or abuse resulting in serious injury. 
           (b) For purposes of this definition, "care of a physician" 
        is treatment received or ordered by a physician but does not 
        include diagnostic testing, assessment, or observation. 
           (c) For purposes of this definition, "abuse resulting in 
        serious injury" means:  bruises, bites, skin laceration, or 
        tissue damage; fractures; dislocations; evidence of internal 
        injuries; head injuries with loss of consciousness; extensive 
        second-degree or third-degree burns and other burns for which 
        complications are present; extensive second-degree or 
        third-degree frostbite and other frostbite for which 
        complications are present; irreversible mobility or avulsion of 
        teeth; injuries to the eyes; ingestion of foreign substances and 
        objects that are harmful; near drowning; and heat exhaustion or 
        sunstroke. 
           (d) Serious maltreatment includes neglect when it results 
        in criminal sexual conduct against a child or vulnerable adult. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 39.  Minnesota Statutes 2003 Supplement, section 
        245C.03, subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSED PROGRAMS.] (a) The commissioner 
        shall conduct a background study on: 
           (1) the applicant person or persons applying for a license; 
           (2) an individual age 13 and over living in the household 
        where the licensed program will be provided; 
           (3) current employees or contractors of the applicant who 
        will have direct contact with persons served by the facility, 
        agency, or program ; 
           (4) volunteers or student volunteers who will have direct 
        contact with persons served by the program to provide program 
        services if the contact is not under the continuous, direct 
        supervision by an individual listed in clause (1) or (3); 
           (5) an individual age ten to 12 living in the household 
        where the licensed services will be provided when the 
        commissioner has reasonable cause; and 
           (6) an individual who, without providing direct contact 
        services at a licensed program, may have unsupervised access to 
        children or vulnerable adults receiving services from a program 
        licensed to provide: 
           (i) family child care for children; 
           (ii) foster care for children in the provider's own home; 
        or 
           (iii) foster care or day care services for adults in the 
        provider's own home; and 
           (7) all managerial officials as defined under section 
        245A.02, subdivision 5a. 
        The commissioner must have reasonable cause to study an 
        individual under this clause subdivision. 
           (b) For family child foster care settings, a short-term 
        substitute caregiver providing direct contact services for a 
        child for less than 72 hours of continuous care is not required 
        to receive a background study under this chapter. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 40.  Minnesota Statutes 2003 Supplement, section 
        245C.03, is amended by adding a subdivision to read: 
           Subd. 5.  [OTHER STATE AGENCIES.] The commissioner shall 
        conduct background studies on applicants and license holders 
        under the jurisdiction of other state agencies who are required 
        in other statutory sections to initiate background studies under 
        this chapter, including the applicant's or license holder's 
        employees, contractors, and volunteers when required under other 
        statutory sections. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 41.  Minnesota Statutes 2003 Supplement, section 
        245C.05, subdivision 1, is amended to read: 
           Subdivision 1.  [INDIVIDUAL STUDIED.] (a) The individual 
        who is the subject of the background study must provide the 
        applicant, license holder, or other entity under section 245C.04 
        with sufficient information to ensure an accurate study, 
        including: 
           (1) the individual's first, middle, and last name and all 
        other names by which the individual has been known; 
           (2) home address, city, county, and state of residence for 
        the past five years; 
           (3) zip code; 
           (4) sex; 
           (5) date of birth; and 
           (6) Minnesota driver's license number or state 
        identification number. 
           (b) Every subject of a background study conducted by 
        counties or private agencies under this chapter must also 
        provide the home address, city, county, and state of residence 
        for the past five years. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 42.  Minnesota Statutes 2003 Supplement, section 
        245C.05, subdivision 2, is amended to read: 
           Subd. 2.  [APPLICANT, LICENSE HOLDER, OR OTHER ENTITY.] The 
        applicant, license holder, or other entity under section 245C.04 
        entities as provided in this chapter shall provide the 
        information collected under subdivision 1 about an individual 
        who is the subject of the background study on forms or in a 
        format prescribed by the commissioner. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 43.  Minnesota Statutes 2003 Supplement, section 
        245C.05, subdivision 5, is amended to read: 
           Subd. 5.  [FINGERPRINTS.] (a) For any background study 
        completed under this section chapter, when the commissioner has 
        reasonable cause to believe that further pertinent information 
        may exist on the subject of the background study, the subject 
        shall provide the commissioner with a set of classifiable 
        fingerprints obtained from an authorized law enforcement agency. 
           (b) For purposes of requiring fingerprints, the 
        commissioner has reasonable cause when, but not limited to, the: 
           (1) information from the Bureau of Criminal Apprehension 
        indicates that the subject is a multistate offender; 
           (2) information from the Bureau of Criminal Apprehension 
        indicates that multistate offender status is undetermined; or 
           (3) commissioner has received a report from the subject or 
        a third party indicating that the subject has a criminal history 
        in a jurisdiction other than Minnesota. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 44.  Minnesota Statutes 2003 Supplement, section 
        245C.05, subdivision 6, is amended to read: 
           Subd. 6.  [APPLICANT, LICENSE HOLDER, REGISTRANT OTHER 
        ENTITIES, AND AGENCIES.] (a) The applicant, license 
        holder, registrant other entities as provided in this chapter, 
        Bureau of Criminal Apprehension, commissioner of health, and 
        county agencies shall help with the study by giving the 
        commissioner criminal conviction data and reports about the 
        maltreatment of adults substantiated under section 626.557 and 
        the maltreatment of minors in licensed programs substantiated 
        under section 626.556. 
           (b) If a background study is initiated by an applicant or, 
        license holder, or other entities as provided in this chapter, 
        and the applicant or, license holder, or other entity receives 
        information about the possible criminal or maltreatment history 
        of an individual who is the subject of the background study, the 
        applicant or, license holder, or other entity must immediately 
        provide the information to the commissioner. 
           (c) The program or county or other agency must provide 
        written notice to the individual who is the subject of the 
        background study of the requirements under this subdivision. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 45.  Minnesota Statutes 2003 Supplement, section 
        245C.08, subdivision 2, is amended to read: 
           Subd. 2.  [BACKGROUND STUDIES CONDUCTED BY A COUNTY OR 
        PRIVATE AGENCY; FOSTER CARE AND FAMILY CHILD CARE.] (a) For a 
        background study conducted by a county or private agency for 
        child foster care, adult foster care, and family child care 
        homes, the commissioner shall review: 
           (1) information from the county agency's record of 
        substantiated maltreatment of adults and the maltreatment of 
        minors; 
           (2) information from juvenile courts as required in 
        subdivision 4 for individuals listed in section 245C.03, 
        subdivision 1, clauses (2), (5), and (6); and 
           (3) information from the Bureau of Criminal Apprehension; 
        and 
           (4) arrest and investigative records maintained by the 
        Bureau of Criminal Apprehension, county attorneys, county 
        sheriffs, courts, county agencies, local police, the National 
        Criminal Records Repository, and criminal records from other 
        states. 
           (b) If the individual has resided in the county for less 
        than five years, the study shall include the records specified 
        under paragraph (a) for the previous county or counties of 
        residence for the past five years. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 46.  Minnesota Statutes 2003 Supplement, section 
        245C.08, subdivision 3, is amended to read: 
           Subd. 3.  [ARREST AND INVESTIGATIVE INFORMATION.] (a) For 
        any background study completed under this section, if the 
        commissioner has reasonable cause to believe the information is 
        pertinent to the disqualification of an individual listed in 
        section 245C.03, subdivisions 1 and 2, the commissioner also may 
        review arrest and investigative information from: 
           (1) the Bureau of Criminal Apprehension; 
           (2) the commissioner of health; 
           (3) a county attorney; 
           (4) a county sheriff; 
           (5) a county agency; 
           (6) a local chief of police; 
           (7) other states; 
           (8) the courts; or 
           (9) the Federal Bureau of Investigation. 
           (b) The commissioner is not required to conduct more than 
        one review of a subject's records from the Federal Bureau of 
        Investigation if a review of the subject's criminal history with 
        the Federal Bureau of Investigation has already been completed 
        by the commissioner and there has been no break in the subject's 
        affiliation with the license holder who initiated the background 
        study. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 47.  Minnesota Statutes 2003 Supplement, section 
        245C.08, subdivision 4, is amended to read: 
           Subd. 4.  [JUVENILE COURT RECORDS.] (a) The commissioner 
        shall review records from the juvenile courts for an individual 
        studied under section 245C.03, subdivision 1, clauses (2) and 
        (5). 
           (b) For individuals studied under section 245C.03, 
        subdivision 1, clauses (1), (3), (4), and (6), and subdivision 
        2, who are ages 13 to 17, the commissioner shall review records 
        from the juvenile courts when the commissioner has reasonable 
        cause. 
           (c) The juvenile courts shall help with the study by giving 
        the commissioner existing juvenile court records on individuals 
        described in section 245C.03, subdivision 1, clauses (2), (5), 
        and (6), relating to delinquency proceedings held within either 
        the five years immediately preceding the background study or the 
        five years immediately preceding the individual's 18th birthday, 
        whichever time period is longer. 
           (d) For purposes of this chapter, a finding that a 
        delinquency petition is proven in juvenile court shall be 
        considered a conviction in state district court. 
           (e) The commissioner shall destroy juvenile court records 
        obtained under this subdivision when the subject of the records 
        reaches age 23. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 48.  Minnesota Statutes 2003 Supplement, section 
        245C.09, subdivision 1, is amended to read: 
           Subdivision 1.  [DISQUALIFICATION; LICENSING ACTION.] An 
        applicant's, license holder's, or registrant's other entity's 
        failure or refusal to cooperate with the commissioner is 
        reasonable cause to disqualify a subject, deny a license 
        application, or immediately suspend or revoke a license or 
        registration. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 49.  Minnesota Statutes 2003 Supplement, section 
        245C.13, subdivision 1, is amended to read: 
           Subdivision 1.  [TIMING.] Upon receipt of the background 
        study forms from an applicant, license holder, registrant, 
        agency, organization, program, or other entity as provided in 
        this chapter required to initiate a background study under 
        section 245C.04, the commissioner shall complete the background 
        study and provide the notice required under section 245C.17, 
        subdivision 1, within 15 working days. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 50.  Minnesota Statutes 2003 Supplement, section 
        245C.14, subdivision 1, is amended to read: 
           Subdivision 1.  [DISQUALIFICATION FROM DIRECT CONTACT.] (a) 
        The commissioner shall disqualify an individual who is the 
        subject of a background study from any position allowing direct 
        contact with persons receiving services from the license holder 
        or entity identified in section 245C.03, upon receipt of 
        information showing, or when a background study completed under 
        this chapter shows any of the following: 
           (1) a conviction of or admission to one or more crimes 
        listed in section 245C.15, regardless of whether the conviction 
        or admission is a felony, gross misdemeanor, or misdemeanor 
        level crime; 
           (2) a preponderance of the evidence indicates the 
        individual has committed an act or acts that meet the definition 
        of any of the crimes listed in section 245C.15, regardless of 
        whether the preponderance of the evidence is for a felony, gross 
        misdemeanor, or misdemeanor level crime; or 
           (3) an investigation results in an administrative 
        determination listed under section 245C.15, subdivision 4, 
        paragraph (b). 
           (b) No individual who is disqualified following a 
        background study under section 245C.03, subdivisions 1 and 2, 
        may be retained in a position involving direct contact with 
        persons served by a program or entity identified in section 
        245C.03, unless the commissioner has provided written notice 
        under section 245C.17 stating that: 
           (1) the individual may remain in direct contact during the 
        period in which the individual may request reconsideration as 
        provided in section 245C.21, subdivision 2; 
           (2) the commissioner has set aside the individual's 
        disqualification for that program or entity identified in 
        section 245C.03, as provided in section 245C.22, subdivision 4; 
        or 
           (3) the license holder has been granted a variance for the 
        disqualified individual under section 245C.30. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 51.  Minnesota Statutes 2003 Supplement, section 
        245C.15, subdivision 2, is amended to read: 
           Subd. 2.  [15-YEAR DISQUALIFICATION.] (a) An individual is 
        disqualified under section 245C.14 if:  (1) less than 15 years 
        have passed since the discharge of the sentence imposed for the 
        offense; and (2) the individual has received a felony conviction 
        for a violation of any of the following offenses:  sections 
        260C.301 (grounds for termination of parental rights); 609.165 
        (felon ineligible to possess firearm); 609.21 (criminal 
        vehicular homicide and injury); 609.215 (suicide); 609.223 or 
        609.2231 (assault in the third or fourth degree); repeat 
        offenses under 609.224 (assault in the fifth degree); 609.2325 
        (criminal abuse of a vulnerable adult); 609.2335 (financial 
        exploitation of a vulnerable adult); 609.235 (use of drugs to 
        injure or facilitate crime); 609.24 (simple robbery); 609.255 
        (false imprisonment); 609.2664 (manslaughter of an unborn child 
        in the first degree); 609.2665 (manslaughter of an unborn child 
        in the second degree); 609.267 (assault of an unborn child in 
        the first degree); 609.2671 (assault of an unborn child in the 
        second degree); 609.268 (injury or death of an unborn child in 
        the commission of a crime); 609.27 (coercion); 609.275 (attempt 
        to coerce); repeat offenses under 609.3451 (criminal sexual 
        conduct in the fifth degree); 609.498, subdivision 1 or 1b 
        (aggravated first degree or first degree tampering with a 
        witness); 609.52 (theft); 609.521 (possession of shoplifting 
        gear); 609.562 (arson in the second degree); 609.563 (arson in 
        the third degree); 609.582 (burglary); 609.625 (aggravated 
        forgery); 609.63 (forgery); 609.631 (check forgery; offering a 
        forged check); 609.635 (obtaining signature by false pretense); 
        609.66 (dangerous weapons); 609.67 (machine guns and 
        short-barreled shotguns); 609.687 (adulteration); 609.71 (riot); 
        609.713 (terroristic threats); repeat offenses under 617.23 
        (indecent exposure; penalties); repeat offenses under 617.241 
        (obscene materials and performances; distribution and exhibition 
        prohibited; penalty); chapter 152 (drugs; controlled substance); 
        or a felony level conviction involving alcohol or drug use. 
           (b) An individual is disqualified under section 245C.14 if 
        less than 15 years has passed since the individual's attempt or 
        conspiracy to commit any of the offenses listed in paragraph 
        (a), as each of these offenses is defined in Minnesota Statutes. 
           (c) An individual is disqualified under section 245C.14 if 
        less than 15 years has passed since the discharge of the 
        sentence imposed for an offense in any other state or country, 
        the elements of which are substantially similar to the elements 
        of the offenses listed in paragraph (a). 
           (d) If the individual studied is convicted of one of the 
        felonies listed in paragraph (a), but the sentence is a gross 
        misdemeanor or misdemeanor disposition, the individual is 
        disqualified but the disqualification lookback period for the 
        conviction is the period applicable to the gross misdemeanor or 
        misdemeanor disposition. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 52.  Minnesota Statutes 2003 Supplement, section 
        245C.15, subdivision 3, is amended to read: 
           Subd. 3.  [TEN-YEAR DISQUALIFICATION.] (a) An individual is 
        disqualified under section 245C.14 if:  (1) less than ten years 
        have passed since the discharge of the sentence imposed for the 
        offense; and (2) the individual has received a gross misdemeanor 
        conviction for a violation of any of the following offenses:  
        sections 609.224 (assault in the fifth degree); 609.224, 
        subdivision 2, paragraph (c) (assault in the fifth degree by a 
        caregiver against a vulnerable adult); 609.2242 and 609.2243 
        (domestic assault); 609.23 (mistreatment of persons confined); 
        609.231 (mistreatment of residents or patients); 609.2325 
        (criminal abuse of a vulnerable adult); 609.233 (criminal 
        neglect of a vulnerable adult); 609.2335 (financial exploitation 
        of a vulnerable adult); 609.234 (failure to report maltreatment 
        of a vulnerable adult); 609.265 (abduction); 609.275 (attempt to 
        coerce); 609.324, subdivision 1a (other prohibited acts; minor 
        engaged in prostitution); 609.33 (disorderly house); 609.3451 
        (criminal sexual conduct in the fifth degree); 609.377 
        (malicious punishment of a child); 609.378 (neglect or 
        endangerment of a child); 609.52 (theft); 609.582 (burglary); 
        609.631 (check forgery; offering a forged check); 609.66 
        (dangerous weapons); 609.71 (riot); 609.72, subdivision 3 
        (disorderly conduct against a vulnerable adult); repeat offenses 
        under 609.746 (interference with privacy); 609.749, subdivision 
        2 (harassment; stalking); repeat offenses under 617.23 (indecent 
        exposure); 617.241 (obscene materials and performances); 617.243 
        (indecent literature, distribution); 617.293 (harmful materials; 
        dissemination and display to minors prohibited); or violation of 
        an order for protection under section 518B.01, subdivision 14. 
           (b) An individual is disqualified under section 245C.14 if 
        less than ten years has passed since the individual's attempt or 
        conspiracy to commit any of the offenses listed in paragraph 
        (a), as each of these offenses is defined in Minnesota Statutes. 
           (c) An individual is disqualified under section 245C.14 if 
        less than ten years has passed since the discharge of the 
        sentence imposed for an offense in any other state or country, 
        the elements of which are substantially similar to the elements 
        of any of the offenses listed in paragraph (a). 
           (d) If the defendant is convicted of one of the gross 
        misdemeanors listed in paragraph (a), but the sentence is a 
        misdemeanor disposition, the individual is disqualified but the 
        disqualification lookback period for the conviction is the 
        period applicable to misdemeanors. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 53.  Minnesota Statutes 2003 Supplement, section 
        245C.15, subdivision 4, is amended to read: 
           Subd. 4.  [SEVEN-YEAR DISQUALIFICATION.] (a) An individual 
        is disqualified under section 245C.14 if:  (1) less than seven 
        years has passed since the discharge of the sentence imposed for 
        the offense; and (2) the individual has received a misdemeanor 
        conviction for a violation of any of the following offenses:  
        sections 609.224 (assault in the fifth degree); 609.2242 
        (domestic assault); 609.2335 (financial exploitation of a 
        vulnerable adult); 609.234 (failure to report maltreatment of a 
        vulnerable adult); 609.2672 (assault of an unborn child in the 
        third degree); 609.27 (coercion); violation of an order for 
        protection under 609.3232 (protective order authorized; 
        procedures; penalties); 609.52 (theft); 609.66 (dangerous 
        weapons); 609.665 (spring guns); 609.746 (interference with 
        privacy); 609.79 (obscene or harassing phone calls); 609.795 
        (letter, telegram, or package; opening; harassment); 617.23 
        (indecent exposure; penalties); 617.293 (harmful materials; 
        dissemination and display to minors prohibited); or violation of 
        an order for protection under section 518B.01 (Domestic Abuse 
        Act). 
           (b) An individual is disqualified under section 245C.14 if 
        less than seven years has passed since a determination or 
        disposition of the individual's: 
           (1) failure to make required reports under section 626.556, 
        subdivision 3, or 626.557, subdivision 3, for incidents in 
        which:  (i) the final disposition under section 626.556 or 
        626.557 was substantiated maltreatment, and (ii) the 
        maltreatment was recurring or serious; or 
           (2) substantiated serious or recurring maltreatment of a 
        minor under section 626.556 or of, a vulnerable adult under 
        section 626.557, or serious or recurring maltreatment in any 
        other state, the elements of which are substantially similar to 
        the elements of maltreatment under section 626.556 or 626.557 
        for which:  (i) there is a preponderance of evidence that the 
        maltreatment occurred, and (ii) the subject was responsible for 
        the maltreatment. 
           (c) An individual is disqualified under section 245C.14 if 
        less than seven years has passed since the individual's attempt 
        or conspiracy to commit any of the offenses listed in paragraphs 
        (a) and (b), as each of these offenses is defined in Minnesota 
        Statutes. 
           (d) An individual is disqualified under section 245C.14 if 
        less than seven years has passed since the discharge of the 
        sentence imposed for an offense in any other state or country, 
        the elements of which are substantially similar to the elements 
        of any of the offenses listed in paragraphs (a) and (b). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 54.  Minnesota Statutes 2003 Supplement, section 
        245C.16, subdivision 1, is amended to read: 
           Subdivision 1.  [DETERMINING IMMEDIATE RISK OF HARM.] (a) 
        If the commissioner determines that the individual studied has a 
        disqualifying characteristic, the commissioner shall review the 
        information immediately available and make a determination as to 
        the subject's immediate risk of harm to persons served by the 
        program where the individual studied will have direct contact. 
           (b) The commissioner shall consider all relevant 
        information available, including the following factors in 
        determining the immediate risk of harm: 
           (1) the recency of the disqualifying characteristic; 
           (2) the recency of discharge from probation for the crimes; 
           (3) the number of disqualifying characteristics; 
           (4) the intrusiveness or violence of the disqualifying 
        characteristic; 
           (5) the vulnerability of the victim involved in the 
        disqualifying characteristic; and 
           (6) the similarity of the victim to the persons served by 
        the program where the individual studied will have direct 
        contact; and 
           (7) whether the individual has a disqualification from a 
        previous background study that has not been set aside. 
           (c) This section does not apply when the subject of a 
        background study is regulated by a health-related licensing 
        board as defined in chapter 214, and the subject is determined 
        to be responsible for substantiated maltreatment under section 
        626.556 or 626.557. 
           (d) If the commissioner has reason to believe, based on 
        arrest information or an active maltreatment investigation, that 
        an individual poses an imminent risk of harm to persons 
        receiving services, the commissioner may order that the person 
        be continuously supervised or immediately removed pending the 
        conclusion of the maltreatment investigation or criminal 
        proceedings. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 55.  Minnesota Statutes 2003 Supplement, section 
        245C.17, subdivision 1, is amended to read: 
           Subdivision 1.  [TIME FRAME FOR NOTICE OF STUDY RESULTS.] 
        (a) Within 15 working days after the commissioner's receipt of 
        the background study form, the commissioner shall notify the 
        individual who is the subject of the study in writing or by 
        electronic transmission of the results of the study or that more 
        time is needed to complete the study. 
           (b) Within 15 working days after the commissioner's receipt 
        of the background study form, the commissioner shall notify the 
        applicant, license holder, or registrant other entity as 
        provided in this chapter in writing or by electronic 
        transmission of the results of the study or that more time is 
        needed to complete the study. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 56.  Minnesota Statutes 2003 Supplement, section 
        245C.17, subdivision 3, is amended to read: 
           Subd. 3.  [DISQUALIFICATION NOTICE SENT TO APPLICANT, 
        LICENSE HOLDER, OR REGISTRANT OTHER ENTITY.] (a) The 
        commissioner shall notify an applicant, license holder, 
        or registrant other entity as provided in this chapter who is 
        not the subject of the study: 
           (1) that the commissioner has found information that 
        disqualifies the individual studied from direct contact with, or 
        from access to, persons served by the program; and 
           (2) the commissioner's determination of the individual's 
        risk of harm under section 245C.16. 
           (b) If the commissioner determines under section 245C.16 
        that an individual studied poses an imminent risk of harm to 
        persons served by the program where the individual studied will 
        have direct contact, the commissioner shall order the license 
        holder to immediately remove the individual studied from direct 
        contact. 
           (c) If the commissioner determines under section 245C.16 
        that an individual studied poses a risk of harm that requires 
        continuous, direct supervision, the commissioner shall order the 
        applicant, license holder, or other entities as provided in this 
        chapter to: 
           (1) immediately remove the individual studied from direct 
        contact services; or 
           (2) assure that the individual studied is under continuous, 
        direct supervision when providing direct contact services during 
        the period in which the individual may request a reconsideration 
        of the disqualification under section 245C.21. 
           (d) If the commissioner determines under section 245C.16 
        that an individual studied does not pose a risk of harm that 
        requires continuous, direct supervision, the commissioner shall 
        send the license holder a notice that more time is needed to 
        complete the individual's background study. 
           (e) The commissioner shall not notify the applicant, 
        license holder, or registrant other entity as provided in this 
        chapter of the information contained in the subject's background 
        study unless: 
           (1) the basis for the disqualification is failure to 
        cooperate with the background study or substantiated 
        maltreatment under section 626.556 or 626.557; 
           (2) the Data Practices Act under chapter 13 provides for 
        release of the information; or 
           (3) the individual studied authorizes the release of the 
        information. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 57.  Minnesota Statutes 2003 Supplement, section 
        245C.18, is amended to read: 
           245C.18 [OBLIGATION TO REMOVE DISQUALIFIED INDIVIDUAL FROM 
        DIRECT CONTACT.] 
           Upon receipt of notice from the commissioner, the license 
        holder must remove a disqualified individual from direct contact 
        with persons served by the licensed program if:  
           (1) the individual does not request reconsideration under 
        section 245C.21 within the prescribed time, or if; 
           (2) the individual submits a timely request for 
        reconsideration, and the commissioner does not set aside the 
        disqualification under section 245C.22, subdivision 4., and the 
        individual does not submit a timely request for a hearing under 
        sections 245C.27 and 256.045, or 245C.28 and chapter 14; or 
           (3) the individual submits a timely request for a hearing 
        under sections 245C.27 and 256.045, or 245C.28 and chapter 14, 
        and the commissioner does not set aside or rescind the 
        disqualification under section 245A.08, subdivision 5, or 
        256.045. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 58.  Minnesota Statutes 2003 Supplement, section 
        245C.20, is amended to read: 
           245C.20 [LICENSE HOLDER RECORD KEEPING.] 
           A licensed program shall document the date the program 
        initiates a background study under this chapter in the program's 
        personnel files.  When a background study is completed under 
        this chapter, a licensed program shall maintain a notice that 
        the study was undertaken and completed in the program's 
        personnel files.  If a licensed program has not received a 
        response from the commissioner under section 245C.17 within 45 
        days of initiation of the background study request, the licensed 
        program must contact the commissioner to inquire about the 
        status of the study. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 59.  Minnesota Statutes 2003 Supplement, section 
        245C.21, subdivision 3, is amended to read: 
           Subd. 3.  [INFORMATION DISQUALIFIED INDIVIDUALS MUST 
        PROVIDE WHEN REQUESTING RECONSIDERATION.] The disqualified 
        individual requesting reconsideration must submit information 
        showing that: 
           (1) the information the commissioner relied upon in 
        determining the underlying conduct that gave rise to the 
        disqualification is incorrect; 
           (2) for maltreatment, the information the commissioner 
        relied upon in determining that maltreatment was serious or 
        recurring is incorrect; or 
           (3) the subject of the study does not pose a risk of harm 
        to any person served by the applicant, license holder, or 
        registrant other entities as provided in this chapter, by 
        addressing the information required under section 245C.22, 
        subdivision 4. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 60.  Minnesota Statutes 2003 Supplement, section 
        245C.21, is amended by adding a subdivision to read: 
           Subd. 4.  [NOTICE OF REQUEST FOR RECONSIDERATION.] Upon 
        request, the commissioner may inform the applicant, license 
        holder, or other entities as provided in this chapter who 
        received a notice of the individual's disqualification under 
        section 245C.17, subdivision 3, or has the consent of the 
        disqualified individual, whether the disqualified individual has 
        requested reconsideration. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 61.  Minnesota Statutes 2003 Supplement, section 
        245C.22, subdivision 3, is amended to read: 
           Subd. 3.  [PREEMINENT WEIGHT GIVEN TO SAFETY OF PERSONS 
        BEING SERVED.] In reviewing a request for reconsideration of a 
        disqualification, the commissioner shall give preeminent weight 
        to the safety of each person served by the license holder, 
        applicant, or registrant other entities as provided in this 
        chapter over the interests of the license holder, applicant, 
        or registrant other entity as provided in this chapter, and any 
        single factor under subdivision 4, paragraph (b), may be 
        determinative of the commissioner's decision whether to set 
        aside the individual's disqualification. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 62.  Minnesota Statutes 2003 Supplement, section 
        245C.22, subdivision 4, is amended to read: 
           Subd. 4.  [RISK OF HARM; SET ASIDE.] (a) The commissioner 
        may set aside the disqualification if the commissioner finds 
        that the individual has submitted sufficient information to 
        demonstrate that the individual does not pose a risk of harm to 
        any person served by the applicant, license holder, 
        or registrant other entities as provided in this chapter. 
           (b) In determining if whether the individual has met the 
        burden of proof by demonstrating the individual does not pose a 
        risk of harm, the commissioner shall consider: 
           (1) the nature, severity, and consequences of the event or 
        events that led to the disqualification; 
           (2) whether there is more than one disqualifying event; 
           (3) the age and vulnerability of the victim at the time of 
        the event; 
           (4) the harm suffered by the victim; 
           (5) the similarity between the victim and persons served by 
        the program; 
           (6) the time elapsed without a repeat of the same or 
        similar event; 
           (7) documentation of successful completion by the 
        individual studied of training or rehabilitation pertinent to 
        the event; and 
           (8) any other information relevant to reconsideration. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 63.  Minnesota Statutes 2003 Supplement, section 
        245C.22, subdivision 5, is amended to read: 
           Subd. 5.  [SCOPE OF SET ASIDE.] If the commissioner sets 
        aside a disqualification under this section, the disqualified 
        individual remains disqualified, but may hold a license and have 
        direct contact with or access to persons receiving services.  
        The commissioner's set aside of a disqualification is limited 
        solely to the licensed program, applicant, or agency specified 
        in the set aside notice under section 245C.23, unless otherwise 
        specified in the notice. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 64.  Minnesota Statutes 2003 Supplement, section 
        245C.22, subdivision 6, is amended to read: 
           Subd. 6.  [RECISION OF SET ASIDE.] The commissioner may 
        rescind a previous set aside of a disqualification under this 
        section based on new information that indicates the individual 
        may pose a risk of harm to persons served by the applicant, 
        license holder, or registrant other entities as provided in this 
        chapter.  If the commissioner rescinds a set aside of a 
        disqualification under this paragraph subdivision, the appeal 
        rights under sections 245C.21 and, 245C.27, subdivision 1, and 
        245C.28, subdivision 3, shall apply. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 65.  Minnesota Statutes 2003 Supplement, section 
        245C.23, subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER'S NOTICE OF DISQUALIFICATION 
        THAT IS SET ASIDE.] (a) Except as provided under paragraph (c), 
        if the commissioner sets aside a disqualification, the 
        commissioner shall notify the applicant or license holder in 
        writing or by electronic transmission of the decision.  In the 
        notice from the commissioner that a disqualification has been 
        set aside, the commissioner must inform the license holder that 
        information about the nature of the disqualification and which 
        factors under section 245C.22, subdivision 4, were the basis of 
        the decision to set aside the disqualification are available to 
        the license holder upon request without the consent of the 
        background study subject. 
           (b) With the written consent of the background study 
        subject, the commissioner may release to the license holder 
        copies of all information related to the background study 
        subject's disqualification and the commissioner's decision to 
        set aside the disqualification as specified in the written 
        consent. 
           (c) If the individual studied submits a timely request for 
        reconsideration under section 245C.21 and the license holder was 
        previously sent a notice under section 245C.17, subdivision 3, 
        paragraph (d), and if the commissioner sets aside the 
        disqualification for that license holder under section 245C.22, 
        the commissioner shall send the license holder the same 
        notification received by license holders in cases where the 
        individual studied has no disqualifying characteristic. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 66.  Minnesota Statutes 2003 Supplement, section 
        245C.23, subdivision 2, is amended to read: 
           Subd. 2.  [COMMISSIONER'S NOTICE OF DISQUALIFICATION THAT 
        IS NOT SET ASIDE.] (a) The commissioner shall notify the license 
        holder of the disqualification and order the license holder to 
        immediately remove the individual from any position allowing 
        direct contact with persons receiving services from the license 
        holder if:  
           (1) the individual studied does not submit a timely request 
        for reconsideration under section 245C.21, or; 
           (2) the individual submits a timely request for 
        reconsideration, but the commissioner does not set aside the 
        disqualification for that license holder under section 245C.22, 
        the commissioner shall notify the license holder of the 
        disqualification and order the license holder to immediately 
        remove the individual from any position allowing direct contact 
        with persons receiving services from the license holder.; 
           (3) an individual who has a right to request a hearing 
        under sections 245C.27 and 256.045, or 245C.28 and chapter 14 
        for a disqualification that has not been set aside, does not 
        request a hearing within the specified time; or 
           (4) an individual submitted a timely request for a hearing 
        under sections 245C.27 and 256.045, or 245C.28 and chapter 14, 
        but the commissioner does not set aside the disqualification 
        under section 245A.08, subdivision 5, or 256.045. 
           (b) If the commissioner does not set aside the 
        disqualification under section 245C.22, and the license holder 
        was previously ordered under section 245C.17 to immediately 
        remove the disqualified individual from direct contact with 
        persons receiving services or to ensure that the individual is 
        under continuous, direct supervision when providing direct 
        contact services, the order remains in effect pending the 
        outcome of a hearing under sections 245C.27 and 256.045, or 
        245C.28 and chapter 14. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 67.  Minnesota Statutes 2003 Supplement, section 
        245C.25, is amended to read: 
           245C.25 [CONSOLIDATED RECONSIDERATION OF MALTREATMENT 
        DETERMINATION AND DISQUALIFICATION.] 
           (a) If an individual is disqualified on the basis of a 
        determination of maltreatment under section 626.556 or 626.557, 
        which was serious or recurring, and the individual requests 
        reconsideration of the maltreatment determination under section 
        626.556, subdivision 10i, or 626.557, subdivision 9d, and also 
        requests reconsideration of the disqualification under section 
        245C.21, the commissioner shall consolidate the reconsideration 
        of the maltreatment determination and the disqualification into 
        a single reconsideration. 
           (b) For maltreatment and disqualification determinations 
        made by county agencies, the county agency shall conduct the 
        consolidated reconsideration.  If the county agency has 
        disqualified an individual on multiple bases, one of which is a 
        county maltreatment determination for which the individual has a 
        right to request reconsideration, the county shall conduct the 
        reconsideration of all disqualifications. 
           (c) If the county has previously conducted a consolidated 
        reconsideration under paragraph (b) of a maltreatment 
        determination and a disqualification based on serious or 
        recurring maltreatment, and the county subsequently disqualifies 
        the individual based on that determination, the county shall 
        conduct the reconsideration of the subsequent disqualification.  
        The scope of the subsequent disqualification shall be limited to 
        whether the individual poses a risk of harm in accordance with 
        section 245C.22, subdivision 4. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 68.  Minnesota Statutes 2003 Supplement, section 
        245C.26, is amended to read: 
           245C.26 [RECONSIDERATION OF A DISQUALIFICATION FOR AN 
        INDIVIDUAL LIVING IN A LICENSED HOME.] 
           In the case of any ground for disqualification under this 
        chapter, if the act was committed by an individual other than 
        the applicant, or license holder, or registrant residing in the 
        applicant's, or license holder's, or registrant's home, the 
        applicant, or license holder, or registrant may seek 
        reconsideration when the individual who committed the act no 
        longer resides in the home. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 69.  Minnesota Statutes 2003 Supplement, section 
        245C.27, subdivision 1, is amended to read: 
           Subdivision 1.  [FAIR HEARING WHEN DISQUALIFICATION IS NOT 
        SET ASIDE.] (a) If the commissioner does not set aside or 
        rescind a disqualification of an individual under section 
        245C.22 who is disqualified on the basis of a preponderance of 
        evidence that the individual committed an act or acts that meet 
        the definition of any of the crimes listed in section 245C.15; 
        for a determination under section 626.556 or 626.557 of 
        substantiated maltreatment that was serious or recurring under 
        section 245C.15; or for failure to make required reports under 
        section 626.556, subdivision 3; or 626.557, subdivision 3, 
        pursuant to section 245C.15, subdivision 4, paragraph (b), 
        clause (1), the individual may request a fair hearing under 
        section 256.045, unless the disqualification is deemed 
        conclusive under section 245C.29. 
           (b) The fair hearing is the only administrative appeal of 
        the final agency determination for purposes of appeal by the 
        disqualified individual.  The disqualified individual does not 
        have the right to challenge the accuracy and completeness of 
        data under section 13.04. 
           (c) If the individual was disqualified based on a 
        conviction or admission to any crimes listed in section 245C.15, 
        subdivisions 1 to 4, the reconsideration decision under this 
        subdivision section 245C.22 is the final agency determination 
        for purposes of appeal by the disqualified individual and is not 
        subject to a hearing under section 256.045. 
           (d) This section subdivision does not apply to a public 
        employee's appeal of a disqualification under section 245C.28, 
        subdivision 3. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 70.  Minnesota Statutes 2003 Supplement, section 
        245C.27, subdivision 2, is amended to read: 
           Subd. 2.  [CONSOLIDATED FAIR HEARING FOR MALTREATMENT 
        DETERMINATION AND DISQUALIFICATION NOT SET ASIDE.] (a) If an 
        individual who is disqualified on the bases of serious or 
        recurring maltreatment requests a fair hearing on the 
        maltreatment determination under section 626.556, subdivision 
        10i, or 626.557, subdivision 9d, and requests a fair hearing 
        under this section on the disqualification, which has not been 
        set aside or rescinded, the scope of the fair hearing under 
        section 256.045 shall include the maltreatment determination and 
        the disqualification. 
           (b) A fair hearing is the only administrative appeal of the 
        final agency determination.  The disqualified individual does 
        not have the right to challenge the accuracy and completeness of 
        data under section 13.04. 
           (c) This section subdivision does not apply to a public 
        employee's appeal of a disqualification under section 245C.28, 
        subdivision 3. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 71.  Minnesota Statutes 2003 Supplement, section 
        245C.28, subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSE HOLDER.] (a) If a maltreatment 
        determination or a disqualification for which reconsideration 
        was requested and which was not set aside or rescinded is the 
        basis for a denial of a license under section 245A.05 or a 
        licensing sanction under section 245A.07, the license holder has 
        the right to a contested case hearing under chapter 14 and 
        Minnesota Rules, parts 1400.8505 to 1400.8612. 
           (b) The license holder must submit the appeal in accordance 
        with section 245A.05 or 245A.07, subdivision 3.  As provided 
        under section 245A.08, subdivision 2a, the scope of the 
        consolidated contested case hearing must include the 
        disqualification and the licensing sanction or denial of a 
        license. 
           (c) If the disqualification was based on a determination of 
        substantiated serious or recurring maltreatment under section 
        626.556 or 626.557, the appeal must be submitted in accordance 
        with sections 245A.07, subdivision 3, and 626.556, subdivision 
        10i, or 626.557, subdivision 9d.  As provided for under section 
        245A.08, subdivision 2a, the scope of the contested case hearing 
        must include the maltreatment determination, the 
        disqualification, and the licensing sanction or denial of a 
        license.  In such cases, a fair hearing must not be conducted 
        under section 256.045. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 72.  Minnesota Statutes 2003 Supplement, section 
        245C.28, subdivision 2, is amended to read: 
           Subd. 2.  [INDIVIDUAL OTHER THAN LICENSE HOLDER.] If the 
        basis for the commissioner's denial of a license under section 
        245A.05 or a licensing sanction under section 245A.07 is a 
        maltreatment determination or disqualification that was not set 
        aside or rescinded under section 245C.22, and the disqualified 
        subject is an individual other than the license holder and upon 
        whom a background study must be conducted under section 245C.03, 
        the hearing of all parties may be consolidated into a single 
        contested case hearing upon consent of all parties and the 
        administrative law judge. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 73.  Minnesota Statutes 2003 Supplement, section 
        245C.28, subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYEES OF PUBLIC EMPLOYER.] (a) If the 
        commissioner does not set aside the disqualification of an 
        individual who is an employee of an employer, as defined in 
        section 179A.03, subdivision 15, the individual may request a 
        contested case hearing under chapter 14.  The request for a 
        contested case hearing must be made in writing and must be 
        postmarked and mailed within 30 calendar days after the employee 
        receives notice that the disqualification has not been set aside.
           (b) If the commissioner does not set aside or rescind a 
        disqualification that is based on a maltreatment determination, 
        the scope of the contested case hearing must include the 
        maltreatment determination and the disqualification.  In such 
        cases, a fair hearing must not be conducted under section 
        256.045. 
           (c) Rules adopted under this chapter may not preclude an 
        employee in a contested case hearing for a disqualification from 
        submitting evidence concerning information gathered under this 
        chapter. 
           (d) When a person has been disqualified from multiple 
        licensed programs and the disqualifications have not been set 
        aside under section 245C.22, if at least one of the 
        disqualifications entitles the person to a contested case 
        hearing under this subdivision, the scope of the contested case 
        hearing shall include all disqualifications from licensed 
        programs which were not set aside. 
           (e) In determining whether the disqualification should be 
        set aside, the administrative law judge shall consider all of 
        the characteristics that cause the individual to be 
        disqualified, including those characteristics that were not 
        subject to review under paragraph (b), in order to determine 
        whether the individual poses a risk of harm.  The administrative 
        law judge's recommendation and the commissioner's order to set 
        aside a disqualification that is the subject of the hearing 
        constitutes a determination that the individual does not pose a 
        risk of harm and that the individual may provide direct contact 
        services in the individual program specified in the set aside. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 74.  Minnesota Statutes 2003 Supplement, section 
        245C.29, subdivision 2, is amended to read: 
           Subd. 2.  [CONCLUSIVE DISQUALIFICATION DETERMINATION.] (a) 
        Unless otherwise specified in statute, a determination that: 
           (1) the information the commissioner relied upon to 
        disqualify an individual under section 245C.14 was correct based 
        on serious or recurring maltreatment; 
           (2) a preponderance of the evidence shows that the 
        individual committed an act or acts that meet the definition of 
        any of the crimes listed in section 245C.15; or 
           (3) the individual failed to make required reports under 
        section 626.556, subdivision 3, or 626.557, subdivision 3, is 
        conclusive if: 
           (i) the commissioner has issued a final order in an appeal 
        of that determination under section 245A.08, subdivision 5, or 
        256.045, or a court has issued a final decision; 
           (ii) the individual did not request reconsideration of the 
        disqualification under section 245C.21; or 
           (iii) the individual did not request a hearing on the 
        disqualification under section 256.045 or chapter 14. 
           (b) When a licensing action under section 245A.05, 245A.06, 
        or 245A.07 is based on the disqualification of an individual in 
        connection with a license to provide family child care, foster 
        care for children in the provider's own home, or foster care 
        services for adults in the provider's own home, that 
        disqualification shall be conclusive for purposes of the 
        licensing action if a request for reconsideration was not 
        submitted within 30 calendar days of the individual's receipt of 
        the notice of disqualification. 
           (c) If a determination that the information relied upon to 
        disqualify an individual was correct and is conclusive under 
        this section, and the individual is subsequently disqualified 
        under section 245C.15, the individual has a right to request 
        reconsideration on the risk of harm under section 245C.21.  
        Subsequent determinations regarding the risk of harm shall be 
        made according to section 245C.22 and are not subject to another 
        hearing under section 256.045 or chapter 14. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 75.  Minnesota Statutes 2002, section 252.28, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DETERMINATIONS; REDETERMINATIONS.] In 
        conjunction with the appropriate county boards, the commissioner 
        of human services shall determine, and shall redetermine at 
        least every four years, the need, anticipated growth or decline 
        in need until the next anticipated redetermination, location, 
        size, and program of public and private day training and 
        habilitation services for persons with mental retardation or 
        related conditions.  This subdivision does not apply to 
        semi-independent living services and residential-based 
        habilitation services provided to four or fewer persons at a 
        single site funded as home and community-based services.  A 
        determination of need shall not be required for a change in 
        ownership. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 76.  Minnesota Statutes 2003 Supplement, section 
        256.045, subdivision 3, is amended to read: 
           Subd. 3.  [STATE AGENCY HEARINGS.] (a) State agency 
        hearings are available for the following:  (1) any person 
        applying for, receiving or having received public assistance, 
        medical care, or a program of social services granted by the 
        state agency or a county agency or the federal Food Stamp Act 
        whose application for assistance is denied, not acted upon with 
        reasonable promptness, or whose assistance is suspended, 
        reduced, terminated, or claimed to have been incorrectly paid; 
        (2) any patient or relative aggrieved by an order of the 
        commissioner under section 252.27; (3) a party aggrieved by a 
        ruling of a prepaid health plan; (4) except as provided under 
        chapter 245C, any individual or facility determined by a lead 
        agency to have maltreated a vulnerable adult under section 
        626.557 after they have exercised their right to administrative 
        reconsideration under section 626.557; (5) any person whose 
        claim for foster care payment according to a placement of the 
        child resulting from a child protection assessment under section 
        626.556 is denied or not acted upon with reasonable promptness, 
        regardless of funding source; (6) any person to whom a right of 
        appeal according to this section is given by other provision of 
        law; (7) an applicant aggrieved by an adverse decision to an 
        application for a hardship waiver under section 256B.15; (8) 
        except as provided under chapter 245A, an individual or facility 
        determined to have maltreated a minor under section 626.556, 
        after the individual or facility has exercised the right to 
        administrative reconsideration under section 626.556; or (9) 
        except as provided under chapter 245C, an individual 
        disqualified under sections 245C.14 and 245C.15, on the basis of 
        serious or recurring maltreatment; a preponderance of the 
        evidence that the individual has committed an act or acts that 
        meet the definition of any of the crimes listed in section 
        245C.15, subdivisions 1 to 4; or for failing to make reports 
        required under section 626.556, subdivision 3, or 626.557, 
        subdivision 3.  Hearings regarding a maltreatment determination 
        under clause (4) or (8) and a disqualification under this clause 
        in which the basis for a disqualification is serious or 
        recurring maltreatment, which has not been set aside or 
        rescinded under sections 245C.22 and 245C.23, shall be 
        consolidated into a single fair hearing.  In such cases, the 
        scope of review by the human services referee shall include both 
        the maltreatment determination and the disqualification.  The 
        failure to exercise the right to an administrative 
        reconsideration shall not be a bar to a hearing under this 
        section if federal law provides an individual the right to a 
        hearing to dispute a finding of maltreatment.  Individuals and 
        organizations specified in this section may contest the 
        specified action, decision, or final disposition before the 
        state agency by submitting a written request for a hearing to 
        the state agency within 30 days after receiving written notice 
        of the action, decision, or final disposition, or within 90 days 
        of such written notice if the applicant, recipient, patient, or 
        relative shows good cause why the request was not submitted 
        within the 30-day time limit. 
           The hearing for an individual or facility under clause (4), 
        (8), or (9) is the only administrative appeal to the final 
        agency determination specifically, including a challenge to the 
        accuracy and completeness of data under section 13.04.  Hearings 
        requested under clause (4) apply only to incidents of 
        maltreatment that occur on or after October 1, 1995.  Hearings 
        requested by nursing assistants in nursing homes alleged to have 
        maltreated a resident prior to October 1, 1995, shall be held as 
        a contested case proceeding under the provisions of chapter 14.  
        Hearings requested under clause (8) apply only to incidents of 
        maltreatment that occur on or after July 1, 1997.  A hearing for 
        an individual or facility under clause (8) is only available 
        when there is no juvenile court or adult criminal action 
        pending.  If such action is filed in either court while an 
        administrative review is pending, the administrative review must 
        be suspended until the judicial actions are completed.  If the 
        juvenile court action or criminal charge is dismissed or the 
        criminal action overturned, the matter may be considered in an 
        administrative hearing. 
           For purposes of this section, bargaining unit grievance 
        procedures are not an administrative appeal. 
           The scope of hearings involving claims to foster care 
        payments under clause (5) shall be limited to the issue of 
        whether the county is legally responsible for a child's 
        placement under court order or voluntary placement agreement 
        and, if so, the correct amount of foster care payment to be made 
        on the child's behalf and shall not include review of the 
        propriety of the county's child protection determination or 
        child placement decision. 
           (b) A vendor of medical care as defined in section 256B.02, 
        subdivision 7, or a vendor under contract with a county agency 
        to provide social services is not a party and may not request a 
        hearing under this section, except if assisting a recipient as 
        provided in subdivision 4. 
           (c) An applicant or recipient is not entitled to receive 
        social services beyond the services included in the amended 
        community social services plan. 
           (d) The commissioner may summarily affirm the county or 
        state agency's proposed action without a hearing when the sole 
        issue is an automatic change due to a change in state or federal 
        law. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 77.  Minnesota Statutes 2003 Supplement, section 
        256.045, subdivision 3b, is amended to read: 
           Subd. 3b.  [STANDARD OF EVIDENCE FOR MALTREATMENT AND 
        DISQUALIFICATION HEARINGS.] (a) The state human services referee 
        shall determine that maltreatment has occurred if a 
        preponderance of evidence exists to support the final 
        disposition under sections 626.556 and 626.557.  For purposes of 
        hearings regarding disqualification, the state human services 
        referee shall affirm the proposed disqualification in an appeal 
        under subdivision 3, paragraph (a), clause (9), if a 
        preponderance of the evidence shows the individual has:  
           (1) committed maltreatment under section 626.556 or 
        626.557, which is serious or recurring; 
           (2) committed an act or acts meeting the definition of any 
        of the crimes listed in section 245C.15, subdivisions 1 to 4; or 
           (3) failed to make required reports under section 626.556 
        or 626.557, for incidents in which the final disposition under 
        section 626.556 or 626.557 was substantiated maltreatment that 
        was serious or recurring.  
           (b) If the disqualification is affirmed, the state human 
        services referee shall determine whether the individual poses a 
        risk of harm in accordance with the requirements of section 
        245C.16., and whether the disqualification should be set aside 
        or not set aside.  In determining whether the disqualification 
        should be set aside, the human services referee shall consider 
        all of the characteristics that cause the individual to be 
        disqualified, including those characteristics that were not 
        subject to review under paragraph (a), in order to determine 
        whether the individual poses a risk of harm.  A decision to set 
        aside a disqualification that is the subject of the hearing 
        constitutes a determination that the individual does not pose a 
        risk of harm and that the individual may provide direct contact 
        services in the individual program specified in the set aside.  
        If a determination that the information relied upon to 
        disqualify an individual was correct and is conclusive under 
        section 245C.29, and the individual is subsequently disqualified 
        under section 245C.14, the individual has a right to again 
        request reconsideration on the risk of harm under section 
        245C.21.  Subsequent determinations regarding risk of harm are 
        not subject to another hearing under this section. 
           (c) The state human services referee shall recommend an 
        order to the commissioner of health, education, or human 
        services, as applicable, who shall issue a final order.  The 
        commissioner shall affirm, reverse, or modify the final 
        disposition.  Any order of the commissioner issued in accordance 
        with this subdivision is conclusive upon the parties unless 
        appeal is taken in the manner provided in subdivision 7.  In any 
        licensing appeal under chapters 245A and 245C and sections 
        144.50 to 144.58 and 144A.02 to 144A.46, the commissioner's 
        determination as to maltreatment is conclusive, as provided 
        under section 245C.29. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 78.  Minnesota Statutes 2003 Supplement, section 
        626.556, subdivision 10, is amended to read: 
           Subd. 10.  [DUTIES OF LOCAL WELFARE AGENCY AND LOCAL LAW 
        ENFORCEMENT AGENCY UPON RECEIPT OF A REPORT.] (a) If the report 
        alleges neglect, physical abuse, or sexual abuse by a parent, 
        guardian, or individual functioning within the family unit as a 
        person responsible for the child's care, the local welfare 
        agency shall immediately conduct an assessment including 
        gathering information on the existence of substance abuse and 
        offer protective social services for purposes of preventing 
        further abuses, safeguarding and enhancing the welfare of the 
        abused or neglected minor, and preserving family life whenever 
        possible.  If the report alleges a violation of a criminal 
        statute involving sexual abuse, physical abuse, or neglect or 
        endangerment, under section 609.378, the local law enforcement 
        agency and local welfare agency shall coordinate the planning 
        and execution of their respective investigation and assessment 
        efforts to avoid a duplication of fact-finding efforts and 
        multiple interviews.  Each agency shall prepare a separate 
        report of the results of its investigation.  In cases of alleged 
        child maltreatment resulting in death, the local agency may rely 
        on the fact-finding efforts of a law enforcement investigation 
        to make a determination of whether or not maltreatment 
        occurred.  When necessary the local welfare agency shall seek 
        authority to remove the child from the custody of a parent, 
        guardian, or adult with whom the child is living.  In performing 
        any of these duties, the local welfare agency shall maintain 
        appropriate records.  
           If the assessment indicates there is a potential for abuse 
        of alcohol or other drugs by the parent, guardian, or person 
        responsible for the child's care, the local welfare agency shall 
        conduct a chemical use assessment pursuant to Minnesota Rules, 
        part 9530.6615.  The local welfare agency shall report the 
        determination of the chemical use assessment, and the 
        recommendations and referrals for alcohol and other drug 
        treatment services to the state authority on alcohol and drug 
        abuse. 
           (b) When a local agency receives a report or otherwise has 
        information indicating that a child who is a client, as defined 
        in section 245.91, has been the subject of physical abuse, 
        sexual abuse, or neglect at an agency, facility, or program as 
        defined in section 245.91, it shall, in addition to its other 
        duties under this section, immediately inform the ombudsman 
        established under sections 245.91 to 245.97.  The commissioner 
        of education shall inform the ombudsman established under 
        sections 245.91 to 245.97 of reports regarding a child defined 
        as a client in section 245.91 that maltreatment occurred at a 
        school as defined in sections 120A.05, subdivisions 9, 11, and 
        13, and 124D.10. 
           (c) Authority of the local welfare agency responsible for 
        assessing the child abuse or neglect report, the agency 
        responsible for assessing or investigating the report, and of 
        the local law enforcement agency for investigating the alleged 
        abuse or neglect includes, but is not limited to, authority to 
        interview, without parental consent, the alleged victim and any 
        other minors who currently reside with or who have resided with 
        the alleged offender.  The interview may take place at school or 
        at any facility or other place where the alleged victim or other 
        minors might be found or the child may be transported to, and 
        the interview conducted at, a place appropriate for the 
        interview of a child designated by the local welfare agency or 
        law enforcement agency.  The interview may take place outside 
        the presence of the alleged offender or parent, legal custodian, 
        guardian, or school official.  Except as provided in this 
        paragraph, the parent, legal custodian, or guardian shall be 
        notified by the responsible local welfare or law enforcement 
        agency no later than the conclusion of the investigation or 
        assessment that this interview has occurred.  Notwithstanding 
        rule 49.02 of the Minnesota Rules of Procedure for Juvenile 
        Courts, the juvenile court may, after hearing on an ex parte 
        motion by the local welfare agency, order that, where reasonable 
        cause exists, the agency withhold notification of this interview 
        from the parent, legal custodian, or guardian.  If the interview 
        took place or is to take place on school property, the order 
        shall specify that school officials may not disclose to the 
        parent, legal custodian, or guardian the contents of the 
        notification of intent to interview the child on school 
        property, as provided under this paragraph, and any other 
        related information regarding the interview that may be a part 
        of the child's school record.  A copy of the order shall be sent 
        by the local welfare or law enforcement agency to the 
        appropriate school official. 
           (d) When the local welfare, local law enforcement agency, 
        or the agency responsible for assessing or investigating a 
        report of maltreatment determines that an interview should take 
        place on school property, written notification of intent to 
        interview the child on school property must be received by 
        school officials prior to the interview.  The notification shall 
        include the name of the child to be interviewed, the purpose of 
        the interview, and a reference to the statutory authority to 
        conduct an interview on school property.  For interviews 
        conducted by the local welfare agency, the notification shall be 
        signed by the chair of the local social services agency or the 
        chair's designee.  The notification shall be private data on 
        individuals subject to the provisions of this paragraph.  School 
        officials may not disclose to the parent, legal custodian, or 
        guardian the contents of the notification or any other related 
        information regarding the interview until notified in writing by 
        the local welfare or law enforcement agency that the 
        investigation or assessment has been concluded, unless a school 
        employee or agent is alleged to have maltreated the child.  
        Until that time, the local welfare or law enforcement agency or 
        the agency responsible for assessing or investigating a report 
        of maltreatment shall be solely responsible for any disclosures 
        regarding the nature of the assessment or investigation.  
           Except where the alleged offender is believed to be a 
        school official or employee, the time and place, and manner of 
        the interview on school premises shall be within the discretion 
        of school officials, but the local welfare or law enforcement 
        agency shall have the exclusive authority to determine who may 
        attend the interview.  The conditions as to time, place, and 
        manner of the interview set by the school officials shall be 
        reasonable and the interview shall be conducted not more than 24 
        hours after the receipt of the notification unless another time 
        is considered necessary by agreement between the school 
        officials and the local welfare or law enforcement agency.  
        Where the school fails to comply with the provisions of this 
        paragraph, the juvenile court may order the school to comply.  
        Every effort must be made to reduce the disruption of the 
        educational program of the child, other students, or school 
        staff when an interview is conducted on school premises.  
           (e) Where the alleged offender or a person responsible for 
        the care of the alleged victim or other minor prevents access to 
        the victim or other minor by the local welfare agency, the 
        juvenile court may order the parents, legal custodian, or 
        guardian to produce the alleged victim or other minor for 
        questioning by the local welfare agency or the local law 
        enforcement agency outside the presence of the alleged offender 
        or any person responsible for the child's care at reasonable 
        places and times as specified by court order.  
           (f) Before making an order under paragraph (e), the court 
        shall issue an order to show cause, either upon its own motion 
        or upon a verified petition, specifying the basis for the 
        requested interviews and fixing the time and place of the 
        hearing.  The order to show cause shall be served personally and 
        shall be heard in the same manner as provided in other cases in 
        the juvenile court.  The court shall consider the need for 
        appointment of a guardian ad litem to protect the best interests 
        of the child.  If appointed, the guardian ad litem shall be 
        present at the hearing on the order to show cause.  
           (g) The commissioner of human services, the ombudsman for 
        mental health and mental retardation, the local welfare agencies 
        responsible for investigating reports, the commissioner of 
        education, and the local law enforcement agencies have the right 
        to enter facilities as defined in subdivision 2 and to inspect 
        and copy the facility's records, including medical records, as 
        part of the investigation.  Notwithstanding the provisions of 
        chapter 13, they also have the right to inform the facility 
        under investigation that they are conducting an investigation, 
        to disclose to the facility the names of the individuals under 
        investigation for abusing or neglecting a child, and to provide 
        the facility with a copy of the report and the investigative 
        findings. 
           (h) The local welfare agency or the agency responsible for 
        assessing or investigating the report shall collect available 
        and relevant information to ascertain whether maltreatment 
        occurred and whether protective services are needed.  
        Information collected includes, when relevant, information with 
        regard to the person reporting the alleged maltreatment, 
        including the nature of the reporter's relationship to the child 
        and to the alleged offender, and the basis of the reporter's 
        knowledge for the report; the child allegedly being maltreated; 
        the alleged offender; the child's caretaker; and other 
        collateral sources having relevant information related to the 
        alleged maltreatment.  The local welfare agency or the agency 
        responsible for assessing or investigating the report may make a 
        determination of no maltreatment early in an assessment, and 
        close the case and retain immunity, if the collected information 
        shows no basis for a full assessment or investigation. 
           Information relevant to the assessment or investigation 
        must be asked for, and may include: 
           (1) the child's sex and age, prior reports of maltreatment, 
        information relating to developmental functioning, credibility 
        of the child's statement, and whether the information provided 
        under this clause is consistent with other information collected 
        during the course of the assessment or investigation; 
           (2) the alleged offender's age, a record check for prior 
        reports of maltreatment, and criminal charges and convictions.  
        The local welfare agency or the agency responsible for assessing 
        or investigating the report must provide the alleged offender 
        with an opportunity to make a statement.  The alleged offender 
        may submit supporting documentation relevant to the assessment 
        or investigation; 
           (3) collateral source information regarding the alleged 
        maltreatment and care of the child.  Collateral information 
        includes, when relevant:  (i) a medical examination of the 
        child; (ii) prior medical records relating to the alleged 
        maltreatment or the care of the child maintained by any 
        facility, clinic, or health care professional and an interview 
        with the treating professionals; and (iii) interviews with the 
        child's caretakers, including the child's parent, guardian, 
        foster parent, child care provider, teachers, counselors, family 
        members, relatives, and other persons who may have knowledge 
        regarding the alleged maltreatment and the care of the child; 
        and 
           (4) information on the existence of domestic abuse and 
        violence in the home of the child, and substance abuse. 
           Nothing in this paragraph precludes the local welfare 
        agency, the local law enforcement agency, or the agency 
        responsible for assessing or investigating the report from 
        collecting other relevant information necessary to conduct the 
        assessment or investigation.  Notwithstanding section 13.384 or 
        144.335, the local welfare agency has access to medical data and 
        records for purposes of clause (3).  Notwithstanding the data's 
        classification in the possession of any other agency, data 
        acquired by the local welfare agency or the agency responsible 
        for assessing or investigating the report during the course of 
        the assessment or investigation are private data on individuals 
        and must be maintained in accordance with subdivision 11.  Data 
        of the commissioner of education collected or maintained during 
        and for the purpose of an investigation of alleged maltreatment 
        in a school are governed by this section, notwithstanding the 
        data's classification as educational, licensing, or personnel 
        data under chapter 13. 
           In conducting an assessment or investigation involving a 
        school facility as defined in subdivision 2, paragraph (f), the 
        commissioner of education shall collect investigative reports 
        and data that are relevant to a report of maltreatment and are 
        from local law enforcement and the school facility.  
           (i) In the initial stages of an assessment or 
        investigation, the local welfare agency shall conduct a 
        face-to-face observation of the child reported to be maltreated 
        and a face-to-face interview of the alleged offender.  At the 
        initial contact, the local child welfare agency or the agency 
        responsible for assessing or investigating the report must 
        inform the alleged offender of the complaints or allegations 
        made against the individual in a manner consistent with laws 
        protecting the rights of the person who made the report.  The 
        interview with the alleged offender may be postponed if it would 
        jeopardize an active law enforcement investigation. 
           (j) The local welfare agency shall use a question and 
        answer interviewing format with questioning as nondirective as 
        possible to elicit spontaneous responses.  The following 
        interviewing methods and procedures must be used whenever 
        possible when collecting information: 
           (1) audio recordings of all interviews with witnesses and 
        collateral sources; and 
           (2) in cases of alleged sexual abuse, audio-video 
        recordings of each interview with the alleged victim and child 
        witnesses.  
           (k) In conducting an assessment or investigation involving 
        a school facility as defined in subdivision 2, paragraph (f), 
        the commissioner of education shall collect available and 
        relevant information and use the procedures in paragraphs (h), 
        (i), and (j), provided that the commissioner may also base the 
        assessment or investigation on investigative reports and data 
        received from the school facility and local law enforcement, to 
        the extent those investigations satisfy the requirements of 
        paragraphs (h), (i), and (j). 
           Sec. 79.  Minnesota Statutes 2003 Supplement, section 
        626.556, subdivision 10i, is amended to read: 
           Subd. 10i.  [ADMINISTRATIVE RECONSIDERATION OF FINAL 
        DETERMINATION OF MALTREATMENT AND DISQUALIFICATION BASED ON 
        SERIOUS OR RECURRING MALTREATMENT; REVIEW PANEL.] (a) Except as 
        provided under paragraph (e), an individual or facility that the 
        commissioner of human services, a local social service agency, 
        or the commissioner of education determines has maltreated a 
        child, an interested person acting on behalf of the child, 
        regardless of the determination, who contests the investigating 
        agency's final determination regarding maltreatment, may request 
        the investigating agency to reconsider its final determination 
        regarding maltreatment.  The request for reconsideration must be 
        submitted in writing to the investigating agency within 15 
        calendar days after receipt of notice of the final determination 
        regarding maltreatment or, if the request is made by an 
        interested person who is not entitled to notice, within 15 days 
        after receipt of the notice by the parent or guardian of the 
        child.  Effective January 1, 2002, an individual who was 
        determined to have maltreated a child under this section and who 
        was disqualified on the basis of serious or recurring 
        maltreatment under sections 245C.14 and 245C.15, may request 
        reconsideration of the maltreatment determination and the 
        disqualification.  The request for reconsideration of the 
        maltreatment determination and the disqualification must be 
        submitted within 30 calendar days of the individual's receipt of 
        the notice of disqualification under sections 245C.16 and 
        245C.17. 
           (b) Except as provided under paragraphs (e) and (f), if the 
        investigating agency denies the request or fails to act upon the 
        request within 15 calendar days after receiving the request for 
        reconsideration, the person or facility entitled to a fair 
        hearing under section 256.045 may submit to the commissioner of 
        human services or the commissioner of education a written 
        request for a hearing under that section.  Section 256.045 also 
        governs hearings requested to contest a final determination of 
        the commissioner of education.  For reports involving 
        maltreatment of a child in a facility, an interested person 
        acting on behalf of the child may request a review by the Child 
        Maltreatment Review Panel under section 256.022 if the 
        investigating agency denies the request or fails to act upon the 
        request or if the interested person contests a reconsidered 
        determination.  The investigating agency shall notify persons 
        who request reconsideration of their rights under this 
        paragraph.  The request must be submitted in writing to the 
        review panel and a copy sent to the investigating agency within 
        30 calendar days of receipt of notice of a denial of a request 
        for reconsideration or of a reconsidered determination.  The 
        request must specifically identify the aspects of the agency 
        determination with which the person is dissatisfied. 
           (c) If, as a result of a reconsideration or review, the 
        investigating agency changes the final determination of 
        maltreatment, that agency shall notify the parties specified in 
        subdivisions 10b, 10d, and 10f. 
           (d) Except as provided under paragraph (f), if an 
        individual or facility contests the investigating agency's final 
        determination regarding maltreatment by requesting a fair 
        hearing under section 256.045, the commissioner of human 
        services shall assure that the hearing is conducted and a 
        decision is reached within 90 days of receipt of the request for 
        a hearing.  The time for action on the decision may be extended 
        for as many days as the hearing is postponed or the record is 
        held open for the benefit of either party. 
           (e) Effective January 1, 2002, if an individual was 
        disqualified under sections 245C.14 and 245C.15, on the basis of 
        a determination of maltreatment, which was serious or recurring, 
        and the individual has requested reconsideration of the 
        maltreatment determination under paragraph (a) and requested 
        reconsideration of the disqualification under sections 245C.21 
        to 245C.27, reconsideration of the maltreatment determination 
        and reconsideration of the disqualification shall be 
        consolidated into a single reconsideration.  If reconsideration 
        of the maltreatment determination is denied or the 
        disqualification is not set aside or rescinded under sections 
        245C.21 to 245C.27, the individual may request a fair hearing 
        under section 256.045.  If an individual requests a fair hearing 
        on the maltreatment determination and the disqualification, the 
        scope of the fair hearing shall include both the maltreatment 
        determination and the disqualification. 
           (f) Effective January 1, 2002, if a maltreatment 
        determination or a disqualification based on serious or 
        recurring maltreatment is the basis for a denial of a license 
        under section 245A.05 or a licensing sanction under section 
        245A.07, the license holder has the right to a contested case 
        hearing under chapter 14 and Minnesota Rules, parts 1400.8510 
        1400.8505 to 1400.8612 and successor rules.  As provided for 
        under section 245A.08, subdivision 2a, the scope of the 
        contested case hearing shall include the maltreatment 
        determination, disqualification, and licensing sanction or 
        denial of a license.  In such cases, a fair hearing regarding 
        the maltreatment determination shall not be conducted under 
        paragraph (b).  If the disqualified subject is an individual 
        other than the license holder and upon whom a background study 
        must be conducted under chapter 245C, the hearings of all 
        parties may be consolidated into a single contested case hearing 
        upon consent of all parties and the administrative law judge. 
           (g) For purposes of this subdivision, "interested person 
        acting on behalf of the child" means a parent or legal guardian; 
        stepparent; grandparent; guardian ad litem; adult stepbrother, 
        stepsister, or sibling; or adult aunt or uncle; unless the 
        person has been determined to be the perpetrator of the 
        maltreatment. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 80.  Minnesota Statutes 2003 Supplement, section 
        626.557, subdivision 9d, is amended to read: 
           Subd. 9d.  [ADMINISTRATIVE RECONSIDERATION OF FINAL 
        DISPOSITION OF MALTREATMENT AND DISQUALIFICATION BASED ON 
        SERIOUS OR RECURRING MALTREATMENT; REVIEW PANEL.] (a) Except as 
        provided under paragraph (e), any individual or facility which a 
        lead agency determines has maltreated a vulnerable adult, or the 
        vulnerable adult or an interested person acting on behalf of the 
        vulnerable adult, regardless of the lead agency's determination, 
        who contests the lead agency's final disposition of an 
        allegation of maltreatment, may request the lead agency to 
        reconsider its final disposition.  The request for 
        reconsideration must be submitted in writing to the lead agency 
        within 15 calendar days after receipt of notice of final 
        disposition or, if the request is made by an interested person 
        who is not entitled to notice, within 15 days after receipt of 
        the notice by the vulnerable adult or the vulnerable adult's 
        legal guardian.  An individual who was determined to have 
        maltreated a vulnerable adult under this section and who was 
        disqualified on the basis of serious or recurring maltreatment 
        under sections 245C.14 and 245C.15, may request reconsideration 
        of the maltreatment determination and the disqualification.  The 
        request for reconsideration of the maltreatment determination 
        and the disqualification must be submitted within 30 calendar 
        days of the individual's receipt of the notice of 
        disqualification under sections 245C.16 and 245C.17. 
           (b) Except as provided under paragraphs (e) and (f), if the 
        lead agency denies the request or fails to act upon the request 
        within 15 calendar days after receiving the request for 
        reconsideration, the person or facility entitled to a fair 
        hearing under section 256.045, may submit to the commissioner of 
        human services a written request for a hearing under that 
        statute.  The vulnerable adult, or an interested person acting 
        on behalf of the vulnerable adult, may request a review by the 
        Vulnerable Adult Maltreatment Review Panel under section 256.021 
        if the lead agency denies the request or fails to act upon the 
        request, or if the vulnerable adult or interested person 
        contests a reconsidered disposition.  The lead agency shall 
        notify persons who request reconsideration of their rights under 
        this paragraph.  The request must be submitted in writing to the 
        review panel and a copy sent to the lead agency within 30 
        calendar days of receipt of notice of a denial of a request for 
        reconsideration or of a reconsidered disposition.  The request 
        must specifically identify the aspects of the agency 
        determination with which the person is dissatisfied.  
           (c) If, as a result of a reconsideration or review, the 
        lead agency changes the final disposition, it shall notify the 
        parties specified in subdivision 9c, paragraph (d). 
           (d) For purposes of this subdivision, "interested person 
        acting on behalf of the vulnerable adult" means a person 
        designated in writing by the vulnerable adult to act on behalf 
        of the vulnerable adult, or a legal guardian or conservator or 
        other legal representative, a proxy or health care agent 
        appointed under chapter 145B or 145C, or an individual who is 
        related to the vulnerable adult, as defined in section 245A.02, 
        subdivision 13. 
           (e) If an individual was disqualified under sections 
        245C.14 and 245C.15, on the basis of a determination of 
        maltreatment, which was serious or recurring, and the individual 
        has requested reconsideration of the maltreatment determination 
        under paragraph (a) and reconsideration of the disqualification 
        under sections 245C.21 to 245C.27, reconsideration of the 
        maltreatment determination and requested reconsideration of the 
        disqualification shall be consolidated into a single 
        reconsideration.  If reconsideration of the maltreatment 
        determination is denied or if the disqualification is not set 
        aside or rescinded under sections 245C.21 to 245C.27, the 
        individual may request a fair hearing under section 256.045.  If 
        an individual requests a fair hearing on the maltreatment 
        determination and the disqualification, the scope of the fair 
        hearing shall include both the maltreatment determination and 
        the disqualification. 
           (f) If a maltreatment determination or a disqualification 
        based on serious or recurring maltreatment is the basis for a 
        denial of a license under section 245A.05 or a licensing 
        sanction under section 245A.07, the license holder has the right 
        to a contested case hearing under chapter 14 and Minnesota 
        Rules, parts 1400.8510 1400.8505 to 1400.8612 and successor 
        rules.  As provided for under section 245A.08, the scope of the 
        contested case hearing shall include the maltreatment 
        determination, disqualification, and licensing sanction or 
        denial of a license.  In such cases, a fair hearing shall not be 
        conducted under paragraph (b).  If the disqualified subject is 
        an individual other than the license holder and upon whom a 
        background study must be conducted under chapter 245C, the 
        hearings of all parties may be consolidated into a single 
        contested case hearing upon consent of all parties and the 
        administrative law judge. 
           (g) Until August 1, 2002, an individual or facility that 
        was determined by the commissioner of human services or the 
        commissioner of health to be responsible for neglect under 
        section 626.5572, subdivision 17, after October 1, 1995, and 
        before August 1, 2001, that believes that the finding of neglect 
        does not meet an amended definition of neglect may request a 
        reconsideration of the determination of neglect.  The 
        commissioner of human services or the commissioner of health 
        shall mail a notice to the last known address of individuals who 
        are eligible to seek this reconsideration.  The request for 
        reconsideration must state how the established findings no 
        longer meet the elements of the definition of neglect.  The 
        commissioner shall review the request for reconsideration and 
        make a determination within 15 calendar days.  The 
        commissioner's decision on this reconsideration is the final 
        agency action. 
           (1) For purposes of compliance with the data destruction 
        schedule under subdivision 12b, paragraph (d), when a finding of 
        substantiated maltreatment has been changed as a result of a 
        reconsideration under this paragraph, the date of the original 
        finding of a substantiated maltreatment must be used to 
        calculate the destruction date. 
           (2) For purposes of any background studies under chapter 
        245C, when a determination of substantiated maltreatment has 
        been changed as a result of a reconsideration under this 
        paragraph, any prior disqualification of the individual under 
        chapter 245C that was based on this determination of 
        maltreatment shall be rescinded, and for future background 
        studies under chapter 245C the commissioner must not use the 
        previous determination of substantiated maltreatment as a basis 
        for disqualification or as a basis for referring the 
        individual's maltreatment history to a health-related licensing 
        board under section 245C.31. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 81.  [DIRECTION TO COMMISSIONER; REPORT.] 
           The commissioner of human services shall report on the 
        number of adult foster care licenses, family adult day services 
        licenses, combined adult foster care and family adult day 
        services, and adult day services center licenses and their 
        capacities with changes in the number of licenses and capacities 
        from August 1, 2004, to August 1, 2006.  The commissioner shall 
        provide this report to the chairs of the senate and house 
        committees with jurisdiction over health and human services 
        policy by September 15, 2006. 
           Sec. 82.  [REVISOR'S INSTRUCTION.] 
           The revisor of statutes shall insert the phrase "or adult 
        day services" after the phrase "adult day care," and the phrase 
        "or adult day services center" after "adult day care center," 
        wherever it appears in Minnesota Rules, parts 9555.9600 to 
        9555.9730, or the headnotes to the rule parts. 
           Sec. 83.  [REPEALER.] 
           Minnesota Statutes 2003 Supplement, section 245C.02, 
        subdivision 17; and Minnesota Rules, parts 9525.1600; 9543.0040, 
        subpart 3; 9543.1000; 9543.1010; 9543.1020; 9543.1030; 
        9543.1040; 9543.1050; and 9543.1060, are repealed. 

                                   ARTICLE 2 
                                  CORRECTIONS 
           Section 1.  Minnesota Statutes 2003 Supplement, section 
        241.021, subdivision 6, is amended to read: 
           Subd. 6.  [BACKGROUND STUDIES.] (a) The commissioner of 
        corrections is authorized to do background studies on personnel 
        employed by any facility serving children or youth that is 
        licensed under this section.  The commissioner of corrections 
        shall contract with the commissioner of human services to 
        conduct background studies of individuals providing services in 
        secure and nonsecure residential facilities and detention 
        facilities who have direct contact, as defined under section 
        245C.02, subdivision 11, with persons served in the facilities.  
        A disqualification of an individual in this section shall 
        disqualify the individual from positions allowing direct contact 
        or access to persons and residents receiving services in 
        programs licensed by the Departments of Health and Human 
        Services as provided in chapter 245C.  
           (b) A clerk or administrator of any court, the Bureau of 
        Criminal Apprehension, a prosecuting attorney, a county sheriff, 
        or a chief of a local police department, shall assist in these 
        studies by providing to the commissioner of human services, or 
        the commissioner's representative, all criminal conviction data 
        available from local, state, and national criminal history 
        record repositories, including the criminal justice data 
        communications network, pertaining to the following individuals: 
        applicants, operators, all persons living in the household, and 
        all staff of any facility subject to background studies under 
        this subdivision.  
           (c) The Department of Human Services shall conduct the 
        background studies required by paragraph (a) in compliance with 
        the provisions of chapter 245C.  For the purpose of this 
        subdivision, the term "secure and nonsecure residential facility 
        and detention facility" shall include programs licensed or 
        certified under subdivision 2.  The Department of Human Services 
        shall provide necessary forms and instructions, shall conduct 
        the necessary background studies of individuals, and shall 
        provide notification of the results of the studies to the 
        facilities, individuals, and the commissioner of corrections.  
        Individuals shall be disqualified under the provisions of 
        chapter 245C. 
           If an individual is disqualified, the Department of Human 
        Services shall notify the facility and the individual and shall 
        inform the individual of the right to request a reconsideration 
        of the disqualification by submitting the request to the 
        Department of Corrections. 
           (d) The commissioner of corrections shall review and decide 
        reconsideration requests, including the granting of variances, 
        in accordance with the procedures and criteria contained in 
        chapter 245C.  The commissioner's decision shall be provided to 
        the individual and to the Department of Human Services.  The 
        commissioner's decision to grant or deny a reconsideration of 
        disqualification is the final administrative agency action. 
           (e) Facilities described in paragraph (a) shall be 
        responsible for cooperating with the departments in implementing 
        the provisions of this subdivision.  The responsibilities 
        imposed on applicants and licensees under chapters 245A and 245C 
        shall apply to these facilities.  The provisions of sections 
        245C.03, subdivision 3, 245C.04, subdivision 4, paragraph (b), 
        and 245C.10, subdivision 2, shall apply to applicants, 
        licensees, and individuals. 

                                   ARTICLE 3 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2002, section 13.43, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PUBLIC DATA.] (a) Except for employees described 
        in subdivision 5 and the limitations described in subdivision 
        5a, the following personnel data on current and former 
        employees, volunteers, and independent contractors of a state 
        agency, statewide system, or political subdivision and members 
        of advisory boards or commissions is public: 
           (1) name; employee identification number, which must not be 
        the employee's Social Security number; actual gross salary; 
        salary range; contract fees; actual gross pension; the value and 
        nature of employer paid fringe benefits; and the basis for and 
        the amount of any added remuneration, including expense 
        reimbursement, in addition to salary; 
           (2) job title and bargaining unit; job description; 
        education and training background; and previous work experience; 
           (3) date of first and last employment; 
           (4) the existence and status of any complaints or charges 
        against the employee, regardless of whether the complaint or 
        charge resulted in a disciplinary action; 
           (5) the final disposition of any disciplinary action 
        together with the specific reasons for the action and data 
        documenting the basis of the action, excluding data that would 
        identify confidential sources who are employees of the public 
        body; 
           (6) the terms of any agreement settling any dispute arising 
        out of an employment relationship, including a buyout agreement 
        as defined in section 123B.143, subdivision 2, paragraph (a); 
        except that the agreement must include specific reasons for the 
        agreement if it involves the payment of more than $10,000 of 
        public money; 
           (7) work location; a work telephone number; badge number; 
        and honors and awards received; and 
           (8) payroll time sheets or other comparable data that are 
        only used to account for employee's work time for payroll 
        purposes, except to the extent that release of time sheet data 
        would reveal the employee's reasons for the use of sick or other 
        medical leave or other not public data; and city and county of 
        residence. 
           (b) For purposes of this subdivision, a final disposition 
        occurs when the state agency, statewide system, or political 
        subdivision makes its final decision about the disciplinary 
        action, regardless of the possibility of any later proceedings 
        or court proceedings.  In the case of arbitration proceedings 
        arising under collective bargaining agreements, a final 
        disposition occurs at the conclusion of the arbitration 
        proceedings, or upon the failure of the employee to elect 
        arbitration within the time provided by the collective 
        bargaining agreement.  Final disposition includes a resignation 
        by an individual when the resignation occurs after the final 
        decision of the state agency, statewide system, political 
        subdivision, or arbitrator. 
           (c) The state agency, statewide system, or political 
        subdivision may display a photograph of a current or former 
        employee to a prospective witness as part of the state agency's, 
        statewide system's, or political subdivision's investigation of 
        any complaint or charge against the employee. 
           (d) A complainant has access to a statement provided by the 
        complainant to a state agency, statewide system, or political 
        subdivision in connection with a complaint or charge against an 
        employee. 
           (e) Notwithstanding paragraph (a), clause (5), upon 
        completion of an investigation of a complaint or charge against 
        a public official, or if a public official resigns or is 
        terminated from employment while the complaint or charge is 
        pending, all data relating to the complaint or charge are 
        public, unless access to the data would jeopardize an active 
        investigation or reveal confidential sources.  For purposes of 
        this paragraph, "public official" means: 
           (1) the head of a state agency and deputy and assistant 
        state agency heads; 
           (2) members of boards or commissions required by law to be 
        appointed by the governor or other elective officers; and 
           (3) executive or administrative heads of departments, 
        bureaus, divisions, or institutions. 
           Sec. 2.  Minnesota Statutes 2002, section 13.43, is amended 
        by adding a subdivision to read: 
           Subd. 5a.  [LIMITATION ON DISCLOSURE OF CERTAIN PERSONNEL 
        DATA.] Notwithstanding any other provision of this section, the 
        following data relating to employees of a secure treatment 
        facility defined in section 253B.02, subdivision 18a, employees 
        of a state correctional facility, or employees of the Department 
        of Corrections directly involved in supervision of offenders in 
        the community, shall not be disclosed to facility patients, 
        corrections inmates, or other individuals whom facility or 
        correction administrators reasonably believe will use the 
        information to harass, intimidate, or assault any such 
        employees:  place where previous education or training occurred; 
        place of prior employment; and payroll timesheets or other 
        comparable data, to the extent that payroll timesheets or other 
        comparable data may disclose:  future work assignments, home 
        address or telephone number, the location of employees during 
        nonwork hours, or the location of employees' immediate family 
        members. 
           Sec. 3.  Minnesota Statutes 2002, section 62A.042, is 
        amended to read: 
           62A.042 [FAMILY COVERAGE; COVERAGE OF NEWBORN INFANTS.] 
           Subdivision 1.  [INDIVIDUAL FAMILY POLICIES.] (a) No policy 
        of individual accident and sickness insurance which provides for 
        insurance for more than one person under section 62A.03, 
        subdivision 1, clause (3), and no individual health maintenance 
        contract which provides for coverage for more than one person 
        under chapter 62D, shall be renewed to insure or cover any 
        person in this state or be delivered or issued for delivery to 
        any person in this state unless the policy or contract includes 
        as insured or covered members of the family any newborn infants 
        immediately from the moment of birth and thereafter which 
        insurance or contract shall provide coverage for illness, 
        injury, congenital malformation, or premature birth.  For 
        purposes of this paragraph, "newborn infants" includes 
        grandchildren who are financially dependent upon a covered 
        grandparent and who reside with that covered grandparent 
        continuously from birth.  No policy or contract covered by this 
        section may require notification to a health carrier as a 
        condition for this dependent coverage.  However, if the policy 
        or contract mandates an additional premium for each dependent, 
        the health carrier shall be entitled to all premiums that would 
        have been collected had the health carrier been aware of the 
        additional dependent.  The health carrier may withhold payment 
        of any health benefits for the new dependent until it has been 
        compensated with the applicable premium which would have been 
        owed if the health carrier had been informed of the additional 
        dependent immediately. 
           (b) The coverage under paragraph (a) includes benefits for 
        inpatient or outpatient expenses arising from medical and dental 
        treatment up to age 18 the limiting age for coverage of the 
        dependent, including orthodontic and oral surgery treatment, 
        involved in the management of birth defects known as cleft lip 
        and cleft palate.  Benefits for individuals age 19 up to the 
        limiting age for coverage of the dependent are limited to 
        inpatient or outpatient expenses arising from medical and dental 
        treatment that was scheduled or initiated prior to the dependent 
        turning age 19.  If orthodontic services are eligible for 
        coverage under a dental insurance plan and another policy or 
        contract, the dental plan shall be primary and the other policy 
        or contract shall be secondary in regard to the coverage 
        required under paragraph (a).  Payment for dental or orthodontic 
        treatment not related to the management of the congenital 
        condition of cleft lip and cleft palate shall not be covered 
        under this provision.  
           Subd. 2.  [GROUP POLICIES.] (a) No group accident and 
        sickness insurance policy and no group health maintenance 
        contract which provide for coverage of family members or other 
        dependents of an employee or other member of the covered group 
        shall be renewed to cover members of a group located in this 
        state or delivered or issued for delivery to any person in this 
        state unless the policy or contract includes as insured or 
        covered family members or dependents any newborn infants 
        immediately from the moment of birth and thereafter which 
        insurance or contract shall provide coverage for illness, 
        injury, congenital malformation, or premature birth.  For 
        purposes of this paragraph, "newborn infants" includes 
        grandchildren who are financially dependent upon a covered 
        grandparent and who reside with that covered grandparent 
        continuously from birth.  No policy or contract covered by this 
        section may require notification to a health carrier as a 
        condition for this dependent coverage.  However, if the policy 
        or contract mandates an additional premium for each dependent, 
        the health carrier shall be entitled to all premiums that would 
        have been collected had the health carrier been aware of the 
        additional dependent.  The health carrier may reduce the health 
        benefits owed to the insured, certificate holder, member, or 
        subscriber by the amount of past due premiums applicable to the 
        additional dependent. 
           (b) The coverage under paragraph (a) includes benefits for 
        inpatient or outpatient expenses arising from medical and dental 
        treatment up to age 18 the limiting age for coverage of the 
        dependent, including orthodontic and oral surgery treatment, 
        involved in the management of birth defects known as cleft lip 
        and cleft palate.  Benefits for individuals age 19 up to the 
        limiting age for coverage of the dependent are limited to 
        inpatient or outpatient expenses arising from medical and dental 
        treatment that was scheduled or initiated prior to the dependent 
        turning age 19.  If orthodontic services are eligible for 
        coverage under a dental insurance plan and another policy or 
        contract, the dental plan shall be primary and the other policy 
        or contract shall be secondary in regard to the coverage 
        required under paragraph (a).  Payment for dental or orthodontic 
        treatment not related to the management of the congenital 
        condition of cleft lip and cleft palate shall not be covered 
        under this provision. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2005, and applies to coverage issued or renewed on or after that 
        date. 
           Sec. 4.  Minnesota Statutes 2002, section 62C.14, 
        subdivision 14, is amended to read: 
           Subd. 14.  [NEWBORN INFANT COVERAGE.] No subscriber's 
        individual contract or any group contract which provides for 
        coverage of family members or other dependents of a subscriber 
        or of an employee or other group member of a group subscriber, 
        shall be renewed, delivered, or issued for delivery in this 
        state unless such contract includes as covered family members or 
        dependents any newborn infants immediately from the moment of 
        birth and thereafter which insurance shall provide coverage for 
        illness, injury, congenital malformation or premature 
        birth.  The coverage described in this subdivision includes 
        coverage of cleft lip and cleft palate to the same extent 
        provided in section 62A.042, subdivisions 1, paragraph (b); and 
        2, paragraph (b).  For purposes of this paragraph, "newborn 
        infants" includes grandchildren who are financially dependent 
        upon a covered grandparent and who reside with that covered 
        grandparent continuously from birth.  No policy, contract, or 
        agreement covered by this section may require notification to a 
        health carrier as a condition for this dependent coverage.  
        However, if the policy, contract, or agreement mandates an 
        additional premium for each dependent, the health carrier shall 
        be entitled to all premiums that would have been collected had 
        the health carrier been aware of the additional dependent.  The 
        health carrier may withhold payment of any health benefits for 
        the new dependent until it has been compensated with the 
        applicable premium which would have been owed if the health 
        carrier had been informed of the additional dependent 
        immediately. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2005, and applies to coverage issued or renewed on or after that 
        date. 
           Sec. 5.  [151.214] [PAYMENT DISCLOSURE.] 
           Subdivision 1.  [EXPLANATION OF PHARMACY BENEFITS.] A 
        pharmacist licensed under this chapter must provide to a 
        purchaser, for each prescription dispensed where part or all of 
        the cost of the prescription is being paid or reimbursed by an 
        employer-sponsored plan or health plan company, or its 
        contracted pharmacy benefit manager, the purchaser's co-payment 
        amount and the usual and customary price of the prescription or 
        the amount the pharmacy will be paid for the prescription drug 
        by the purchaser's employer-sponsored plan or health plan 
        company, or its contracted pharmacy benefit manager. 
           Subd. 2.  [NO PROHIBITION ON DISCLOSURE.] No contracting 
        agreement between an employer-sponsored health plan or health 
        plan company, or its contracted pharmacy benefit manager, and a 
        resident or nonresident pharmacy registered under this chapter, 
        may prohibit the pharmacy from disclosing to patients 
        information a pharmacy is required or given the option to 
        provide under subdivision 1. 
           Sec. 6.  Minnesota Statutes 2002, section 243.55, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any person who brings, sends, or in any 
        manner causes to be introduced into any state correctional 
        facility or state hospital, or within or upon the grounds 
        belonging to or land or controlled by any such facility or 
        hospital, or is found in possession of any controlled substance 
        as defined in section 152.01, subdivision 4, or any firearms, 
        weapons or explosives of any kind, without the consent of the 
        chief executive officer thereof, shall be guilty of a felony 
        and, upon conviction thereof, punished by imprisonment for a 
        term of not more than ten years.  Any person who brings, sends, 
        or in any manner causes to be introduced into any state 
        correctional facility or within or upon the grounds belonging to 
        or land controlled by the facility, or is found in the 
        possession of any intoxicating or alcoholic liquor or malt 
        beverage of any kind without the consent of the chief executive 
        officer thereof, shall be guilty of a gross misdemeanor.  The 
        provisions of this section shall not apply to physicians 
        carrying drugs or introducing any of the above described liquors 
        into such facilities for use in the practice of their 
        profession; nor to sheriffs or other peace officers carrying 
        revolvers or firearms as such officers in the discharge of 
        duties. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004, 
        and applies to crimes committed on or after that date. 
           Sec. 7.  Minnesota Statutes 2002, section 245.462, 
        subdivision 18, is amended to read: 
           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 who is 
        licensed under sections 148.171 to 148.285,; and: 
           (i) who is certified as a clinical specialist or as a nurse 
        practitioner in adult or family psychiatric and mental health 
        nursing by a national nurse certification organization; or 
           (ii) who has a master's degree in nursing or one of the 
        behavioral sciences or related fields from an accredited college 
        or university or its equivalent, with at least 4,000 hours of 
        post-master's supervised experience in the delivery of clinical 
        services in the treatment of mental illness; 
           (2) 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:  an individual licensed by the board of 
        psychology under sections 148.88 to 148.98 who has stated to the 
        board of psychology competencies in the diagnosis and treatment 
        of mental illness; 
           (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; 
           (5) in marriage and family therapy:  the mental health 
        professional must be a marriage and family therapist licensed 
        under sections 148B.29 to 148B.39 with at least two years of 
        post-master's supervised experience in the delivery of clinical 
        services in the treatment of mental illness; or 
           (6) 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. 
           Sec. 8.  Minnesota Statutes 2002, section 245.464, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [PUBLIC-PRIVATE PARTNERSHIPS.] The commissioner 
        may establish a mechanism by which counties, the Department of 
        Human Services, hospitals, health plans, consumers, providers, 
        and others may enter into agreements that allow for capacity 
        building and oversight of any agreed-upon entity that is 
        developed through these partnerships.  The purpose of these 
        partnerships is the development and provision of mental health 
        services which would be more effective, efficient, and 
        accessible than services that might be provided separately by 
        each partner. 
           Sec. 9.  Minnesota Statutes 2003 Supplement, section 
        245.4874, is amended to read: 
           245.4874 [DUTIES OF COUNTY BOARD.] 
           The county board in each county shall use its share of 
        mental health and Community Social Services Act funds allocated 
        by the commissioner according to a biennial children's mental 
        health component of the community social services plan that is 
        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) establish a mechanism providing for interagency 
        coordination as specified in section 245.4875, subdivision 6; 
           (3) develop a biennial children's mental health component 
        of the community social services plan which considers the 
        assessment of unmet needs in the county as reported by the local 
        children's mental health advisory council under section 
        245.4875, subdivision 5, paragraph (b), clause (3).  The county 
        shall provide, upon request of the local children's mental 
        health advisory council, readily available data to assist in the 
        determination of unmet needs; 
           (4) assure that parents and providers in the county receive 
        information about how to gain access to services provided 
        according to sections 245.487 to 245.4887; 
           (5) coordinate the delivery of children's mental health 
        services with services provided by social services, education, 
        corrections, health, and vocational agencies to improve the 
        availability of mental health services to children and the 
        cost-effectiveness of their delivery; 
           (6) assure that mental health services delivered according 
        to sections 245.487 to 245.4887 are delivered expeditiously and 
        are appropriate to the child's diagnostic assessment and 
        individual treatment plan; 
           (7) provide the community with information about predictors 
        and symptoms of emotional disturbances and how to access 
        children's mental health services according to sections 245.4877 
        and 245.4878; 
           (8) provide for case management services to each child with 
        severe emotional disturbance according to sections 245.486; 
        245.4871, subdivisions 3 and 4; and 245.4881, subdivisions 1, 3, 
        and 5; 
           (9) provide for screening of each child under section 
        245.4885 upon admission to a residential treatment facility, 
        acute care hospital inpatient treatment, or informal admission 
        to a regional treatment center; 
           (10) prudently administer grants and purchase-of-service 
        contracts that the county board determines are necessary to 
        fulfill its responsibilities under sections 245.487 to 245.4887; 
           (11) assure that mental health professionals, mental health 
        practitioners, and case managers employed by or under contract 
        to the county to provide mental health services are qualified 
        under section 245.4871; 
           (12) assure that children's mental health services are 
        coordinated with adult mental health services specified in 
        sections 245.461 to 245.486 so that a continuum of mental health 
        services is available to serve persons with mental illness, 
        regardless of the person's age; 
           (13) assure that culturally informed mental health 
        consultants are used as necessary to assist the county board in 
        assessing and providing appropriate treatment for children of 
        cultural or racial minority heritage; and 
           (14) consistent with section 245.486, arrange for or 
        provide a children's mental health screening to a child 
        receiving child protective services or a child in out-of-home 
        placement, a child for whom parental rights have been 
        terminated, a child found to be delinquent, and a child found to 
        have committed a juvenile petty offense for the third or 
        subsequent time, unless a screening has been performed within 
        the previous 180 days, or the child is currently under the care 
        of a mental health professional.  The court or county agency 
        must notify a parent or guardian whose parental rights have not 
        been terminated of the potential mental health screening and the 
        option to prevent the screening by notifying the court or county 
        agency in writing.  The screening shall be conducted with a 
        screening instrument approved by the commissioner of human 
        services according to criteria that are updated and issued 
        annually to ensure that approved screening instruments are valid 
        and useful for child welfare and juvenile justice populations, 
        and shall be conducted by a mental health practitioner as 
        defined in section 245.4871, subdivision 26, or a probation 
        officer or local social services agency staff person who is 
        trained in the use of the screening instrument.  Training in the 
        use of the instrument shall include training in the 
        administration of the instrument, the interpretation of its 
        validity given the child's current circumstances, the state and 
        federal data practices laws and confidentiality standards, the 
        parental consent requirement, and providing respect for families 
        and cultural values.  If the screen indicates a need for 
        assessment, the child's family, or if the family lacks mental 
        health insurance, the local social services agency, in 
        consultation with the child's family, shall have conducted a 
        diagnostic assessment, including a functional assessment, as 
        defined in section 245.4871.  The administration of the 
        screening shall safeguard the privacy of children receiving the 
        screening and their families and shall comply with the Minnesota 
        Government Data Practices Act, chapter 13, and the federal 
        Health Insurance Portability and Accountability Act of 1996, 
        Public Law 104-191.  Screening results shall be considered 
        private data and the commissioner shall not collect individual 
        screening results. 
           Sec. 10.  Minnesota Statutes 2002, section 245.4881, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT SERVICES.] 
        (a) By April 1, 1992, The county board shall provide case 
        management services for each child with severe emotional 
        disturbance who is a resident of the county and the child's 
        family who request or consent to the services.  Case management 
        services may be continued to be provided for a child with a 
        serious emotional disturbance who is over the age of 18 
        consistent with section 245.4875, subdivision 8.  Staffing 
        ratios must be sufficient to serve the needs of the clients.  
        The case manager must meet the requirements in section 245.4871, 
        subdivision 4.  
           (b) Except as permitted by law and the commissioner under 
        demonstration projects, case management services provided to 
        children with severe emotional disturbance eligible for medical 
        assistance must be billed to the medical assistance program 
        under sections 256B.02, subdivision 8, and 256B.0625. 
           (c) Case management services are eligible for reimbursement 
        under the medical assistance program.  Costs of mentoring, 
        supervision, and continuing education may be included in the 
        reimbursement rate methodology used for case management services 
        under the medical assistance program. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 11.  Minnesota Statutes 2003 Supplement, section 
        246.15, is amended by adding a subdivision to read: 
           Subd. 3.  [SAVINGS ACCOUNT.] The commissioner of human 
        services shall create a savings account for each patient 
        receiving treatment in a secure treatment facility as defined by 
        section 253B.02, subdivision 18a.  The source of money to be 
        deposited in this account shall come from a portion of the 
        patient's share of the cost of care.  The money in this savings 
        account shall be made available to the patient when the patient 
        is ready to be transitioned into the community.  The money in 
        the account shall be used for expenses associated with obtaining 
        housing and other personal needs necessary for the patient's 
        smooth transition into the community.  The savings account shall 
        be called "forensic patient transition savings account." 
           Sec. 12.  [246B.05] [MINNESOTA SEX OFFENDER PROGRAM; 
        PRODUCTIVE DAY PROGRAM.] 
           Subdivision 1.  [EMPLOYMENT OPTION.] The commissioner of 
        human services, in consultation with the commissioner of 
        corrections, shall develop an employment option for persons 
        committed to a sexual psychopathic personality treatment center 
        in order for patients to contribute to their cost of care.  The 
        employment may include work maintaining the center or work that 
        is brought to the center by an outside source.  The earnings 
        generated must be deposited into the account created in 
        subdivision 2 and divided between the participating patient and 
        the center, in an effort to reduce state costs. 
           Subd. 2.  [MINNESOTA SEX OFFENDER PROGRAM; PRODUCTIVE DAY 
        PROGRAM ACCOUNT.] A productive day program account is created in 
        the state treasury.  Money collected by the commissioner of 
        human services for the program under this section must be 
        deposited in this account.  Money in the account is appropriated 
        to the commissioner for purposes of this section. 
           Subd. 3.  [MONEY.] The commissioner has the authority to 
        collect money resulting from the productive day program, and 
        retain 50 percent to reimburse the state for the cost of 
        administering the work program and for the purpose of reducing 
        state costs associated with the Minnesota Sex Offender Program 
        and return 50 percent of the earnings to the patient. 
           Sec. 13.  Minnesota Statutes 2003 Supplement, section 
        252.27, subdivision 2a, is amended to read: 
           Subd. 2a.  [CONTRIBUTION AMOUNT.] (a) The natural or 
        adoptive parents of a minor child, including a child determined 
        eligible for medical assistance without consideration of 
        parental income, must contribute monthly to the cost of services 
        used by making monthly payments on a sliding scale based on 
        income, unless the child is married or has been married, 
        parental rights have been terminated, or the child's adoption is 
        subsidized according to section 259.67 or through title IV-E of 
        the Social Security Act. 
           (b) For households with adjusted gross income equal to or 
        greater than 100 percent of federal poverty guidelines, the 
        parental contribution shall be computed by applying the 
        following schedule of rates to the adjusted gross income of the 
        natural or adoptive parents: 
           (1) if the adjusted gross income is equal to or greater 
        than 100 percent of federal poverty guidelines and less than 175 
        percent of federal poverty guidelines, the parental contribution 
        is $4 per month; 
           (2) if the adjusted gross income is equal to or greater 
        than 175 percent of federal poverty guidelines and less than or 
        equal to 375 percent of federal poverty guidelines, the parental 
        contribution shall be determined using a sliding fee scale 
        established by the commissioner of human services which begins 
        at one percent of adjusted gross income at 175 percent of 
        federal poverty guidelines and increases to 7.5 percent of 
        adjusted gross income for those with adjusted gross income up to 
        375 percent of federal poverty guidelines; 
           (3) if the adjusted gross income is greater than 375 
        percent of federal poverty guidelines and less than 675 percent 
        of federal poverty guidelines, the parental contribution shall 
        be 7.5 percent of adjusted gross income; 
           (4) if the adjusted gross income is equal to or greater 
        than 675 percent of federal poverty guidelines and less than 975 
        percent of federal poverty guidelines, the parental contribution 
        shall be ten percent of adjusted gross income; and 
           (5) if the adjusted gross income is equal to or greater 
        than 975 percent of federal poverty guidelines, the parental 
        contribution shall be 12.5 percent of adjusted gross income. 
           If the child lives with the parent, the annual adjusted 
        gross income is reduced by $2,400 prior to calculating the 
        parental contribution.  If the child resides in an institution 
        specified in section 256B.35, the parent is responsible for the 
        personal needs allowance specified under that section in 
        addition to the parental contribution determined under this 
        section.  The parental contribution is reduced by any amount 
        required to be paid directly to the child pursuant to a court 
        order, but only if actually paid. 
           (c) The household size to be used in determining the amount 
        of contribution under paragraph (b) includes natural and 
        adoptive parents and their dependents under age 21, including 
        the child receiving services.  Adjustments in the contribution 
        amount due to annual changes in the federal poverty guidelines 
        shall be implemented on the first day of July following 
        publication of the changes. 
           (d) For purposes of paragraph (b), "income" means the 
        adjusted gross income of the natural or adoptive parents 
        determined according to the previous year's federal tax form, 
        except, effective retroactive to July 1, 2003, taxable capital 
        gains to the extent the funds have been used to purchase a home 
        shall not be counted as income. 
           (e) The contribution shall be explained in writing to the 
        parents at the time eligibility for services is being 
        determined.  The contribution shall be made on a monthly basis 
        effective with the first month in which the child receives 
        services.  Annually upon redetermination or at termination of 
        eligibility, if the contribution exceeded the cost of services 
        provided, the local agency or the state shall reimburse that 
        excess amount to the parents, either by direct reimbursement if 
        the parent is no longer required to pay a contribution, or by a 
        reduction in or waiver of parental fees until the excess amount 
        is exhausted. 
           (f) The monthly contribution amount must be reviewed at 
        least every 12 months; when there is a change in household size; 
        and when there is a loss of or gain in income from one month to 
        another in excess of ten percent.  The local agency shall mail a 
        written notice 30 days in advance of the effective date of a 
        change in the contribution amount.  A decrease in the 
        contribution amount is effective in the month that the parent 
        verifies a reduction in income or change in household size. 
           (g) Parents of a minor child who do not live with each 
        other shall each pay the contribution required under paragraph 
        (a).  An amount equal to the annual court-ordered child support 
        payment actually paid on behalf of the child receiving services 
        shall be deducted from the adjusted gross income of the parent 
        making the payment prior to calculating the parental 
        contribution under paragraph (b). 
           (h) The contribution under paragraph (b) shall be increased 
        by an additional five percent if the local agency determines 
        that insurance coverage is available but not obtained for the 
        child.  For purposes of this section, "available" means the 
        insurance is a benefit of employment for a family member at an 
        annual cost of no more than five percent of the family's annual 
        income.  For purposes of this section, "insurance" means health 
        and accident insurance coverage, enrollment in a nonprofit 
        health service plan, health maintenance organization, 
        self-insured plan, or preferred provider organization. 
           Parents who have more than one child receiving services 
        shall not be required to pay more than the amount for the child 
        with the highest expenditures.  There shall be no resource 
        contribution from the parents.  The parent shall not be required 
        to pay a contribution in excess of the cost of the services 
        provided to the child, not counting payments made to school 
        districts for education-related services.  Notice of an increase 
        in fee payment must be given at least 30 days before the 
        increased fee is due.  
           (i) The contribution under paragraph (b) shall be reduced 
        by $300 per fiscal year if, in the 12 months prior to July 1: 
           (1) the parent applied for insurance for the child; 
           (2) the insurer denied insurance; 
           (3) the parents submitted a complaint or appeal, in writing 
        to the insurer, submitted a complaint or appeal, in writing, to 
        the commissioner of health or the commissioner of commerce, or 
        litigated the complaint or appeal; and 
           (4) as a result of the dispute, the insurer reversed its 
        decision and granted insurance. 
           For purposes of this section, "insurance" has the meaning 
        given in paragraph (h). 
           A parent who has requested a reduction in the contribution 
        amount under this paragraph shall submit proof in the form and 
        manner prescribed by the commissioner or county agency, 
        including, but not limited to, the insurer's denial of 
        insurance, the written letter or complaint of the parents, court 
        documents, and the written response of the insurer approving 
        insurance.  The determinations of the commissioner or county 
        agency under this paragraph are not rules subject to chapter 14. 
           Sec. 14.  Minnesota Statutes 2002, section 253B.02, is 
        amended by adding a subdivision to read: 
           Subd. 24.  [ADMINISTRATIVE RESTRICTION.] "Administrative 
        restriction" means any measure utilized by the commissioner to 
        maintain safety and security, protect possible evidence, and 
        prevent the continuation of suspected criminal acts.  
        Administrative restriction does not mean protective isolation as 
        defined by Minnesota Rules, part 9515.3090, subpart 4.  
        Administrative restriction may include increased monitoring, 
        program limitations, loss of privileges, restricted access to 
        and use of possessions, and separation of a patient from the 
        normal living environment, as determined by the commissioner or 
        the commissioner's designee.  Administrative restriction applies 
        only to patients in a secure treatment facility as defined in 
        subdivision 18a who:  
           (1) are suspected of committing a crime or charged with a 
        crime; 
           (2) are the subject of a criminal investigation; 
           (3) are awaiting sentencing following a conviction of a 
        crime; or 
           (4) are awaiting transfer to a correctional facility.  
        The commissioner shall establish policies and procedures 
        according to section 246.014, paragraph (d), regarding the use 
        of administrative restriction.  The policies and procedures 
        shall identify the implementation and termination of 
        administrative restrictions.  Use of administrative restriction 
        and the reason associated with the use shall be documented in 
        the patient's medical record. 
           Sec. 15.  Minnesota Statutes 2002, section 253B.02, is 
        amended by adding a subdivision to read: 
           Subd. 25.  [SAFETY.] "Safety" means protection of persons 
        or property from potential danger, risk, injury, harm, or damage.
           Sec. 16.  Minnesota Statutes 2002, section 253B.02, is 
        amended by adding a subdivision to read: 
           Subd. 26.  [SECURITY.] "Security" means the measures 
        necessary to achieve the management and accountability of 
        patients of the facility, staff, and visitors, as well as 
        property of the facility. 
           Sec. 17.  Minnesota Statutes 2002, section 253B.03, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [ADMINISTRATIVE RESTRICTION.] (a) A patient has 
        the right to be free from unnecessary or excessive 
        administrative restriction.  Administrative restriction shall 
        not be used for the convenience of staff, for retaliation for 
        filing complaints, or as a substitute for program treatment.  
        Administrative restriction may not involve any further 
        deprivation of privileges than is necessary. 
           (b) Administrative restriction may include separate and 
        secure housing.  
           (c) Patients under administrative restriction shall not be 
        limited in access to their attorney. 
           (d) If a patient is placed on administrative restriction 
        because the patient is suspected of committing a crime, the 
        secure treatment facility must report the crime to the 
        appropriate police agency within 24 hours of the beginning of 
        administrative restriction.  The patient must be released from 
        administrative restriction if a police agency does not begin an 
        investigation within 72 hours of the report. 
           (e) A patient placed on administrative restriction because 
        the patient is a subject of a criminal investigation must be 
        released from administrative restriction when the investigation 
        is completed.  If the patient is charged with a crime following 
        the investigation, administrative restriction may continue until 
        the charge is disposed of. 
           (f) The secure treatment facility must notify the patient's 
        attorney of the patient's being placed on administrative 
        restriction within 24 hours after the beginning of 
        administrative restriction. 
           Sec. 18.  Minnesota Statutes 2002, section 253B.185, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [RIGHTS OF PATIENTS COMMITTED UNDER THIS 
        SECTION.] (a) The commissioner or the commissioner's designee 
        may limit the statutory rights described in paragraph (b) for 
        patients committed to the Minnesota sex offender program under 
        this section or with the commissioner's consent under section 
        246B.02.  The statutory rights described in paragraph (b) may be 
        limited only as necessary to maintain a therapeutic environment 
        or the security of the facility or to protect the safety and 
        well-being of patients, staff, and the public. 
           (b) The statutory rights that may be limited in accordance 
        with paragraph (a) are those set forth in section 144.651, 
        subdivision 19, personal privacy; section 144.651, subdivision 
        21, private communications; section 144.651, subdivision 22, 
        retain and use of personal property; section 144.651, 
        subdivision 25, manage personal financial affairs; section 
        144.651, subdivision 26, meet with visitors and participate in 
        groups; section 253B.03, subdivision 2, correspond with others; 
        and section 253B.03, subdivision 3, receive visitors and make 
        telephone calls.  Other statutory rights enumerated by sections 
        144.651 and 253B.03, or any other law, may be limited as 
        provided in those sections. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 19.  Minnesota Statutes 2002, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 14a.  [SINGLE BENEFIT DEMONSTRATION.] The 
        commissioner may conduct a demonstration program under a federal 
        Title IV-E waiver to demonstrate the impact of a single benefit 
        level on the rate of permanency for children in long-term foster 
        care through transfer of permanent legal custody or adoption.  
        The commissioner of human services is authorized to waive 
        enforcement of related statutory program requirements, rules, 
        and standards in one or more counties for the purpose of this 
        demonstration.  The demonstration must comply with the 
        requirements of the secretary of health and human services under 
        federal waiver and be cost neutral to the state. 
           The commissioner may measure cost neutrality to the state 
        by the same mechanism approved by the secretary of health and 
        human services to measure federal cost neutrality.  The 
        commissioner is authorized to accept and administer county funds 
        and to transfer state and federal funds among the affected 
        programs as necessary for the conduct of the demonstration. 
           Sec. 20.  Minnesota Statutes 2002, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 22.  [HOMELESS SERVICES.] The commissioner of human 
        services may contract directly with nonprofit organizations 
        providing homeless services in two or more counties. 
           [EFFECTIVE DATE.] This section is effective immediately 
        following final enactment. 
           Sec. 21.  Minnesota Statutes 2002, section 256B.055, is 
        amended by adding a subdivision to read: 
           Subd. 10b.  [CHILDREN.] This subdivision supersedes 
        subdivision 10 as long as the Minnesota health care reform 
        waiver remains in effect.  When the waiver expires, the 
        commissioner of human services shall publish a notice in the 
        State Register and notify the revisor of statutes.  Medical 
        assistance may be paid for a child less than two years of age 
        with countable family income as established for infants under 
        section 256B.057, subdivision 1.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2003. 
           Sec. 22.  Minnesota Statutes 2003 Supplement, section 
        256B.0596, is amended to read: 
           256B.0596 [MENTAL HEALTH CASE MANAGEMENT.] 
           Counties shall contract with eligible providers willing to 
        provide mental health case management services under section 
        256B.0625, subdivision 20.  In order to be eligible, in addition 
        to general provider requirements under this chapter, the 
        provider must: 
           (1) be willing to provide the mental health case management 
        services; and 
           (2) have a minimum of at least one contact with the client 
        per week.  This section is not intended to limit the ability of 
        a county to provide its own mental health case management 
        services. 
           Sec. 23.  Minnesota Statutes 2003 Supplement, section 
        256B.0622, subdivision 8, is amended to read: 
           Subd. 8.  [MEDICAL ASSISTANCE PAYMENT FOR INTENSIVE 
        REHABILITATIVE MENTAL HEALTH SERVICES.] (a) Payment for 
        residential and nonresidential services in this section shall be 
        based on one daily rate per provider inclusive of the following 
        services received by an eligible recipient in a given calendar 
        day:  all rehabilitative services under this section, staff 
        travel time to provide rehabilitative services under this 
        section, and nonresidential crisis stabilization services under 
        section 256B.0624. 
           (b) Except as indicated in paragraph (c), payment will not 
        be made to more than one entity for each recipient for services 
        provided under this section on a given day.  If services under 
        this section are provided by a team that includes staff from 
        more than one entity, the team must determine how to distribute 
        the payment among the members. 
           (c) The host county shall recommend to the commissioner one 
        rate for each entity that will bill medical assistance for 
        residential services under this section and two rates for each 
        nonresidential provider.  The first nonresidential rate is for 
        recipients who are not receiving residential services.  The 
        second nonresidential rate is for recipients who are temporarily 
        receiving residential services and need continued contact with 
        the nonresidential team to assure timely discharge from 
        residential services.  In developing these rates, the host 
        county shall consider and document: 
           (1) the cost for similar services in the local trade area; 
           (2) actual costs incurred by entities providing the 
        services; 
           (3) the intensity and frequency of services to be provided 
        to each recipient; 
           (4) the degree to which recipients will receive services 
        other than services under this section; 
           (5) the costs of other services, such as case management, 
        that will be separately reimbursed; and 
           (6) input from the local planning process authorized by the 
        adult mental health initiative under section 245.4661, regarding 
        recipients' service needs. 
           (d) The rate for intensive rehabilitative mental health 
        services must exclude room and board, as defined in section 
        256I.03, subdivision 6, and services not covered under this 
        section, such as case management, partial hospitalization, home 
        care, and inpatient services.  Physician services that are not 
        separately billed may be included in the rate to the extent that 
        a psychiatrist is a member of the treatment team.  The county's 
        recommendation shall specify the period for which the rate will 
        be applicable, not to exceed two years. 
           (e) When services under this section are provided by an 
        assertive community team, case management functions must be an 
        integral part of the team.  The county must allocate costs which 
        are reimbursable under this section versus costs which are 
        reimbursable through case management or other reimbursement, so 
        that payment is not duplicated. 
           (f) The rate for a provider must not exceed the rate 
        charged by that provider for the same service to other payors. 
           (g) The commissioner shall approve or reject the county's 
        rate recommendation, based on the commissioner's own analysis of 
        the criteria in paragraph (c). 
           Sec. 24.  Minnesota Statutes 2002, section 256B.0916, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISTRIBUTION OF FUNDS; PARTNERSHIPS.] (a) 
        Beginning with fiscal year 2000, the commissioner shall 
        distribute all funding available for home and community-based 
        waiver services for persons with mental retardation or related 
        conditions to individual counties or to groups of counties that 
        form partnerships to jointly plan, administer, and authorize 
        funding for eligible individuals.  The commissioner shall 
        encourage counties to form partnerships that have a sufficient 
        number of recipients and funding to adequately manage the risk 
        and maximize use of available resources.  
           (b) Counties must submit a request for funds and a plan for 
        administering the program as required by the commissioner.  The 
        plan must identify the number of clients to be served, their 
        ages, and their priority listing based on: 
           (1) requirements in Minnesota Rules, part 9525.1880; 
           (2) unstable living situations due to the age or incapacity 
        of the primary caregiver; 
           (3) the need for services to avoid out-of-home placement of 
        children; and 
           (4) the need to serve persons affected by private sector 
        ICF/MR closures; and 
           (5) the need to serve persons whose consumer support grant 
        exception amount was eliminated in 2004. 
        The plan must also identify changes made to improve services to 
        eligible persons and to improve program management. 
           (c) In allocating resources to counties, priority must be 
        given to groups of counties that form partnerships to jointly 
        plan, administer, and authorize funding for eligible individuals 
        and to counties determined by the commissioner to have 
        sufficient waiver capacity to maximize resource use. 
           (d) Within 30 days after receiving the county request for 
        funds and plans, the commissioner shall provide a written 
        response to the plan that includes the level of resources 
        available to serve additional persons. 
           (e) Counties are eligible to receive medical assistance 
        administrative reimbursement for administrative costs under 
        criteria established by the commissioner. 
           Sec. 25.  Minnesota Statutes 2002, section 256B.49, is 
        amended by adding a subdivision to read: 
           Subd. 21.  [REPORT.] The commissioner shall expand on the 
        annual report required under section 256B.0916, subdivision 7, 
        to include information on the county of residence and financial 
        responsibility, age, and major diagnoses for persons eligible 
        for the home and community-based waivers authorized under 
        subdivision 11 who are: 
           (1) receiving those services; 
           (2) screened and waiting for waiver services; and 
           (3) residing in nursing facilities and are under age 65. 
           Sec. 26.  Minnesota Statutes 2003 Supplement, section 
        256B.69, subdivision 4, is amended to read: 
           Subd. 4.  [LIMITATION OF CHOICE.] (a) 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.  
           (b) 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; 
           (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:  
           (i) they are 65 years of age or older; or 
           (ii) they reside in Itasca County or they reside in a 
        county in which the commissioner conducts a pilot project under 
        a waiver granted pursuant to section 1115 of the Social Security 
        Act; 
           (3) recipients who currently have private coverage through 
        a health maintenance organization; 
           (4) recipients who are eligible for medical assistance by 
        spending down excess income for medical expenses other than the 
        nursing facility per diem expense; 
           (5) recipients who receive benefits under the Refugee 
        Assistance Program, established under United States Code, title 
        8, section 1522(e); 
           (6) children who are both determined to be severely 
        emotionally disturbed and receiving case management services 
        according to section 256B.0625, subdivision 20; 
           (7) adults who are both determined to be seriously and 
        persistently mentally ill and received case management services 
        according to section 256B.0625, subdivision 20; 
           (8) persons eligible for medical assistance according to 
        section 256B.057, subdivision 10; and 
           (9) persons with access to cost-effective 
        employer-sponsored private health insurance or persons enrolled 
        in an individual health plan determined to be cost-effective 
        according to section 256B.0625, subdivision 15.  
        Children under age 21 who are in foster placement may enroll in 
        the project on an elective basis.  Individuals excluded under 
        clauses (1), (6), and (7) may choose to enroll on an elective 
        basis.  The commissioner may enroll recipients in the prepaid 
        medical assistance program for seniors who are (1) age 65 and 
        over, and (2) eligible for medical assistance by spending down 
        excess income. 
           (c) The commissioner may allow persons with a one-month 
        spenddown who are otherwise eligible to enroll to voluntarily 
        enroll or remain enrolled, if they elect to prepay their monthly 
        spenddown to the state.  
           (d) The commissioner may require those individuals to 
        enroll in the prepaid medical assistance program who otherwise 
        would have been excluded under paragraph (b), clauses (1), (3), 
        and (8), and under Minnesota Rules, part 9500.1452, subpart 2, 
        items H, K, and L.  
           (e) Before limitation of choice is implemented, eligible 
        individuals shall be notified and after notification, shall be 
        allowed to choose only among demonstration providers.  The 
        commissioner may assign an individual with private coverage 
        through a health maintenance organization, to the same health 
        maintenance organization for medical assistance coverage, if the 
        health maintenance organization is under contract for medical 
        assistance in the individual's county of residence.  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. 
           (f) An infant born to a woman who is eligible for and 
        receiving medical assistance and who is enrolled in the prepaid 
        medical assistance program shall be retroactively enrolled to 
        the month of birth in the same managed care plan as the mother 
        once the child is enrolled in medical assistance unless the 
        child is determined to be excluded from enrollment in a prepaid 
        plan under this section.  
           [EFFECTIVE DATE.] This section is effective July 1, 2004, 
        or upon federal approval, whichever is later.  
           Sec. 27.  Minnesota Statutes 2002, section 256F.10, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CASE MANAGERS.] Case managers are individuals 
        employed by and authorized by the certified child welfare 
        targeted case management provider to provide case management 
        services under section 256B.094 and this section.  A case 
        manager must have:  
           (1) skills in identifying and assessing a wide range of 
        children's needs; 
           (2) knowledge of local child welfare and a variety of 
        community resources and effective use of those resources for the 
        benefit of the child; and 
           (3) a bachelor's degree in social work, psychology, 
        sociology, or a closely related field from an accredited 
        four-year college or university; or a bachelor's degree from an 
        accredited four-year college or university in a field other than 
        social work, psychology, sociology or a closely related field, 
        plus one year of experience in the delivery of social services 
        to children as a supervised social worker in a public or private 
        social services agency; or 
           (4) been authorized to serve as a tribal child welfare case 
        manager certified by a federally recognized tribal government 
        within the state of Minnesota, pursuant to section 256B.02, 
        subdivision 7, paragraph (c), and determined as meeting 
        applicable standards. 
           Sec. 28.  Minnesota Statutes 2002, section 260C.007, 
        subdivision 18, is amended to read: 
           Subd. 18.  [FOSTER CARE.] "Foster care" means the 24 hour a 
        day care of a child in any facility which for gain or otherwise 
        regularly provides one or more children, when unaccompanied by 
        their parents, with a substitute for the care, food, lodging, 
        training, education, supervision or treatment they need but 
        which for any reason cannot be furnished by their parents or 
        legal guardians in their homes. substitute care for children 
        placed away from their parents or guardian and for whom a 
        responsible social services agency has placement and care 
        responsibility.  "Foster care" includes, but is not limited to, 
        placement in foster family homes, foster homes of relatives, 
        group homes, emergency shelters, residential facilities not 
        excluded in this subdivision, child care institutions, and 
        proadoptive homes.  A child is in foster care under this 
        definition regardless of whether the facility is licensed and 
        payments are made for the cost of care.  Nothing in this 
        definition creates any authority to place a child in a home or 
        facility that is required to be licensed which is not licensed.  
        "Foster care" does not include placement in any of the following 
        facilities:  hospitals, in-patient chemical dependency treatment 
        facilities, facilities that are primarily for delinquent 
        children, any corrections facility or program within a 
        particular correction's facility not meeting requirements for 
        Title IV-E facilities as determined by the commissioner, 
        facilities to which a child is committed under the provision of 
        chapter 253B, forestry camps, or jails. 
           Sec. 29.  Minnesota Statutes 2002, section 260C.201, 
        subdivision 11, is amended to read: 
           Subd. 11.  [REVIEW OF COURT ORDERED PLACEMENTS; PERMANENT 
        PLACEMENT DETERMINATION.] (a) Except for This subdivision and 
        subdivision 11a do not apply in cases where the child is in 
        placement due solely to the child's developmental disability or 
        emotional disturbance, and where legal custody has not been 
        transferred to the responsible social services agency, and where 
        the court finds compelling reasons under section 260C.007, 
        subdivision 8, to continue the child in foster care past the 
        time periods specified in this subdivision.  Foster care 
        placements of children due solely to their disability are 
        governed by section 260C.141, subdivision 2b.  In all other 
        cases where the child is in foster care or in the care of a 
        noncustodial parent under subdivision 1 of this section, the 
        court shall conduct a hearing to determine the permanent status 
        of a child not later than 12 months after the child is 
        placed out of the home of the in foster care or in the care of a 
        noncustodial parent. 
           For purposes of this subdivision, the date of the child's 
        placement out of the home of the parent in foster care is the 
        earlier of the first court-ordered placement or 60 days after 
        the date on which the child has been voluntarily placed out of 
        the home in foster care by the child's parent or guardian.  For 
        purposes of this subdivision, time spent by a child under the 
        protective supervision of the responsible social services agency 
        in the home of a noncustodial parent pursuant to an order under 
        subdivision 1 of this section counts towards the requirement of 
        a permanency hearing under this subdivision or subdivision 11a. 
           For purposes of this subdivision, 12 months is calculated 
        as follows: 
           (1) during the pendency of a petition alleging that a child 
        is in need of protection or services, all time periods when a 
        child is placed out of the home of the in foster care or in the 
        home of a noncustodial parent are cumulated; 
           (2) if a child has been placed out of the home of the 
        parent in foster care within the previous five years under one 
        or more previous petitions, the lengths of all prior time 
        periods when the child was placed out of the home in foster care 
        within the previous five years are cumulated.  If a child under 
        this clause has been out of the home in foster care for 12 
        months or more, the court, if it is in the best interests of the 
        child and for compelling reasons, may extend the total time the 
        child may continue out of the home under the current petition up 
        to an additional six months before making a permanency 
        determination.  
           (b) Unless the responsible social services agency 
        recommends return of the child to the custodial parent or 
        parents, not later than 30 days prior to this hearing, the 
        responsible social services agency shall file pleadings in 
        juvenile court to establish the basis for the juvenile court to 
        order permanent placement of the child according to paragraph 
        (d).  Notice of the hearing and copies of the pleadings must be 
        provided pursuant to section 260C.152.  If a termination of 
        parental rights petition is filed before the date required for 
        the permanency planning determination and there is a trial under 
        section 260C.163 scheduled on that petition within 90 days of 
        the filing of the petition, no hearing need be conducted under 
        this subdivision.  
           (c) At the conclusion of the hearing, the court shall order 
        the child returned to the care of the parent or guardian from 
        whom the child was removed or order a permanent placement in the 
        child's best interests.  The "best interests of the child" means 
        all relevant factors to be considered and evaluated.  Transfer 
        of permanent legal and physical custody, termination of parental 
        rights, or guardianship and legal custody to the commissioner 
        through a consent to adopt are preferred permanency options for 
        a child who cannot return home. 
           (d) If the child is not returned to the home, the court 
        must order one of the following dispositions: 
           (1) permanent legal and physical custody to a relative in 
        the best interests of the child according to the following 
        conditions: 
           (i) an order for transfer of permanent legal and physical 
        custody to a relative shall only be made after the court has 
        reviewed the suitability of the prospective legal and physical 
        custodian; 
           (ii) in transferring permanent legal and physical custody 
        to a relative, the juvenile court shall follow the standards 
        applicable under this chapter and chapter 260, and the 
        procedures set out in the juvenile court rules; 
           (iii) an order establishing permanent legal and physical 
        custody under this subdivision must be filed with the family 
        court; 
           (iv) a transfer of legal and physical custody includes 
        responsibility for the protection, education, care, and control 
        of the child and decision making on behalf of the child; 
           (v) the social services agency may bring a petition or 
        motion naming a fit and willing relative as a proposed permanent 
        legal and physical custodian.  The commissioner of human 
        services shall annually prepare for counties information that 
        must be given to proposed custodians about their legal rights 
        and obligations as custodians together with information on 
        financial and medical benefits for which the child is eligible; 
        and 
           (vi) the juvenile court may maintain jurisdiction over the 
        responsible social services agency, the parents or guardian of 
        the child, the child, and the permanent legal and physical 
        custodian for purposes of ensuring appropriate services are 
        delivered to the child and permanent legal custodian or for the 
        purpose of ensuring conditions ordered by the court related to 
        the care and custody of the child are met; 
           (2) termination of parental rights according to the 
        following conditions: 
           (i) unless the social services agency has already filed a 
        petition for termination of parental rights under section 
        260C.307, the court may order such a petition filed and all the 
        requirements of sections 260C.301 to 260C.328 remain applicable; 
        and 
           (ii) an adoption completed subsequent to a determination 
        under this subdivision may include an agreement for 
        communication or contact under section 259.58; 
           (3) long-term foster care according to the following 
        conditions: 
           (i) the court may order a child into long-term foster care 
        only if it finds compelling reasons that neither an award of 
        permanent legal and physical custody to a relative, nor 
        termination of parental rights is in the child's best interests; 
        and 
           (ii) further, the court may only order long-term foster 
        care for the child under this section if it finds the following: 
           (A) the child has reached age 12 and reasonable efforts by 
        the responsible social services agency have failed to locate an 
        adoptive family for the child; or 
           (B) the child is a sibling of a child described in subitem 
        (A) and the siblings have a significant positive relationship 
        and are ordered into the same long-term foster care home; 
           (4) foster care for a specified period of time according to 
        the following conditions: 
           (i) foster care for a specified period of time may be 
        ordered only if: 
           (A) the sole basis for an adjudication that the child is in 
        need of protection or services is the child's behavior; 
           (B) the court finds that foster care for a specified period 
        of time is in the best interests of the child; and 
           (C) the court finds compelling reasons that neither an 
        award of permanent legal and physical custody to a relative, nor 
        termination of parental rights is in the child's best interests; 
           (ii) the order does not specify that the child continue in 
        foster care for any period exceeding one year; or 
           (5) guardianship and legal custody to the commissioner of 
        human services under the following procedures and conditions: 
           (i) there is an identified prospective adoptive home that 
        has agreed to adopt the child and the court accepts the parent's 
        voluntary consent to adopt under section 259.24; 
           (ii) if the court accepts a consent to adopt in lieu of 
        ordering one of the other enumerated permanency dispositions, 
        the court must review the matter at least every 90 days.  The 
        review will address the reasonable efforts of the agency to 
        achieve a finalized adoption; 
           (iii) a consent to adopt under this clause vests all legal 
        authority regarding the child, including guardianship and legal 
        custody of the child, with the commissioner of human services as 
        if the child were a state ward after termination of parental 
        rights; 
           (iv) the court must forward a copy of the consent to adopt, 
        together with a certified copy of the order transferring 
        guardianship and legal custody to the commissioner, to the 
        commissioner; and 
           (v) if an adoption is not finalized by the identified 
        prospective adoptive parent within 12 months of the execution of 
        the consent to adopt under this clause, the commissioner of 
        human services or the commissioner's delegate shall pursue 
        adoptive placement in another home unless the commissioner 
        certifies that the failure to finalize is not due to either an 
        action or a failure to act by the prospective adoptive parent. 
           (e) In ordering a permanent placement of a child, the court 
        must be governed by the best interests of the child, including a 
        review of the relationship between the child and relatives and 
        the child and other important persons with whom the child has 
        resided or had significant contact. 
           (f) Once a permanent placement determination has been made 
        and permanent placement has been established, further court 
        reviews are necessary if: 
           (1) the placement is long-term foster care or foster care 
        for a specified period of time; 
           (2) the court orders further hearings because it has 
        retained jurisdiction of a transfer of permanent legal and 
        physical custody matter; 
           (3) an adoption has not yet been finalized; or 
           (4) there is a disruption of the permanent or long-term 
        placement.  
           (g) Court reviews of an order for long-term foster care, 
        whether under this section or section 260C.317, subdivision 3, 
        paragraph (d), or foster care for a specified period of time 
        must be conducted at least yearly and must review the child's 
        out-of-home placement plan and the reasonable efforts of the 
        agency to: 
           (1) identify a specific long-term foster home for the child 
        or a specific foster home for the time the child is specified to 
        be out of the care of the parent, if one has not already been 
        identified; 
           (2) support continued placement of the child in the 
        identified home, if one has been identified; 
           (3) ensure appropriate services are provided to the child 
        during the period of long-term foster care or foster care for a 
        specified period of time; 
           (4) plan for the child's independence upon the child's 
        leaving long-term foster care living as required under section 
        260C.212, subdivision 1; and 
           (5) where placement is for a specified period of time, a 
        plan for the safe return of the child to the care of the parent. 
           (h) An order under this subdivision must include the 
        following detailed findings: 
           (1) how the child's best interests are served by the order; 
           (2) the nature and extent of the responsible social service 
        agency's reasonable efforts, or, in the case of an Indian child, 
        active efforts to reunify the child with the parent or parents; 
           (3) the parent's or parents' efforts and ability to use 
        services to correct the conditions which led to the out-of-home 
        placement; and 
           (4) whether the conditions which led to the out-of-home 
        placement have been corrected so that the child can return home. 
           (i) An order for permanent legal and physical custody of a 
        child may be modified under sections 518.18 and 518.185.  The 
        social services agency is a party to the proceeding and must 
        receive notice.  A parent may only seek modification of an order 
        for long-term foster care upon motion and a showing by the 
        parent of a substantial change in the parent's circumstances 
        such that the parent could provide appropriate care for the 
        child and that removal of the child from the child's permanent 
        placement and the return to the parent's care would be in the 
        best interest of the child. 
           (j) The court shall issue an order required under this 
        section within 15 days of the close of the proceedings.  The 
        court may extend issuing the order an additional 15 days when 
        necessary in the interests of justice and the best interests of 
        the child. 
           Sec. 30.  Minnesota Statutes 2002, section 260C.212, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RELATIVE SEARCH; NATURE.] (a) In implementing 
        the requirement that the responsible social services agency must 
        consider placement with a relative under subdivision 2 as soon 
        as possible without delay after identifying the need for 
        placement of the child in foster care, the responsible social 
        services agency shall identify relatives of the child and notify 
        them of the need for a foster care home for the child and of the 
        possibility of the need for a permanent out-of-home placement of 
        the child.  The relative search required by this section shall 
        be reasonable and comprehensive in scope and may last up to six 
        months or until a fit and willing relative is 
        identified.  Relatives should be notified that a decision not to 
        be a placement resource at the beginning of the case may affect 
        the relative being considered for placement of the child with 
        that relative later The relative search required by this section 
        shall include both maternal relatives of the child and paternal 
        relatives of the child, if paternity is adjudicated.  The 
        relatives must be notified that they must keep the responsible 
        social services agency informed of their current address in 
        order to receive notice that a permanent placement is being 
        sought for the child.  A relative who fails to provide a current 
        address to the responsible social services agency forfeits the 
        right to notice of the possibility of permanent placement.  A 
        decision by a relative not to be a placement resource at the 
        beginning of the case shall not affect whether the relative is 
        considered for placement of the child with that relative later. 
           (b) A responsible social services agency may disclose 
        private or confidential data, as defined in section 13.02, to 
        relatives of the child for the purpose of locating a suitable 
        placement.  The agency shall disclose only data that is 
        necessary to facilitate possible placement with relatives.  If 
        the child's parent refuses to give the responsible social 
        services agency information sufficient to identify the maternal 
        and paternal relatives of the child, the agency shall determine 
        whether the parent's refusal is in the child's best interests.  
        If the agency determines the parent's refusal is not in the 
        child's best interests, the agency shall file a petition under 
        section 260C.141, and shall ask the juvenile court to order the 
        parent to provide the necessary information.  If a parent makes 
        an explicit request that relatives or a specific relative not be 
        contacted or considered for placement, the agency shall bring 
        the parent's request to the attention of the court to determine 
        whether the parent's request is consistent with the best 
        interests of the child and the agency shall not contact 
        relatives or a specific relative unless authorized to do so by 
        the juvenile court. 
           (c) When the placing agency determines that a permanent 
        placement hearing is necessary because there is a likelihood 
        that the child will not return to a parent's care, the agency 
        may send the notice provided in paragraph (d), may ask the court 
        to modify the requirements of the agency under this paragraph, 
        or may ask the court to completely relieve the agency of the 
        requirements of this paragraph.  The relative notification 
        requirements of this paragraph do not apply when the child is 
        placed with an appropriate relative or a foster home that has 
        committed to being the permanent legal placement for the child 
        and the agency approves of that foster home for permanent 
        placement of the child.  The actions ordered by the court under 
        this section must be consistent with the best interests, safety, 
        and welfare of the child. 
           (d) Unless required under the Indian Child Welfare Act or 
        relieved of this duty by the court under paragraph (c), when the 
        agency determines that it is necessary to prepare for the 
        permanent placement determination hearing, or in anticipation of 
        filing a termination of parental rights petition, the agency 
        shall send notice to the relatives, any adult with whom the 
        child is currently residing, any adult with whom the child has 
        resided for one year or longer in the past, and any adults who 
        have maintained a relationship or exercised visitation with the 
        child as identified in the agency case plan.  The notice must 
        state that a permanent home is sought for the child and that the 
        individuals receiving the notice may indicate to the agency 
        their interest in providing a permanent home.  The notice must 
        state that within 30 days of receipt of the notice an individual 
        receiving the notice must indicate to the agency the 
        individual's interest in providing a permanent home for the 
        child or that the individual may lose the opportunity to be 
        considered for a permanent placement.  
           (e) The Department of Human Services shall develop a best 
        practices guide and specialized staff training to assist the 
        responsible social services agency in performing and complying 
        with the relative search requirements under this subdivision. 
           Sec. 31.  [LEAD REDUCTION STUDY.] 
           The commissioner of health, in consultation with the 
        Department of Employment and Economic Development, the Minnesota 
        Housing Finance Agency, and the Department of Human Services, 
        shall develop and evaluate the best strategies to reduce the 
        number of children endangered by lead paint.  The study shall 
        examine:  
           (1) how to promote and encourage primary prevention; 
           (2) how to ensure that all children at risk are tested; 
           (3) whether or not to reduce the state mandatory 
        intervention from 20 to ten micrograms of lead per deciliter of 
        whole blood and if a reduction is not recommended whether to 
        develop guidelines on intervention for children with blood 
        levels between ten and 20 micrograms of lead per deciliter of 
        whole blood; 
           (4) how to provide incentives and funding support to 
        property owners for lead hazard prevention and reduction; and 
           (5) ways to provide resources for local jurisdictions to 
        conduct outreach.  
        The commissioner shall submit the results of the study and any 
        recommendations, including any necessary legislative changes to 
        the legislature by January 15, 2005.  
           Sec. 32.  [CONSUMER-DIRECTED COMMUNITY SUPPORT EVALUATION.] 
           The commissioner of human services, in consultation with 
        interested stakeholders, including representatives of consumers, 
        families, guardians, advocacy groups, counties, and providers, 
        shall evaluate the new consumer-directed community support 
        option under the home and community-based waiver programs, as 
        required by the federal Center for Medicare and Medicaid 
        Services.  The evaluation shall include, but not be limited to, 
        an examination of whether any current consumer-directed option 
        participants will have their funding reduced so significantly 
        that their health, safety, and welfare at home will be 
        jeopardized, and whether replacement services will cost more or 
        be of lower quality than their current consumer-directed 
        services.  The preliminary findings of the evaluation shall be 
        provided to the house and senate committees with jurisdiction 
        over human services policy and finance by February 15, 2005. 
           Sec. 33.  [REPEALER.] 
           Laws 2003, First Special Session chapter 14, article 3, 
        section 56, is repealed effective immediately following final 
        enactment. 

                                   ARTICLE 4
                  CHILD CARE; MINNESOTA FAMILY INVESTMENT PLAN
           Section 1.  Minnesota Statutes 2003 Supplement, section 
        119B.011, subdivision 6, is amended to read: 
           Subd. 6.  [CHILD CARE FUND.] "Child care fund" means a 
        program under this chapter providing:  
           (1) financial assistance for child care to parents engaged 
        in employment, job search, or education and training leading to 
        employment, or an at-home infant child care subsidy; and 
           (2) grants to develop, expand, and improve the access and 
        availability of child care services statewide. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 2.  Minnesota Statutes 2003 Supplement, section 
        119B.011, subdivision 8, is amended to read: 
           Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of education human services. 
           Sec. 3.  Minnesota Statutes 2003 Supplement, section 
        119B.011, subdivision 10, is amended to read: 
           Subd. 10.  [DEPARTMENT.] "Department" means the Department 
        of Education Human Services. 
           Sec. 4.  Minnesota Statutes 2002, section 119B.011, is 
        amended by adding a subdivision to read: 
           Subd. 10a.  [DIVERSIONARY WORK PROGRAM.] "Diversionary work 
        program" means the program established under section 256J.95. 
           Sec. 5.  Minnesota Statutes 2003 Supplement, section 
        119B.011, subdivision 15, is amended to read: 
           Subd. 15.  [INCOME.] "Income" means earned or unearned 
        income received by all family members, including public 
        assistance cash benefits and at-home infant child care subsidy 
        payments, unless specifically excluded and child support and 
        maintenance distributed to the family under section 256.741, 
        subdivision 15.  The following are excluded from income:  funds 
        used to pay for health insurance premiums for family members, 
        Supplemental Security Income, scholarships, work-study income, 
        and grants that cover costs or reimbursement for tuition, fees, 
        books, and educational supplies; student loans for tuition, 
        fees, books, supplies, and living expenses; state and federal 
        earned income tax credits; assistance specifically excluded as 
        income by law; in-kind income such as food support, energy 
        assistance, foster care assistance, medical assistance, child 
        care assistance, and housing subsidies; earned income of 
        full-time or part-time students up to the age of 19, who have 
        not earned a high school diploma or GED high school equivalency 
        diploma including earnings from summer employment; grant awards 
        under the family subsidy program; nonrecurring lump sum income 
        only to the extent that it is earmarked and used for the purpose 
        for which it is paid; and any income assigned to the public 
        authority according to section 256.741. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 6.  Minnesota Statutes 2003 Supplement, section 
        119B.011, subdivision 20, is amended to read: 
           Subd. 20.  [TRANSITION YEAR FAMILIES.] (a) "Transition year 
        families" means families who have received MFIP assistance, or 
        who were eligible to receive MFIP assistance after choosing to 
        discontinue receipt of the cash portion of MFIP assistance under 
        section 256J.31, subdivision 12, or families who have received 
        DWP assistance under section 256J.95 for at least three of the 
        last six months before losing eligibility for MFIP or DWP.  
        Transition year child care may be used to support employment or 
        job search. Transition year child care is not available to 
        families who have been disqualified from MFIP or DWP due to 
        fraud.  
           (b) Subd. 20a.  [TRANSITION YEAR EXTENSION FAMILIES.] 
        "Transition year extension year families" means families who 
        have completed their transition year of child care assistance 
        under this subdivision and who are eligible for, but on a 
        waiting list for, services under section 119B.03.  For purposes 
        of sections 119B.03, subdivision 3, and 119B.05, subdivision 1, 
        clause (2), families participating in extended transition year 
        shall not be considered transition year families.  Transition 
        year extension child care may be used to support employment or a 
        job search that meets the requirements of section 119B.10 for 
        the length of time necessary for families to be moved from the 
        basic sliding fee waiting list into the basic sliding fee 
        program.  
           Sec. 7.  Minnesota Statutes 2002, section 119B.02, 
        subdivision 4, is amended to read: 
           Subd. 4.  [UNIVERSAL APPLICATION FORM.] The commissioner 
        must develop and make available to all counties a universal 
        application form for child care assistance under this 
        chapter.  The commissioner may develop and make available to all 
        counties a child care addendum form to be used to supplement the 
        combined application form for MFIP, DWP, or Food Support or to 
        supplement other statewide application forms for public 
        assistance programs for families applying for one of these 
        programs in addition to child care assistance.  The application 
        must provide notice of eligibility requirements for assistance 
        and penalties for wrongfully obtaining assistance. 
           Sec. 8.  Minnesota Statutes 2002, section 119B.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBLE PARTICIPANTS.] Families that meet the 
        eligibility requirements under sections 119B.07, 119B.09, and 
        119B.10, except MFIP participants, work first 
        participants diversionary work program, and transition year 
        families are eligible for child care assistance under the basic 
        sliding fee program.  Families enrolled in the basic sliding fee 
        program shall be continued until they are no longer eligible.  
        Child care assistance provided through the child care fund is 
        considered assistance to the parent. 
           Sec. 9.  Minnesota Statutes 2003 Supplement, section 
        119B.03, subdivision 4, is amended to read: 
           Subd. 4.  [FUNDING PRIORITY.] (a) First priority for child 
        care assistance under the basic sliding fee program must be 
        given to eligible non-MFIP families who do not have a high 
        school or general equivalency diploma or who need remedial and 
        basic skill courses in order to pursue employment or to pursue 
        education leading to employment and who need child care 
        assistance to participate in the education program.  Within this 
        priority, the following subpriorities must be used: 
           (1) child care needs of minor parents; 
           (2) child care needs of parents under 21 years of age; and 
           (3) child care needs of other parents within the priority 
        group described in this paragraph. 
           (b) Second priority must be given to parents who have 
        completed their MFIP or work first DWP transition year, or 
        parents who are no longer receiving or eligible for diversionary 
        work program supports. 
           (c) Third priority must be given to families who are 
        eligible for portable basic sliding fee assistance through the 
        portability pool under subdivision 9. 
           (d) Families under paragraph (b) must be added to the basic 
        sliding fee waiting list on the date they begin the transition 
        year under section 119B.011, subdivision 20, and must be moved 
        into the basic sliding fee program as soon as possible after 
        they complete their transition year.  
           Sec. 10.  Minnesota Statutes 2002, section 119B.03, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [ALLOCATION DUE TO INCREASED FUNDING.] When 
        funding increases are implemented within a calendar year, every 
        county must receive an allocation at least equal and 
        proportionate to its original allocation for the same time 
        period.  The remainder of the allocation must be recalculated to 
        reflect the funding increase, according to formulas identified 
        in subdivision 6. 
           Sec. 11.  Minnesota Statutes 2002, section 119B.03, is 
        amended by adding a subdivision to read: 
           Subd. 6b.  [ALLOCATION DUE TO DECREASED FUNDING.] When 
        funding decreases are implemented within a calendar year, county 
        allocations must be reduced in an amount proportionate to the 
        reduction in the total allocation for the same time period.  
        This applies when a funding decrease necessitates the revision 
        of an existing calendar year allocation. 
           Sec. 12.  [119B.035] [AT-HOME INFANT CHILD CARE PROGRAM.] 
           Subdivision 1.  [ESTABLISHMENT.] A family in which a parent 
        provides care for the family's infant child may receive a 
        subsidy in lieu of assistance if the family is eligible for or 
        is receiving assistance under the basic sliding fee program.  An 
        eligible family must meet the eligibility factors under section 
        119B.09, except as provided in subdivision 4, and the 
        requirements of this section.  Subject to federal match and 
        maintenance of effort requirements for the child care and 
        development fund, the commissioner shall establish a pool of up 
        to three percent of the annual appropriation for the basic 
        sliding fee program to provide assistance under the at-home 
        infant child care program and for administrative costs 
        associated with the program.  At the end of a fiscal year, the 
        commissioner may carry forward any unspent funds under this 
        section to the next fiscal year within the same biennium for 
        assistance under the basic sliding fee program. 
           Subd. 2.  [ELIGIBLE FAMILIES.] A family with an infant 
        under the age of one year is eligible for assistance if: 
           (1) the family is not receiving MFIP, other cash 
        assistance, or other child care assistance; 
           (2) the family has not previously received a life-long 
        total of 12 months of assistance under this section; and 
           (3) the family is participating in the basic sliding fee 
        program or provides verification of participating in an 
        authorized activity at the time of application and meets the 
        program requirements. 
           Subd. 3.  [ELIGIBLE PARENT.] A family is eligible for 
        assistance under this section if one parent cares for the 
        family's infant child.  The eligible parent must: 
           (1) be over the age of 18; 
           (2) care for the infant full time in the infant's home; and 
           (3) care for any other children in the family who are 
        eligible for child care assistance under this chapter. 
           For purposes of this section, "parent" means birth parent, 
        adoptive parent, or stepparent. 
           Subd. 4.  [ASSISTANCE.] (a) A family is limited to a 
        lifetime total of 12 months of assistance under subdivision 2.  
        The maximum rate of assistance is equal to 90 percent of the 
        rate established under section 119B.13 for care of infants in 
        licensed family child care in the applicant's county of 
        residence.  
           (b) A participating family must report income and other 
        family changes as specified in the county's plan under section 
        119B.08, subdivision 3. 
           (c) Persons who are admitted to the at-home infant child 
        care program retain their position in any basic sliding fee 
        program.  Persons leaving the at-home infant child care program 
        reenter the basic sliding fee program at the position they would 
        have occupied. 
           (d) Assistance under this section does not establish an 
        employer-employee relationship between any member of the 
        assisted family and the county or state. 
           Subd. 5.  [IMPLEMENTATION.] The commissioner shall 
        implement the at-home infant child care program under this 
        section through counties that administer the basic sliding fee 
        program under section 119B.03.  The commissioner must develop 
        and distribute consumer information on the at-home infant child 
        care program to assist parents of infants or expectant parents 
        in making informed child care decisions. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 13.  Minnesota Statutes 2003 Supplement, section 
        119B.05, subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBLE PARTICIPANTS.] Families eligible 
        for child care assistance under the MFIP child care program are: 
           (1) MFIP participants who are employed or in job search and 
        meet the requirements of section 119B.10; 
           (2) persons who are members of transition year families 
        under section 119B.011, subdivision 20, and meet the 
        requirements of section 119B.10; 
           (3) families who are participating in employment 
        orientation or job search, or other employment or training 
        activities that are included in an approved employability 
        development plan under chapter 256K section 256J.95; 
           (4) MFIP families who are participating in work job search, 
        job support, employment, or training activities as required in 
        their job search support or employment plan, or in appeals, 
        hearings, assessments, or orientations according to chapter 
        256J; 
           (5) MFIP families who are participating in social services 
        activities under chapter 256J or 256K as required in their 
        employment plan approved according to chapter 256J or 256K; 
           (6) families who are participating in programs as required 
        in tribal contracts under section 119B.02, subdivision 2, or 
        256.01, subdivision 2; and 
           (7) families who are participating in the transition year 
        extension under section 119B.011, subdivision 20, paragraph 
        (a) 20a. 
           Sec. 14.  Minnesota Statutes 2003 Supplement, section 
        119B.09, subdivision 7, is amended to read: 
           Subd. 7.  [DATE OF ELIGIBILITY FOR ASSISTANCE.] (a) The 
        date of eligibility for child care assistance under this chapter 
        is the later of the date the application was signed; the 
        beginning date of employment, education, or training; the date 
        the infant is born for applicants to the at-home infant care 
        program; or the date a determination has been made that the 
        applicant is a participant in employment and training services 
        under Minnesota Rules, part 3400.0080, subpart 2a, or chapter 
        256J or 256K.  
           (b) Payment ceases for a family under the at-home infant 
        child care program when a family has used a total of 12 months 
        of assistance as specified under section 119B.035.  Payment of 
        child care assistance for employed persons on MFIP is effective 
        the date of employment or the date of MFIP eligibility, 
        whichever is later.  Payment of child care assistance for MFIP 
        or work first DWP participants in employment and training 
        services is effective the date of commencement of the services 
        or the date of MFIP or work first DWP eligibility, whichever is 
        later.  Payment of child care assistance for transition year 
        child care must be made retroactive to the date of eligibility 
        for transition year child care. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 15.  Minnesota Statutes 2003 Supplement, section 
        119B.12, subdivision 2, is amended to read: 
           Subd. 2.  [PARENT FEE.] A family must be assessed a parent 
        fee for each service period.  A family's parent fee must be a 
        fixed percentage of its annual gross income.  Parent fees must 
        apply to families eligible for child care assistance under 
        sections 119B.03 and 119B.05.  Income must be as defined in 
        section 119B.011, subdivision 15.  The fixed percent is based on 
        the relationship of the family's annual gross income to 100 
        percent of the annual federal poverty guidelines.  Parent fees 
        must begin at 75 percent of the poverty level.  The minimum 
        parent fees for families between 75 percent and 100 percent of 
        poverty level must be $10 per month.  Parent fees must provide 
        for graduated movement to full payment. 
           Sec. 16.  Minnesota Statutes 2003 Supplement, section 
        119B.125, subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZATION.] Except as provided in 
        subdivision 5, a county must authorize the provider chosen by an 
        applicant or a participant before the county can authorize 
        payment for care provided by that provider.  The commissioner 
        must establish the requirements necessary for authorization of 
        providers.  A provider must be reauthorized every two years.  A 
        legal, nonlicensed family child care provider also must be 
        reauthorized when another person over the age of 13 joins the 
        household, a current household member turns 13, or there is 
        reason to believe that a household member has a factor that 
        prevents authorization.  The provider is required to report all 
        family changes that would require reauthorization.  When a 
        provider has been authorized for payment for providing care for 
        families in more than one county, the county responsible for 
        reauthorization of that provider is the county of the family 
        with a current authorization for that provider and who has used 
        the provider for the longest length of time. 
           Sec. 17.  Minnesota Statutes 2003 Supplement, section 
        119B.125, subdivision 2, is amended to read: 
           Subd. 2.  [PERSONS WHO CANNOT BE AUTHORIZED.] (a) A person 
        who meets any of the conditions under paragraphs (b) to (n) must 
        not be authorized as a legal nonlicensed family child care 
        provider.  To determine whether any of the listed conditions 
        exist, the county must request information about the provider 
        from the Bureau of Criminal Apprehension, the juvenile courts, 
        and social service agencies.  When one of the listed entities 
        does not maintain information on a statewide basis, the county 
        must contact the entity in the county where the provider resides 
        and any other county in which the provider previously resided in 
        the past year.  For purposes of this subdivision, a finding that 
        a delinquency petition is proven in juvenile court must be 
        considered a conviction in state district court.  If a county 
        has determined that a provider is able to be authorized in that 
        county, and a family in another county later selects that 
        provider, the provider is able to be authorized in the second 
        county without undergoing a new background investigation unless 
        one of the following conditions exists: 
           (1) two years have passed since the first authorization; 
           (2) another person age 13 or older has joined the 
        provider's household since the last authorization; 
           (3) a current household member has turned 13 since the last 
        authorization; or 
           (4) there is reason to believe that a household member has 
        a factor that prevents authorization. 
           (b) The person has been convicted of one of the following 
        offenses or has admitted to committing or a preponderance of the 
        evidence indicates that the person has committed an act that 
        meets the definition of one of the following offenses:  sections 
        609.185 to 609.195, murder in the first, second, or third 
        degree; 609.2661 to 609.2663, murder of an unborn child in the 
        first, second, or third degree; 609.322, solicitation, 
        inducement, or promotion of prostitution; 609.323, receiving 
        profit from prostitution; 609.342 to 609.345, criminal sexual 
        conduct in the first, second, third, or fourth degree; 609.352, 
        solicitation of children to engage in sexual conduct; 609.365, 
        incest; 609.377, felony malicious punishment of a child; 
        617.246, use of minors in sexual performance; 617.247, 
        possession of pictorial representation of a minor; 609.2242 to 
        609.2243, felony domestic assault; a felony offense of spousal 
        abuse; a felony offense of child abuse or neglect; a felony 
        offense of a crime against children; or an attempt or conspiracy 
        to commit any of these offenses as defined in Minnesota 
        Statutes; or an offense in any other state or country where the 
        elements are substantially similar to any of the offenses listed 
        in this paragraph. 
           (c) Less than 15 years have passed since the discharge of 
        the sentence imposed for the offense and the person has received 
        a felony conviction for one of the following offenses, or the 
        person has admitted to committing or a preponderance of the 
        evidence indicates that the person has committed an act that 
        meets the definition of a felony conviction for one of the 
        following offenses:  sections 609.20 to 609.205, manslaughter in 
        the first or second degree; 609.21, criminal vehicular homicide; 
        609.215, aiding suicide or aiding attempted suicide; 609.221 to 
        609.2231, assault in the first, second, third, or fourth degree; 
        609.224, repeat offenses of fifth degree assault; 609.228, great 
        bodily harm caused by distribution of drugs; 609.2325, criminal 
        abuse of a vulnerable adult; 609.2335, financial exploitation of 
        a vulnerable adult; 609.235, use of drugs to injure or 
        facilitate a crime; 609.24, simple robbery; 617.241, repeat 
        offenses of obscene materials and performances; 609.245, 
        aggravated robbery; 609.25, kidnapping; 609.255, false 
        imprisonment; 609.2664 to 609.2665, manslaughter of an unborn 
        child in the first or second degree; 609.267 to 609.2672, 
        assault of an unborn child in the first, second, or third 
        degree; 609.268, injury or death of an unborn child in the 
        commission of a crime; 609.27, coercion; 609.275, attempt to 
        coerce; 609.324, subdivision 1, other prohibited acts, minor 
        engaged in prostitution; 609.3451, repeat offenses of criminal 
        sexual conduct in the fifth degree; 609.378, neglect or 
        endangerment of a child; 609.52, theft; 609.521, possession of 
        shoplifting gear; 609.561 to 609.563, arson in the first, 
        second, or third degree; 609.582, burglary in the first, second, 
        third, or fourth degree; 609.625, aggravated forgery; 609.63, 
        forgery; 609.631, check forgery, offering a forged check; 
        609.635, obtaining signature by false pretenses; 609.66, 
        dangerous weapon; 609.665, setting a spring gun; 609.67, 
        unlawfully owning, possessing, or operating a machine gun; 
        609.687, adulteration; 609.71, riot; 609.713, terrorist threats; 
        609.749, harassment, stalking; 260.221, grounds for termination 
        of parental rights; 152.021 to 152.022, controlled substance 
        crime in the first or second degree; 152.023, subdivision 1, 
        clause (3) or (4), or 152.023, subdivision 2, clause (4), 
        controlled substance crime in third degree; 152.024, subdivision 
        1, clause (2), (3), or (4), controlled substance crime in fourth 
        degree; 617.23, repeat offenses of indecent exposure; an attempt 
        or conspiracy to commit any of these offenses as defined in 
        Minnesota Statutes; or an offense in any other state or country 
        where the elements are substantially similar to any of the 
        offenses listed in this paragraph. 
           (d) Less than ten years have passed since the discharge of 
        the sentence imposed for the offense and the person has received 
        a gross misdemeanor conviction for one of the following offenses 
        or the person has admitted to committing or a preponderance of 
        the evidence indicates that the person has committed an act that 
        meets the definition of a gross misdemeanor conviction for one 
        of the following offenses:  sections 609.224, fifth degree 
        assault; 609.2242 to 609.2243, domestic assault; 518B.01, 
        subdivision 14, violation of an order for protection; 609.3451, 
        fifth degree criminal sexual conduct; 609.746, repeat offenses 
        of interference with privacy; 617.23, repeat offenses of 
        indecent exposure; 617.241, obscene materials and performances; 
        617.243, indecent literature, distribution; 617.293, 
        disseminating or displaying harmful material to minors; 609.71, 
        riot; 609.66, dangerous weapons; 609.749, harassment, stalking; 
        609.224, subdivision 2, paragraph (c), fifth degree assault 
        against a vulnerable adult by a caregiver; 609.23, mistreatment 
        of persons confined; 609.231, mistreatment of residents or 
        patients; 609.2325, criminal abuse of a vulnerable adult; 
        609.2335, financial exploitation of a vulnerable adult; 609.233, 
        criminal neglect of a vulnerable adult; 609.234, failure to 
        report maltreatment of a vulnerable adult; 609.72, subdivision 
        3, disorderly conduct against a vulnerable adult; 609.265, 
        abduction; 609.378, neglect or endangerment of a child; 609.377, 
        malicious punishment of a child; 609.324, subdivision 1a, other 
        prohibited acts, minor engaged in prostitution; 609.33, 
        disorderly house; 609.52, theft; 609.582, burglary in the first, 
        second, third, or fourth degree; 609.631, check forgery, 
        offering a forged check; 609.275, attempt to coerce; an attempt 
        or conspiracy to commit any of these offenses as defined in 
        Minnesota Statutes; or an offense in any other state or country 
        where the elements are substantially similar to any of the 
        offenses listed in this paragraph. 
           (e) Less than seven years have passed since the discharge 
        of the sentence imposed for the offense and the person has 
        received a misdemeanor conviction for one of the following 
        offenses or the person has admitted to committing or a 
        preponderance of the evidence indicates that the person has 
        committed an act that meets the definition of a misdemeanor 
        conviction for one of the following offenses:  sections 609.224, 
        fifth degree assault; 609.2242, domestic assault; 518B.01, 
        violation of an order for protection; 609.3232, violation of an 
        order for protection; 609.746, interference with privacy; 
        609.79, obscene or harassing telephone calls; 609.795, letter, 
        telegram, or package opening, harassment; 617.23, indecent 
        exposure; 609.2672, assault of an unborn child, third degree; 
        617.293, dissemination and display of harmful materials to 
        minors; 609.66, dangerous weapons; 609.665, spring guns; an 
        attempt or conspiracy to commit any of these offenses as defined 
        in Minnesota Statutes; or an offense in any other state or 
        country where the elements are substantially similar to any of 
        the offenses listed in this paragraph. 
           (f) The person has been identified by the county's child 
        protection agency in the county where the provider resides or a 
        county where the provider has resided or by the statewide child 
        protection database as the person allegedly responsible for 
        physical or sexual abuse of a child within the last seven years. 
           (g) The person has been identified by the county's adult 
        protection agency in the county where the provider resides or a 
        county where the provider has resided or by the statewide adult 
        protection database as the person responsible for abuse or 
        neglect of a vulnerable adult within the last seven years. 
           (h) The person has refused to give written consent for 
        disclosure of criminal history records. 
           (i) The person has been denied a family child care license 
        or has received a fine or a sanction as a licensed child care 
        provider that has not been reversed on appeal. 
           (j) The person has a family child care licensing 
        disqualification that has not been set aside. 
           (k) The person has admitted or a county has found that 
        there is a preponderance of evidence that fraudulent information 
        was given to the county for child care assistance application 
        purposes or was used in submitting child care assistance bills 
        for payment. 
           (l) The person has been convicted or there is a 
        preponderance of evidence of the crime of theft by wrongfully 
        obtaining public assistance. 
           (m) The person has a household member age 13 or older who 
        has access to children during the hours that care is provided 
        and who meets one of the conditions listed in paragraphs (b) to 
        (l). 
           (n) The person has a household member ages ten to 12 who 
        has access to children during the hours that care is provided; 
        information or circumstances exist which provide the county with 
        articulable suspicion that further pertinent information may 
        exist showing the household member meets one of the conditions 
        listed in paragraphs (b) to (l); and the household member 
        actually meets one of the conditions listed in paragraphs (b) to 
        (l). 
           Sec. 18.  Minnesota Statutes 2003 Supplement, section 
        119B.13, subdivision 1, is amended to read: 
           Subdivision 1.  [SUBSIDY RESTRICTIONS.] The maximum rate 
        paid for child care assistance under the child care fund may not 
        exceed the 75th percentile rate for like-care arrangements in 
        the county as surveyed by the commissioner.  A rate which 
        includes a provider bonus paid under subdivision 2 or a special 
        needs rate paid under subdivision 3 may be in excess of the 
        maximum rate allowed under this subdivision.  The department 
        shall monitor the effect of this paragraph on provider rates.  
        The county shall pay the provider's full charges for every child 
        in care up to the maximum established.  The commissioner shall 
        determine the maximum rate for each type of care on an hourly, 
        full-day, and weekly basis, including special needs and 
        handicapped care.  Not less than once every two years, the 
        commissioner shall evaluate market practices for payment of 
        absences and shall establish policies for payment of absent days 
        that reflect current market practice. 
           When the provider charge is greater than the maximum 
        provider rate allowed, the parent is responsible for payment of 
        the difference in the rates in addition to any family co-payment 
        fee. 
           Sec. 19.  Minnesota Statutes 2003 Supplement, section 
        119B.13, subdivision 1a, is amended to read: 
           Subd. 1a.  [LEGAL NONLICENSED FAMILY CHILD CARE PROVIDER 
        RATES.] (a) Legal nonlicensed family child care providers 
        receiving reimbursement under this chapter must be paid on an 
        hourly basis for care provided to families receiving assistance. 
           (b) The maximum rate paid to legal nonlicensed family child 
        care providers must be 80 percent of the county maximum hourly 
        rate for licensed family child care providers.  In counties 
        where the maximum hourly rate for licensed family child care 
        providers is higher than the maximum weekly rate for those 
        providers divided by 50, the maximum hourly rate that may be 
        paid to legal nonlicensed family child care providers is the 
        rate equal to the maximum weekly rate for licensed family child 
        care providers divided by 50 and then multiplied by 0.80. 
           (c) A rate which includes a provider bonus paid under 
        subdivision 2 or a special needs rate paid under subdivision 3 
        may be in excess of the maximum rate allowed under this 
        subdivision. 
           (d) Legal nonlicensed family child care providers receiving 
        reimbursement under this chapter may not be paid registration 
        fees for families receiving assistance. 
           Sec. 20.  Minnesota Statutes 2003 Supplement, section 
        119B.189, subdivision 2, is amended to read: 
           Subd. 2.  [INTERIM FINANCING.] "Interim financing" means 
        funding for up to 18 months: 
           (1) for activities that are necessary to receive and 
        maintain state child care licensing; 
           (2) to expand an existing child care program or to improve 
        program quality; and 
           (3) to operate for a period of six consecutive months after 
        a child care facility becomes licensed or satisfies standards of 
        the commissioner of education human services. 
           Sec. 21.  Minnesota Statutes 2003 Supplement, section 
        119B.189, subdivision 4, is amended to read: 
           Subd. 4.  [TRAINING PROGRAM.] "Training program" means 
        child development courses offered by an accredited postsecondary 
        institution or similar training approved by a county board or 
        the commissioner.  A training program must be a course of study 
        that teaches specific skills to meet licensing requirements or 
        requirements of the commissioner of education human services. 
           Sec. 22.  Minnesota Statutes 2003 Supplement, section 
        119B.19, subdivision 1, is amended to read: 
           Subdivision 1.  [DISTRIBUTION OF FUNDS FOR OPERATION OF 
        CHILD CARE RESOURCE AND REFERRAL PROGRAMS.] The commissioner 
        of education human services shall distribute funds to public or 
        private nonprofit organizations for the planning, establishment, 
        expansion, improvement, or operation of child care resource and 
        referral programs under this section.  The commissioner must 
        adopt rules for programs under this section and sections 
        119B.189 and 119B.21.  The commissioner must develop a process 
        to fund organizations to operate child care resource and 
        referral programs that includes application forms, timelines, 
        and standards for renewal. 
           Sec. 23.  Minnesota Statutes 2003 Supplement, section 
        119B.24, is amended to read: 
           119B.24 [DUTIES OF COMMISSIONER.] 
           In addition to the powers and duties already conferred by 
        law, the commissioner of education human services shall: 
           (1) administer the child care fund, including the basic 
        sliding fee program authorized under sections 119B.011 to 
        119B.16; 
           (2) monitor the child care resource and referral programs 
        established under section 119B.19; and 
           (3) encourage child care providers to participate in a 
        nationally recognized accreditation system for early childhood 
        and school-age care programs.  Subject to approval by the 
        commissioner, family child care providers and early childhood 
        and school-age care programs shall be reimbursed for one-half of 
        the direct cost of accreditation fees, upon successful 
        completion of accreditation. 
           Sec. 24.  Minnesota Statutes 2003 Supplement, section 
        119B.25, subdivision 2, is amended to read: 
           Subd. 2.  [GRANTS.] The commissioner shall distribute money 
        provided by this section through a grant to a nonprofit 
        corporation organized to plan, develop, and finance early 
        childhood education and child care sites.  The nonprofit 
        corporation must have demonstrated the ability to analyze 
        financing projects, have knowledge of other sources of public 
        and private financing for child care and early childhood 
        education sites, and have a relationship with the resource and 
        referral programs under section 119B.211.  The board of 
        directors of the nonprofit corporation must include members who 
        are knowledgeable about early childhood education, child care, 
        development and improvement, and financing.  The commissioners 
        of the Departments of Education Human Services and Employment 
        and Economic Development, and the commissioner of the Housing 
        Finance Agency shall advise the board on the loan program.  The 
        grant must be used to make loans to improve child care or early 
        childhood education sites, or loans to plan, design, and 
        construct or expand licensed and legal unlicensed sites to 
        increase the availability of child care or early childhood 
        education.  All loans made by the nonprofit corporation must 
        comply with section 363A.16. 
           Sec. 25.  Minnesota Statutes 2003 Supplement, section 
        256.046, subdivision 1, is amended to read: 
           Subdivision 1.  [HEARING AUTHORITY.] A local agency must 
        initiate an administrative fraud disqualification hearing for 
        individuals, including child care providers caring for children 
        receiving child care assistance, accused of wrongfully obtaining 
        assistance or intentional program violations, in lieu of a 
        criminal action when it has not been pursued, in the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, MFIP, the diversionary work program, 
        child care assistance programs, general assistance, family 
        general assistance program formerly codified in section 256D.05, 
        subdivision 1, clause (15), Minnesota supplemental aid, food 
        stamp programs, general assistance medical care, MinnesotaCare 
        for adults without children, and upon federal approval, all 
        categories of medical assistance and remaining categories of 
        MinnesotaCare except for children through age 18.  The hearing 
        is subject to the requirements of section 256.045 and the 
        requirements in Code of Federal Regulations, title 7, section 
        273.16, for the food stamp program and title 45, section 
        235.112, as of September 30, 1995, for the cash grant, medical 
        care programs, and child care assistance under chapter 119B. 
           Sec. 26.  Minnesota Statutes 2003 Supplement, section 
        256.98, subdivision 8, is amended to read: 
           Subd. 8.  [DISQUALIFICATION FROM PROGRAM.] (a) Any person 
        found to be guilty of wrongfully obtaining assistance by a 
        federal or state court or by an administrative hearing 
        determination, or waiver thereof, through a disqualification 
        consent agreement, or as part of any approved diversion plan 
        under section 401.065, or any court-ordered stay which carries 
        with it any probationary or other conditions, in the Minnesota 
        family investment program, the diversionary work program, the 
        food stamp or food support program, the general assistance 
        program, the group residential housing program, or the Minnesota 
        supplemental aid program shall be disqualified from that 
        program.  In addition, any person disqualified from the 
        Minnesota family investment program shall also be disqualified 
        from the food stamp or food support program.  The needs of that 
        individual shall not be taken into consideration in determining 
        the grant level for that assistance unit:  
           (1) for one year after the first offense; 
           (2) for two years after the second offense; and 
           (3) permanently after the third or subsequent offense.  
           The period of program disqualification shall begin on the 
        date stipulated on the advance notice of disqualification 
        without possibility of postponement for administrative stay or 
        administrative hearing and shall continue through completion 
        unless and until the findings upon which the sanctions were 
        imposed are reversed by a court of competent jurisdiction.  The 
        period for which sanctions are imposed is not subject to 
        review.  The sanctions provided under this subdivision are in 
        addition to, and not in substitution for, any other sanctions 
        that may be provided for by law for the offense involved.  A 
        disqualification established through hearing or waiver shall 
        result in the disqualification period beginning immediately 
        unless the person has become otherwise ineligible for 
        assistance.  If the person is ineligible for assistance, the 
        disqualification period begins when the person again meets the 
        eligibility criteria of the program from which they were 
        disqualified and makes application for that program. 
           (b) A family receiving assistance through child care 
        assistance programs under chapter 119B with a family member who 
        is found to be guilty of wrongfully obtaining child care 
        assistance by a federal court, state court, or an administrative 
        hearing determination or waiver, through a disqualification 
        consent agreement, as part of an approved diversion plan under 
        section 401.065, or a court-ordered stay with probationary or 
        other conditions, is disqualified from child care assistance 
        programs.  The disqualifications must be for periods of three 
        months, six months, and two years for the first, second, and 
        third offenses respectively.  Subsequent violations must result 
        in permanent disqualification.  During the disqualification 
        period, disqualification from any child care program must extend 
        to all child care programs and must be immediately applied. 
           (c) A provider caring for children receiving assistance 
        through child care assistance programs under chapter 119B is 
        disqualified from receiving payment for child care services from 
        the child care assistance program under chapter 119B when the 
        provider is found to have wrongfully obtained child care 
        assistance by a federal court, state court, or an administrative 
        hearing determination or waiver under section 256.046, through a 
        disqualification consent agreement, as part of an approved 
        diversion plan under section 401.065, or a court-ordered stay 
        with probationary or other conditions.  The disqualification 
        must be for a period of one year for the first offense and two 
        years for the second offense.  Any subsequent violation must 
        result in permanent disqualification.  The disqualification 
        period must be imposed immediately after a determination is made 
        under this paragraph.  During the disqualification period, the 
        provider is disqualified from receiving payment from any child 
        care program under chapter 119B.  
           (d) Any person found to be guilty of wrongfully obtaining 
        general assistance medical care, MinnesotaCare for adults 
        without children, and upon federal approval, all categories of 
        medical assistance and remaining categories of MinnesotaCare, 
        except for children through age 18, by a federal or state court 
        or by an administrative hearing determination, or waiver 
        thereof, through a disqualification consent agreement, or as 
        part of any approved diversion plan under section 401.065, or 
        any court-ordered stay which carries with it any probationary or 
        other conditions, is disqualified from that program.  The period 
        of disqualification is one year after the first offense, two 
        years after the second offense, and permanently after the third 
        or subsequent offense.  The period of program disqualification 
        shall begin on the date stipulated on the advance notice of 
        disqualification without possibility of postponement for 
        administrative stay or administrative hearing and shall continue 
        through completion unless and until the findings upon which the 
        sanctions were imposed are reversed by a court of competent 
        jurisdiction.  The period for which sanctions are imposed is not 
        subject to review.  The sanctions provided under this 
        subdivision are in addition to, and not in substitution for, any 
        other sanctions that may be provided for by law for the offense 
        involved. 
           Sec. 27.  Minnesota Statutes 2002, section 256D.051, 
        subdivision 6c, is amended to read: 
           Subd. 6c.  [PROGRAM FUNDING.] (a) Within the limits of 
        available resources, the commissioner shall reimburse the actual 
        costs of county agencies and their employment and training 
        service providers for the provision of food stamp employment and 
        training services, including participant support services, 
        direct program services, and program administrative activities.  
        The cost of services for each county's food stamp employment and 
        training program shall not exceed an average of $400 per 
        participant the annual allocated amount.  No more than 15 
        percent of program funds may be used for administrative 
        activities.  The county agency may expend county funds in excess 
        of the limits of this subdivision without state reimbursement. 
           Program funds shall be allocated based on the county's 
        average number of food stamp cases as compared to the statewide 
        total number of such cases.  The average number of cases shall 
        be based on counts of cases as of March 31, June 30, September 
        30, and December 31 of the previous calendar year.  The 
        commissioner may reallocate unexpended money appropriated under 
        this section to those county agencies that demonstrate a need 
        for additional funds. 
           (b) This subdivision expires effective June 30, 2005. 
           Sec. 28.  Minnesota Statutes 2002, section 256J.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [IMPLEMENTATION OF MINNESOTA FAMILY 
        INVESTMENT PROGRAM (MFIP).] Except for section 256J.95, this 
        chapter and chapter 256K may be cited as the Minnesota family 
        investment program (MFIP).  MFIP is the statewide implementation 
        of components of the Minnesota family investment plan (MFIP) 
        authorized and formerly codified in section 256.031 and 
        Minnesota family investment plan-Ramsey County (MFIP-R) formerly 
        codified in section 256.047. 
           Sec. 29.  Minnesota Statutes 2002, section 256J.08, 
        subdivision 73, is amended to read: 
           Subd. 73.  [QUALIFIED NONCITIZEN.] "Qualified noncitizen" 
        means a person: 
           (1) who was lawfully admitted for permanent residence 
        pursuant according to United States Code, title 8; 
           (2) who was admitted to the United States as a refugee 
        pursuant according to United States Code, title 8; section 1157; 
           (3) whose deportation is being withheld pursuant according 
        to United States Code, title 8, section sections 1231(b)(3), 
        1253(h), and 1641(b)(5); 
           (4) who was paroled for a period of at least one year 
        pursuant according to United States Code, title 8, section 
        1182(d)(5); 
           (5) who was granted conditional entry pursuant according to 
        United State Code, title 8, section 1153(a)(7); 
           (6) who is a Cuban or Haitian entrant as defined in section 
        501(e) of the Refugee Education Assistance Act of 1980, United 
        States Code, title 8, section 1641(b)(7); 
           (7) who was granted asylum pursuant according to United 
        States Code, title 8, section 1158; 
           (7) determined to be a battered noncitizen by the United 
        States Attorney General according to the Illegal Immigration 
        Reform and Immigrant Responsibility Act of 1996, Title V of the 
        Omnibus Consolidated Appropriations Bill, Public Law 104-208; 
           (8) who is a child of a noncitizen determined to be a 
        battered noncitizen by the United States Attorney General 
        according to the Illegal Immigration Reform and Responsibility 
        Act of 1996, title V, Public Law 104-200 battered noncitizen 
        according to United States Code, title 8, section 1641(c); or 
           (9) who was admitted as a Cuban or Haitian entrant is a 
        parent or child of a battered noncitizen according to United 
        States Code, title 8, section 1641(c). 
           Sec. 30.  Minnesota Statutes 2002, section 256J.08, 
        subdivision 82a, is amended to read: 
           Subd. 82a.  [SHARED HOUSEHOLD STANDARD.] "Shared household 
        standard" means the basic standard used when the household 
        includes an unrelated member.  The standard also applies to a 
        member disqualified under section 256J.425.  The cash portion of 
        the shared household standard is equal to 90 percent of the cash 
        portion of the transitional standard.  The cash portion of the 
        shared household standard plus the food portion equals the full 
        shared household standard. 
           Sec. 31.  Minnesota Statutes 2003 Supplement, section 
        256J.09, subdivision 3b, is amended to read: 
           Subd. 3b.  [INTERVIEW TO DETERMINE REFERRALS AND SERVICES.] 
        If the applicant is not diverted from applying for MFIP, and if 
        the applicant meets the MFIP eligibility requirements, then a 
        county agency must: 
           (1) identify an applicant who is under the age of 20 
        without a high school diploma or its equivalent and explain to 
        the applicant the assessment procedures and employment plan 
        requirements under section 256J.54; 
           (2) explain to the applicant the eligibility criteria in 
        section 256J.545 for the family violence waiver, and what an 
        applicant should do to develop an employment plan; 
           (3) determine if an applicant qualifies for an exemption 
        under section 256J.56 from employment and training services 
        requirements explain that the activities and hourly requirements 
        of the employment plan may be adjusted to accommodate the 
        personal and family circumstances of applicants who meet the 
        criteria in section 256J.561, subdivision 2, paragraph (d), 
        explain how a person should report to the county agency any 
        status changes, and explain that an applicant who is exempt not 
        required to participate in employment services under section 
        256J.561 may volunteer to participate in employment and training 
        services; 
           (4) for applicants who are not exempt from the requirement 
        to attend orientation, arrange for an orientation under section 
        256J.45 and an assessment under section 256J.521; 
           (5) inform an applicant who is not exempt from the 
        requirement to attend orientation that failure to attend the 
        orientation is considered an occurrence of noncompliance with 
        program requirements and will result in an imposition of a 
        sanction under section 256J.46; and 
           (6) explain how to contact the county agency if an 
        applicant has questions about compliance with program 
        requirements. 
           Sec. 32.  Minnesota Statutes 2003 Supplement, section 
        256J.21, subdivision 2, is amended to read: 
           Subd. 2.  [INCOME EXCLUSIONS.] The following must be 
        excluded in determining a family's available income: 
           (1) payments for basic care, difficulty of care, and 
        clothing allowances received for providing family foster care to 
        children or adults under Minnesota Rules, parts 9545.0010 to 
        9545.0260 and 9555.5050 to 9555.6265, and payments received and 
        used for care and maintenance of a third-party beneficiary who 
        is not a household member; 
           (2) reimbursements for employment training received through 
        the Workforce Investment Act of 1998, United States Code, title 
        20, chapter 73, section 9201; 
           (3) reimbursement for out-of-pocket expenses incurred while 
        performing volunteer services, jury duty, employment, or 
        informal carpooling arrangements directly related to employment; 
           (4) all educational assistance, except the county agency 
        must count graduate student teaching assistantships, 
        fellowships, and other similar paid work as earned income and, 
        after allowing deductions for any unmet and necessary 
        educational expenses, shall count scholarships or grants awarded 
        to graduate students that do not require teaching or research as 
        unearned income; 
           (5) loans, regardless of purpose, from public or private 
        lending institutions, governmental lending institutions, or 
        governmental agencies; 
           (6) loans from private individuals, regardless of purpose, 
        provided an applicant or participant documents that the lender 
        expects repayment; 
           (7)(i) state income tax refunds; and 
           (ii) federal income tax refunds; 
           (8)(i) federal earned income credits; 
           (ii) Minnesota working family credits; 
           (iii) state homeowners and renters credits under chapter 
        290A; and 
           (iv) federal or state tax rebates; 
           (9) funds received for reimbursement, replacement, or 
        rebate of personal or real property when these payments are made 
        by public agencies, awarded by a court, solicited through public 
        appeal, or made as a grant by a federal agency, state or local 
        government, or disaster assistance organizations, subsequent to 
        a presidential declaration of disaster; 
           (10) the portion of an insurance settlement that is used to 
        pay medical, funeral, and burial expenses, or to repair or 
        replace insured property; 
           (11) reimbursements for medical expenses that cannot be 
        paid by medical assistance; 
           (12) payments by a vocational rehabilitation program 
        administered by the state under chapter 268A, except those 
        payments that are for current living expenses; 
           (13) in-kind income, including any payments directly made 
        by a third party to a provider of goods and services; 
           (14) assistance payments to correct underpayments, but only 
        for the month in which the payment is received; 
           (15) payments for short-term emergency needs under section 
        256J.626, subdivision 2; 
           (16) funeral and cemetery payments as provided by section 
        256.935; 
           (17) nonrecurring cash gifts of $30 or less, not exceeding 
        $30 per participant in a calendar month; 
           (18) any form of energy assistance payment made through 
        Public Law 97-35, Low-Income Home Energy Assistance Act of 1981, 
        payments made directly to energy providers by other public and 
        private agencies, and any form of credit or rebate payment 
        issued by energy providers; 
           (19) Supplemental Security Income (SSI), including 
        retroactive SSI payments and other income of an SSI recipient, 
        except as described in section 256J.37, subdivision 3b; 
           (20) Minnesota supplemental aid, including retroactive 
        payments; 
           (21) proceeds from the sale of real or personal property; 
           (22) state adoption assistance payments under section 
        259.67, and up to an equal amount of county adoption assistance 
        payments; 
           (23) state-funded family subsidy program payments made 
        under section 252.32 to help families care for children with 
        mental retardation or related conditions, consumer support grant 
        funds under section 256.476, and resources and services for a 
        disabled household member under one of the home and 
        community-based waiver services programs under chapter 256B; 
           (24) interest payments and dividends from property that is 
        not excluded from and that does not exceed the asset limit; 
           (25) rent rebates; 
           (26) income earned by a minor caregiver, minor child 
        through age 6, or a minor child who is at least a half-time 
        student in an approved elementary or secondary education 
        program; 
           (27) income earned by a caregiver under age 20 who is at 
        least a half-time student in an approved elementary or secondary 
        education program; 
           (28) MFIP child care payments under section 119B.05; 
           (29) all other payments made through MFIP to support a 
        caregiver's pursuit of greater economic stability; 
           (30) income a participant receives related to shared living 
        expenses; 
           (31) reverse mortgages; 
           (32) benefits provided by the Child Nutrition Act of 1966, 
        United States Code, title 42, chapter 13A, sections 1771 to 
        1790; 
           (33) benefits provided by the women, infants, and children 
        (WIC) nutrition program, United States Code, title 42, chapter 
        13A, section 1786; 
           (34) benefits from the National School Lunch Act, United 
        States Code, title 42, chapter 13, sections 1751 to 1769e; 
           (35) relocation assistance for displaced persons under the 
        Uniform Relocation Assistance and Real Property Acquisition 
        Policies Act of 1970, United States Code, title 42, chapter 61, 
        subchapter II, section 4636, or the National Housing Act, United 
        States Code, title 12, chapter 13, sections 1701 to 1750jj; 
           (36) benefits from the Trade Act of 1974, United States 
        Code, title 19, chapter 12, part 2, sections 2271 to 2322; 
           (37) war reparations payments to Japanese Americans and 
        Aleuts under United States Code, title 50, sections 1989 to 
        1989d; 
           (38) payments to veterans or their dependents as a result 
        of legal settlements regarding Agent Orange or other chemical 
        exposure under Public Law 101-239, section 10405, paragraph 
        (a)(2)(E); 
           (39) income that is otherwise specifically excluded from 
        MFIP consideration in federal law, state law, or federal 
        regulation; 
           (40) security and utility deposit refunds; 
           (41) American Indian tribal land settlements excluded under 
        Public Laws 98-123, 98-124, and 99-377 to the Mississippi Band 
        Chippewa Indians of White Earth, Leech Lake, and Mille Lacs 
        reservations and payments to members of the White Earth Band, 
        under United States Code, title 25, chapter 9, section 331, and 
        chapter 16, section 1407; 
           (42) all income of the minor parent's parents and 
        stepparents when determining the grant for the minor parent in 
        households that include a minor parent living with parents or 
        stepparents on MFIP with other children; 
           (43) income of the minor parent's parents and stepparents 
        equal to 200 percent of the federal poverty guideline for a 
        family size not including the minor parent and the minor 
        parent's child in households that include a minor parent living 
        with parents or stepparents not on MFIP when determining the 
        grant for the minor parent.  The remainder of income is deemed 
        as specified in section 256J.37, subdivision 1b; 
           (44) payments made to children eligible for relative 
        custody assistance under section 257.85; 
           (45) vendor payments for goods and services made on behalf 
        of a client unless the client has the option of receiving the 
        payment in cash; and 
           (46) the principal portion of a contract for deed payment. 
           Sec. 33.  Minnesota Statutes 2002, section 256J.21, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INITIAL INCOME TEST.] The county agency shall 
        determine initial eligibility by considering all earned and 
        unearned income that is not excluded under subdivision 2.  To be 
        eligible for MFIP, the assistance unit's countable income minus 
        the disregards in paragraphs (a) and (b) must be below the 
        transitional standard of assistance according to section 256J.24 
        for that size assistance unit. 
           (a) The initial eligibility determination must disregard 
        the following items: 
           (1) the employment disregard is 18 percent of the gross 
        earned income whether or not the member is working full time or 
        part time; 
           (2) dependent care costs must be deducted from gross earned 
        income for the actual amount paid for dependent care up to a 
        maximum of $200 per month for each child less than two years of 
        age, and $175 per month for each child two years of age and 
        older under this chapter and chapter 119B; 
           (3) all payments made according to a court order for 
        spousal support or the support of children not living in the 
        assistance unit's household shall be disregarded from the income 
        of the person with the legal obligation to pay support, provided 
        that, if there has been a change in the financial circumstances 
        of the person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the support 
        order; and 
           (4) an allocation for the unmet need of an ineligible 
        spouse or an ineligible child under the age of 21 for whom the 
        caregiver is financially responsible and who lives with the 
        caregiver according to section 256J.36. 
           (b) Notwithstanding paragraph (a), when determining initial 
        eligibility for applicant units when at least one member has 
        received work first or MFIP in this state within four months of 
        the most recent application for MFIP, apply the disregard as 
        defined in section 256J.08, subdivision 24, for all unit members.
           After initial eligibility is established, the assistance 
        payment calculation is based on the monthly income test. 
           Sec. 34.  Minnesota Statutes 2003 Supplement, section 
        256J.24, subdivision 5, is amended to read: 
           Subd. 5.  [MFIP TRANSITIONAL STANDARD.] The MFIP 
        transitional standard is based on the number of persons in the 
        assistance unit eligible for both food and cash assistance 
        unless the restrictions in subdivision 6 on the birth of a child 
        apply.  The following table represents the transitional 
        standards effective October 1, 2002 2003. 
            Number of       Transitional         Cash       Food
         Eligible People     Standard           Portion    Portion
              1                $370   $371:      $250       $120 $121
              2                $658   $661:      $437       $221 $224
              3                $844   $852:      $532       $312 $320
              4                $998 $1,006:      $621       $377 $385
              5              $1,135 $1,146:      $697       $438 $449
              6              $1,296 $1,309:      $773       $523 $536
              7              $1,414 $1,428:      $850       $564 $578
              8              $1,558 $1,572:      $916       $642 $656
              9              $1,700 $1,715:      $980       $720 $735
             10              $1,836 $1,853:    $1,035       $801 $818
        over 10            add $136   $137:       $53        $83  $84
        per additional member.
           The commissioner shall annually publish in the State 
        Register the transitional standard for an assistance unit sizes 
        1 to 10 including a breakdown of the cash and food portions. 
           Sec. 35.  Minnesota Statutes 2003 Supplement, section 
        256J.32, subdivision 2, is amended to read: 
           Subd. 2.  [DOCUMENTATION.] The applicant or participant 
        must document the information required under subdivisions 4 to 6 
        or authorize the county agency to verify the information.  The 
        applicant or participant has the burden of providing documentary 
        evidence to verify eligibility.  The county agency shall assist 
        the applicant or participant in obtaining required documents 
        when the applicant or participant is unable to do so.  The 
        county agency may accept an affidavit a signed personal 
        statement from the applicant or participant only for factors 
        specified under subdivision 8.  
           Sec. 36.  Minnesota Statutes 2003 Supplement, section 
        256J.32, subdivision 8, is amended to read: 
           Subd. 8.  [AFFIDAVIT PERSONAL STATEMENT.] The county agency 
        may accept an affidavit a signed personal statement from the 
        applicant or recipient participant explaining the reasons that 
        the documentation requested in subdivision 2 is unavailable as 
        sufficient documentation at the time of application or, 
        recertification, or change related to eligibility only for the 
        following factors: 
           (1) a claim of family violence if used as a basis to 
        qualify for the family violence waiver; 
           (2) information needed to establish an exception under 
        section 256J.24, subdivision 9; 
           (3) relationship of a minor child to caregivers in the 
        assistance unit; and 
           (4) citizenship status from a noncitizen who reports to be, 
        or is identified as, a victim of severe forms of trafficking in 
        persons, if the noncitizen reports that the noncitizen's 
        immigration documents are being held by an individual or group 
        of individuals against the noncitizen's will.  The noncitizen 
        must follow up with the Office of Refugee Resettlement (ORR) to 
        pursue certification.  If verification that certification is 
        being pursued is not received within 30 days, the MFIP case must 
        be closed and the agency shall pursue overpayments.  The ORR 
        documents certifying the noncitizen's status as a victim of 
        severe forms of trafficking in persons, or the reason for the 
        delay in processing, must be received within 90 days, or the 
        MFIP case must be closed and the agency shall pursue 
        overpayments; and 
           (5) other documentation unavailable for reasons beyond the 
        control of the applicant or participant.  Reasonable attempts 
        must have been made to obtain the documents requested under 
        subdivision 2. 
           Sec. 37.  Minnesota Statutes 2003 Supplement, section 
        256J.37, subdivision 9, is amended to read: 
           Subd. 9.  [UNEARNED INCOME.] (a) The county agency must 
        apply unearned income to the MFIP standard of need.  When 
        determining the amount of unearned income, the county agency 
        must deduct the costs necessary to secure payments of unearned 
        income.  These costs include legal fees, medical fees, and 
        mandatory deductions such as federal and state income taxes. 
           (b) The county agency must convert unearned income received 
        on a periodic basis to monthly amounts by prorating the income 
        over the number of months represented by the frequency of the 
        payments.  The county agency must begin counting the monthly 
        amount in the month the periodic payment is received and budget 
        it according to the assistance unit's budget cycle. 
           Sec. 38.  Minnesota Statutes 2002, section 256J.415, is 
        amended to read: 
           256J.415 [NOTICE OF TIME LIMIT 12 MONTHS PRIOR TO 60-MONTH 
        TIME LIMIT EXPIRING.] 
           (a) The county agency shall mail a notice to each 
        assistance unit when the assistance unit has 12 months of TANF 
        assistance remaining and each month thereafter until the 
        60-month limit has expired.  The notice must be developed by the 
        commissioner of human services and must contain information 
        about the 60-month limit, the number of months the participant 
        has remaining, the hardship extension policy, and any other 
        information that the commissioner deems pertinent to an 
        assistance unit nearing the 60-month limit. 
           (b) For applicants who have less than 12 months remaining 
        in the 60-month time limit because the unit previously received 
        TANF assistance in Minnesota or another state, the county agency 
        shall notify the applicant of the number of months of TANF 
        remaining when the application is approved and begin the process 
        required in paragraph (a). 
           Sec. 39.  Minnesota Statutes 2003 Supplement, section 
        256J.425, subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) To be eligible for a 
        hardship extension, a participant in an assistance unit subject 
        to the time limit under section 256J.42, subdivision 1, must be 
        in compliance in the participant's 60th counted month.  For 
        purposes of determining eligibility for a hardship extension, a 
        participant is in compliance in any month that the participant 
        has not been sanctioned. 
           (b) If one participant in a two-parent assistance unit is 
        determined to be ineligible for a hardship extension, the county 
        shall give the assistance unit the option of disqualifying the 
        ineligible participant from MFIP.  In that case, the assistance 
        unit shall be treated as a one-parent assistance unit and the 
        assistance unit's MFIP grant shall be calculated using the 
        shared household standard under section 256J.08, subdivision 82a.
           (c) Prior to denying an extension, the county must review 
        the sanction status and determine whether the sanction is 
        appropriate or if good cause exists under section 256J.57.  If 
        the sanction was inappropriately applied or the participant is 
        granted a good cause exception before the end of month 60, the 
        participant shall be considered for an extension. 
           Sec. 40.  Minnesota Statutes 2003 Supplement, section 
        256J.425, subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYED PARTICIPANTS.] (a) An assistance unit 
        subject to the time limit under section 256J.42, subdivision 1, 
        is eligible to receive assistance under a hardship extension if 
        the participant who reached the time limit belongs to: 
           (1) a one-parent assistance unit in which the participant 
        is participating in work activities for at least 30 hours per 
        week, of which an average of at least 25 hours per week every 
        month are spent participating in employment; 
           (2) a two-parent assistance unit in which the participants 
        are participating in work activities for at least 55 hours per 
        week, of which an average of at least 45 hours per week every 
        month are spent participating in employment; or 
           (3) an assistance unit in which a participant is 
        participating in employment for fewer hours than those specified 
        in clause (1), and the participant submits verification from a 
        qualified professional, in a form acceptable to the 
        commissioner, stating that the number of hours the participant 
        may work is limited due to illness or disability, as long as the 
        participant is participating in employment for at least the 
        number of hours specified by the qualified professional.  The 
        participant must be following the treatment recommendations of 
        the qualified professional providing the verification.  The 
        commissioner shall develop a form to be completed and signed by 
        the qualified professional, documenting the diagnosis and any 
        additional information necessary to document the functional 
        limitations of the participant that limit work hours.  If the 
        participant is part of a two-parent assistance unit, the other 
        parent must be treated as a one-parent assistance unit for 
        purposes of meeting the work requirements under this subdivision.
           (b) For purposes of this section, employment means: 
           (1) unsubsidized employment under section 256J.49, 
        subdivision 13, clause (1); 
           (2) subsidized employment under section 256J.49, 
        subdivision 13, clause (2); 
           (3) on-the-job training under section 256J.49, subdivision 
        13, clause (2); 
           (4) an apprenticeship under section 256J.49, subdivision 
        13, clause (1); 
           (5) supported work under section 256J.49, subdivision 13, 
        clause (2); 
           (6) a combination of clauses (1) to (5); or 
           (7) child care under section 256J.49, subdivision 13, 
        clause (7), if it is in combination with paid employment. 
           (c) If a participant is complying with a child protection 
        plan under chapter 260C, the number of hours required under the 
        child protection plan count toward the number of hours required 
        under this subdivision.  
           (d) The county shall provide the opportunity for subsidized 
        employment to participants needing that type of employment 
        within available appropriations. 
           (e) To be eligible for a hardship extension for employed 
        participants under this subdivision, a participant must be in 
        compliance for at least ten out of the 12 months the participant 
        received MFIP immediately preceding the participant's 61st month 
        on assistance.  If ten or fewer months of eligibility for TANF 
        assistance remain at the time the participant from another state 
        applies for assistance, the participant must be in compliance 
        every month.  
           (f) The employment plan developed under section 256J.521, 
        subdivision 2, for participants under this subdivision must 
        contain at least the minimum number of hours specified in 
        paragraph (a) related to employment and work activities for the 
        purpose of meeting the requirements for an extension under this 
        subdivision.  The job counselor and the participant must sign 
        the employment plan to indicate agreement between the job 
        counselor and the participant on the contents of the plan. 
           (g) Participants who fail to meet the requirements in 
        paragraph (a), without good cause under section 256J.57, shall 
        be sanctioned or permanently disqualified under subdivision 6.  
        Good cause may only be granted for that portion of the month for 
        which the good cause reason applies.  Participants must meet all 
        remaining requirements in the approved employment plan or be 
        subject to sanction or permanent disqualification.  
           (h) If the noncompliance with an employment plan is due to 
        the involuntary loss of employment, the participant is exempt 
        from the hourly employment requirement under this subdivision 
        for one month.  Participants must meet all remaining 
        requirements in the approved employment plan or be subject to 
        sanction or permanent disqualification.  This exemption is 
        available to a each participant two times in a 12-month period. 
           Sec. 41.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ACCRUAL OF CERTAIN EXEMPT MONTHS.] (a) A 
        participant who received TANF assistance that counted towards 
        the federal 60-month time limit while the participant 
        was Participants who meet the criteria in clause (1), (2), or (3)
        and who are not eligible for assistance under a hardship 
        extension under subdivision 2, paragraph (a), clause (3), shall 
        be eligible for a hardship extension for a period of time equal 
        to the number of months that were counted toward the federal 
        60-month time limit while the participant was: 
           (1) a caregiver with a child or an adult in the household 
        who meets the disability or medical criteria for home care 
        services under section 256B.0627, subdivision 1, paragraph (f), 
        or a home and community-based waiver services program under 
        chapter 256B, or meets the criteria for severe emotional 
        disturbance under section 245.4871, subdivision 6, or for 
        serious and persistent mental illness under section 245.462, 
        subdivision 20, paragraph (c), who was subject to the 
        requirements in section 256J.561, subdivision 2; 
           (2) exempt under section 256J.56, paragraph (a), clause 
        (7), from employment and training services requirements and who 
        is no longer eligible for assistance under a hardship extension 
        under subdivision 2, paragraph (a), clause (3), is eligible for 
        assistance under a hardship extension for a period of time equal 
        to the number of months that were counted toward the federal 
        60-month time limit while the participant was exempt under 
        section 256J.56, paragraph (a), clause (7), from the employment 
        and training services requirements.; or 
           (3) exempt under section 256J.56, paragraph (a), clause 
        (3), and demonstrates at the time of the case review required 
        under section 256J.42, subdivision 6, that the participant met 
        the exemption criteria under section 256J.56, paragraph (a), 
        clause (7), during one or more months the participant was exempt 
        under section 256J.56, paragraph (a), clause (3).  Only months 
        during which the participant met the criteria under section 
        256J.56, paragraph (a), clause (7), shall be considered. 
           (b) A participant who received TANF assistance that counted 
        towards the federal 60-month time limit while the participant 
        met the state time limit exemption criteria under section 
        256J.42, subdivision 4 or 5, is eligible for assistance under a 
        hardship extension for a period of time equal to the number of 
        months that were counted toward the federal 60-month time limit 
        while the participant met the state time limit exemption 
        criteria under section 256J.42, subdivision 4 or 5. 
           (c) A participant who received TANF assistance that counted 
        towards the federal 60-month time limit while the participant 
        was exempt under section 256J.56, paragraph (a), clause (3), 
        from employment and training services requirements, who 
        demonstrates at the time of the case review required under 
        section 256J.42, subdivision 6, that the participant met the 
        exemption criteria under section 256J.56, paragraph (a), clause 
        (7), during one or more months the participant was exempt under 
        section 256J.56, paragraph (a), clause (3), before or after July 
        1, 2002, is eligible for assistance under a hardship extension 
        for a period of time equal to the number of months that were 
        counted toward the federal 60-month time limit during the time 
        the participant met the criteria under section 256J.56, 
        paragraph (a), clause (7) After the accrued months have been 
        exhausted, the county agency must determine if the assistance 
        unit is eligible for an extension under another extension 
        category in section 256J.425, subdivision 2, 3, or 4.  
           (d) At the time of the case review, a county agency must 
        explain to the participant the basis for receiving a hardship 
        extension based on the accrual of exempt months.  The 
        participant must provide documentation necessary to enable the 
        county agency to determine whether the participant is eligible 
        to receive a hardship extension based on the accrual of exempt 
        months or authorize a county agency to verify the information. 
           (e) While receiving extended MFIP assistance under this 
        subdivision, a participant is subject to the MFIP policies that 
        apply to participants during the first 60 months of MFIP, unless 
        the participant is a member of a two-parent family in which one 
        parent is extended under subdivision 3 or 4.  For two-parent 
        families in which one parent is extended under subdivision 3 or 
        4, the sanction provisions in subdivision 6, shall apply. 
           Sec. 42.  Minnesota Statutes 2003 Supplement, section 
        256J.425, subdivision 6, is amended to read: 
           Subd. 6.  [SANCTIONS FOR EXTENDED CASES.] (a) If one or 
        both participants in an assistance unit receiving assistance 
        under subdivision 3 or 4 are not in compliance with the 
        employment and training service requirements in sections 
        256J.521 to 256J.57, the sanctions under this subdivision 
        apply.  For a first occurrence of noncompliance, an assistance 
        unit must be sanctioned under section 256J.46, subdivision 1, 
        paragraph (c), clause (1).  For a second or third occurrence of 
        noncompliance, the assistance unit must be sanctioned under 
        section 256J.46, subdivision 1, paragraph (c), clause (2).  For 
        a fourth occurrence of noncompliance, the assistance unit is 
        disqualified from MFIP.  If a participant is determined to be 
        out of compliance, the participant may claim a good cause 
        exception under section 256J.57, however, the participant may 
        not claim an exemption under section 256J.56.  
           (b) If both participants in a two-parent assistance unit 
        are out of compliance at the same time, it is considered one 
        occurrence of noncompliance. 
           (c) When a parent in an extended two-parent assistance unit 
        who has not used 60 months of assistance is out of compliance 
        with the employment and training service requirements in 
        sections 256J.521 to 256J.57, sanctions must be applied as 
        specified in clauses (1) and (2). 
           (1) If the assistance unit is receiving assistance under 
        subdivision 3 or 4, the assistance unit is subject to the 
        sanction policy in this subdivision. 
           (2) If the assistance unit is receiving assistance under 
        subdivision 2, the assistance unit is subject to the sanction 
        policy in section 256J.46. 
           (d) If a two-parent assistance unit is extended under 
        subdivision 3 or 4, and a parent who has not reached the 
        60-month time limit is out of compliance with the employment and 
        training services requirements in sections 256J.521 to 256J.57 
        when the case is extended, the sanction in the 61st month is 
        considered the first sanction for the purposes of applying the 
        sanctions in this subdivision, except that the sanction amount 
        shall be 30 percent. 
           Sec. 43.  Minnesota Statutes 2003 Supplement, section 
        256J.46, subdivision 1, is amended to read: 
           Subdivision 1.  [PARTICIPANTS NOT COMPLYING WITH PROGRAM 
        REQUIREMENTS.] (a) A participant who fails without good cause 
        under section 256J.57 to comply with the requirements of this 
        chapter, and who is not subject to a sanction under subdivision 
        2, shall be subject to a sanction as provided in this 
        subdivision.  Prior to the imposition of a sanction, a county 
        agency shall provide a notice of intent to sanction under 
        section 256J.57, subdivision 2, and, when applicable, a notice 
        of adverse action as provided in section 256J.31. 
           (b) A sanction under this subdivision becomes effective the 
        month following the month in which a required notice is given.  
        A sanction must not be imposed when a participant comes into 
        compliance with the requirements for orientation under section 
        256J.45 prior to the effective date of the sanction.  A sanction 
        must not be imposed when a participant comes into compliance 
        with the requirements for employment and training services under 
        sections 256J.515 to 256J.57 ten days prior to the effective 
        date of the sanction.  For purposes of this subdivision, each 
        month that a participant fails to comply with a requirement of 
        this chapter shall be considered a separate occurrence of 
        noncompliance.  If both participants in a two-parent assistance 
        unit are out of compliance at the same time, it is considered 
        one occurrence of noncompliance.  
           (c) Sanctions for noncompliance shall be imposed as follows:
           (1) For the first occurrence of noncompliance by a 
        participant in an assistance unit, the assistance unit's grant 
        shall be reduced by ten percent of the MFIP standard of need for 
        an assistance unit of the same size with the residual grant paid 
        to the participant.  The reduction in the grant amount must be 
        in effect for a minimum of one month and shall be removed in the 
        month following the month that the participant returns to 
        compliance.  
           (2) For a second, third, fourth, fifth, or sixth occurrence 
        of noncompliance by a participant in an assistance unit, the 
        assistance unit's shelter costs shall be vendor paid up to the 
        amount of the cash portion of the MFIP grant for which the 
        assistance unit is eligible.  At county option, the assistance 
        unit's utilities may also be vendor paid up to the amount of the 
        cash portion of the MFIP grant remaining after vendor payment of 
        the assistance unit's shelter costs.  The residual amount of the 
        grant after vendor payment, if any, must be reduced by an amount 
        equal to 30 percent of the MFIP standard of need for an 
        assistance unit of the same size before the residual grant is 
        paid to the assistance unit.  The reduction in the grant amount 
        must be in effect for a minimum of one month and shall be 
        removed in the month following the month that the participant in 
        a one-parent assistance unit returns to compliance.  In a 
        two-parent assistance unit, the grant reduction must be in 
        effect for a minimum of one month and shall be removed in the 
        month following the month both participants return to 
        compliance.  The vendor payment of shelter costs and, if 
        applicable, utilities shall be removed six months after the 
        month in which the participant or participants return to 
        compliance.  If an assistance unit is sanctioned under this 
        clause, the participant's case file must be reviewed to 
        determine if the employment plan is still appropriate. 
           (d) For a seventh occurrence of noncompliance by a 
        participant in an assistance unit, or when the participants in a 
        two-parent assistance unit have a total of seven occurrences of 
        noncompliance, the county agency shall close the MFIP assistance 
        unit's financial assistance case, both the cash and food 
        portions, and redetermine the family's continued eligibility for 
        food support payments.  The MFIP case must remain closed for a 
        minimum of one full month.  Closure under this paragraph does 
        not make a participant automatically ineligible for food 
        support, if otherwise eligible.  Before the case is closed, the 
        county agency must review the participant's case to determine if 
        the employment plan is still appropriate and attempt to meet 
        with the participant face-to-face.  The participant may bring an 
        advocate to the face-to-face meeting.  If a face-to-face meeting 
        is not conducted, the county agency must send the participant a 
        written notice that includes the information required under 
        clause (1). 
           (1) During the face-to-face meeting, the county agency must:
           (i) determine whether the continued noncompliance can be 
        explained and mitigated by providing a needed preemployment 
        activity, as defined in section 256J.49, subdivision 13, clause 
        (9); 
           (ii) determine whether the participant qualifies for a good 
        cause exception under section 256J.57, or if the sanction is for 
        noncooperation with child support requirements, determine if the 
        participant qualifies for a good cause exemption under section 
        256.741, subdivision 10; 
           (iii) determine whether the participant qualifies for an 
        exemption under section 256J.56 or the work activities in the 
        employment plan are appropriate based on the criteria in section 
        256J.521, subdivision 2 or 3; 
           (iv) determine whether the participant qualifies for the 
        family violence waiver; 
           (v) inform the participant of the participant's sanction 
        status and explain the consequences of continuing noncompliance; 
           (vi) identify other resources that may be available to the 
        participant to meet the needs of the family; and 
           (vii) inform the participant of the right to appeal under 
        section 256J.40. 
           (2) If the lack of an identified activity or service can 
        explain the noncompliance, the county must work with the 
        participant to provide the identified activity. 
           (3) The grant must be restored to the full amount for which 
        the assistance unit is eligible retroactively to the first day 
        of the month in which the participant was found to lack 
        preemployment activities or to qualify for an exemption under 
        section 256J.56, a family violence waiver, or for a good cause 
        exemption under section 256.741, subdivision 10, or 256J.57. 
           (e) For the purpose of applying sanctions under this 
        section, only occurrences of noncompliance that occur after July 
        1, 2003, shall be considered.  If the participant is in 30 
        percent sanction in the month this section takes effect, that 
        month counts as the first occurrence for purposes of applying 
        the sanctions under this section, but the sanction shall remain 
        at 30 percent for that month. 
           (f) An assistance unit whose case is closed under paragraph 
        (d) or (g), may reapply for MFIP and shall be eligible if the 
        participant complies with MFIP program requirements and 
        demonstrates compliance for up to one month.  No assistance 
        shall be paid during this period. 
           (g) An assistance unit whose case has been closed for 
        noncompliance, that reapplies under paragraph (f), is subject to 
        sanction under paragraph (c), clause (2), for a first occurrence 
        of noncompliance.  Any subsequent occurrence of noncompliance 
        shall result in case closure under paragraph (d). 
           Sec. 44.  Minnesota Statutes 2003 Supplement, section 
        256J.49, subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYMENT AND TRAINING SERVICE PROVIDER.] 
        "Employment and training service provider" means: 
           (1) a public, private, or nonprofit employment and training 
        agency certified by the commissioner of economic security under 
        sections 268.0122, subdivision 3, and 268.871, subdivision 1, or 
        is approved under section 256J.51 and is included in the county 
        service agreement submitted under section 256J.626, subdivision 
        4; 
           (2) a public, private, or nonprofit agency that is not 
        certified by the commissioner under clause (1), but with which a 
        county has contracted to provide employment and training 
        services and which is included in the county's service agreement 
        submitted under section 256J.626, subdivision 4; or 
           (3) (2) a county agency, if the county has opted to provide 
        employment and training services and the county has indicated 
        that fact in the service agreement submitted under section 
        256J.626, subdivision 4. 
           Notwithstanding section 268.871, an employment and training 
        services provider meeting this definition may deliver employment 
        and training services under this chapter. 
           Sec. 45.  Minnesota Statutes 2003 Supplement, section 
        256J.515, is amended to read: 
           256J.515 [OVERVIEW OF EMPLOYMENT AND TRAINING SERVICES.] 
           During the first meeting with participants, job counselors 
        must ensure that an overview of employment and training services 
        is provided that: 
           (1) stresses the necessity and opportunity of immediate 
        employment; 
           (2) outlines the job search resources offered; 
           (3) outlines education or training opportunities available; 
           (4) describes the range of work activities, including 
        activities under section 256J.49, subdivision 13, clause (18), 
        that are allowable under MFIP to meet the individual needs of 
        participants; 
           (5) explains the requirements to comply with an employment 
        plan; 
           (6) explains the consequences for failing to comply; 
           (7) explains the services that are available to support job 
        search and work and education; and 
           (8) provides referral information about shelters and 
        programs for victims of family violence, and the time limit 
        exemption, and waivers of regular employment and training 
        requirements for family violence victims. 
           Failure to attend the overview of employment and training 
        services without good cause results in the imposition of a 
        sanction under section 256J.46. 
           An applicant who requests and qualifies for a family 
        violence waiver is exempt from attending a group overview.  
        Information usually presented in an overview must be covered 
        during the development of an employment plan under section 
        256J.521, subdivision 3. 
           Sec. 46.  Minnesota Statutes 2003 Supplement, section 
        256J.521, subdivision 1, is amended to read: 
           Subdivision 1.  [ASSESSMENTS.] (a) For purposes of MFIP 
        employment services, assessment is a continuing process of 
        gathering information related to employability for the purpose 
        of identifying both participant's strengths and strategies for 
        coping with issues that interfere with employment.  The job 
        counselor must use information from the assessment process to 
        develop and update the employment plan under subdivision 2 or 3, 
        as appropriate, and to determine whether the participant 
        qualifies for a family violence waiver including an employment 
        plan under subdivision 3. 
           (b) The scope of assessment must cover at least the 
        following areas: 
           (1) basic information about the participant's ability to 
        obtain and retain employment, including:  a review of the 
        participant's education level; interests, skills, and abilities; 
        prior employment or work experience; transferable work skills; 
        child care and transportation needs; 
           (2) identification of personal and family circumstances 
        that impact the participant's ability to obtain and retain 
        employment, including:  any special needs of the children, the 
        level of English proficiency, family violence issues, and any 
        involvement with social services or the legal system; 
           (3) the results of a mental and chemical health screening 
        tool designed by the commissioner and results of the brief 
        screening tool for special learning needs.  Screening tools for 
        mental and chemical health and special learning needs must be 
        approved by the commissioner and may only be administered by job 
        counselors or county staff trained in using such screening 
        tools.  The commissioner shall work with county agencies to 
        develop protocols for referrals and follow-up actions after 
        screens are administered to participants, including guidance on 
        how employment plans may be modified based upon outcomes of 
        certain screens.  Participants must be told of the purpose of 
        the screens and how the information will be used to assist the 
        participant in identifying and overcoming barriers to 
        employment.  Screening for mental and chemical health and 
        special learning needs must be completed by participants who are 
        unable to find suitable employment after six weeks of job search 
        under subdivision 2, paragraph (b), and participants who are 
        determined to have barriers to employment under subdivision 2, 
        paragraph (d).  Failure to complete the screens will result in 
        sanction under section 256J.46; and 
           (4) a comprehensive review of participation and progress 
        for participants who have received MFIP assistance and have not 
        worked in unsubsidized employment during the past 12 months.  
        The purpose of the review is to determine the need for 
        additional services and supports, including placement in 
        subsidized employment or unpaid work experience under section 
        256J.49, subdivision 13. 
           (c) Information gathered during a caregiver's participation 
        in the diversionary work program under section 256J.95 must be 
        incorporated into the assessment process. 
           (d) The job counselor may require the participant to 
        complete a professional chemical use assessment to be performed 
        according to the rules adopted under section 254A.03, 
        subdivision 3, including provisions in the administrative rules 
        which recognize the cultural background of the participant, or a 
        professional psychological assessment as a component of the 
        assessment process, when the job counselor has a reasonable 
        belief, based on objective evidence, that a participant's 
        ability to obtain and retain suitable employment is impaired by 
        a medical condition.  The job counselor may assist the 
        participant with arranging services, including child care 
        assistance and transportation, necessary to meet needs 
        identified by the assessment.  Data gathered as part of a 
        professional assessment must be classified and disclosed 
        according to the provisions in section 13.46. 
           Sec. 47.  Minnesota Statutes 2003 Supplement, section 
        256J.521, subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYMENT PLAN; CONTENTS.] (a) Based on the 
        assessment under subdivision 1, the job counselor and the 
        participant must develop an employment plan that includes 
        participation in activities and hours that meet the requirements 
        of section 256J.55, subdivision 1.  The purpose of the 
        employment plan is to identify for each participant the most 
        direct path to unsubsidized employment and any subsequent steps 
        that support long-term economic stability.  The employment plan 
        should be developed using the highest level of activity 
        appropriate for the participant.  Activities must be chosen from 
        clauses (1) to (6), which are listed in order of preference.  
        Notwithstanding this order of preference for activities, 
        priority must be given for activities related to a family 
        violence waiver when developing the employment plan.  The 
        employment plan must also list the specific steps the 
        participant will take to obtain employment, including steps 
        necessary for the participant to progress from one level of 
        activity to another, and a timetable for completion of each 
        step.  Levels of activity include: 
           (1) unsubsidized employment; 
           (2) job search; 
           (3) subsidized employment or unpaid work experience; 
           (4) unsubsidized employment and job readiness education or 
        job skills training; 
           (5) unsubsidized employment or unpaid work experience and 
        activities related to a family violence waiver or preemployment 
        needs; and 
           (6) activities related to a family violence waiver or 
        preemployment needs. 
           (b) Participants who are determined to possess sufficient 
        skills such that the participant is likely to succeed in 
        obtaining unsubsidized employment must job search at least 30 
        hours per week for up to six weeks and accept any offer of 
        suitable employment.  The remaining hours necessary to meet the 
        requirements of section 256J.55, subdivision 1, may be met 
        through participation in other work activities under section 
        256J.49, subdivision 13.  The participant's employment plan must 
        specify, at a minimum:  (1) whether the job search is supervised 
        or unsupervised; (2) support services that will be provided; and 
        (3) how frequently the participant must report to the job 
        counselor.  Participants who are unable to find suitable 
        employment after six weeks must meet with the job counselor to 
        determine whether other activities in paragraph (a) should be 
        incorporated into the employment plan.  Job search activities 
        which are continued after six weeks must be structured and 
        supervised. 
           (c) Beginning July 1, 2004, activities and hourly 
        requirements in the employment plan may be adjusted as necessary 
        to accommodate the personal and family circumstances of 
        participants identified under section 256J.561, subdivision 2, 
        paragraph (d).  Participants who no longer meet the provisions 
        of section 256J.561, subdivision 2, paragraph (d), must meet 
        with the job counselor within ten days of the determination to 
        revise the employment plan. 
           (d) Participants who are determined to have barriers to 
        obtaining or retaining employment that will not be overcome 
        during six weeks of job search under paragraph (b) must work 
        with the job counselor to develop an employment plan that 
        addresses those barriers by incorporating appropriate activities 
        from paragraph (a), clauses (1) to (6).  The employment plan 
        must include enough hours to meet the participation requirements 
        in section 256J.55, subdivision 1, unless a compelling reason to 
        require fewer hours is noted in the participant's file. 
           (e) The job counselor and the participant must sign the 
        employment plan to indicate agreement on the contents.  Failure 
        to develop or comply with activities in the plan, or voluntarily 
        quitting suitable employment without good cause, will result in 
        the imposition of a sanction under section 256J.46. 
           (f) Employment plans must be reviewed at least every three 
        months to determine whether activities and hourly requirements 
        should be revised. 
           Sec. 48.  Minnesota Statutes 2003 Supplement, section 
        256J.53, subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL OF POSTSECONDARY EDUCATION OR 
        TRAINING.] (a) In order for a postsecondary education or 
        training program to be an approved activity in an employment 
        plan, the participant must be working in unsubsidized employment 
        at least 20 hours per week. 
           (b) Participants seeking approval of a postsecondary 
        education or training plan must provide documentation that: 
           (1) the employment goal can only be met with the additional 
        education or training; 
           (2) there are suitable employment opportunities that 
        require the specific education or training in the area in which 
        the participant resides or is willing to reside; 
           (3) the education or training will result in significantly 
        higher wages for the participant than the participant could earn 
        without the education or training; 
           (4) the participant can meet the requirements for admission 
        into the program; and 
           (5) there is a reasonable expectation that the participant 
        will complete the training program based on such factors as the 
        participant's MFIP assessment, previous education, training, and 
        work history; current motivation; and changes in previous 
        circumstances. 
           (c) The hourly unsubsidized employment requirement may be 
        reduced does not apply for intensive education or training 
        programs lasting 12 weeks or less when full-time attendance is 
        required. 
           (d) Participants with an approved employment plan in place 
        on July 1, 2003, which includes more than 12 months of 
        postsecondary education or training shall be allowed to complete 
        that plan provided that hourly requirements in section 256J.55, 
        subdivision 1, and conditions specified in paragraph (b), and 
        subdivisions 3 and 5 are met.  A participant whose case is 
        subsequently closed for three months or less for reasons other 
        than noncompliance with program requirements and who return to 
        MFIP shall be allowed to complete that plan provided that hourly 
        requirements in section 256J.55, subdivision 1, and conditions 
        specified in paragraph (b) and subdivisions 3 and 5 are met. 
           Sec. 49.  Minnesota Statutes 2003 Supplement, section 
        256J.56, is amended to read: 
           256J.56 [EMPLOYMENT AND TRAINING SERVICES COMPONENT; 
        EXEMPTIONS.] 
           (a) An MFIP Paragraphs (b) and (c) apply only to an MFIP 
        participant who was exempt from participating in employment 
        services as of June 30, 2004, has not been required to develop 
        an employment plan under section 256J.561, and continues to 
        qualify for an exemption under this section.  All exemptions 
        under this section expire at the time of the participant's 
        recertification.  No new exemptions shall be granted under this 
        section after June 30, 2004. 
           (b) A participant is exempt from the requirements of 
        sections 256J.515 to 256J.57 if the participant belongs 
        continues to belong to any of the following groups: 
           (1) participants who are age 60 or older; 
           (2) participants who are suffering from a permanent or 
        temporary illness, injury, or incapacity which has been 
        certified by a qualified professional when the illness, injury, 
        or incapacity is expected to continue for more than 30 days and 
        prevents the person from obtaining or retaining employment.  
        Persons in this category with a temporary illness, injury, or 
        incapacity must be reevaluated at least quarterly; 
           (3) participants whose presence in the home is required as 
        a caregiver because of the illness, injury, or incapacity of 
        another member in the assistance unit, a relative in the 
        household, or a foster child in the household when the illness 
        or incapacity and the need for a person to provide assistance in 
        the home has been certified by a qualified professional and is 
        expected to continue for more than 30 days; 
           (4) women who are pregnant, if the pregnancy has resulted 
        in an incapacity that prevents the woman from obtaining or 
        retaining employment, and the incapacity has been certified by a 
        qualified professional; 
           (5) caregivers of a child under the age of one year who 
        personally provide full-time care for the child.  This exemption 
        may be used for only 12 months in a lifetime.  In two-parent 
        households, only one parent or other relative may qualify for 
        this exemption; 
           (6) participants experiencing a personal or family crisis 
        that makes them incapable of participating in the program, as 
        determined by the county agency.  If the participant does not 
        agree with the county agency's determination, the participant 
        may seek certification from a qualified professional, as defined 
        in section 256J.08, that the participant is incapable of 
        participating in the program. 
           Persons in this exemption category must be reevaluated 
        every 60 days.  A personal or family crisis related to family 
        violence, as determined by the county or a job counselor with 
        the assistance of a person trained in domestic violence, should 
        not result in an exemption, but should be addressed through the 
        development or revision of an employment plan under section 
        256J.521, subdivision 3; or 
           (7) caregivers with a child or an adult in the household 
        who meets the disability or medical criteria for home care 
        services under section 256B.0627, subdivision 1, paragraph (f), 
        or a home and community-based waiver services program under 
        chapter 256B, or meets the criteria for severe emotional 
        disturbance under section 245.4871, subdivision 6, or for 
        serious and persistent mental illness under section 245.462, 
        subdivision 20, paragraph (c).  Caregivers in this exemption 
        category are presumed to be prevented from obtaining or 
        retaining employment. 
           A caregiver who is exempt under clause (5) must enroll in 
        and attend an early childhood and family education class, a 
        parenting class, or some similar activity, if available, during 
        the period of time the caregiver is exempt under this section.  
        Notwithstanding section 256J.46, failure to attend the required 
        activity shall not result in the imposition of a sanction. 
           (b) (c) The county agency must provide employment and 
        training services to MFIP participants who are exempt under this 
        section, but who volunteer to participate.  Exempt volunteers 
        may request approval for any work activity under section 
        256J.49, subdivision 13.  The hourly participation requirements 
        for nonexempt participants under section 256J.55, subdivision 1, 
        do not apply to exempt participants who volunteer to participate.
           (c) (d) This section expires on June 30, 2004 2005. 
           Sec. 50.  Minnesota Statutes 2003 Supplement, section 
        256J.57, subdivision 1, is amended to read: 
           Subdivision 1.  [GOOD CAUSE FOR FAILURE TO COMPLY.] The 
        county agency shall not impose the sanction under section 
        256J.46 if it determines that the participant has good cause for 
        failing to comply with the requirements of sections 256J.515 to 
        256J.57.  Good cause exists when: 
           (1) appropriate child care is not available; 
           (2) the job does not meet the definition of suitable 
        employment; 
           (3) the participant is ill or injured; 
           (4) a member of the assistance unit, a relative in the 
        household, or a foster child in the household is ill and needs 
        care by the participant that prevents the participant from 
        complying with the employment plan; 
           (5) the parental caregiver participant is unable to secure 
        necessary transportation; 
           (6) the parental caregiver participant is in an emergency 
        situation that prevents compliance with the employment plan; 
           (7) the schedule of compliance with the employment plan 
        conflicts with judicial proceedings; 
           (8) a mandatory MFIP meeting is scheduled during a time 
        that conflicts with a judicial proceeding or a meeting related 
        to a juvenile court matter, or a participant's work schedule; 
           (9) the parental caregiver participant is already 
        participating in acceptable work activities; 
           (10) the employment plan requires an educational program 
        for a caregiver under age 20, but the educational program is not 
        available; 
           (11) activities identified in the employment plan are not 
        available; 
           (12) the parental caregiver participant is willing to 
        accept suitable employment, but suitable employment is not 
        available; or 
           (13) the parental caregiver participant documents other 
        verifiable impediments to compliance with the employment plan 
        beyond the parental caregiver's participant's control. 
           The job counselor shall work with the participant to 
        reschedule mandatory meetings for individuals who fall under 
        clauses (1), (3), (4), (5), (6), (7), and (8). 
           Sec. 51.  Minnesota Statutes 2003 Supplement, section 
        256J.626, subdivision 2, is amended to read: 
           Subd. 2.  [ALLOWABLE EXPENDITURES.] (a) The commissioner 
        must restrict expenditures under the consolidated fund to 
        benefits and services allowed under title IV-A of the federal 
        Social Security Act.  Allowable expenditures under the 
        consolidated fund may include, but are not limited to: 
           (1) short-term, nonrecurring shelter and utility needs that 
        are excluded from the definition of assistance under Code of 
        Federal Regulations, title 45, section 260.31, for families who 
        meet the residency requirement in section 256J.12, subdivisions 
        1 and 1a.  Payments under this subdivision are not considered 
        TANF cash assistance and are not counted towards the 60-month 
        time limit; 
           (2) transportation needed to obtain or retain employment or 
        to participate in other approved work activities; 
           (3) direct and administrative costs of staff to deliver 
        employment services for MFIP or the diversionary work program, 
        to administer financial assistance, and to provide specialized 
        services intended to assist hard-to-employ participants to 
        transition to work; 
           (4) costs of education and training including functional 
        work literacy and English as a second language; 
           (5) cost of work supports including tools, clothing, boots, 
        and other work-related expenses; 
           (6) county administrative expenses as defined in Code of 
        Federal Regulations, title 45, section 260(b); 
           (7) services to parenting and pregnant teens; 
           (8) supported work; 
           (9) wage subsidies; 
           (10) child care needed for MFIP or diversionary work 
        program participants to participate in social services; 
           (11) child care to ensure that families leaving MFIP or 
        diversionary work program will continue to receive child care 
        assistance from the time the family no longer qualifies for 
        transition year child care until an opening occurs under the 
        basic sliding fee child care program; and 
           (12) services to help noncustodial parents who live in 
        Minnesota and have minor children receiving MFIP or DWP 
        assistance, but do not live in the same household as the child, 
        obtain or retain employment. 
           (b) Administrative costs that are not matched with county 
        funds as provided in subdivision 8 may not exceed 7.5 percent of 
        a county's or 15 percent of a tribe's reimbursement allocation 
        under this section.  The commissioner shall define 
        administrative costs for purposes of this subdivision. 
           Sec. 52.  Minnesota Statutes 2003 Supplement, section 
        256J.626, subdivision 6, is amended to read: 
           Subd. 6.  [BASE ALLOCATION TO COUNTIES AND TRIBES.] (a) For 
        purposes of this section, the following terms have the meanings 
        given them: 
           (1) "2002 historic spending base" means the commissioner's 
        determination of the sum of the reimbursement related to fiscal 
        year 2002 of county or tribal agency expenditures for the base 
        programs listed in clause (4), items (i) through (iv), and 
        earnings related to calendar year 2002 in the base program 
        listed in clause (4), item (v), and the amount of spending in 
        fiscal year 2002 in the base program listed in clause (4), item 
        (vi), issued to or on behalf of persons residing in the county 
        or tribal service delivery area. 
           (2) "Initial allocation" means the amount potentially 
        available to each county or tribe based on the formula in 
        paragraphs (b) through (d). 
           (3) "Final allocation" means the amount available to each 
        county or tribe based on the formula in paragraphs (b) through 
        (d), after adjustment by subdivision 7. 
           (4) "Base programs" means the: 
           (i) MFIP employment and training services under Minnesota 
        Statutes 2002, section 256J.62, subdivision 1, in effect June 
        30, 2002; 
           (ii) bilingual employment and training services to refugees 
        under Minnesota Statutes 2002, section 256J.62, subdivision 6, 
        in effect June 30, 2002; 
           (iii) work literacy language programs under Minnesota 
        Statutes 2002, section 256J.62, subdivision 7, in effect June 
        30, 2002; 
           (iv) supported work program authorized in Laws 2001, First 
        Special Session chapter 9, article 17, section 2, in effect June 
        30, 2002; 
           (v) administrative aid program under section 256J.76 in 
        effect December 31, 2002; and 
           (vi) emergency assistance program under Minnesota Statutes 
        2002, section 256J.48, in effect June 30, 2002. 
           (b)(1) Beginning July 1, 2003, the commissioner shall 
        determine the initial allocation of funds available under this 
        section according to clause (2). 
           (2) All of the funds available for the period beginning 
        July 1, 2003, and ending December 31, 2004, shall be allocated 
        to each county or tribe in proportion to the county's or tribe's 
        share of the statewide 2002 historic spending base. 
           (c) For calendar year 2005, the commissioner shall 
        determine the initial allocation of funds to be made available 
        under this section in proportion to the county or tribe's 
        initial allocation for the period of July 1, 2003, to December 
        31, 2004. 
           (d) The formula under this subdivision sunsets December 31, 
        2005. 
           (e) Before November 30, 2003, a county or tribe may ask for 
        a review of the commissioner's determination of the historic 
        base spending when the county or tribe believes the 2002 
        information was inaccurate or incomplete.  By January 1, 2004, 
        the commissioner must adjust that county's or tribe's base when 
        the commissioner has determined that inaccurate or incomplete 
        information was used to develop that base.  The commissioner 
        shall adjust each county's or tribe's initial allocation under 
        paragraph (c) and final allocation under subdivision 7 to 
        reflect the base change With the commencement of a new or 
        expanded tribal TANF program or an agreement under section 
        256.01, subdivision 2, paragraph (g), in which some or all of 
        the responsibilities of particular counties under this section 
        are transferred to a tribe, the commissioner shall: 
           (1) in the case where all responsibilities under this 
        section are transferred to a tribal program, determine the 
        percentage of the county's current caseload that is transferring 
        to a tribal program and adjust the affected county's allocation 
        accordingly; and 
           (2) in the case where a portion of the responsibilities 
        under this section are transferred to a tribal program, the 
        commissioner shall consult with the affected county or counties 
        to determine an appropriate adjustment to the allocation. 
           (f) Effective January 1, 2005, counties and tribes will 
        have their final allocations adjusted based on the performance 
        provisions of subdivision 7. 
           Sec. 53.  Minnesota Statutes 2003 Supplement, section 
        256J.626, subdivision 7, is amended to read: 
           Subd. 7.  [PERFORMANCE BASE FUNDS.] (a) Beginning calendar 
        year 2005, each county and tribe will be allocated 95 percent of 
        their initial calendar year 2005 allocation.  Counties and 
        tribes will be allocated additional funds based on performance 
        as follows: 
           (1) for calendar year 2005, a county or tribe that achieves 
        a 50 30 percent rate or higher on the MFIP participation rate 
        under section 256J.751, subdivision 2, clause (8), as averaged 
        across the four quarterly measurements for the most recent year 
        for which the measurements are available, will receive an 
        additional allocation equal to 2.5 percent of its initial 
        allocation; and 
           (2) for calendar year 2006, a county or tribe that achieves 
        a 40 percent rate or a five percentage point improvement over 
        the previous year's MFIP participation rate under section 
        256J.751, subdivision 2, clause (8), as averaged across the four 
        quarterly measurements for the most recent year for which the 
        measurements are available, will receive an additional 
        allocation equal to 2.5 percent of its initial allocation; and 
           (3) for calendar year 2007, a county or tribe that achieves 
        a 50 percent rate or a five percentage point improvement over 
        the previous year's MFIP participation rate under section 
        256J.751, subdivision 2, clause (8), as averaged across the four 
        quarterly measurements for the most recent year for which the 
        measurements are available, will receive an additional 
        allocation equal to 2.5 percent of its initial allocation; and 
           (4) for calendar year 2008 and yearly thereafter, a county 
        or tribe that achieves a 50 percent MFIP participation rate 
        under section 256J.751, subdivision 2, clause (8), as averaged 
        across the four quarterly measurements for the most recent year 
        for which the measurements are available, will receive an 
        additional allocation equal to 2.5 percent of its initial 
        allocation; and 
           (5) for calendar years 2005 and thereafter, a county or 
        tribe that performs above the top of its range of expected 
        performance on the three-year self-support index under section 
        256J.751, subdivision 2, clause (7), in both measurements in the 
        preceding year will receive an additional allocation equal to 
        five percent of its initial allocation; or 
           (3) (6) for calendar years 2005 and thereafter, a county or 
        tribe that performs within its range of expected performance on 
        the three-year self-support index under section 256J.751, 
        subdivision 2, clause (7), in both measurements in the preceding 
        year, or above the top of its range of expected performance in 
        one measurement and within its expected range of performance in 
        the other measurement, will receive an additional allocation 
        equal to 2.5 percent of its initial allocation. 
           (b) Funds remaining unallocated after the performance-based 
        allocations in paragraph (a) are available to the commissioner 
        for innovation projects under subdivision 5. 
           (c)(1) If available funds are insufficient to meet county 
        and tribal allocations under paragraph (a), the commissioner may 
        make available for allocation funds that are unobligated and 
        available from the innovation projects through the end of the 
        current biennium. 
           (2) If after the application of clause (1) funds remain 
        insufficient to meet county and tribal allocations under 
        paragraph (a), the commissioner must proportionally reduce the 
        allocation of each county and tribe with respect to their 
        maximum allocation available under paragraph (a). 
           Sec. 54.  Minnesota Statutes 2003 Supplement, section 
        256J.751, subdivision 2, is amended to read: 
           Subd. 2.  [QUARTERLY COMPARISON REPORT.] The commissioner 
        shall report quarterly to all counties on each county's 
        performance on the following measures: 
           (1) percent of MFIP caseload working in paid employment; 
           (2) percent of MFIP caseload receiving only the food 
        portion of assistance; 
           (3) number of MFIP cases that have left assistance; 
           (4) federal participation requirements as specified in 
        Title 1 of Public Law 104-193; 
           (5) median placement wage rate; 
           (6) caseload by months of TANF assistance; 
           (7) percent of MFIP and diversionary work program (DWP) 
        cases off cash assistance or working 30 or more hours per week 
        at one-year, two-year, and three-year follow-up points from a 
        baseline quarter.  This measure is called the self-support 
        index.  Twice annually, the commissioner shall report an 
        expected range of performance for each county, county grouping, 
        and tribe on the self-support index.  The expected range shall 
        be derived by a statistical methodology developed by the 
        commissioner in consultation with the counties and tribes.  The 
        statistical methodology shall control differences across 
        counties in economic conditions and demographics of the MFIP and 
        DWP case load; and 
           (8) the MFIP work participation rate, defined as the 
        participation requirements specified in title 1 of Public Law 
        104-193 applied to all MFIP cases except child only cases and 
        cases exempt under section 256J.56. 
           Sec. 55.  Minnesota Statutes 2003 Supplement, section 
        256J.95, subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHING A DIVERSIONARY WORK PROGRAM 
        (DWP).] (a) The Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, Public Law 104-193, establishes 
        block grants to states for temporary assistance for needy 
        families (TANF).  TANF provisions allow states to use TANF 
        dollars for nonrecurrent, short-term diversionary benefits.  The 
        diversionary work program established on July 1, 2003, is 
        Minnesota's TANF program to provide short-term diversionary 
        benefits to eligible recipients of the diversionary work program.
           (b) The goal of the diversionary work program is to provide 
        short-term, necessary services and supports to families which 
        will lead to unsubsidized employment, increase economic 
        stability, and reduce the risk of those families needing longer 
        term assistance, under the Minnesota family investment program 
        (MFIP). 
           (c) When a family unit meets the eligibility criteria in 
        this section, the family must receive a diversionary work 
        program grant and is not eligible for MFIP. 
           (d) A family unit is eligible for the diversionary work 
        program for a maximum of four consecutive months only once in a 
        12-month period.  The 12-month period begins at the date of 
        application or the date eligibility is met, whichever is later.  
        During the four-month period four consecutive months, family 
        maintenance needs as defined in subdivision 2, shall be vendor 
        paid, up to the cash portion of the MFIP standard of need for 
        the same size household.  To the extent there is a balance 
        available between the amount paid for family maintenance needs 
        and the cash portion of the transitional standard, a personal 
        needs allowance of up to $70 per DWP recipient in the family 
        unit shall be issued.  The personal needs allowance payment plus 
        the family maintenance needs shall not exceed the cash portion 
        of the MFIP standard of need.  Counties may provide supportive 
        and other allowable services funded by the MFIP consolidated 
        fund under section 256J.626 to eligible participants during the 
        four-month diversionary period. 
           Sec. 56.  Minnesota Statutes 2003 Supplement, section 
        256J.95, subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY FOR DIVERSIONARY WORK PROGRAM.] (a) 
        Except for the categories of family units listed below, all 
        family units who apply for cash benefits and who meet MFIP 
        eligibility as required in sections 256J.11 to 256J.15 are 
        eligible and must participate in the diversionary work program.  
        Family units that are not eligible for the diversionary work 
        program include: 
           (1) child only cases; 
           (2) a single-parent family unit that includes a child under 
        12 weeks of age.  A parent is eligible for this exception once 
        in a parent's lifetime and is not eligible if the parent has 
        already used the previously allowed child under age one 
        exemption from MFIP employment services; 
           (3) a minor parent without a high school diploma or its 
        equivalent; 
           (4) a caregiver an 18 or 19 years of age year-old caregiver 
        without a high school diploma or its equivalent who chooses to 
        have an employment plan with an education option; 
           (5) a caregiver age 60 or over; 
           (6) family units with a parent caregiver who received DWP 
        benefits within a 12-month period as defined in subdivision 1, 
        paragraph (d) in the 12 months prior to the month the family 
        applied for DWP, except as provided in paragraph (c); and 
           (7) family units with a parent caregiver who received MFIP 
        within the past 12 months prior to the month the family unit 
        applied for DWP; 
           (8) a family unit with a caregiver who received 60 or more 
        months of TANF assistance; and 
           (9) a family unit with a caregiver who is disqualified from 
        DWP or MFIP due to fraud. 
           (b) A two-parent family must participate in DWP unless both 
        parents caregivers meet the criteria for an exception under 
        paragraph (a), clauses (1) through (5), or the family unit 
        includes a parent who meets the criteria in paragraph (a), 
        clause (6) or, (7), (8), or (9). 
           (c) Once DWP eligibility is determined, the four months run 
        consecutively.  If a participant leaves the program for any 
        reason and reapplies during the four-month period, the county 
        must redetermine eligibility for DWP. 
           Sec. 57.  Minnesota Statutes 2003 Supplement, section 
        256J.95, subdivision 11, is amended to read: 
           Subd. 11.  [UNIVERSAL PARTICIPATION REQUIRED.] (a) All DWP 
        caregivers, except caregivers who meet the criteria in paragraph 
        (d), are required to participate in DWP employment services.  
        Except as specified in paragraphs (b) and (c), employment plans 
        under DWP must, at a minimum, meet the requirements in section 
        256J.55, subdivision 1. 
           (b) A caregiver who is a member of a two-parent family that 
        is required to participate in DWP who would otherwise be 
        ineligible for DWP under subdivision 3 may be allowed to develop 
        an employment plan under section 256J.521, subdivision 2, 
        paragraph (c), that may contain alternate activities and reduced 
        hours.  
           (c) A participant who has is a victim of family violence 
        waiver shall be allowed to develop an employment plan under 
        section 256J.521, subdivision 3.  A claim of family violence 
        must be documented by the applicant or participant by providing 
        a sworn statement which is supported by collateral documentation 
        in section 256J.545, paragraph (b). 
           (d) One parent in a two-parent family unit that has a 
        natural born child under 12 weeks of age is not required to have 
        an employment plan until the child reaches 12 weeks of age 
        unless the family unit has already used the exclusion under 
        section 256J.561, subdivision 2, or the previously allowed child 
        under age one exemption under section 256J.56, paragraph (a), 
        clause (5). 
           (e) The provision in paragraph (d) ends the first full 
        month after the child reaches 12 weeks of age.  This provision 
        is allowable only once in a caregiver's lifetime.  In a 
        two-parent household, only one parent shall be allowed to use 
        this category. 
           (f) The participant and job counselor must meet within ten 
        working days after the child reaches 12 weeks of age to revise 
        the participant's employment plan.  The employment plan for a 
        family unit that has a child under 12 weeks of age that has 
        already used the exclusion in section 256J.561 or the previously 
        allowed child under age one exemption under section 256J.56, 
        paragraph (a), clause (5), must be tailored to recognize the 
        caregiving needs of the parent. 
           Sec. 58.  Minnesota Statutes 2003 Supplement, section 
        256J.95, subdivision 12, is amended to read: 
           Subd. 12.  [CONVERSION OR REFERRAL TO MFIP.] (a) If at any 
        time during the DWP application process or during the four-month 
        DWP eligibility period, it is determined that a participant is 
        unlikely to benefit from the diversionary work program, the 
        county shall convert or refer the participant to MFIP as 
        specified in paragraph (d).  Participants who are determined to 
        be unlikely to benefit from the diversionary work program must 
        develop and sign an employment plan.  Participants who meet any 
        one of the criteria in paragraph (b) shall be considered to be 
        unlikely to benefit from DWP, provided the necessary 
        documentation is available to support the determination. 
           (b) A participant who: 
           (1) has been determined by a qualified professional as 
        being unable to obtain or retain employment due to an illness, 
        injury, or incapacity that is expected to last at least 60 days; 
           (2) is required in the home as a caregiver because of the 
        illness, injury, or incapacity, of a family member, or a 
        relative in the household, or a foster child, and the illness, 
        injury, or incapacity and the need for a person to provide 
        assistance in the home has been certified by a qualified 
        professional and is expected to continue more than 60 days; 
           (3) is determined by a qualified professional as being 
        needed in the home to care for a child or adult meeting the 
        special medical criteria in section 256J.425 256J.561, 
        subdivision 2, paragraph (d), clause (3); 
           (4) is pregnant and is determined by a qualified 
        professional as being unable to obtain or retain employment due 
        to the pregnancy; or 
           (5) has applied for SSI or RSDI SSDI. 
           (c) In a two-parent family unit, both parents must be 
        determined to be unlikely to benefit from the diversionary work 
        program before the family unit can be converted or referred to 
        MFIP. 
           (d) A participant who is determined to be unlikely to 
        benefit from the diversionary work program shall be converted to 
        MFIP and, if the determination was made within 30 days of the 
        initial application for benefits, no additional application form 
        is required.  A participant who is determined to be unlikely to 
        benefit from the diversionary work program shall be referred to 
        MFIP and, if the determination is made more than 30 days after 
        the initial application, the participant must submit a program 
        change request form.  The county agency shall process the 
        program change request form by the first of the following month 
        to ensure that no gap in benefits is due to delayed action by 
        the county agency.  In processing the program change request 
        form, the county must follow section 256J.32, subdivision 1, 
        except that the county agency shall not require additional 
        verification of the information in the case file from the DWP 
        application unless the information in the case file is 
        inaccurate, questionable, or no longer current. 
           (e) The county shall not request a combined application 
        form for a participant who has exhausted the four months of the 
        diversionary work program, has continued need for cash and food 
        assistance, and has completed, signed, and submitted a program 
        change request form within 30 days of the fourth month of the 
        diversionary work program.  The county must process the program 
        change request according to section 256J.32, subdivision 1, 
        except that the county agency shall not require additional 
        verification of information in the case file unless the 
        information is inaccurate, questionable, or no longer current.  
        When a participant does not request MFIP within 30 days of the 
        diversionary work program benefits being exhausted, a new 
        combined application form must be completed for any subsequent 
        request for MFIP. 
           Sec. 59.  Minnesota Statutes 2003 Supplement, section 
        256J.95, subdivision 19, is amended to read: 
           Subd. 19.  [RECOVERY OF DWP OVERPAYMENTS AND 
        UNDERPAYMENTS.] When DWP benefits are subject to overpayments 
        and underpayments.  Anytime an overpayment or an ATM error 
        underpayment is determined for DWP, the overpayment correction 
        shall be recouped or calculated using prospective budgeting.  
        Corrections shall be determined based on the policy in section 
        256J.34, subdivision 1, paragraphs (a), (b), and (c), and 
        subdivision 3, paragraph (b), clause (1).  ATM errors must be 
        recovered as specified in section 256J.38, subdivision 5.  DWP 
        overpayments are not subject to cross program recoupment. 
           Sec. 60.  Laws 1997, chapter 245, article 2, section 11, as 
        amended by Laws 2003, First Special Session chapter 14, article 
        10, section 7, is amended to read: 
           Sec. 11.  [FEDERAL FUNDS FOR VISITATION AND ACCESS.] 
           The commissioner of human services may shall apply for and 
        accept on behalf of the state any federal funding received under 
        Public Law Number 104-193 for access and visitation programs, 
        and must administer the funds for the activities allowed under 
        federal law.  The commissioner may distribute the funds on a 
        competitive basis and shall transfer these funds in three equal 
        amounts to the FATHER Project of Goodwill/Easter Seals 
        Minnesota, the Hennepin County African American Men Project, and 
        the Minnesota Fathers & Families Network for use of the 
        activities allowed under federal law.  These programs must 
        monitor, evaluate, and report on the access and visitation 
        programs in accordance with any applicable regulations. 
           Sec. 61.  [TEMPORARY INELIGIBILITY OF MILITARY PERSONNEL.] 
           Counties must reserve a family's position under the child 
        care assistance fund if a family has been receiving child care 
        assistance but is temporarily ineligible for assistance due to 
        increased income from active military service.  Activated 
        military personnel may be temporarily ineligible until 
        deactivated.  A county must reserve a military family's position 
        on the basic sliding fee waiting list under the child care 
        assistance fund if a family is approved to receive child care 
        assistance and reaches the top of the waiting list but is 
        temporarily ineligible for assistance. 
           Sec. 62.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 119B.211 and 
        256D.051, subdivision 17, are repealed. 
           (b) Laws 2000, chapter 489, article 1, section 36, is 
        repealed. 

                                   ARTICLE 5
                                 LONG-TERM CARE 
           Section 1.  Minnesota Statutes 2002, section 198.261, is 
        amended to read: 
           198.261 [CANTEEN AND, COFFEE SHOP, AND WOOD SHOP.] 
           Any profits derived from the operation of canteens and, 
        coffee shops, and wood shops at the Minnesota veterans homes 
        shall be used by the board only for the direct benefit of the 
        residents of the homes. 
           Sec. 2.  Minnesota Statutes 2003 Supplement, section 
        245A.11, subdivision 2a, is amended to read: 
           Subd. 2a.  [ADULT FOSTER CARE LICENSE CAPACITY.] (a) An 
        adult foster care license holder may have a maximum license 
        capacity of five if all persons in care are age 55 or over and 
        do not have a serious and persistent mental illness or a 
        developmental disability.  
           (b) The commissioner may grant variances to paragraph (a) 
        to allow a foster care provider with a licensed capacity of five 
        persons to admit an individual under the age of 55 if the 
        variance complies with section 245A.04, subdivision 9, and 
        approval of the variance is recommended by the county in which 
        the licensed foster care provider is located. 
           (c) The commissioner may grant variances to paragraph (a) 
        to allow the use of a fifth bed for emergency crisis services 
        for a person with serious and persistent mental illness or a 
        developmental disability, regardless of age, if the variance 
        complies with section 245A.04, subdivision 9, and approval of 
        the variance is recommended by the county in which the licensed 
        foster care provider is located. 
           (d) Notwithstanding paragraph (a), the commissioner may 
        issue an adult foster care license with a capacity of five 
        adults when the capacity is recommended by the county licensing 
        agency of the county in which the facility is located and if the 
        recommendation verifies that: 
           (1) the facility meets the physical environment 
        requirements in the adult foster care licensing rule; 
           (2) the five-bed living arrangement is specified for each 
        resident in the resident's: 
           (i) individualized plan of care; 
           (ii) individual service plan under section 256B.092, 
        subdivision 1b, if required; or 
           (iii) individual resident placement agreement under 
        Minnesota Rules, part 9555.5105, subpart 19, if required; 
           (3) the license holder obtains written and signed informed 
        consent from each resident or resident's legal representative 
        documenting the resident's informed choice to living in the home 
        and that the resident's refusal to consent would not have 
        resulted in service termination; and 
           (4) the facility was licensed for adult foster care before 
        March 1, 2003. 
           (e) The commissioner shall not issue a new adult foster 
        care license under paragraph (d) after June 30, 2005.  The 
        commissioner shall allow a facility with an adult foster care 
        license issued under paragraph (d) before June 30, 2005, to 
        continue with a capacity of five or six adults if the license 
        holder continues to comply with the requirements in paragraph 
        (d). 
           Sec. 3.  Minnesota Statutes 2002, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [SKILLED NURSING FACILITY AND HOSPICE SERVICES 
        FOR DUAL ELIGIBLES.] Medical assistance covers skilled nursing 
        facility services for individuals eligible for both medical 
        assistance and Medicare who have waived the Medicare skilled 
        nursing facility room and board benefit and have enrolled in the 
        Medicare hospice program.  Medical assistance covers skilled 
        nursing facility services regardless of whether an individual 
        enrolled in the Medicare hospice program prior to, on, or after 
        the date of the hospitalization that qualified the individual 
        for Medicare skilled nursing facility services. 
           Sec. 4.  Minnesota Statutes 2002, section 256B.0911, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [PREADMISSION SCREENING ACTIVITIES RELATED TO 
        NURSING FACILITY ADMISSIONS.] (a) All applicants to Medicaid 
        certified nursing facilities, including certified boarding care 
        facilities, must be screened prior to admission regardless of 
        income, assets, or funding sources for nursing facility care, 
        except as described in subdivision 4b.  The purpose of the 
        screening is to determine the need for nursing facility level of 
        care as described in paragraph (d) and to complete activities 
        required under federal law related to mental illness and mental 
        retardation as outlined in paragraph (b). 
           (b) A person who has a diagnosis or possible diagnosis of 
        mental illness, mental retardation, or a related condition must 
        receive a preadmission screening before admission regardless of 
        the exemptions outlined in subdivision 4b, paragraph (b), to 
        identify the need for further evaluation and specialized 
        services, unless the admission prior to screening is authorized 
        by the local mental health authority or the local developmental 
        disabilities case manager, or unless authorized by the county 
        agency according to Public Law 100-508 101-508.  
           The following criteria apply to the preadmission screening: 
           (1) the county must use forms and criteria developed by the 
        commissioner to identify persons who require referral for 
        further evaluation and determination of the need for specialized 
        services; and 
           (2) the evaluation and determination of the need for 
        specialized services must be done by: 
           (i) a qualified independent mental health professional, for 
        persons with a primary or secondary diagnosis of a serious 
        mental illness; or 
           (ii) a qualified mental retardation professional, for 
        persons with a primary or secondary diagnosis of mental 
        retardation or related conditions.  For purposes of this 
        requirement, a qualified mental retardation professional must 
        meet the standards for a qualified mental retardation 
        professional under Code of Federal Regulations, title 42, 
        section 483.430. 
           (c) The local county mental health authority or the state 
        mental retardation authority under Public Law Numbers 100-203 
        and 101-508 may prohibit admission to a nursing facility if the 
        individual does not meet the nursing facility level of care 
        criteria or needs specialized services as defined in Public Law 
        Numbers 100-203 and 101-508.  For purposes of this section, 
        "specialized services" for a person with mental retardation or a 
        related condition means active treatment as that term is defined 
        under Code of Federal Regulations, title 42, section 483.440 
        (a)(1). 
           (d) The determination of the need for nursing facility 
        level of care must be made according to criteria developed by 
        the commissioner.  In assessing a person's needs, consultation 
        team members shall have a physician available for consultation 
        and shall consider the assessment of the individual's attending 
        physician, if any.  The individual's physician must be included 
        if the physician chooses to participate.  Other personnel may be 
        included on the team as deemed appropriate by the county. 
           Sec. 5.  Minnesota Statutes 2003 Supplement, section 
        256B.0915, subdivision 3a, is amended to read: 
           Subd. 3a.  [ELDERLY WAIVER COST LIMITS.] (a) The monthly 
        limit for the cost of waivered services to an individual elderly 
        waiver client shall be the weighted average monthly nursing 
        facility rate of the case mix resident class to which the 
        elderly waiver client would be assigned under Minnesota Rules, 
        parts 9549.0050 to 9549.0059, less the recipient's maintenance 
        needs allowance as described in subdivision 1d, paragraph (a), 
        until the first day of the state fiscal year in which the 
        resident assessment system as described in section 256B.437 for 
        nursing home rate determination is implemented.  Effective on 
        the first day of the state fiscal year in which the resident 
        assessment system as described in section 256B.437 for nursing 
        home rate determination is implemented and the first day of each 
        subsequent state fiscal year, the monthly limit for the cost of 
        waivered services to an individual elderly waiver client shall 
        be the rate of the case mix resident class to which the waiver 
        client would be assigned under Minnesota Rules, parts 9549.0050 
        to 9549.0059, in effect on the last day of the previous state 
        fiscal year, adjusted by the greater of any legislatively 
        adopted home and community-based services cost-of-living 
        percentage rate increase or any legislatively adopted the 
        average statewide percent rate percentage increase for in 
        nursing facilities facility payment rates. 
           (b) If extended medical supplies and equipment or 
        environmental modifications are or will be purchased for an 
        elderly waiver client, the costs may be prorated for up to 12 
        consecutive months beginning with the month of purchase.  If the 
        monthly cost of a recipient's waivered services exceeds the 
        monthly limit established in paragraph (a), the annual cost of 
        all waivered services shall be determined.  In this event, the 
        annual cost of all waivered services shall not exceed 12 times 
        the monthly limit of waivered services as described in paragraph 
        (a).  
           Sec. 6.  Minnesota Statutes 2003 Supplement, section 
        256B.0915, subdivision 3b, is amended to read: 
           Subd. 3b.  [COST LIMITS FOR ELDERLY WAIVER APPLICANTS WHO 
        RESIDE IN A NURSING FACILITY.] (a) For a person who is a nursing 
        facility resident at the time of requesting a determination of 
        eligibility for elderly waivered services, a monthly conversion 
        limit for the cost of elderly waivered services may be 
        requested.  The monthly conversion limit for the cost of elderly 
        waiver services shall be the resident class assigned under 
        Minnesota Rules, parts 9549.0050 to 9549.0059, for that resident 
        in the nursing facility where the resident currently resides 
        until July 1 of the state fiscal year in which the resident 
        assessment system as described in section 256B.437 for nursing 
        home rate determination is implemented.  Effective on July 1 of 
        the state fiscal year in which the resident assessment system as 
        described in section 256B.437 for nursing home rate 
        determination is implemented, the monthly conversion limit for 
        the cost of elderly waiver services shall be the per diem 
        nursing facility rate as determined by the resident assessment 
        system as described in section 256B.437 for that resident in the 
        nursing facility where the resident currently resides multiplied 
        by 365 and divided by 12, less the recipient's maintenance needs 
        allowance as described in subdivision 1d.  The initially 
        approved conversion rate may be adjusted by the greater of any 
        subsequent legislatively adopted home and community-based 
        services cost-of-living percentage rate increase or any 
        subsequent legislatively adopted the average statewide 
        percentage rate increase for in nursing facilities facility 
        payment rates.  The limit under this subdivision only applies to 
        persons discharged from a nursing facility after a minimum 
        30-day stay and found eligible for waivered services on or after 
        July 1, 1997.  
           (b) The following costs must be included in determining the 
        total monthly costs for the waiver client: 
           (1) cost of all waivered services, including extended 
        medical supplies and equipment and environmental modifications; 
        and 
           (2) cost of skilled nursing, home health aide, and personal 
        care services reimbursable by medical assistance.  
           Sec. 7.  Minnesota Statutes 2003 Supplement, section 
        256B.431, subdivision 32, is amended to read: 
           Subd. 32.  [PAYMENT DURING FIRST 90 DAYS.] (a) For rate 
        years beginning on or after July 1, 2001, the total payment rate 
        for a facility reimbursed under this section, section 256B.434, 
        or any other section for the first 90 paid days after admission 
        shall be: 
           (1) for the first 30 paid days, the rate shall be 120 
        percent of the facility's medical assistance rate for each case 
        mix class; 
           (2) for the next 60 paid days after the first 30 paid days, 
        the rate shall be 110 percent of the facility's medical 
        assistance rate for each case mix class; 
           (3) beginning with the 91st paid day after admission, the 
        payment rate shall be the rate otherwise determined under this 
        section, section 256B.434, or any other section; and 
           (4) payments under this paragraph apply to admissions 
        occurring on or after July 1, 2001, and before July 1, 2003, and 
        to resident days occurring before July 30, 2003. 
           (b) For rate years beginning on or after July 1, 2003, the 
        total payment rate for a facility reimbursed under this section, 
        section 256B.434, or any other section shall be: 
           (1) for the first 30 calendar days after admission, the 
        rate shall be 120 percent of the facility's medical assistance 
        rate for each RUG class; 
           (2) beginning with the 31st calendar day after admission, 
        the payment rate shall be the rate otherwise determined under 
        this section, section 256B.434, or any other section; and 
           (3) payments under this paragraph apply to admissions 
        occurring on or after July 1, 2003. 
           (c) Effective January 1, 2004, the enhanced rates under 
        this subdivision shall not be allowed if a resident has resided 
        during the previous 30 calendar days in: 
           (1) the same nursing facility; 
           (2) a nursing facility owned or operated by a related 
        party; or 
           (3) a nursing facility or part of a facility that closed or 
        was in the process of closing. 
           Sec. 8.  Minnesota Statutes 2002, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 40.  [DESIGNATION OF AREAS TO RECEIVE METROPOLITAN 
        RATES.] (a) For rate years beginning on or after July 1, 2004, 
        and subject to paragraph (b), nursing facilities located in 
        areas designated as metropolitan areas by the federal Office of 
        Management and Budget using census bureau data shall be 
        considered metro, in order to: 
           (1) determine rate increases under this section, section 
        256B.434, or any other section; and 
           (2) establish nursing facility reimbursement rates for the 
        new nursing facility reimbursement system developed under Laws 
        2001, First Special Session chapter 9, article 5, section 35, as 
        amended by Laws 2002, chapter 220, article 14, section 19. 
           (b) Paragraph (a) applies only if designation as a metro 
        facility results in a level of reimbursement that is higher than 
        the level the facility would have received without application 
        of that paragraph. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 9.  Minnesota Statutes 2003 Supplement, section 
        256B.69, subdivision 6b, is amended to read: 
           Subd. 6b.  [HOME AND COMMUNITY-BASED WAIVER SERVICES.] (a) 
        For individuals enrolled in the Minnesota senior health options 
        project authorized under subdivision 23, elderly waiver services 
        shall be covered according to the terms and conditions of the 
        federal agreement governing that demonstration project. 
           (b) For individuals under age 65 enrolled in demonstrations 
        authorized under subdivision 23, home and community-based waiver 
        services shall be covered according to the terms and conditions 
        of the federal agreement governing that demonstration project. 
           (c) The commissioner of human services shall issue requests 
        for proposals for collaborative service models between counties 
        and managed care organizations to integrate the home and 
        community-based elderly waiver services and additional nursing 
        home services into the prepaid medical assistance program. 
           (d) Notwithstanding Minnesota Rules, part 9500.1457, 
        subpart 1, item C, elderly waiver services shall be covered 
        statewide no sooner than July 1, 2006, under the prepaid medical 
        assistance program for all individuals who are eligible 
        according to section 256B.0915.  The commissioner may develop a 
        schedule to phase in implementation of these waiver services, 
        including collaborative service models under paragraph (c).  The 
        commissioner shall phase in implementation beginning with those 
        counties participating under section 256B.692, and those 
        counties where a viable collaborative service model has been 
        developed.  In consultation with counties and all managed care 
        organizations that have expressed an interest in participating 
        in collaborative service models, the commissioner shall evaluate 
        the models.  The commissioner shall consider the evaluation in 
        selecting the most appropriate models for statewide 
        implementation. 

                                   ARTICLE 6
                                  HEALTH CARE
           Section 1.  Minnesota Statutes 2002, section 13.3806, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [BIRTH DEFECTS INFORMATION SYSTEM.] Information 
        collected for the birth defects information system is governed 
        by section 144.2217. 
           [EFFECTIVE DATE.] This section is effective upon receipt of 
        a federal grant to establish a birth defects information system. 
           Sec. 2.  Minnesota Statutes 2002, section 62A.30, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUIRED COVERAGE.] Every policy, plan, 
        certificate, or contract referred to in subdivision 1 issued or 
        renewed after August 1, 1988, that provides coverage to a 
        Minnesota resident must provide coverage for routine screening 
        procedures for cancer, including mammograms, surveillance tests 
        for ovarian cancer for women who are at risk for ovarian cancer 
        as defined in subdivision 3, and pap smears, when ordered or 
        provided by a physician in accordance with the standard practice 
        of medicine. 
           Sec. 3.  Minnesota Statutes 2002, section 62A.30, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [OVARIAN CANCER SURVEILLANCE TESTS.] For purposes 
        of subdivision 2: 
           (a) "At risk for ovarian cancer" means: 
           (1) having a family history: 
           (i) with one or more first or second degree relatives with 
        ovarian cancer; 
           (ii) of clusters of women relatives with breast cancer; or 
           (iii) of nonpolyposis colorectal cancer; or 
           (2) testing positive for BRCA1 or BRCA2 mutations. 
           (b) "Surveillance tests for ovarian cancer" means annual 
        screening using: 
           (1) CA-125 serum tumor marker testing; 
           (2) transvaginal ultrasound; 
           (3) pelvic examination; or 
           (4) other proven ovarian cancer screening tests currently 
        being evaluated by the federal Food and Drug Administration or 
        by the National Cancer Institute. 
           Sec. 4.  Minnesota Statutes 2002, section 62H.01, is 
        amended to read: 
           62H.01 [AUTHORITY TO JOINTLY SELF-INSURE.] 
           Any two or more employers, excluding the state and its 
        political subdivisions as described in section 471.617, 
        subdivision 1, who are authorized to transact business in 
        Minnesota may jointly self-insure employee health, dental, 
        short-term disability benefits, or other benefits permitted 
        under the Employee Retirement Income Security Act of 1974, 
        United States Code, title 29, sections 1001 et seq.  If an 
        employer chooses to jointly self-insure in accordance with this 
        chapter, the employer must participate in the joint plan for at 
        least three consecutive years.  If an employer terminates 
        participation in the joint plan before the conclusion of this 
        three-year period, a financial penalty may be assessed under the 
        joint plan, not to exceed the amount contributed by the employer 
        to the plan's reserves as determined under Minnesota Rules, part 
        2765.1200.  Joint plans must have a minimum of 1,000 covered 
        employees enrollees and meet all conditions and terms of 
        sections 62H.01 to 62H.08.  Joint plans covering employers not 
        resident in Minnesota must meet the requirements of sections 
        62H.01 to 62H.08 as if the portion of the plan covering 
        Minnesota resident employees was treated as a separate plan.  A 
        plan may cover employees resident in other states only if the 
        plan complies with the applicable laws of that state. 
           A multiple employer welfare arrangement as defined in 
        United States Code, title 29, section 1002(40)(a), is subject to 
        this chapter to the extent authorized by the Employee Retirement 
        Income Security Act of 1974, United States Code, title 29, 
        sections 1001 et seq.  The commissioner of commerce may, on 
        behalf of the state, enter into an agreement with the United 
        States Secretary of Labor for delegation to the state of some or 
        all of the secretary's enforcement authority with respect to 
        multiple employer welfare arrangements, as described in United 
        States Code, title 29, section 1136(c). 
           Sec. 5.  Minnesota Statutes 2002, section 62H.02, is 
        amended to read: 
           62H.02 [REQUIRED PROVISIONS.] 
           A joint self-insurance plan must include aggregate excess 
        stop-loss coverage and individual excess stop-loss coverage 
        provided by an insurance company licensed by the state of 
        Minnesota.  Aggregate excess stop-loss coverage must include 
        provisions to cover incurred, unpaid claim liability in the 
        event of plan termination.  In addition, the plan of 
        self-insurance must have participating employers fund an amount 
        at least equal to the point at which the excess or stop-loss 
        insurer has contracted to assume 100 percent of additional 
        liability.  A joint self-insurance plan must submit its proposed 
        excess or stop-loss insurance contract to the commissioner of 
        commerce at least 30 days prior to the proposed plan's effective 
        date and at least 30 days subsequent to any renewal date.  The 
        commissioner shall review the contract to determine if they meet 
        the standards established by sections 62H.01 to 62H.08 and 
        respond within a 30-day period.  Any excess or stop-loss 
        insurance plan must contain a provision that the excess or 
        stop-loss insurer will give the plan and the commissioner of 
        commerce a minimum of 180 days' notice of termination or 
        nonrenewal.  If the plan fails to secure replacement coverage 
        within 60 days after receipt of the notice of cancellation or 
        nonrenewal, the commissioner shall issue an order providing for 
        the orderly termination of the plan.  The commissioner may waive 
        the requirements of this section and of any rule relating to the 
        requirements of this section, if the commissioner determines 
        that a joint self-insurance plan has established alternative 
        arrangements that fully fund the plan's liability or incurred 
        but unpaid claims.  The commissioner may not waive the 
        requirement that a joint self-insurance plan have excess 
        stop-loss coverage. 
           Sec. 6.  Minnesota Statutes 2002, section 62H.04, is 
        amended to read: 
           62H.04 [COMPLIANCE WITH OTHER LAWS.] 
           (a) A joint self-insurance plan is subject to the 
        requirements of chapters 62A, 62E, 62L, and 62Q, and sections 
        72A.17 to 72A.32 unless otherwise specifically exempt.  A joint 
        self-insurance plan must pay assessments made by the Minnesota 
        Comprehensive Health Association, as required under section 
        62E.11. 
           (b) A joint self-insurance plan is exempt from providing 
        the mandated health benefits described in chapters 62A, 62E, 
        62L, and 62Q if it otherwise provides the benefits required 
        under the Employee Retirement Income Security Act of 1974, 
        United States Code, title 29, sections 1001, et seq., for all 
        employers and not just for the employers with 50 or more 
        employees who are covered by that federal law.  
           (c) A joint self-insurance plan is exempt from section 
        62L.03, subdivision 1, if the plan offers an annual open 
        enrollment period of no less than 15 days during which all 
        employers that qualify for membership may enter the plan without 
        preexisting condition limitations or exclusions except those 
        permitted under chapter 62L.  
           (d) A joint self-insurance plan is exempt from sections 
        62A.146, 62A.16, 62A.17, 62A.20, and 62A.21, 62A.65, subdivision 
        5, paragraph (b), and 62E.16 if the joint self-insurance plan 
        complies with the continuation requirements under the Employee 
        Retirement Income Security Act of 1974, United States Code, 
        title 29, sections 1001, et seq., for all employers and not just 
        for the employers with 20 or more employees who are covered by 
        that federal law. 
           (e) A joint self-insurance plan must provide to all 
        employers the maternity coverage required by federal law for 
        employers with 15 or more employees. 
           Sec. 7.  Minnesota Statutes 2002, section 62J.23, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INTERIM RESTRICTIONS.] (a) From July 1, 1992, 
        until rules are adopted by the commissioner under this section, 
        the restrictions in the federal Medicare antikickback statutes 
        in section 1128B(b) of the Social Security Act, United States 
        Code, title 42, section 1320a-7b(b), and rules adopted under the 
        federal statutes, apply to all persons in the state, regardless 
        of whether the person participates in any state health care 
        program.  The commissioner shall approve a transition plan 
        submitted to the commissioner by January 1, 1993, by a person 
        who is in violation of this section that provides a reasonable 
        time for the person to modify prohibited practices or divest 
        financial interests in other persons in order to come into 
        compliance with this section.  Transition plans that identify 
        individuals are private data.  Transition plans that do not 
        identify individuals are nonpublic data. 
           (b) Nothing in paragraph (a) shall be construed to prohibit 
        an individual from receiving a discount or other reduction in 
        price or a limited-time free supply or samples of a prescription 
        drug, medical supply, or medical equipment offered by a 
        pharmaceutical manufacturer, medical supply or device 
        manufacturer, health plan company, or pharmacy benefit manager, 
        so long as: 
           (1) the discount or reduction in price is provided to the 
        individual in connection with the purchase of a prescription 
        drug, medical supply, or medical equipment prescribed for that 
        individual; 
           (2) it otherwise complies with the requirements of state 
        and federal law applicable to enrollees of state and federal 
        public health care programs; 
           (3) the discount or reduction in price does not exceed the 
        amount paid directly by the individual for the prescription 
        drug, medical supply, or medical equipment; and 
           (4) the limited-time free supply or samples are provided by 
        a physician or pharmacist, as provided by the federal 
        Prescription Drug Marketing Act. 
           (c) No benefit, reward, remuneration, or incentive for 
        continued product use may be provided to an individual or an 
        individual's family by a pharmaceutical manufacturer, medical 
        supply or device manufacturer, or pharmacy benefit manager, 
        except that this prohibition does not apply to: 
           (1) activities permitted under paragraph (b); 
           (2) a pharmaceutical manufacturer, medical supply or device 
        manufacturer, health plan company, or pharmacy benefit manager 
        providing to a patient, at a discount or reduced price or free 
        of charge, ancillary products necessary for treatment of the 
        medical condition for which the prescription drug, medical 
        supply, or medical equipment was prescribed or provided; and 
           (3) a pharmaceutical manufacturer, medical supply or device 
        manufacturer, health plan company, or pharmacy benefit manager 
        providing to a patient a trinket or memento of insignificant 
        value. 
           (d) Nothing in this subdivision shall be construed to 
        prohibit a health plan company from offering a tiered formulary 
        with different co-payment or cost-sharing amounts for different 
        drugs. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 8.  [62Q.37] [AUDITS CONDUCTED BY NATIONALLY 
        RECOGNIZED INDEPENDENT ORGANIZATION.] 
           Subdivision 1.  [APPLICABILITY.] This section applies only 
        to (i) a nonprofit health service plan corporation operating 
        under chapter 62C; (ii) a health maintenance organization 
        operating under chapter 62D; (iii) a community integrated 
        service network operating under chapter 62N; and (iv) managed 
        care organizations operating under chapter 256B, 256D, or 256L. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them. 
           (a) "Commissioner" means the commissioner of health for 
        purposes of regulating health maintenance organizations and 
        community integrated service networks, the commissioner of 
        commerce for purposes of regulating nonprofit health service 
        plan corporations, or the commissioner of human services for the 
        purpose of contracting with managed care organizations serving 
        persons enrolled in programs under chapter 256B, 256D, or 256L. 
           (b) "Health plan company" means (i) a nonprofit health 
        service plan corporation operating under chapter 62C; (ii) a 
        health maintenance organization operating under chapter 62D; 
        (iii) a community integrated service network operating under 
        chapter 62N; or (iv) a managed care organization operating under 
        chapter 256B, 256D, or 256L. 
           (c) "Nationally recognized independent organization" means 
        (i) an organization that sets specific national standards 
        governing health care quality assurance processes, utilization 
        review, provider credentialing, marketing, and other topics 
        covered by this chapter and other chapters and audits and 
        provides accreditation to those health plan companies that meet 
        those standards.  The American Accreditation Health Care 
        Commission (URAC), the National Committee for Quality Assurance 
        (NCQA), and the Joint Commission on Accreditation of Healthcare 
        Organizations (JCAHO) are, at a minimum, defined as nationally 
        recognized independent organizations; and (ii) the Centers for 
        Medicare and Medicaid Services for purposes of reviews or audits 
        conducted of health plan companies under Part C of Title XVIII 
        of the Social Security Act or under section 1876 of the Social 
        Security Act. 
           (d) "Performance standard" means those standards relating 
        to quality management and improvement, access and availability 
        of service, utilization review, provider selection, provider 
        credentialing, marketing, member rights and responsibilities, 
        complaints, appeals, grievance systems, enrollee information and 
        materials, enrollment and disenrollment, subcontractual 
        relationships and delegation, confidentiality, continuity and 
        coordination of care, assurance of adequate capacity and 
        services, coverage and authorization of services, practice 
        guidelines, health information systems, and financial solvency. 
           Subd. 3.  [AUDITS.] (a) The commissioner may conduct 
        routine audits and investigations as prescribed under the 
        commissioner's respective state authorizing statutes.  If a 
        nationally recognized independent organization has conducted an 
        audit of the health plan company using audit procedures that are 
        comparable to or more stringent than the commissioner's audit 
        procedures: 
           (1) the commissioner may accept the independent audit and 
        require no further audit if the results of the independent audit 
        show that the performance standard being audited meets or 
        exceeds state standards; 
           (2) the commissioner may accept the independent audit and 
        limit further auditing if the results of the independent audit 
        show that the performance standard being audited partially meets 
        state standards; 
           (3) the health plan company must demonstrate to the 
        commissioner that the nationally recognized independent 
        organization that conducted the audit is qualified and that the 
        results of the audit demonstrate that the particular performance 
        standard partially or fully meets state standards; and 
           (4) if the commissioner has partially or fully accepted an 
        independent audit of the performance standard, the commissioner 
        may use the finding of a deficiency with regard to statutes or 
        rules by an independent audit as the basis for a targeted audit 
        or enforcement action. 
           (b) If a health plan company has formally delegated 
        activities that are required under either state law or contract 
        to another organization that has undergone an audit by a 
        nationally recognized independent organization, that health plan 
        company may use the nationally recognized accrediting body's 
        determination on its own behalf under this section. 
           Subd. 4.  [DISCLOSURE OF NATIONAL STANDARDS AND 
        REPORTS.] The health plan company shall: 
           (1) request that the nationally recognized independent 
        organization provide to the commissioner a copy of the current 
        nationally recognized independent organization's standards upon 
        which the acceptable accreditation status has been granted; and 
           (2) provide the commissioner a copy of the most current 
        final audit report issued by the nationally recognized 
        independent organization. 
           Subd. 5.  [ACCREDITATION NOT REQUIRED.] Nothing in this 
        section requires a health plan company to seek an acceptable 
        accreditation status from a nationally recognized independent 
        organization. 
           Subd. 6.  [CONTINUED AUTHORITY.] Nothing in this section 
        precludes the commissioner from conducting audits and 
        investigations or requesting data as granted under the 
        commissioner's respective state authorizing statutes. 
           Subd. 7.  [HUMAN SERVICES.] The commissioner of human 
        services shall implement this section in a manner that is 
        consistent with applicable federal laws and regulations. 
           Subd. 8.  [CONFIDENTIALITY.] Any documents provided to the 
        commissioner related to the audit report that may be accepted 
        under this section are private data on individuals pursuant to 
        chapter 13 and may only be released as permitted under section 
        60A.03, subdivision 9. 
           Sec. 9.  Minnesota Statutes 2002, section 62T.02, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [SEASONAL EMPLOYEES.] A purchasing alliance may 
        define eligible employees to include seasonal employees.  For 
        purposes of this chapter, "seasonal employee" means an employee 
        who is employed on a full-time basis for at least six months 
        during the calendar year and is unemployed for no longer than 
        four months during the calendar year.  If seasonal employees are 
        included: 
           (1) the alliance must not show bias in the selection of 
        members based on the percentage of seasonal employees employed 
        by an employer member; 
           (2) prior to issuance or renewal, the employer must inform 
        the alliance that it will include seasonal employees; 
           (3) the employer must cover seasonal employees for the 
        entire term of its plan year; and 
           (4) the purchasing alliance may require an employer-member 
        contribution of at least 50 percent of the cost of employee 
        coverage during the months the seasonal employee is unemployed. 
           Sec. 10.  Minnesota Statutes 2003 Supplement, section 
        128C.05, subdivision 1a, is amended to read: 
           Subd. 1a.  [SUPERVISED COMPETITIVE HIGH SCHOOL DIVING.] 
        Notwithstanding Minnesota Rules, part 4717.3750, any pool built 
        before January 1, 1987, that was used for a one-meter board high 
        school diving program during the 2000-2001 school year may be 
        used for supervised competitive one-meter board high school 
        diving unless a pool that meets the requirements of Minnesota 
        Rules, part 4717.3750, is located within the school district.  A 
        school or district using a pool for supervised training practice 
        for competitive high school diving that does not meet the 
        requirements of the rule Minnesota Rules, part 4717.3750, must 
        provide appropriate notice to parents and participants as to the 
        type of variance from Minnesota Rules and risk it may present. 
           Sec. 11.  Minnesota Statutes 2002, section 144.2215, is 
        amended to read: 
           144.2215 [MINNESOTA BIRTH DEFECTS REGISTRY INFORMATION 
        SYSTEM.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of health 
        shall develop a statewide birth defects registry system to 
        provide for the collection, analysis, and dissemination of birth 
        defects information establish and maintain an information system 
        containing data on the cause, treatment, prevention, and cure of 
        major birth defects.  The commissioner shall consult with 
        representatives and experts in epidemiology, medicine, 
        insurance, health maintenance organizations, genetics, 
        consumers, and voluntary organizations in developing the system 
        and may phase in the implementation of the system. 
           Subd. 2.  [DUTIES OF COMMISSIONER.] The commissioner of 
        health shall design a system that allows the commissioner to: 
           (1) monitor incidence trends of birth defects to detect 
        potential public health problems, predict risks, and assist in 
        responding to birth defects clusters; 
           (2) more accurately target intervention, prevention, and 
        services for communities, patients, and their families; 
           (3) inform health professionals and citizens of the 
        prevalence of and risks for birth defects; 
           (4) conduct scientific investigation and surveys of the 
        causes, mortality, methods of treatment, prevention, and cure 
        for birth defects; 
           (5) modify, as necessary, the birth defects information 
        system through demonstration projects; 
           (6) remove identifying information about a child whose 
        parent or legal guardian has chosen not to participate in the 
        system as permitted by section 144.2216, subdivision 4; 
           (7) protect the individually identifiable information as 
        required by section 144.2217; 
           (8) limit the dissemination of identifying information as 
        required by sections 144.2218 and 144.2219; and 
           (9) use the birth defects coding scheme defined by the 
        Centers for Disease Control and Prevention (CDC) of the United 
        States Public Health Service.  
           [EFFECTIVE DATE.] This section is effective upon receipt of 
        a federal grant to establish a birth defects information system. 
           Sec. 12.  [144.2216] [BIRTH DEFECTS RECORDS AND REPORTS 
        REQUIRED.] 
           Subdivision 1.  [HOSPITALS AND SIMILAR INSTITUTIONS.] With 
        the informed consent of a parent or guardian, as provided in 
        subdivision 4, a hospital, medical clinic, medical laboratory, 
        or other institution for the hospitalization, clinical or 
        laboratory diagnosis, or care of human beings shall provide the 
        commissioner of health with access to information on each birth 
        defect case in the manner and at the times that the commissioner 
        designates. 
           Subd. 2.  [OTHER INFORMATION REPOSITORIES.] With the 
        informed consent of a parent or guardian, as provided in 
        subdivision 4, other repositories of information on the 
        diagnosis or care of infants may provide the commissioner with 
        access to information on each case of birth defects in the 
        manner and at the times that the commissioner designates. 
           Subd. 3.  [REPORTING WITHOUT LIABILITY.] Furnishing 
        information in good faith in compliance with this section does 
        not subject the person, hospital, medical clinic, medical 
        laboratory, data repository, or other institution furnishing the 
        information to any action for damages or relief. 
           Subd. 4.  [OPT OUT.] A parent or legal guardian must be 
        informed by the commissioner at the time of the initial data 
        collection that they may request removal at any time of personal 
        identifying information concerning a child from the birth 
        defects information system using a written form prescribed by 
        the commissioner.  The commissioner shall advise parents or 
        legal guardians of infants: 
           (1) that the information on birth defects may be retained 
        by the Department of Health; 
           (2) the benefit of retaining birth defects records; 
           (3) that they may elect to have the birth defects 
        information collected once, within one year of birth, but to 
        require that all personally identifying information be destroyed 
        immediately upon the commissioner receiving the information.  
        If the parents of an infant object in writing to the maintaining 
        of birth defects information, the objection or election shall be 
        recorded on a form that is signed by a parent or legal guardian 
        and submitted to the commissioner of health; and 
           (4) that if the parent or legal guardian chooses to 
        opt-out, the commissioner will not be able to inform the parent 
        or legal guardian of a child of information related to the 
        prevention, treatment, or cause of a particular birth defect. 
           [EFFECTIVE DATE.] This section is effective upon receipt of 
        a federal grant to establish a birth defects information system. 
           Sec. 13.  [144.2217] [CLASSIFICATION OF BIRTH DEFECTS 
        INFORMATION.] 
           Information collected on individuals for the birth defects 
        information system are private data on individuals as defined in 
        section 13.02, subdivision 12, and may only be used for the 
        purposes in sections 144.2215 to 144.2219.  Any disclosure other 
        than one provided for in sections 144.2215 to 144.2219 is a 
        misdemeanor. 
           [EFFECTIVE DATE.] This section is effective upon receipt of 
        a federal grant to establish a birth defects information system. 
           Sec. 14.  [144.2218] [TRANSFERS OF INFORMATION TO OTHER 
        GOVERNMENT AGENCIES.] 
           Information collected by the birth defects information 
        system may be disseminated to a state or local government agency 
        in Minnesota or another state solely for purposes consistent 
        with sections 144.2215 to 144.2219, provided that the state or 
        local government agency agrees to maintain the classification of 
        the information as provided under section 144.2217.  Information 
        collected by other states consistent with sections 144.2215 to 
        144.2219 may be received by the commissioner of health and must 
        be maintained according to section 144.2217. 
           [EFFECTIVE DATE.] This section is effective upon receipt of 
        a federal grant to establish a birth defects information system. 
           Sec. 15.  [144.2219] [TRANSFERS OF INFORMATION TO RESEARCH 
        ENTITIES.] 
           Information from the birth defects information system that 
        does not contain identifying information may be shared with 
        research entities upon request for studies approved by the 
        commissioner and appropriate institutional review boards.  For 
        studies approved by the commissioner that require identifying 
        information about a child or a parent or legal guardian of the 
        child, the commissioner shall contact the parent or legal 
        guardian to obtain informed consent to share identifying 
        information with the research entity.  Notwithstanding section 
        144.335, subdivision 3a, paragraph (d), the parent or legal 
        guardian must provide informed consent before the information 
        may be shared.  The commissioner must collect all reasonable 
        costs of locating and obtaining consent from the research entity.
           [EFFECTIVE DATE.] This section is effective upon receipt of 
        a federal grant to establish a birth defects information system. 
           Sec. 16.  Minnesota Statutes 2002, section 145C.01, 
        subdivision 7, is amended to read: 
           Subd. 7.  [HEALTH CARE FACILITY.] "Health care facility" 
        means a hospital or other entity licensed under sections 144.50 
        to 144.58, a nursing home licensed to serve adults under section 
        144A.02, a home care provider licensed under sections 144A.43 to 
        144A.47, an adult foster care provider licensed under chapter 
        245A and Minnesota Rules, parts 9555.5105 to 9555.6265, or a 
        hospice provider licensed under sections 144A.75 to 144A.755.  
           Sec. 17.  Minnesota Statutes 2003 Supplement, section 
        256.01, subdivision 2, is amended to read: 
           Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
        section 241.021, subdivision 2, the commissioner of human 
        services shall carry out the specific duties in paragraphs (a) 
        through (aa): 
           (1) (a) Administer and supervise all forms of public 
        assistance provided for by state law and other welfare 
        activities or services as are vested in the commissioner.  
        Administration and supervision of human services activities or 
        services includes, but is not limited to, assuring timely and 
        accurate distribution of benefits, completeness of service, and 
        quality program management.  In addition to administering and 
        supervising human services activities vested by law in the 
        department, the commissioner shall have the authority to: 
           (a) (1) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (b) (2) monitor, on an ongoing basis, the performance of 
        county agencies in the operation and administration of human 
        services, enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (c) (3) develop a quality control program or other 
        monitoring program to review county performance and accuracy of 
        benefit determinations; 
           (d) (4) require county agencies to make an adjustment to 
        the public assistance benefits issued to any individual 
        consistent with federal law and regulation and state law and 
        rule and to issue or recover benefits as appropriate; 
           (e) (5) delay or deny payment of all or part of the state 
        and federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; 
           (f) (6) make contracts with and grants to public and 
        private agencies and organizations, both profit and nonprofit, 
        and individuals, using appropriated funds; and 
           (g) (7) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (2) (b) Inform county agencies, on a timely basis, of 
        changes in statute, rule, federal law, regulation, and policy 
        necessary to county agency administration of the programs. 
           (3) (c) 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) (d) 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) (e) Assist and actively cooperate with other 
        departments, agencies and institutions, local, state, and 
        federal, by performing services in conformity with the purposes 
        of Laws 1939, chapter 431. 
           (6) (f) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (7) (g) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (8) (h) Act as designated guardian of both the estate and 
        the person of all the wards of the state of Minnesota, whether 
        by operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        mentally retarded.  For children under the guardianship of the 
        commissioner whose interests would be best served by adoptive 
        placement, the commissioner may contract with a licensed 
        child-placing agency or a Minnesota tribal social services 
        agency to provide adoption services.  A contract with a licensed 
        child-placing agency must be designed to supplement existing 
        county efforts and may not replace existing county programs, 
        unless the replacement is agreed to by the county board and the 
        appropriate exclusive bargaining representative or the 
        commissioner has evidence that child placements of the county 
        continue to be substantially below that of other counties.  
        Funds encumbered and obligated under an agreement for a specific 
        child shall remain available until the terms of the agreement 
        are fulfilled or the agreement is terminated. 
           (9) (i) Act as coordinating referral and informational 
        center on requests for service for newly arrived immigrants 
        coming to Minnesota. 
           (10) (j) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (11) (k) Establish county, regional, or statewide schedules 
        of maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (12) (l) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (a) (1) the secretary of health and human services of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity.; and 
           (b) (2) a comprehensive plan, including estimated project 
        costs, shall be approved by the Legislative Advisory Commission 
        and filed with the commissioner of administration.  
           (13) (m) According to federal requirements, establish 
        procedures to be followed by local welfare boards in creating 
        citizen advisory committees, including procedures for selection 
        of committee members. 
           (14) (n) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, medical assistance, or food stamp 
        program in the following manner:  
           (a) (1) one-half of the total amount of the disallowance 
        shall be borne by the county boards responsible for 
        administering the programs.  For the medical assistance and the 
        AFDC program formerly codified in sections 256.72 to 256.87, 
        disallowances shall be shared by each county board in the same 
        proportion as that county's expenditures for the sanctioned 
        program are to the total of all counties' expenditures for the 
        AFDC program formerly codified in sections 256.72 to 256.87, and 
        medical assistance programs.  For the food stamp program, 
        sanctions shall be shared by each county board, with 50 percent 
        of the sanction being distributed to each county in the same 
        proportion as that county's administrative costs for food stamps 
        are to the total of all food stamp administrative costs for all 
        counties, and 50 percent of the sanctions being distributed to 
        each county in the same proportion as that county's value of 
        food stamp benefits issued are to the total of all benefits 
        issued for all counties.  Each county shall pay its share of the 
        disallowance to the state of Minnesota.  When a county fails to 
        pay the amount due hereunder, the commissioner may deduct the 
        amount from reimbursement otherwise due the county, or the 
        attorney general, upon the request of the commissioner, may 
        institute civil action to recover the amount due.; and 
           (b) (2) notwithstanding the provisions of paragraph 
        (a) clause (1), if the disallowance results from knowing 
        noncompliance by one or more counties with a specific program 
        instruction, and that knowing noncompliance is a matter of 
        official county board record, the commissioner may require 
        payment or recover from the county or counties, in the manner 
        prescribed in paragraph (a) clause (1), an amount equal to the 
        portion of the total disallowance which resulted from the 
        noncompliance, and may distribute the balance of the 
        disallowance according to paragraph (a) clause (1).  
           (15) (o) Develop and implement special projects that 
        maximize reimbursements and result in the recovery of money to 
        the state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (16) (p) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (17) (q) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (a) (1) the commissioner shall establish fiscal and 
        statistical reporting requirements necessary to account for the 
        expenditure of funds allocated to counties for human services 
        programs.  When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced.; 
           (b) (2) the county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner.; 
           (c) (3) if the required reports are not received by the 
        deadlines established in clause (b) (2), the commissioner may 
        delay payments and withhold funds from the county board until 
        the next reporting period.  When the report is needed to account 
        for the use of federal funds and the late report results in a 
        reduction in federal funding, the commissioner shall withhold 
        from the county boards with late reports an amount equal to the 
        reduction in federal funding until full federal funding is 
        received.; 
           (d) (4) a county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of 
        noncompliance.; 
           (e) (5) the final deadline for fiscal reports or amendments 
        to fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period.; 
           (f) (6) the commissioner may not delay payments, withhold 
        funds, or require repayment under paragraph (c) clause (3) or 
        (e) (5) if the county demonstrates that the commissioner failed 
        to provide appropriate forms, guidelines, and technical 
        assistance to enable the county to comply with the 
        requirements.  If the county board disagrees with an action 
        taken by the commissioner under paragraph (c) clause (3) or 
        (e) (5), the county board may appeal the action according to 
        sections 14.57 to 14.69.; and 
           (g) (7) counties subject to withholding of funds under 
        paragraph (c) clause (3) or forfeiture or repayment of funds 
        under paragraph (e) clause (5) shall not reduce or withhold 
        benefits or services to clients to cover costs incurred due to 
        actions taken by the commissioner under paragraph (c) clause (3) 
        or (e) (5). 
           (18) (r) Allocate federal fiscal disallowances or sanctions 
        for audit exceptions when federal fiscal disallowances or 
        sanctions are based on a statewide random sample for the foster 
        care program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (19) (s) Be responsible for ensuring the detection, 
        prevention, investigation, and resolution of fraudulent 
        activities or behavior by applicants, recipients, and other 
        participants in the human services programs administered by the 
        department. 
           (20) (t) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (21) (u) Have the authority to administer a drug rebate 
        program for drugs purchased pursuant to the prescription drug 
        program established under section 256.955 after the 
        beneficiary's satisfaction of any deductible established in the 
        program.  The commissioner shall require a rebate agreement from 
        all manufacturers of covered drugs as defined in section 
        256B.0625, subdivision 13.  Rebate agreements for prescription 
        drugs delivered on or after July 1, 2002, must include rebates 
        for individuals covered under the prescription drug program who 
        are under 65 years of age.  For each drug, the amount of the 
        rebate shall be equal to the rebate as defined for purposes of 
        the federal rebate program in United States Code, title 42, 
        section 1396r-8(c)(1) 1396r-8.  The manufacturers must provide 
        full payment within 30 days of receipt of the state invoice for 
        the rebate within the terms and conditions used for the federal 
        rebate program established pursuant to section 1927 of title XIX 
        of the Social Security Act.  The manufacturers must provide the 
        commissioner with any information necessary to verify the rebate 
        determined per drug.  The rebate program shall utilize the terms 
        and conditions used for the federal rebate program established 
        pursuant to section 1927 of title XIX of the Social Security Act.
           (22) (v) Have the authority to administer the federal drug 
        rebate program for drugs purchased under the medical assistance 
        program as allowed by section 1927 of title XIX of the Social 
        Security Act and according to the terms and conditions of 
        section 1927.  Rebates shall be collected for all drugs that 
        have been dispensed or administered in an outpatient setting and 
        that are from manufacturers who have signed a rebate agreement 
        with the United States Department of Health and Human Services. 
           (23) (w) Have the authority to administer a supplemental 
        drug rebate program for drugs purchased under the medical 
        assistance program.  The commissioner may enter into 
        supplemental rebate contracts with pharmaceutical manufacturers 
        and may require prior authorization for drugs that are from 
        manufacturers that have not signed a supplemental rebate 
        contract.  Prior authorization of drugs shall be subject to the 
        provisions of section 256B.0625, subdivision 13. 
           (24) (x) Operate the department's communication systems 
        account established in Laws 1993, First Special Session chapter 
        1, article 1, section 2, subdivision 2, to manage shared 
        communication costs necessary for the operation of the programs 
        the commissioner supervises.  A communications account may also 
        be established for each regional treatment center which operates 
        communications systems.  Each account must be used to manage 
        shared communication costs necessary for the operations of the 
        programs the commissioner supervises.  The commissioner may 
        distribute the costs of operating and maintaining communication 
        systems to participants in a manner that reflects actual usage. 
        Costs may include acquisition, licensing, insurance, 
        maintenance, repair, staff time and other costs as determined by 
        the commissioner.  Nonprofit organizations and state, county, 
        and local government agencies involved in the operation of 
        programs the commissioner supervises may participate in the use 
        of the department's communications technology and share in the 
        cost of operation.  The commissioner may accept on behalf of the 
        state any gift, bequest, devise or personal property of any 
        kind, or money tendered to the state for any lawful purpose 
        pertaining to the communication activities of the department.  
        Any money received for this purpose must be deposited in the 
        department's communication systems accounts.  Money collected by 
        the commissioner for the use of communication systems must be 
        deposited in the state communication systems account and is 
        appropriated to the commissioner for purposes of this section. 
           (25) (y) Receive any federal matching money that is made 
        available through the medical assistance program for the 
        consumer satisfaction survey.  Any federal money received for 
        the survey is appropriated to the commissioner for this 
        purpose.  The commissioner may expend the federal money received 
        for the consumer satisfaction survey in either year of the 
        biennium. 
           (26) (z) Designate community information and referral call 
        centers and Incorporate cost reimbursement claims from First 
        Call Minnesota and Greater Twin Cities United Way the designated 
        community information and referral call centers into the federal 
        cost reimbursement claiming processes of the department 
        according to federal law, rule, and regulations.  Existing 
        information and referral centers provided by Greater Twin Cities 
        United Way or existing call centers for which Greater Twin 
        Cities United Way has legal authority to represent, shall be 
        included in these designations upon review by the commissioner 
        and assurance that these services are accredited and in 
        compliance with national standards.  Any reimbursement received 
        is appropriated to the commissioner and all designated 
        information and referral centers shall be disbursed to First 
        Call Minnesota and Greater Twin receive payments Cities United 
        Way according to normal department payment schedules established 
        by the commissioner upon final approval of allocation 
        methodologies from the United States Department of Health and 
        Human Services Division of Cost Allocation or other appropriate 
        authorities. 
           (27) (aa) Develop recommended standards for foster care 
        homes that address the components of specialized therapeutic 
        services to be provided by foster care homes with those services.
           Sec. 18.  Minnesota Statutes 2002, section 256.955, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
        the following definitions apply. 
           (b) "Health plan" has the meaning provided in section 
        62Q.01, subdivision 3. 
           (c) "Health plan company" has the meaning provided in 
        section 62Q.01, subdivision 4. 
           (d) "Qualified individual" means an individual who meets 
        the requirements described in subdivision 2a or 2b, and: 
           (1) who is not determined eligible for medical assistance 
        according to section 256B.0575, who is not determined eligible 
        for medical assistance or general assistance medical care 
        without a spenddown, or who is not enrolled in MinnesotaCare; 
           (2) is not enrolled in prescription drug coverage under a 
        health plan; 
           (3) is not enrolled in prescription drug coverage under a 
        Medicare supplement plan, as defined in sections 62A.31 to 
        62A.44, or policies, contracts, or certificates that supplement 
        Medicare issued by health maintenance organizations or those 
        policies, contracts, or certificates governed by section 1833 or 
        1876 of the federal Social Security Act, United States Code, 
        title 42, section 1395, et seq., as amended; 
           (4) has not had coverage described in clauses (2) and (3) 
        for at least four months prior to application for the program; 
        and 
           (5) is a permanent resident of Minnesota as defined in 
        section 256L.09. 
           Sec. 19.  Minnesota Statutes 2003 Supplement, section 
        256.955, subdivision 2a, is amended to read: 
           Subd. 2a.  [ELIGIBILITY.] An individual satisfying the 
        following requirements and the requirements described in 
        subdivision 2, paragraph (d), is eligible for the prescription 
        drug program: 
           (1) is at least 65 years of age or older; and 
           (2) is eligible as a qualified Medicare beneficiary 
        according to section 256B.057, subdivision 3 or 3a, or is 
        eligible under section 256B.057, subdivision 3 or 3a, and is 
        also eligible for medical assistance or general assistance 
        medical care with a spenddown as defined in section 256B.056, 
        subdivision 5. 
           Sec. 20.  Minnesota Statutes 2002, section 256.955, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [ELIGIBILITY.] Effective July 1, 2002, an 
        individual satisfying the following requirements and the 
        requirements described in subdivision 2, paragraph (d), is 
        eligible for the prescription drug program: 
           (1) is under 65 years of age; and 
           (2) is eligible as a qualified Medicare beneficiary 
        according to section 256B.057, subdivision 3 or 3a or is 
        eligible under section 256B.057, subdivision 3 or 3a and is also 
        eligible for medical assistance or general assistance medical 
        care with a spenddown as defined in section 256B.056, 
        subdivision 5. 
           Sec. 21.  Minnesota Statutes 2003 Supplement, section 
        256B.06, subdivision 4, is amended to read: 
           Subd. 4.  [CITIZENSHIP REQUIREMENTS.] (a) Eligibility for 
        medical assistance is limited to citizens of the United States, 
        qualified noncitizens as defined in this subdivision, and other 
        persons residing lawfully in the United States. 
           (b) "Qualified noncitizen" means a person who meets one of 
        the following immigration criteria: 
           (1) admitted for lawful permanent residence according to 
        United States Code, title 8; 
           (2) admitted to the United States as a refugee according to 
        United States Code, title 8, section 1157; 
           (3) granted asylum according to United States Code, title 
        8, section 1158; 
           (4) granted withholding of deportation according to United 
        States Code, title 8, section 1253(h); 
           (5) paroled for a period of at least one year according to 
        United States Code, title 8, section 1182(d)(5); 
           (6) granted conditional entrant status according to United 
        States Code, title 8, section 1153(a)(7); 
           (7) determined to be a battered noncitizen by the United 
        States Attorney General according to the Illegal Immigration 
        Reform and Immigrant Responsibility Act of 1996, title V of the 
        Omnibus Consolidated Appropriations Bill, Public Law 104-200; 
           (8) is a child of a noncitizen determined to be a battered 
        noncitizen by the United States Attorney General according to 
        the Illegal Immigration Reform and Immigrant Responsibility Act 
        of 1996, title V, of the Omnibus Consolidated Appropriations 
        Bill, Public Law 104-200; or 
           (9) determined to be a Cuban or Haitian entrant as defined 
        in section 501(e) of Public Law 96-422, the Refugee Education 
        Assistance Act of 1980. 
           (c) All qualified noncitizens who were residing in the 
        United States before August 22, 1996, who otherwise meet the 
        eligibility requirements of this chapter, are eligible for 
        medical assistance with federal financial participation. 
           (d) All qualified noncitizens who entered the United States 
        on or after August 22, 1996, and who otherwise meet the 
        eligibility requirements of this chapter, are eligible for 
        medical assistance with federal financial participation through 
        November 30, 1996. 
           Beginning December 1, 1996, qualified noncitizens who 
        entered the United States on or after August 22, 1996, and who 
        otherwise meet the eligibility requirements of this chapter are 
        eligible for medical assistance with federal participation for 
        five years if they meet one of the following criteria: 
           (i) refugees admitted to the United States according to 
        United States Code, title 8, section 1157; 
           (ii) persons granted asylum according to United States 
        Code, title 8, section 1158; 
           (iii) persons granted withholding of deportation according 
        to United States Code, title 8, section 1253(h); 
           (iv) veterans of the United States armed forces with an 
        honorable discharge for a reason other than noncitizen status, 
        their spouses and unmarried minor dependent children; or 
           (v) persons on active duty in the United States armed 
        forces, other than for training, their spouses and unmarried 
        minor dependent children. 
           Beginning December 1, 1996, qualified noncitizens who do 
        not meet one of the criteria in items (i) to (v) are eligible 
        for medical assistance without federal financial participation 
        as described in paragraph (j). 
           (e) Noncitizens who are not qualified noncitizens as 
        defined in paragraph (b), who are lawfully residing in the 
        United States and who otherwise meet the eligibility 
        requirements of this chapter, are eligible for medical 
        assistance under clauses (1) to (3).  These individuals must 
        cooperate with the Immigration and Naturalization Service to 
        pursue any applicable immigration status, including citizenship, 
        that would qualify them for medical assistance with federal 
        financial participation. 
           (1) Persons who were medical assistance recipients on 
        August 22, 1996, are eligible for medical assistance with 
        federal financial participation through December 31, 1996. 
           (2) Beginning January 1, 1997, persons described in clause 
        (1) are eligible for medical assistance without federal 
        financial participation as described in paragraph (j). 
           (3) Beginning December 1, 1996, persons residing in the 
        United States prior to August 22, 1996, who were not receiving 
        medical assistance and persons who arrived on or after August 
        22, 1996, are eligible for medical assistance without federal 
        financial participation as described in paragraph (j). 
           (f) Nonimmigrants who otherwise meet the eligibility 
        requirements of this chapter are eligible for the benefits as 
        provided in paragraphs (g) to (i).  For purposes of this 
        subdivision, a "nonimmigrant" is a person in one of the classes 
        listed in United States Code, title 8, section 1101(a)(15). 
           (g) Payment shall also be made for care and services that 
        are furnished to noncitizens, regardless of immigration status, 
        who otherwise meet the eligibility requirements of this chapter, 
        if such care and services are necessary for the treatment of an 
        emergency medical condition, except for organ transplants and 
        related care and services and routine prenatal care.  
           (h) For purposes of this subdivision, the term "emergency 
        medical condition" means a medical condition that meets the 
        requirements of United States Code, title 42, section 1396b(v). 
           (i) Pregnant noncitizens who are undocumented or 
        nonimmigrants, who otherwise meet the eligibility requirements 
        of this chapter, are eligible for medical assistance payment 
        without federal financial participation for care and services 
        through the period of pregnancy, and 60 days postpartum, except 
        for labor and delivery.  
           (j) Qualified noncitizens as described in paragraph (d), 
        and all other noncitizens lawfully residing in the United States 
        as described in paragraph (e), who are ineligible for medical 
        assistance with federal financial participation and who 
        otherwise meet the eligibility requirements of chapter 256B and 
        of this paragraph, are eligible for medical assistance without 
        federal financial participation.  Qualified noncitizens as 
        described in paragraph (d) are only eligible for medical 
        assistance without federal financial participation for five 
        years from their date of entry into the United States.  
           (k) Beginning October 1, 2003, persons who are receiving 
        care and rehabilitation services from a nonprofit center 
        established to serve victims of torture and are otherwise 
        ineligible for medical assistance under this chapter or general 
        assistance medical care under section 256D.03 are eligible for 
        medical assistance without federal financial participation.  
        These individuals are eligible only for the period during which 
        they are receiving services from the center.  Individuals 
        eligible under this paragraph shall not be required to 
        participate in prepaid medical assistance. 
           Sec. 22.  Minnesota Statutes 2003 Supplement, section 
        256B.0625, subdivision 9, is amended to read: 
           Subd. 9.  [DENTAL SERVICES.] (a) Medical assistance covers 
        dental services.  Dental services include, with prior 
        authorization, fixed bridges that are cost-effective for persons 
        who cannot use removable dentures because of their medical 
        condition.  
           (b) Coverage of dental services for adults age 21 and over 
        who are not pregnant is subject to a $500 annual benefit limit 
        and covered services are limited to:  
           (1) diagnostic and preventative services; 
           (2) basic restorative services; and 
           (3) emergency services. 
           Emergency services, dentures, and extractions related to 
        dentures are not included in the $500 annual benefit limit. 
           Sec. 23.  Minnesota Statutes 2003 Supplement, section 
        256D.03, subdivision 3, is amended to read: 
           Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
        (a) General assistance medical care may be paid for any person 
        who is not eligible for medical assistance under chapter 256B, 
        including eligibility for medical assistance based on a 
        spenddown of excess income according to section 256B.056, 
        subdivision 5, or MinnesotaCare as defined in paragraph (b), 
        except as provided in paragraph (c), and: 
           (1) who is receiving assistance under section 256D.05, 
        except for families with children who are eligible under 
        Minnesota family investment program (MFIP), or who is having a 
        payment made on the person's behalf under sections 256I.01 to 
        256I.06; or 
           (2) who is a resident of Minnesota; and 
           (i) who has gross countable income not in excess of 75 
        percent of the federal poverty guidelines for the family size, 
        using a six-month budget period and whose equity in assets is 
        not in excess of $1,000 per assistance unit.  Exempt assets, the 
        reduction of excess assets, and the waiver of excess assets must 
        conform to the medical assistance program in section 256B.056, 
        subdivision 3, with the following exception:  the maximum amount 
        of undistributed funds in a trust that could be distributed to 
        or on behalf of the beneficiary by the trustee, assuming the 
        full exercise of the trustee's discretion under the terms of the 
        trust, must be applied toward the asset maximum; or 
           (ii) who has gross countable income above 75 percent of the 
        federal poverty guidelines but not in excess of 175 percent of 
        the federal poverty guidelines for the family size, using a 
        six-month budget period, whose equity in assets is not in excess 
        of the limits in section 256B.056, subdivision 3c, and who 
        applies during an inpatient hospitalization.  
           (b) General assistance medical care may not be paid for 
        applicants or recipients who meet all eligibility requirements 
        of MinnesotaCare as defined in sections 256L.01 to 256L.16, and 
        are adults with dependent children under 21 whose gross family 
        income is equal to or less than 275 percent of the federal 
        poverty guidelines. 
           (c) For applications received on or after October 1, 2003, 
        eligibility may begin no earlier than the date of application.  
        For individuals eligible under paragraph (a), clause (2), item 
        (i), a redetermination of eligibility must occur every 12 
        months.  Individuals are eligible under paragraph (a), clause 
        (2), item (ii), only during inpatient hospitalization but may 
        reapply if there is a subsequent period of inpatient 
        hospitalization.  Beginning January 1, 2000, Minnesota health 
        care program applications completed by recipients and applicants 
        who are persons described in paragraph (b), may be returned to 
        the county agency to be forwarded to the Department of Human 
        Services or sent directly to the Department of Human Services 
        for enrollment in MinnesotaCare.  If all other eligibility 
        requirements of this subdivision are met, eligibility for 
        general assistance medical care shall be available in any month 
        during which a MinnesotaCare eligibility determination and 
        enrollment are pending.  Upon notification of eligibility for 
        MinnesotaCare, notice of termination for eligibility for general 
        assistance medical care shall be sent to an applicant or 
        recipient.  If all other eligibility requirements of this 
        subdivision are met, eligibility for general assistance medical 
        care shall be available until enrollment in MinnesotaCare 
        subject to the provisions of paragraph (e). 
           (d) The date of an initial Minnesota health care program 
        application necessary to begin a determination of eligibility 
        shall be the date the applicant has provided a name, address, 
        and Social Security number, signed and dated, to the county 
        agency or the Department of Human Services.  If the applicant is 
        unable to provide a name, address, Social Security number, and 
        signature when health care is delivered due to a medical 
        condition or disability, a health care provider may act on an 
        applicant's behalf to establish the date of an initial Minnesota 
        health care program application by providing the county agency 
        or Department of Human Services with provider identification and 
        a temporary unique identifier for the applicant.  The applicant 
        must complete the remainder of the application and provide 
        necessary verification before eligibility can be determined.  
        The county agency must assist the applicant in obtaining 
        verification if necessary.  
           (e) County agencies are authorized to use all automated 
        databases containing information regarding recipients' or 
        applicants' income in order to determine eligibility for general 
        assistance medical care or MinnesotaCare.  Such use shall be 
        considered sufficient in order to determine eligibility and 
        premium payments by the county agency. 
           (f) General assistance medical care is not available for a 
        person in a correctional facility unless the person is detained 
        by law for less than one year in a county correctional or 
        detention facility as a person accused or convicted of a crime, 
        or admitted as an inpatient to a hospital on a criminal hold 
        order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (g) General assistance medical care is not available for 
        applicants or recipients who do not cooperate with the county 
        agency to meet the requirements of medical assistance.  
           (h) In determining the amount of assets of an individual 
        eligible under paragraph (a), clause (2), item (i), there shall 
        be included any asset or interest in an asset, including an 
        asset excluded under paragraph (a), that was given away, sold, 
        or disposed of for less than fair market value within the 60 
        months preceding application for general assistance medical care 
        or during the period of eligibility.  Any transfer described in 
        this paragraph shall be presumed to have been for the purpose of 
        establishing eligibility for general assistance medical care, 
        unless the individual furnishes convincing evidence to establish 
        that the transaction was exclusively for another purpose.  For 
        purposes of this paragraph, the value of the asset or interest 
        shall be the fair market value at the time it was given away, 
        sold, or disposed of, less the amount of compensation received.  
        For any uncompensated transfer, the number of months of 
        ineligibility, including partial months, shall be calculated by 
        dividing the uncompensated transfer amount by the average 
        monthly per person payment made by the medical assistance 
        program to skilled nursing facilities for the previous calendar 
        year.  The individual shall remain ineligible until this fixed 
        period has expired.  The period of ineligibility may exceed 30 
        months, and a reapplication for benefits after 30 months from 
        the date of the transfer shall not result in eligibility unless 
        and until the period of ineligibility has expired.  The period 
        of ineligibility begins in the month the transfer was reported 
        to the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (i) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        104-193, sections 421 and 422, and subsequently set out in 
        federal rules. 
           (j) Undocumented noncitizens and nonimmigrants are 
        ineligible for general assistance medical care, except an 
        individual eligible under paragraph (a), clause (4), remains 
        eligible through September 30, 2003.  For purposes of this 
        subdivision, a nonimmigrant is an individual in one or more of 
        the classes listed in United States Code, title 8, section 
        1101(a)(15), and an undocumented noncitizen is an individual who 
        resides in the United States without the approval or 
        acquiescence of the Immigration and Naturalization Service. 
           (k) Notwithstanding any other provision of law, a 
        noncitizen who is ineligible for medical assistance due to the 
        deeming of a sponsor's income and resources, is ineligible for 
        general assistance medical care. 
           (l) Effective July 1, 2003, general assistance medical care 
        emergency services end.  
           Sec. 24.  Minnesota Statutes 2003 Supplement, section 
        256D.03, subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] 
        (a)(i) For a person who is eligible under subdivision 3, 
        paragraph (a), clause (2), item (i), general assistance medical 
        care covers, except as provided in paragraph (c): 
           (1) inpatient hospital services; 
           (2) outpatient hospital services; 
           (3) services provided by Medicare certified rehabilitation 
        agencies; 
           (4) prescription drugs and other products recommended 
        through the process established in section 256B.0625, 
        subdivision 13; 
           (5) equipment necessary to administer insulin and 
        diagnostic supplies and equipment for diabetics to monitor blood 
        sugar level; 
           (6) eyeglasses and eye examinations provided by a physician 
        or optometrist; 
           (7) hearing aids; 
           (8) prosthetic devices; 
           (9) laboratory and X-ray services; 
           (10) physician's services; 
           (11) medical transportation except special transportation; 
           (12) chiropractic services as covered under the medical 
        assistance program; 
           (13) podiatric services; 
           (14) dental services and dentures, subject to the 
        limitations specified in section 256B.0625, subdivision 9; 
           (15) outpatient services provided by a mental health center 
        or clinic that is under contract with the county board and is 
        established under section 245.62; 
           (16) day treatment services for mental illness provided 
        under contract with the county board; 
           (17) prescribed medications for persons who have been 
        diagnosed as mentally ill as necessary to prevent more 
        restrictive institutionalization; 
           (18) psychological services, medical supplies and 
        equipment, and Medicare premiums, coinsurance and deductible 
        payments; 
           (19) medical equipment not specifically listed in this 
        paragraph when the use of the equipment will prevent the need 
        for costlier services that are reimbursable under this 
        subdivision; 
           (20) services performed by a certified pediatric nurse 
        practitioner, a certified family nurse practitioner, a certified 
        adult nurse practitioner, a certified obstetric/gynecological 
        nurse practitioner, a certified neonatal nurse practitioner, or 
        a certified geriatric nurse practitioner in independent 
        practice, if (1) the service is otherwise covered under this 
        chapter as a physician service, (2) the service provided on an 
        inpatient basis is not included as part of the cost for 
        inpatient services included in the operating payment rate, and 
        (3) the service is within the scope of practice of the nurse 
        practitioner's license as a registered nurse, as defined in 
        section 148.171; 
           (21) services of a certified public health nurse or a 
        registered nurse practicing in a public health nursing clinic 
        that is a department of, or that operates under the direct 
        authority of, a unit of government, if the service is within the 
        scope of practice of the public health nurse's license as a 
        registered nurse, as defined in section 148.171; and 
           (22) telemedicine consultations, to the extent they are 
        covered under section 256B.0625, subdivision 3b.  
           (ii) Effective October 1, 2003, for a person who is 
        eligible under subdivision 3, paragraph (a), clause (2), item 
        (ii), general assistance medical care coverage is limited to 
        inpatient hospital services, including physician services 
        provided during the inpatient hospital stay.  A $1,000 
        deductible is required for each inpatient hospitalization.  
           (b) Gender reassignment surgery and related services are 
        not covered services under this subdivision unless the 
        individual began receiving gender reassignment services prior to 
        July 1, 1995.  
           (c) In order to contain costs, the commissioner of human 
        services shall select vendors of medical care who can provide 
        the most economical care consistent with high medical standards 
        and shall where possible contract with organizations on a 
        prepaid capitation basis to provide these services.  The 
        commissioner shall consider proposals by counties and vendors 
        for prepaid health plans, competitive bidding programs, block 
        grants, or other vendor payment mechanisms designed to provide 
        services in an economical manner or to control utilization, with 
        safeguards to ensure that necessary services are provided.  
        Before implementing prepaid programs in counties with a county 
        operated or affiliated public teaching hospital or a hospital or 
        clinic operated by the University of Minnesota, the commissioner 
        shall consider the risks the prepaid program creates for the 
        hospital and allow the county or hospital the opportunity to 
        participate in the program in a manner that reflects the risk of 
        adverse selection and the nature of the patients served by the 
        hospital, provided the terms of participation in the program are 
        competitive with the terms of other participants considering the 
        nature of the population served.  Payment for services provided 
        pursuant to this subdivision shall be as provided to medical 
        assistance vendors of these services under sections 256B.02, 
        subdivision 8, and 256B.0625.  For payments made during fiscal 
        year 1990 and later years, the commissioner shall consult with 
        an independent actuary in establishing prepayment rates, but 
        shall retain final control over the rate methodology.  
           (d) Recipients eligible under subdivision 3, paragraph (a), 
        clause (2), item (i), shall pay the following co-payments for 
        services provided on or after October 1, 2003: 
           (1) $3 per nonpreventive visit.  For purposes of this 
        subdivision, a visit means an episode of service which is 
        required because of a recipient's symptoms, diagnosis, or 
        established illness, and which is delivered in an ambulatory 
        setting by a physician or physician ancillary, chiropractor, 
        podiatrist, nurse midwife, advanced practice nurse, audiologist, 
        optician, or optometrist; 
           (2) $25 for eyeglasses; 
           (3) $25 for nonemergency visits to a hospital-based 
        emergency room; 
           (4) $3 per brand-name drug prescription and $1 per generic 
        drug prescription, subject to a $20 per month maximum for 
        prescription drug co-payments.  No co-payments shall apply to 
        antipsychotic drugs when used for the treatment of mental 
        illness; and 
           (5) 50 percent coinsurance on basic restorative dental 
        services.  
           (e) Co-payments shall be limited to one per day per 
        provider for nonpreventive visits, eyeglasses, and nonemergency 
        visits to a hospital-based emergency room.  Recipients of 
        general assistance medical care are responsible for all 
        co-payments in this subdivision.  The general assistance medical 
        care reimbursement to the provider shall be reduced by the 
        amount of the co-payment, except that reimbursement for 
        prescription drugs shall not be reduced once a recipient has 
        reached the $20 per month maximum for prescription drug 
        co-payments.  The provider collects the co-payment from the 
        recipient.  Providers may not deny services to recipients who 
        are unable to pay the co-payment, except as provided in 
        paragraph (f). 
           (f) If it is the routine business practice of a provider to 
        refuse service to an individual with uncollected debt, the 
        provider may include uncollected co-payments under this 
        section.  A provider must give advance notice to a recipient 
        with uncollected debt before services can be denied. 
           (g) Any county may, from its own resources, provide medical 
        payments for which state payments are not made. 
           (h) Chemical dependency services that are reimbursed under 
        chapter 254B must not be reimbursed under general assistance 
        medical care. 
           (i) The maximum payment for new vendors enrolled in the 
        general assistance medical care program after the base year 
        shall be determined from the average usual and customary charge 
        of the same vendor type enrolled in the base year. 
           (j) The conditions of payment for services under this 
        subdivision are the same as the conditions specified in rules 
        adopted under chapter 256B governing the medical assistance 
        program, unless otherwise provided by statute or rule. 
           (k) Inpatient and outpatient payments shall be reduced by 
        five percent, effective July 1, 2003.  This reduction is in 
        addition to the five percent reduction effective July 1, 2003, 
        and incorporated by reference in paragraph (i).  
           (l) Payments for all other health services except 
        inpatient, outpatient, and pharmacy services shall be reduced by 
        five percent, effective July 1, 2003.  
           (m) Payments to managed care plans shall be reduced by five 
        percent for services provided on or after October 1, 2003. 
           (n) 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. 
           Sec. 25.  Minnesota Statutes 2003 Supplement, section 
        295.50, subdivision 9b, is amended to read: 
           Subd. 9b.  [PATIENT SERVICES.] (a) "Patient services" means 
        inpatient and outpatient services and other goods and services 
        provided by hospitals, surgical centers, or health care 
        providers.  They include the following health care goods and 
        services provided to a patient or consumer: 
           (1) bed and board; 
           (2) nursing services and other related services; 
           (3) use of hospitals, surgical centers, or health care 
        provider facilities; 
           (4) medical social services; 
           (5) drugs, biologicals, supplies, appliances, and 
        equipment; 
           (6) other diagnostic or therapeutic items or services; 
           (7) medical or surgical services; 
           (8) items and services furnished to ambulatory patients not 
        requiring emergency care; and 
           (9) emergency services; and 
           (10) covered services listed in section 256B.0625 and in 
        Minnesota Rules, parts 9505.0170 to 9505.0475. 
           (b) "Patient services" does not include:  
           (1) services provided to nursing homes licensed under 
        chapter 144A; 
           (2) examinations for purposes of utilization reviews, 
        insurance claims or eligibility, litigation, and employment, 
        including reviews of medical records for those purposes; 
           (3) services provided to and by community residential 
        mental health facilities licensed under Minnesota Rules, parts 
        9520.0500 to 9520.0690, and to and by residential treatment 
        programs for children with severe emotional disturbance licensed 
        or certified under chapter 245A; 
           (4) services provided to and by community support programs 
        and family community support programs approved under Minnesota 
        Rules, parts 9535.1700 to 9535.1760 or certified as mental 
        health rehabilitative services under chapter 256B; 
           (5) services provided to and by community mental health 
        centers as defined in section 245.62, subdivision 2; 
           (6) services provided to and by assisted living programs 
        and congregate housing programs; and 
           (7) hospice care services.; 
           (8) home and community-based waivered services under 
        sections 256B.0915, 256B.49, 256B.491, and 256B.501; 
           (9) targeted case management services under sections 
        256B.0621; 256B.0625, subdivisions 20, 20a, 33, and 44; and 
        256B.094; and 
           (10) services provided to the following:  supervised living 
        facilities for persons with mental retardation or related 
        conditions licensed under Minnesota Rules, parts 4665.0100 to 
        4665.9900; housing with services establishments required to be 
        registered under chapter 144D; board and lodging establishments 
        providing only custodial services that are licensed under 
        chapter 157 and registered under section 157.17 to provide 
        supportive services or health supervision services; adult foster 
        homes as defined in Minnesota Rules, part 9555.5105; day 
        training and habilitation services for adults with mental 
        retardation and related conditions as defined in section 252.41, 
        subdivision 3; boarding care homes as defined in Minnesota 
        Rules, part 4655.0100; adult day care services as defined in 
        section 245A.02, subdivision 2a; and home health agencies as 
        defined in Minnesota Rules, part 9505.0175, subpart 15, or 
        licensed under chapter 144A. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from January 1, 2004. 
           Sec. 26.  Minnesota Statutes 2003 Supplement, section 
        295.53, subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
        are excluded from the gross revenues subject to the hospital, 
        surgical center, or health care provider taxes under sections 
        295.50 to 295.59: 
           (1) payments received for services provided under the 
        Medicare program, including payments received from the 
        government, and organizations governed by sections 1833 and 1876 
        of title XVIII of the federal Social Security Act, United States 
        Code, title 42, section 1395, and enrollee deductibles, 
        coinsurance, and co-payments, whether paid by the Medicare 
        enrollee or by a Medicare supplemental coverage as defined in 
        section 62A.011, subdivision 3, clause (10), or by Medicaid 
        payments under title XIX of the federal Social Security Act.  
        Payments for services not covered by Medicare are taxable; 
           (2) payments received for home health care services; 
           (3) payments received from hospitals or surgical centers 
        for goods and services on which liability for tax is imposed 
        under section 295.52 or the source of funds for the payment is 
        exempt under clause (1), (7), (10), or (14); 
           (4) payments received from health care providers for goods 
        and services on which liability for tax is imposed under this 
        chapter or the source of funds for the payment is exempt under 
        clause (1), (7), (10), or (14); 
           (5) amounts paid for legend drugs, other than nutritional 
        products, to a wholesale drug distributor who is subject to tax 
        under section 295.52, subdivision 3, reduced by reimbursements 
        received for legend drugs otherwise exempt under this chapter; 
           (6) payments received by a health care provider or the 
        wholly owned subsidiary of a health care provider for care 
        provided outside Minnesota; 
           (7) payments received from the chemical dependency fund 
        under chapter 254B; 
           (8) payments received in the nature of charitable donations 
        that are not designated for providing patient services to a 
        specific individual or group; 
           (9) payments received for providing patient services 
        incurred through a formal program of health care research 
        conducted in conformity with federal regulations governing 
        research on human subjects.  Payments received from patients or 
        from other persons paying on behalf of the patients are subject 
        to tax; 
           (10) payments received from any governmental agency for 
        services benefiting the public, not including payments made by 
        the government in its capacity as an employer or insurer or 
        payments made by the government for services provided under 
        medical assistance, general assistance medical care, or the 
        MinnesotaCare program, or the medical assistance program 
        governed by title XIX of the federal Social Security Act, United 
        States Code, title 42, sections 1396 to 1396v; 
           (11) government payments received by a regional treatment 
        center the commissioner of human services for state-operated 
        services; 
           (12) payments received by a health care provider for 
        hearing aids and related equipment or prescription eyewear 
        delivered outside of Minnesota; 
           (13) payments received by an educational institution from 
        student tuition, student activity fees, health care service 
        fees, government appropriations, donations, or grants, and for 
        services identified in and provided under an individualized 
        education plan as defined in section 256B.0625 or Code of 
        Federal Regulations, chapter 34, section 300.340(a).  Fee for 
        service payments and payments for extended coverage are taxable; 
        and 
           (14) payments received under the federal Employees Health 
        Benefits Act, United States Code, title 5, section 8909(f), as 
        amended by the Omnibus Reconciliation Act of 1990. 
           (b) Payments received by wholesale drug distributors for 
        legend drugs sold directly to veterinarians or veterinary bulk 
        purchasing organizations are excluded from the gross revenues 
        subject to the wholesale drug distributor tax under sections 
        295.50 to 295.59. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from January 1, 2004. 
           Sec. 27.  [FETAL ALCOHOL SPECTRUM DISORDER APPROPRIATION 
        TRANSFER.] 
           (a) On July 1 of each fiscal year, beginning July 1, 2004, 
        a portion of the general fund appropriation to the commissioner 
        of health for fetal alcohol spectrum disorder administration and 
        grants shall be transferred to a statewide organization that 
        focuses solely on prevention of and intervention with fetal 
        alcohol spectrum disorder as follows: 
           (1) on July 1, 2004, $340,000; 
           (2) on July 1, 2005, $990,049; and 
           (3) on July 1, 2006, and annually thereafter, $1,190,000. 
           (b) The money shall be used for prevention and intervention 
        services and programs, including, but not limited to, community 
        grants, professional education, public awareness, and 
        diagnosis.  The organization may retain $60,000 of the 
        transferred money for administrative costs.  The organization 
        shall report to the commissioner annually by January 15 on the 
        services and programs funded by the appropriation.  
           Sec. 28.  [RULE AMENDMENT.] 
           The commissioner of human services shall amend Minnesota 
        Rules, part 9555.5105, subpart 20, to expand the definition of 
        "legal representative" to include a health care agent appointed 
        by a principal in a health care power of attorney to make health 
        care decisions as provided in Minnesota Statutes, chapter 145C.  
        The commissioner shall adopt rule amendments required by this 
        section using the authority of Minnesota Statutes, section 
        14.388, subdivision 1, clause (3). 
           Sec. 29.  [COST OF HEALTH CARE REPORTING.] 
           The commissioners of human services, health, and commerce 
        shall meet with representatives of health plan companies as 
        defined in Minnesota Statutes, section 62Q.01, subdivision 4, 
        and hospitals to evaluate reporting requirements for these 
        regulated entities and develop recommendations for reducing 
        required reports.  The commissioner must meet with the specified 
        representatives prior to August 30, 2004, and must submit a 
        consolidated report to the legislature by January 15, 2005.  The 
        report must: 
           (1) identify the name and scope of each required report; 
           (2) evaluate the need for and use of each report, including 
        the value of the report to consumers; 
           (3) evaluate the extent to which the report is used to 
        reduce costs and increase quality of care; 
           (4) identify reports that are no longer required; and 
           (5) specify any statutory changes necessary to eliminate 
        required reports. 
           Sec. 30.  [TRANSFER FROM THE UNIVERSITY OF MINNESOTA.] 
           The transfer provided in Minnesota Statutes, section 
        62J.692, subdivision 10, may occur twice in fiscal year 2005, 
        with the approval of the commissioners of human services, 
        health, and finance, for the purposes of Minnesota Statutes, 
        section 62J.692, subdivision 8. 
           Sec. 31.  [REPEALER.] 
           Minnesota Statutes 2002, section 62H.07, is repealed. 

                                   ARTICLE 7 
                          HEALTH CARE COST CONTAINMENT 
           Section 1.  Minnesota Statutes 2002, section 62A.28, is 
        amended to read: 
           62A.28 [COVERAGE FOR SCALP HAIR PROSTHESES.] 
           Subdivision 1.  [SCOPE OF COVERAGE.] This section applies 
        to all policies of accident and health insurance, health 
        maintenance contracts regulated under chapter 62D, health 
        benefit certificates offered through a fraternal benefit society 
        regulated under chapter 64B, and group subscriber contracts 
        offered by nonprofit health service plan corporations regulated 
        under chapter 62C.  This section does not apply to policies 
        designed primarily to provide coverage payable on a per diem, 
        fixed indemnity or nonexpense incurred basis, or policies that 
        provide only accident coverage. 
           Subd. 2.  [REQUIRED COVERAGE.] Every policy, plan, 
        certificate, or contract referred to in subdivision 1 issued or 
        renewed after August 1, 1987, must provide coverage for scalp 
        hair prostheses worn for hair loss suffered as a result of 
        alopecia areata. 
           The coverage required by this section is subject to a 
        policy's the co-payment requirement, coinsurance, deductible, 
        and other enrollee cost sharing requirements that apply to 
        similar types of items under the policy, plan, certificate, or 
        contract, and is limited to a maximum of $350 in any benefit 
        year, exclusive of any deductible. 
           [EFFECTIVE DATE.] This section is effective retroactive to 
        January 1, 2004. 
           Sec. 2.  [62J.43] [BEST PRACTICES AND QUALITY IMPROVEMENT.] 
           (a) To improve quality and reduce health care costs, state 
        agencies shall encourage the adoption of best practice 
        guidelines and participation in best practices measurement 
        activities by physicians, other health care providers, and 
        health plan companies.  The commissioner of health shall 
        facilitate access to best practice guidelines and quality of 
        care measurement information to providers, purchasers, and 
        consumers by: 
           (1) identifying and promoting local community-based, 
        physician-designed best practices care across the Minnesota 
        health care system; 
           (2) disseminating information available to the commissioner 
        on adherence to best practices care by physicians and other 
        health care providers in Minnesota; 
           (3) educating consumers and purchasers on how to 
        effectively use this information in choosing their providers and 
        in making purchasing decisions; and 
           (4) making best practices and quality care measurement 
        information available to enrollees and program participants 
        through the Department of Health's Web site.  The commissioner 
        may convene an advisory committee to ensure that the Web site is 
        designed to provide user friendly and easy accessibility. 
           (b) The commissioner of health shall collaborate with a 
        nonprofit Minnesota quality improvement organization 
        specializing in best practices and quality of care measurements 
        to provide best practices criteria and assist in the collection 
        of the data.  
           (c) The initial best practices and quality of care 
        measurement criteria developed shall include asthma, diabetes, 
        and at least two other preventive health measures.  Hypertension 
        and coronary artery disease shall be included within one year 
        following availability.  
           (d) The commissioners of human services and employee 
        relations may use the data to make decisions about contracts 
        they enter into with health plan companies.  
           (e) This section does not apply if the best practices 
        guidelines authorize or recommend denial of treatment, food, or 
        fluids necessary to sustain life on the basis of the patient's 
        age or expected length of life or the patient's present or 
        predicted disability, degree of medical dependency, or quality 
        of life. 
           (f) The commissioner of health, human services, and 
        employee relations shall report to the legislature by January 
        15, 2005, on the status of best practices and quality of care 
        initiatives, and shall present recommendations to the 
        legislature on any statutory changes needed to increase the 
        effectiveness of these initiatives. 
           (g) This section expires June 30, 2006.  
           Sec. 3.  [62J.81] [DISCLOSURE OF PAYMENTS FOR HEALTH CARE 
        SERVICES.] 
           Subdivision 1.  [REQUIRED DISCLOSURE OF ESTIMATED PAYMENT.] 
        A health care provider, as defined in section 62J.03, 
        subdivision 8, shall, at the request of a consumer, provide that 
        consumer with a good faith estimate of the reimbursement the 
        provider expects to receive from the health plan company in 
        which the consumer is enrolled.  Health plan companies must 
        allow contracted providers to release this information.  A good 
        faith estimate must also be made available at the request of a 
        consumer who is not enrolled in a health plan company.  Payment 
        information provided by a provider to a patient pursuant to this 
        subdivision does not constitute a legally binding estimate of 
        the cost of services.  
           Subd. 2.  [APPLICABILITY.] For purposes of this section, 
        "consumer" does not include a medical assistance, MinnesotaCare, 
        or general assistance medical care enrollee, for services 
        covered under those programs. 
           Sec. 4.  Minnesota Statutes 2002, section 72A.20, is 
        amended by adding a subdivision to read: 
           Subd. 37.  [ELECTRONIC TRANSMISSION OF REQUIRED 
        INFORMATION.] A health carrier, as defined in section 62A.011, 
        subdivision 2, is not in violation of this chapter for 
        electronically transmitting or electronically making available 
        information otherwise required to be delivered in writing under 
        chapters 62A to 62Q and 72A to an enrollee as defined in section 
        62Q.01, subdivision 2a, and with the requirements of those 
        chapters if the following conditions are met: 
           (1) the health carrier informs the enrollee that electronic 
        transmission or access is available and, at the discretion of 
        the health carrier, the enrollee is given one of the following 
        options: 
           (i) electronic transmission or access will occur only if 
        the enrollee affirmatively requests to the health carrier that 
        the required information be electronically transmitted or 
        available and a record of that request is retained by the health 
        carrier; or 
           (ii) electronic transmission or access will automatically 
        occur if the enrollee has not opted out of that manner of 
        transmission by request to the health carrier and requested that 
        the information be provided in writing.  If the enrollee opts 
        out of electronic transmission, a record of that request must be 
        retained by the health carrier; 
           (2) the enrollee is allowed to withdraw the request at any 
        time; 
           (3) if the information transmitted electronically contains 
        individually identifiable data, it must be transmitted to a 
        secured mailbox.  If the information made available 
        electronically contains individually identifiable data, it must 
        be made available at a password-protected secured Web site; 
           (4) the enrollee is provided a customer service number on 
        the enrollee's member card that may be called to request a 
        written copy of the document; and 
           (5) the electronic transmission or electronic availability 
        meets all other requirements of this chapter including, but not 
        limited to, size of the typeface and any required time frames 
        for distribution. 
           Sec. 5.  Minnesota Statutes 2002, section 147.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ENDORSEMENT; RECIPROCITY.] (a) The board 
        may issue a license to practice medicine to any person who 
        satisfies the requirements in paragraphs (b) to (f).  
           (b) The applicant shall satisfy all the requirements 
        established in section 147.02, subdivision 1, paragraphs (a), 
        (b), (d), (e), and (f).  
           (c) The applicant shall: 
           (1) have passed an examination prepared and graded by the 
        Federation of State Medical Boards, the National Board of 
        Medical Examiners, or the United States Medical Licensing 
        Examination program in accordance with section 147.02, 
        subdivision 1, paragraph (c), clause (2); the National Board of 
        Osteopathic Examiners; or the Medical Council of Canada; and 
           (2) have a current license from the equivalent licensing 
        agency in another state or Canada and, if the examination in 
        clause (1) was passed more than ten years ago, either: 
           (i) pass the Special Purpose Examination of the Federation 
        of State Medical Boards with a score of 75 or better within 
        three attempts; or 
           (ii) have a current certification by a specialty board of 
        the American Board of Medical Specialties, of the American 
        Osteopathic Association Bureau of Professional Education, or of 
        the Royal College of Physicians and Surgeons of Canada. 
           (d) The applicant shall pay a fee established by the board 
        by rule.  The fee may not be refunded.  
           (e) The applicant must not be under license suspension or 
        revocation by the licensing board of the state or jurisdiction 
        in which the conduct that caused the suspension or revocation 
        occurred. 
           (f) The applicant must not have engaged in conduct 
        warranting disciplinary action against a licensee, or have been 
        subject to disciplinary action other than as specified in 
        paragraph (e).  If an applicant does not satisfy the 
        requirements stated in this paragraph, the board may issue a 
        license only on the applicant's showing that the public will be 
        protected through issuance of a license with conditions or 
        limitations the board considers appropriate. 
           (g) Upon the request of an applicant, the board may conduct 
        the final interview of the applicant by teleconference. 
           Sec. 6.  [256B.075] [DISEASE MANAGEMENT PROGRAMS.] 
           Subdivision 1.  [GENERAL.] The commissioner shall implement 
        disease management initiatives that seek to improve patient care 
        and health outcomes and reduce health care costs by managing the 
        care provided to recipients with chronic conditions. 
           Subd. 2.  [FEE-FOR-SERVICE.] (a) The commissioner shall 
        develop and implement a disease management program for medical 
        assistance and general assistance medical care recipients who 
        are not enrolled in the prepaid medical assistance or prepaid 
        general assistance medical care programs and who are receiving 
        services on a fee-for-service basis.  The commissioner may 
        contract with an outside organization to provide these services. 
           (b) The commissioner shall seek any federal approval 
        necessary to implement this section and to obtain federal 
        matching funds. 
           Subd. 3.  [PREPAID MANAGED CARE PROGRAMS.] For the prepaid 
        medical assistance, prepaid general assistance medical care, and 
        MinnesotaCare programs, the commissioner shall ensure that 
        contracting health plans implement disease management programs 
        that are appropriate for Minnesota health care program 
        recipients and have been designed by the health plan to improve 
        patient care and health outcomes and reduce health care costs by 
        managing the care provided to recipients with chronic conditions.
           Subd. 4.  [REPORT.] The commissioner of human services 
        shall report to the legislature by January 15, 2005, on the 
        status of disease management initiatives, and shall present 
        recommendations to the legislature on any statutory changes 
        needed to increase the effectiveness of these initiatives. 
           Subd. 5.  [EXPIRATION.] This section expires June 30, 2006. 
           Sec. 7.  [ELECTRONIC HEALTH RECORD WORK GROUP.] 
           (a) The commissioner of health shall convene an Electronic 
        Health Record Planning and Implementation Work Group.  The work 
        group shall consist of representatives of hospitals, health 
        plans, physicians, nurses, other health care providers, academic 
        institutions, state government purchasers, public health 
        providers, citizens, and others with knowledge of health 
        information technology and electronic health records systems. 
           (b) The work group shall:  
           (1) identify barriers to the adoption and implementation of 
        electronic health record systems in Minnesota; 
           (2) identify core components of an electronic health record 
        and standards for interoperability; 
           (3) assess the status of current implementation of 
        electronic health records in Minnesota; 
           (4) assess the costs for primary and acute health care 
        providers, including safety net clinics and hospitals, to 
        implement electronic health records systems; 
           (5) identify partnership models and collaboration potential 
        for implementing electronic health records systems; 
           (6) monitor the development of federal standards, 
        coordinate input to the National Health Information 
        Infrastructure Process, and ensure that Minnesota's 
        recommendations are consistent with emerging federal standards; 
        and 
           (7) identify barriers and develop a plan to develop a 
        unified record system among public hospitals and clinics. 
           (c) By December 31, 2004, the work group shall provide 
        preliminary assessments and recommendations to the chairs of the 
        house and senate committees with jurisdiction over health care 
        policy and financing. 
           The recommendations shall also include the appropriate role 
        of the state in the development, financing, promotion, and 
        implementation of an electronic health records system.  
           Sec. 8.  [REPEALER; BONE MARROW TRANSPLANT MANDATE.] 
           Minnesota Statutes 2002, section 62A.309, is repealed. 
           Presented to the governor May 18, 2004 
           Signed by the governor May 29, 2004, 11:00 a.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569