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2005 Minnesota Session Laws

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                             CHAPTER 4-H.F.No. 139 
                  An act relating to the operation of state government; 
                  making changes to health and human services programs; 
                  modifying human services policy; modifying health 
                  policy; changing licensing provisions; changing 
                  provisions for mental and chemical health; 
                  establishing treatment foster care and transitional 
                  youth intensive rehab mental health services; 
                  enhancing family support; providing training for child 
                  care providers and hospitals on dangers of shaking 
                  infants and children; establishing long-term homeless 
                  supportive services; establishing the tobacco health 
                  impact fee; establishing a cancer drug repository 
                  program; establishing a health information technology 
                  and infrastructure advisory committee and a rural 
                  pharmacy planning and transition grant program; 
                  establishing a statewide trauma system and trauma 
                  registry; changing long-term care provisions and 
                  establishing a partnership; establishing a nursing 
                  facility reimbursement system; modifying health care 
                  programs; changing certain fees; appropriating money; 
                  amending Minnesota Statutes 2004, sections 13.46, 
                  subdivision 4, as amended; 16A.724; 62J.692, 
                  subdivision 3, as amended; 62Q.251, as added; 62Q.37, 
                  subdivision 7; 103I.101, subdivision 6; 103I.208, 
                  subdivisions 1, as amended, 2, as amended; 103I.235, 
                  subdivision 1; 103I.601, subdivision 2; 119B.13, 
                  subdivision 1, by adding a subdivision; 144.122, as 
                  amended; 144.147, subdivisions 1, 2; 144.148, 
                  subdivision 1; 144.1483; 144.1501, subdivisions 1, 2, 
                  3, 4; 144.226, subdivisions 1, as amended, 4, as 
                  amended, by adding subdivisions; 144.3831, subdivision 
                  1; 144.551, subdivision 1; 144.562, subdivision 2; 
                  144.9504, subdivision 2; 144.98, subdivision 3; 
                  144A.073, subdivision 10, by adding a subdivision; 
                  144E.101, by adding a subdivision; 145.4242; 145.56, 
                  subdivisions 2, 5; 145.9268; 147A.08; 148D.220, 
                  subdivision 8, as added; 150A.22; 157.011, by adding a 
                  subdivision; 157.15, by adding a subdivision; 157.16, 
                  subdivisions 2, 3, by adding subdivisions; 157.20, 
                  subdivisions 2, 2a; 241.01, by adding a subdivision; 
                  243.166, subdivisions 4b, as added, 7, as amended; 
                  245.4661, subdivisions 2, 6, by adding a subdivision; 
                  245.4874, as amended; 245.4885, subdivisions 1, 2, by 
                  adding a subdivision; 245A.02, subdivision 17; 
                  245A.03, subdivisions 2, 3; 245A.035, subdivisions 1, 
                  5; 245A.04, subdivisions 7, 13; 245A.06, by adding a 
                  subdivision; 245A.07, subdivisions 1, 3, by adding a 
                  subdivision; 245A.08, subdivisions 2a, 5; 245A.10, 
                  subdivisions 4, 5; 245A.14, by adding subdivisions; 
                  245A.144; 245A.16, subdivisions 1, 4; 245A.18; 
                  245B.02, subdivision 10; 245B.055, subdivision 7; 
                  245B.07, subdivision 8; 245C.03, subdivision 1; 
                  245C.07; 245C.08, subdivisions 1, 2; 245C.10, 
                  subdivisions 2, 3; 245C.15, subdivisions 1, as 
                  amended, 2, 3, 4; 245C.21, subdivision 2; 245C.22, 
                  subdivisions 3, 4, 7, as added; 245C.23, subdivision 
                  1; 245C.24, subdivisions 2, as amended, 3; 245C.27, 
                  subdivision 1; 245C.28, subdivision 3; 245C.30, 
                  subdivisions 1, 2; 245C.32, subdivision 2; 246.0136, 
                  subdivision 1; 246.13, as amended; 252.27, subdivision 
                  2a; 253.20; 254A.035, subdivision 2; 254A.04; 256.01, 
                  subdivision 2, by adding subdivisions; 256.019, 
                  subdivision 1; 256.045, subdivisions 3, as amended, 
                  3a; 256.046, subdivision 1; 256.741, subdivision 4; 
                  256.9657, by adding a subdivision; 256.969, 
                  subdivisions 3a, 9, 26, by adding a subdivision; 
                  256.975, subdivision 9; 256B.02, subdivision 12; 
                  256B.04, by adding a subdivision; 256B.055, by adding 
                  a subdivision; 256B.056, subdivisions 5, 5a, 5b, 7, by 
                  adding subdivisions; 256B.057, subdivision 9; 
                  256B.0575; 256B.06, subdivision 4; 256B.0621, 
                  subdivisions 2, 3, 4, 5, 6, 7, by adding a 
                  subdivision; 256B.0622, subdivision 2; 256B.0625, 
                  subdivisions 2, 3a, 9, 13, 13a, 13c, 13d, 13e, as 
                  amended, 13f, as amended, 17, 19c, by adding 
                  subdivisions; 256B.0627, subdivisions 1, as amended, 
                  4, 5, as amended, 9, by adding a subdivision; 
                  256B.0631, subdivisions 1, 3; 256B.075, subdivision 2; 
                  256B.0911, subdivision 1a; 256B.0913, subdivisions 2, 
                  4, 5, 5a; 256B.0916, by adding a subdivision; 
                  256B.0924, subdivision 3; 256B.093, subdivision 1; 
                  256B.0943, subdivision 3; 256B.095; 256B.0951, 
                  subdivision 1; 256B.0952, subdivision 5; 256B.0953, 
                  subdivision 1; 256B.15, subdivisions 1, 4, by adding 
                  subdivisions; 256B.19, subdivisions 1, 1c; 256B.195, 
                  subdivision 3; 256B.431, by adding subdivisions; 
                  256B.432, subdivisions 1, 2, 5, by adding 
                  subdivisions; 256B.434, subdivisions 3, 4, by adding a 
                  subdivision; 256B.49, subdivision 16; 256B.5012, by 
                  adding a subdivision; 256B.69, subdivisions 4, 23; 
                  256D.03, subdivisions 3, as amended, 4; 256D.045; 
                  256D.06, subdivisions 5, 7; 256D.44, subdivision 5; 
                  256I.05, subdivision 1e; 256I.06, by adding a 
                  subdivision; 256J.37, subdivision 3b; 256J.515; 
                  256L.01, subdivisions 4, 5; 256L.03, subdivisions 1, 
                  1b, 5; 256L.035; 256L.04, subdivision 2, by adding 
                  subdivisions; 256L.05, subdivisions 2, 3, 3a, by 
                  adding a subdivision; 256L.06, subdivision 3; 256L.07, 
                  subdivisions 1, as amended, 3, by adding subdivisions; 
                  256L.12, by adding a subdivision; 256L.15, 
                  subdivisions 2, as amended, 3, by adding a 
                  subdivision; 256L.17, by adding a subdivision; 
                  256M.40, subdivision 2; 260.835; 260B.163, subdivision 
                  6; 260C.163, subdivision 5; 295.582, as amended; 
                  297F.185; 299C.093, as amended; 325D.32, subdivision 
                  9; 326.42, subdivision 2; 471.61, by adding a 
                  subdivision; 514.981, subdivision 6; 518.165, by 
                  adding subdivisions; 549.02, by adding a subdivision; 
                  549.04; 609A.03, subdivision 7, as amended; 626.556, 
                  subdivision 10i, as amended; 626.557, subdivisions 9d, 
                  14, as amended; 641.15, subdivision 2; Laws 2003, 
                  First Special Session chapter 14, article 12, section 
                  93; Laws 2003, First Special Session chapter 14, 
                  article 13C, section 2, subdivision 6; Laws 2005, 
                  chapter 107, article 1, section 6; Laws 2005, chapter 
                  159, article 1, section 14; proposing coding for new 
                  law in Minnesota Statutes, chapters 16A; 62J; 144; 
                  145; 151; 245A; 245C; 256; 256B; 256K; 641; repealing 
                  Minnesota Statutes 2004, sections 119B.074, as 
                  amended; 144.1486; 144.1502; 157.215; 256.955; 
                  256B.075, subdivision 5; 256D.54, subdivision 3; 
                  256L.04, subdivision 11; 256M.40, subdivision 2; 
                  514.991; 514.992; 514.993; 514.994; 514.995; Laws 
                  2003, First Special Session chapter 14, article 9, 
                  section 34; Laws 2005, chapter 107, article 2, section 
                  51. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                              LICENSING PROVISIONS 
           Section 1.  Minnesota Statutes 2004, section 13.46, 
        subdivision 4, as amended by Laws 2005, chapter 163, section 40, 
        is amended to read: 
           Subd. 4.  [LICENSING DATA.] (a) As used in this subdivision:
           (1) "licensing data" means all data collected, maintained, 
        used, or disseminated by the welfare system pertaining to 
        persons licensed or registered or who apply for licensure or 
        registration or who formerly were licensed or registered under 
        the authority of the commissioner of human services; 
           (2) "client" means a person who is receiving services from 
        a licensee or from an applicant for licensure; and 
           (3) "personal and personal financial data" means Social 
        Security numbers, identity of and letters of reference, 
        insurance information, reports from the Bureau of Criminal 
        Apprehension, health examination reports, and social/home 
        studies. 
           (b)(1) Except as provided in paragraph (c), the following 
        data on current and former licensees are public:  name, address, 
        telephone number of licensees, date of receipt of a completed 
        application, dates of licensure, licensed capacity, type of 
        client preferred, variances granted, record of training and 
        education in child care and child development, type of dwelling, 
        name and relationship of other family members, previous license 
        history, class of license, the existence and status of 
        complaints, and the number of serious injuries to or deaths of 
        individuals in the licensed program as reported to the 
        commissioner of human services, the local social services 
        agency, or any other county welfare agency.  For purposes of 
        this clause, a serious injury is one that is treated by a 
        physician.  When a correction order or fine has been issued, a 
        license is suspended, immediately suspended, revoked, denied, or 
        made conditional, or a complaint is resolved, the following data 
        on current and former licensees are public:  the substance and 
        investigative findings of the licensing or maltreatment 
        complaint, licensing violation, or substantiated maltreatment; 
        the record of informal resolution of a licensing violation; 
        orders of hearing; findings of fact; conclusions of law; 
        specifications of the final correction order, fine, suspension, 
        immediate suspension, revocation, denial, or conditional license 
        contained in the record of licensing action; and the status of 
        any appeal of these actions.  
           (2) Notwithstanding sections 626.556, subdivision 11, and 
        626.557, subdivision 12b, when any person subject to 
        disqualification under section 245C.14 in connection with a 
        license to provide family day care for children, child care 
        center services, foster care for children in the provider's 
        home, or foster care or day care services for adults in the 
        provider's home is a substantiated perpetrator of maltreatment, 
        and the substantiated maltreatment is a reason for a licensing 
        action, the identity of the substantiated perpetrator of 
        maltreatment is public data.  For purposes of this clause, a 
        person is a substantiated perpetrator if the maltreatment 
        determination has been upheld under section 256.045; 626.556, 
        subdivision 10i; 626.557, subdivision 9d; or chapter 14, or if 
        an individual or facility has not timely exercised appeal rights 
        under these sections. 
           (3) For applicants who withdraw their application prior to 
        licensure or denial of a license, the following data are 
        public:  the name of the applicant, the city and county in which 
        the applicant was seeking licensure, the dates of the 
        commissioner's receipt of the initial application and completed 
        application, the type of license sought, and the date of 
        withdrawal of the application. 
           (4) For applicants who are denied a license, the following 
        data are public:  the name of the applicant, the city and county 
        in which the applicant was seeking licensure, the dates of the 
        commissioner's receipt of the initial application and completed 
        application, the type of license sought, the date of denial of 
        the application, the nature of the basis for the denial, and the 
        status of any appeal of the denial. 
           (5) The following data on persons subject to 
        disqualification under section 245C.14 in connection with a 
        license to provide family day care for children, child care 
        center services, foster care for children in the provider's 
        home, or foster care or day care services for adults in the 
        provider's home, are public:  the nature of any disqualification 
        set aside under section 245C.22, subdivisions 2 and 4, and the 
        reasons for setting aside the disqualification; the nature of 
        any disqualification for which a variance was granted under 
        sections 245A.04, subdivision 9; and 245C.30, and the reasons 
        for granting any variance under section 245A.04, subdivision 9; 
        and, if applicable, the disclosure that any person subject to a 
        background study under section 245C.03, subdivision 1, has 
        successfully passed a background study. 
           (6) When maltreatment is substantiated under section 
        626.556 or 626.557 and the victim and the substantiated 
        perpetrator are affiliated with a program licensed under chapter 
        245A, the commissioner of human services, local social services 
        agency, or county welfare agency may inform the license holder 
        where the maltreatment occurred of the identity of the 
        substantiated perpetrator and the victim. 
           (c) The following are private data on individuals under 
        section 13.02, subdivision 12, or nonpublic data under section 
        13.02, subdivision 9:  personal and personal financial data on 
        family day care program and family foster care program 
        applicants and licensees and their family members who provide 
        services under the license. 
           (d) The following are private data on individuals:  the 
        identity of persons who have made reports concerning licensees 
        or applicants that appear in inactive investigative data, and 
        the records of clients or employees of the licensee or applicant 
        for licensure whose records are received by the licensing agency 
        for purposes of review or in anticipation of a contested 
        matter.  The names of reporters under sections 626.556 and 
        626.557 may be disclosed only as provided in section 626.556, 
        subdivision 11, or 626.557, subdivision 12b. 
           (e) Data classified as private, confidential, nonpublic, or 
        protected nonpublic under this subdivision become public data if 
        submitted to a court or administrative law judge as part of a 
        disciplinary proceeding in which there is a public hearing 
        concerning a license which has been suspended, immediately 
        suspended, revoked, or denied. 
           (f) Data generated in the course of licensing 
        investigations that relate to an alleged violation of law are 
        investigative data under subdivision 3. 
           (g) Data that are not public data collected, maintained, 
        used, or disseminated under this subdivision that relate to or 
        are derived from a report as defined in section 626.556, 
        subdivision 2, or 626.5572, subdivision 18, are subject to the 
        destruction provisions of sections 626.556, subdivision 11c, and 
        626.557, subdivision 12b.  
           (h) Upon request, not public data collected, maintained, 
        used, or disseminated under this subdivision that relate to or 
        are derived from a report of substantiated maltreatment as 
        defined in section 626.556 or 626.557 may be exchanged with the 
        Department of Health for purposes of completing background 
        studies pursuant to section 144.057 and with the Department of 
        Corrections for purposes of completing background studies 
        pursuant to section 241.021. 
           (i) Data on individuals collected according to licensing 
        activities under chapters 245A and 245C, and data on individuals 
        collected by the commissioner of human services according to 
        maltreatment investigations under sections 626.556 and 626.557, 
        may be shared with the Department of Human Rights, the 
        Department of Health, the Department of Corrections, the 
        Ombudsman for Mental Health and Retardation, and the 
        individual's professional regulatory board when there is reason 
        to believe that laws or standards under the jurisdiction of 
        those agencies may have been violated. 
           (j) In addition to the notice of determinations required 
        under section 626.556, subdivision 10f, if the commissioner or 
        the local social services agency has determined that an 
        individual is a substantiated perpetrator of maltreatment of a 
        child based on sexual abuse, as defined in section 626.556, 
        subdivision 2, and the commissioner or local social services 
        agency knows that the individual is a person responsible for a 
        child's care in another facility, the commissioner or local 
        social services agency shall notify the head of that facility of 
        this determination.  The notification must include an 
        explanation of the individual's available appeal rights and the 
        status of any appeal.  If a notice is given under this 
        paragraph, the government entity making the notification shall 
        provide a copy of the notice to the individual who is the 
        subject of the notice. 
           (k) All not public data collected, maintained, used, or 
        disseminated under this subdivision and subdivision 3 may be 
        exchanged between the Department of Human Services, Licensing 
        Division, and the Department of Corrections for purposes of 
        regulating services for which the Department of Human Services 
        and the Department of Corrections have regulatory authority. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 243.166, 
        subdivision 4b, as added by Laws 2005, chapter 136, article 3, 
        section 8, is amended to read: 
           Subd. 4b.  [HEALTH CARE FACILITY; NOTICE OF STATUS.] (a) As 
        used in paragraphs (b) and (c), For the purposes of this 
        subdivision, "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, or a group 
        residential housing facility or an intermediate care facility 
        for the mentally retarded licensed under chapter 245A.  As used 
        in paragraph (d), "health care facility" means a nursing home 
        licensed to serve adults under section 144A.02, or a group 
        residential housing facility or an intermediate care facility 
        for the mentally retarded licensed under chapter 245A facility 
        licensed by: 
           (1) the commissioner of health as a hospital, boarding care 
        home or supervised living facility under sections 144.50 to 
        144.58, or a nursing home under chapter 144A; or 
           (2) the commissioner of human services as a residential 
        facility under chapter 245A to provide adult foster care, adult 
        mental health treatment, chemical dependency treatment to 
        adults, or residential services to persons with developmental 
        disabilities. 
           (b) Upon admittance to a health care facility, a person 
        required to register under this section shall disclose to: 
           (1) the health care facility employee processing the 
        admission the person's status as a registered predatory offender 
        under this section; and 
           (2) the person's corrections agent, or if the person does 
        not have an assigned corrections agent, the law enforcement 
        authority with whom the person is currently required to 
        register, that inpatient admission has occurred. 
           (c) A law enforcement authority or corrections agent who 
        receives notice under paragraph (b) or who knows that a person 
        required to register under this section has been admitted and is 
        receiving health care at a health care facility shall notify the 
        administrator of the facility. 
           (d) Except for a hospital licensed under sections 144.50 to 
        144.58, a health care facility that receives notice under this 
        subdivision that a predatory offender has been admitted to the 
        facility shall notify other patients residents at the facility 
        of this fact.  If the facility determines that notice to 
        a patient resident is not appropriate given the patient's 
        resident's medical, emotional, or mental status, the facility 
        shall notify the patient's next of kin or emergency contact. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 3.  Minnesota Statutes 2004, section 243.166, 
        subdivision 7, as amended by Laws 2005, chapter 136, article 5, 
        section 1, is amended to read: 
           Subd. 7.  [USE OF DATA.] Except as otherwise provided in 
        subdivision 7a or sections 244.052 and 299C.093, the data 
        provided under this section is private data on individuals under 
        section 13.02, subdivision 12.  The data may be used only for 
        law enforcement and corrections purposes.  State-operated 
        services, as defined in section 246.014, are also authorized to 
        have access to the data for the purposes described in section 
        246.13, subdivision 2, paragraph (c) (b). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 4.  Minnesota Statutes 2004, section 245A.02, 
        subdivision 17, is amended to read: 
           Subd. 17.  [SCHOOL AGE CHILD CARE PROGRAM.] "School age 
        child care program" means a program licensed or required to be 
        licensed as a child care center, serving more than ten children 
        with the primary purpose of providing child care for school age 
        children.  School age child care program does not include 
        programs such as scouting, boys clubs, girls clubs, nor sports 
        or art programs. 
           Sec. 5.  Minnesota Statutes 2004, 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 33 
        months or older; 
           (6) nonresidential programs primarily for children that 
        provide care or supervision for periods of less than three hours 
        a day while the child's parent or legal guardian is in the same 
        building 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 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 are 
        operated or approved by a park and recreation board whose 
        primary purpose is to provide social and recreational 
        activities; 
           (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; 
           (13) Head Start nonresidential programs which operate for 
        less than 31 45 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) programs for children such as scouting, boys clubs, 
        girls clubs, and sports and art programs, and nonresidential 
        programs for 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; 
           (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. 6.  Minnesota Statutes 2004, 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) 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 or continues to operate without 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. 7.  Minnesota Statutes 2004, section 245A.035, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GRANT OF EMERGENCY LICENSE.] 
        Notwithstanding section 245A.03, subdivision 2a, or 245C.13, 
        subdivision 2, a county agency may place a child for foster care 
        with a relative who is not licensed to provide foster care, 
        provided the requirements of subdivision 2 are met.  As used in 
        this section, the term "relative" has the meaning given it under 
        section 260C.007, subdivision 27. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2004, section 245A.035, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CHILD FOSTER CARE LICENSE APPLICATION.] (a) The 
        emergency license holder shall complete the child foster care 
        license application and necessary paperwork within ten days of 
        the placement.  The county agency shall assist the emergency 
        license holder to complete the application.  The granting of a 
        child foster care license to a relative shall be under the 
        procedures in this chapter and according to the standards set 
        forth by foster care rule.  In licensing a relative, the 
        commissioner shall consider the importance of maintaining the 
        child's relationship with relatives as an additional significant 
        factor in determining whether to set aside a licensing 
        disqualifier under section 245C.22, or to grant a variance of 
        licensing requirements under sections 245C.21 to 245C.27. 
           (b) When the county or private child-placing agency is 
        processing an application for child foster care licensure of a 
        relative as defined in section 260B.007, subdivision 12, or 
        260C.007, subdivision 27, the county agency or child-placing 
        agency must explain the licensing process to the prospective 
        licensee, including the background study process and the 
        procedure for reconsideration of an initial disqualification for 
        licensure.  The county or private child-placing agency must also 
        provide the prospective relative licensee with information 
        regarding appropriate options for legal representation in the 
        pertinent geographic area.  If a relative is initially 
        disqualified under section 245C.14, the county or child-placing 
        agency must provide written notice of the reasons for the 
        disqualification and the right to request a reconsideration by 
        the commissioner as required under section 245C.17. 
           (c) The commissioner shall maintain licensing data so that 
        activities related to applications and licensing actions for 
        relative foster care providers may be distinguished from other 
        child foster care settings. 
           Sec. 9.  Minnesota Statutes 2004, 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. 
           (f) The commissioner shall not issue a license if an 
        individual living in the household where the licensed services 
        will be provided as specified under section 245C.03, subdivision 
        1, has been disqualified and the disqualification has not been 
        set aside. 
           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. 10.  Minnesota Statutes 2004, section 245A.04, 
        subdivision 13, is amended to read: 
           Subd. 13.  [RESIDENTIAL PROGRAMS HANDLING RESIDENT FUNDS 
        AND PROPERTY; ADDITIONAL REQUIREMENTS.] (a) A license holder 
        must ensure that residents persons served by the program retain 
        the use and availability of personal funds or property unless 
        restrictions are justified in the resident's person's individual 
        plan.  This subdivision does not apply to programs governed by 
        the provisions in section 245B.07, subdivision 10. 
           (b) The license holder must ensure separation of resident 
        funds of persons served by the program from funds of the license 
        holder, the residential program, or program staff. 
           (c) Whenever the license holder assists a resident person 
        served by the program with the safekeeping of funds or other 
        property, the license holder must: 
           (1) immediately document receipt and disbursement of the 
        resident's person's funds or other property at the time of 
        receipt or disbursement, including the person's signature of the 
        resident, or the signature of the conservator, or payee; and 
           (2) provide a statement, at least quarterly, itemizing 
        receipts and disbursements of resident funds or other property; 
        and 
           (3) return to the resident person upon the 
        resident's person's request, funds and property in the license 
        holder's possession subject to restrictions in the resident's 
        person'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 person served by the 
        program; 
           (2) purchase personal items from a resident person served 
        by the program; 
           (3) sell merchandise or personal services to a resident 
        person served by the program; 
           (4) require a resident person served by the program to 
        purchase items for which the license holder is eligible for 
        reimbursement; or 
           (5) use resident funds of persons served by the program to 
        purchase items for which the facility is already receiving 
        public or private payments. 
           Sec. 11.  Minnesota Statutes 2004, section 245A.06, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [FAMILY CHILD CARE AND CHILD CARE CENTERS POSTING 
        OF ORDER.] For licensed family child care providers and child 
        care centers, upon receipt of any correction order or order of 
        conditional license issued by the commissioner under this 
        section, and notwithstanding a pending request for 
        reconsideration of the correction order or order of conditional 
        license by the license holder, the license holder shall post the 
        correction order or order of conditional license in a place that 
        is conspicuous to the people receiving services and all visitors 
        to the facility for two years.  When the correction order or 
        order of conditional license is accompanied by a maltreatment 
        investigation memorandum prepared under section 626.556 or 
        626.557, the investigation memoranda must be posted with the 
        correction order or order of conditional license. 
           Sec. 12.  Minnesota Statutes 2004, section 245A.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SANCTIONS AVAILABLE; APPEALS; TEMPORARY 
        PROVISIONAL LICENSE.] (a) In addition to making a license 
        conditional under section 245A.06, the commissioner may propose 
        to suspend or revoke the license, impose a fine, or secure an 
        injunction against the continuing operation of the program of a 
        license holder who does not comply with applicable law or rule.  
        When applying sanctions authorized under this section, the 
        commissioner shall consider the nature, chronicity, or severity 
        of the violation of law or rule and the effect of the violation 
        on the health, safety, or rights of persons served by the 
        program. 
           (b) If a license holder appeals the suspension or 
        revocation of a license and the license holder continues to 
        operate the program pending a final order on the appeal, and the 
        license expires during this time period, the commissioner shall 
        issue the license holder a temporary provisional license.  The 
        temporary provisional license is effective on the date issued 
        and expires on the date that a final order is issued.  Unless 
        otherwise specified by the commissioner, variances in effect on 
        the date of the license sanction under appeal continue under the 
        temporary provisional license.  If a license holder fails to 
        comply with applicable law or rule while operating under a 
        temporary provisional license, the commissioner may impose 
        sanctions under this section and section 245A.06, and may 
        terminate any prior variance.  If the license holder prevails on 
        the appeal and the effective period of the previous license has 
        expired, a new license shall be issued to the license holder 
        upon payment of any fee required under section 245A.10.  The 
        effective date of the new license shall be retroactive to the 
        date the license would have shown had no sanction been 
        initiated.  The expiration date shall be the expiration date of 
        that license had no license sanction been initiated. 
           (c) If a license holder is under investigation and the 
        license is due to expire before completion of the investigation, 
        the program shall be issued a new license upon completion of the 
        reapplication requirements.  Upon completion of the 
        investigation, a licensing sanction may be imposed against the 
        new license under this section, section 245A.06, or 245A.08. 
           (d) Failure to reapply or closure of a license by the 
        license holder prior to the completion of any investigation 
        shall not preclude the commissioner from issuing a licensing 
        sanction under this section, section 245A.06, or 245A.08 at the 
        conclusion of the investigation. 
           Sec. 13.  Minnesota Statutes 2004, section 245A.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LICENSE SUSPENSION, REVOCATION, OR FINE.] (a) 
        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, if a license holder or an individual living in 
        the household where the licensed services are provided has a 
        disqualification which has not been set aside under section 
        245C.22, or if a license holder 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) (b) 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 1400.8505 to 
        1400.8612.  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 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)(c)(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 1400.8505 to 
        1400.8612.  The appeal of an order to pay a fine must be made in 
        writing by certified mail 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. 14.  Minnesota Statutes 2004, section 245A.07, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [FAMILY CHILD CARE AND CHILD CARE CENTERS POSTING 
        OF ORDER.] For licensed family child care providers and child 
        care centers, upon receipt of any order of license suspension, 
        temporary immediate suspension, fine, or revocation issued by 
        the commissioner under this section, and notwithstanding a 
        pending appeal of the order of license suspension, temporary 
        immediate suspension, fine, or revocation by the license holder, 
        the license holder shall post the order of license suspension, 
        temporary immediate suspension, fine, or revocation in a place 
        that is conspicuous to the people receiving services and all 
        visitors to the facility for two years.  When the order of 
        license suspension, temporary immediate suspension, fine, or 
        revocation is accompanied by a maltreatment investigation 
        memorandum prepared under section 626.556 or 626.557, the 
        investigation memoranda must be posted with the order of license 
        suspension, temporary immediate suspension, fine, or revocation. 
           Sec. 15.  Minnesota Statutes 2004, 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 under 
        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, 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.  
        When a fine is based on a determination that the license holder 
        is responsible for maltreatment and the fine is issued at the 
        same time as the maltreatment determination, if the license 
        holder appeals the maltreatment and fine, the scope of the 
        contested case hearing shall include the maltreatment 
        determination and fine and reconsideration of the maltreatment 
        determination 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, family 
        adult day services, 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 under 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.  
           (f) Notwithstanding section 245C.27, subdivision 1, 
        paragraph (c), when a denial of a license under section 245A.05 
        or a licensing sanction under section 245A.07 is based on a 
        disqualification for which reconsideration was requested and was 
        not set aside under section 245C.22, and the disqualification 
        was based on a conviction or an admission to any crimes listed 
        in section 245C.15, the scope of the administrative law judge's 
        review shall include the denial or sanction and a determination 
        whether the disqualification should be set aside.  In 
        determining whether the disqualification should be set aside, 
        the administrative law judge shall consider the factors under 
        section 245C.22, subdivision 4, to determine whether the 
        individual poses a risk of harm to any person receiving services 
        from the license holder. 
           (g) Notwithstanding section 245C.30, subdivision 5, when a 
        licensing sanction under section 245A.07 is based on the 
        termination of a variance under section 245C.30, subdivision 4, 
        the scope of the administrative law judge's review shall include 
        the sanction and a determination whether the disqualification 
        should be set aside.  In determining whether the 
        disqualification should be set aside, the administrative law 
        judge shall consider the factors under section 245C.22, 
        subdivision 4, to determine whether the individual poses a risk 
        of harm to any person receiving services from the license holder.
           Sec. 16.  Minnesota Statutes 2004, 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 1400.8505 to 1400.8612.  The notice must 
        also contain information about the appellant's rights under 
        chapter 14 and Minnesota Rules, parts 1400.8505 to 1400.8612.  
        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.  
           Subd. 5a.  [EFFECT OF FINAL ORDER ON GRANTING A SUBSEQUENT 
        LICENSE.] (a) 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.  Notwithstanding the five-year restriction, when a 
        license is revoked because a person, other than the license 
        holder, resides in the home where services are provided and that 
        person has a disqualification that is not set aside and no 
        variance has been granted, the former license holder may reapply 
        for a license when:  
           (1) the person with a disqualification, who is not a minor 
        child, is no longer residing in the home and is prohibited from 
        residing in or returning to the home; or 
           (2) the person with the disqualification is a minor child, 
        the restriction applies until the minor child becomes an adult 
        and permanently moves away from the home or five years, 
        whichever is less.  
           (b) 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. 17.  Minnesota Statutes 2004, section 245A.14, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [FIRST AID TRAINING REQUIREMENTS FOR STAFF IN 
        CHILD CARE CENTERS AND FAMILY CHILD CARE.] Notwithstanding 
        Minnesota Rules, part 9503.0035, subpart 2, when children are 
        present in a family child care home governed by Minnesota Rules, 
        parts 9502.0315 to 9502.0445, or a child care center governed by 
        Minnesota Rules, parts 9503.0005 to 9503.0170, at least one 
        staff person must be present in the center or home who has been 
        trained in first aid.  The first aid training must have been 
        provided by an individual approved to provide first aid 
        instruction.  First aid training may be less than eight hours 
        and persons qualified to provide first aid training shall 
        include individuals approved as first aid instructors. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 18.  Minnesota Statutes 2004, section 245A.14, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [CARDIOPULMONARY RESUSCITATION (CPR) TRAINING 
        REQUIREMENT.] (a) When children are present in a child care 
        center governed by Minnesota Rules, parts 9503.0005 to 
        9503.0170, or in a family child care home governed by Minnesota 
        Rules, parts 9502.0315 to 9502.0445, at least one staff person 
        must be present in the center or home who has been trained in 
        cardiopulmonary resuscitation (CPR) and in the treatment of 
        obstructed airways.  The CPR training must have been provided by 
        an individual approved to provide CPR instruction, must be 
        repeated at least once every three years, and must be documented 
        in the staff person's records. 
           (b) Notwithstanding Minnesota Rules, part 9503.0035, 
        subpart 3, item A, cardiopulmonary resuscitation training may be 
        provided for less than four hours. 
           (c) Notwithstanding Minnesota Rules, part 9503.0035, 
        subpart 3, item C, persons qualified to provide cardiopulmonary 
        resuscitation training shall include individuals approved as 
        cardiopulmonary resuscitation instructors. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 19.  Minnesota Statutes 2004, section 245A.144, is 
        amended to read: 
           245A.144 [REDUCTION OF RISK OF SUDDEN INFANT DEATH SYNDROME 
        AND SHAKEN BABY SYNDROME IN CHILD CARE AND CHILD FOSTER CARE 
        PROGRAMS.] 
           (a) License holders must ensure document that before staff 
        persons, caregivers, and helpers assist in the care of infants, 
        they receive training on reducing the risk of sudden infant 
        death syndrome and shaken baby syndrome.  The training on 
        reducing the risk of sudden infant death syndrome and shaken 
        baby syndrome may be provided as: 
           (1) orientation training to child care center staff under 
        Minnesota Rules, part 9503.0035, subpart 1, as and to child 
        foster care providers, who care for infants, under Minnesota 
        Rules, part 2960.3070, subpart 1; 
           (2) initial training to family and group family child care 
        providers under Minnesota Rules, part 9502.0385, subpart 2, as; 
           (3) in-service training to child care center staff under 
        Minnesota Rules, part 9503.0035, subpart 4, and to child foster 
        care providers, who care for infants, under Minnesota Rules, 
        part 2960.3070, subpart 2; or as 
           (4) ongoing training to family and group family child care 
        providers under Minnesota Rules, part 9502.0385, subpart 3.  
           (b) Training required under this section must be at least 
        one hour in length and must be completed at least once every 
        five years.  At a minimum, the training must address the risk 
        factors related to sudden infant death syndrome and shaken baby 
        syndrome, means of reducing the risk of sudden infant death 
        syndrome and shaken baby syndrome in child care, and license 
        holder communication with parents regarding reducing the risk of 
        sudden infant death syndrome and shaken baby syndrome.  
           (c) Training for family and group family child care 
        providers must be approved by the county licensing agency 
        according to Minnesota Rules, part 9502.0385.  
           (d) Training for child foster care providers must be 
        approved by the county licensing agency and fulfills, in part, 
        training required under Minnesota Rules, part 2960.3070. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 20.  Minnesota Statutes 2004, 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: 
           (1)  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; and 
           (2) for relative child foster care applicants and license 
        holders, the number of relatives, as defined in section 
        260C.007, subdivision 27, and household members of relatives who 
        are disqualified under section 245C.14; the disqualifying 
        characteristics under section 245C.15; the number of these 
        individuals who requested reconsideration under section 245C.21; 
        the number of set-asides under section 245C.22; and variances 
        under section 245C.30 issued.  This information shall be 
        reported to the commissioner annually by January 15 of each year 
        in a format prescribed by the commissioner. 
           (c) For family day care programs, the commissioner may 
        authorize licensing reviews every two years after a licensee has 
        had at least one annual review. 
           (d) For family adult day services programs, the 
        commissioner may authorize licensing reviews every two years 
        after a licensee has had at least one annual review. 
           (e) A license issued under this section may be issued for 
        up to two years. 
           Sec. 21.  Minnesota Statutes 2004, 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, 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, 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.  For 
        purposes of this section, a conflict of interest means that the 
        county attorney has a direct or shared financial interest with 
        the license holder or has a personal relationship or family 
        relationship with a party in the licensing action. 
           Sec. 22.  Minnesota Statutes 2004, section 245A.18, is 
        amended to read: 
           245A.18 [SEAT BELT USE REQUIRED CHILD PASSENGER RESTRAINT 
        SYSTEMS; TRAINING REQUIREMENT.] 
           (a) When a nonresidential license holder provides or 
        arranges for transportation for children served by the license 
        holder, children four years old and older must be restrained by 
        a properly adjusted and fastened seat belt and children under 
        age four must be properly fastened in a child passenger 
        restraint system meeting federal motor vehicle safety 
        standards.  A child passenger restraint system is not required 
        for a child who, in the judgment of a licensed physician, cannot 
        be safely transported in a child passenger restraint system 
        because of a medical condition, body size, or physical 
        disability, if the license holder possesses a written statement 
        from the physician that satisfies the requirements in section 
        169.685, subdivision 6, paragraph (b). 
           (b) Paragraph (a) does not apply to transportation of 
        children in a school bus inspected under section 169.451 that 
        has a gross vehicle weight rating of more than 10,000 pounds, is 
        designed for carrying more than ten persons, and was 
        manufactured after 1977. 
           Subdivision 1.  [SEAT BELT USE.] A license holder must 
        comply with all seat belt and child passenger restraint system 
        requirements under section 169.685. 
           Subd. 2.  [CHILD PASSENGER RESTRAINT SYSTEMS; TRAINING 
        REQUIREMENT.] 
           (a) Family and group family child care, child care centers, 
        child foster care, and other programs licensed by the Department 
        of Human Services that serve a child or children under nine 
        years of age must document training that fulfills the 
        requirements in this subdivision.  
           (b) Before a license holder, staff person, caregiver, or 
        helper transports a child or children under age nine in a motor 
        vehicle, the person transporting the child must satisfactorily 
        complete training on the proper use and installation of child 
        restraint systems in motor vehicles.  Training completed under 
        this section may be used to meet initial or ongoing training 
        under the following: 
           (1) Minnesota Rules, part 2960.3070, subparts 1 and 2; 
           (2) Minnesota Rules, part 9502.0385, subparts 2 and 3; and 
           (3) Minnesota Rules, part 9503.0035, subparts 1 and 4. 
           (c) Training required under this section must be at least 
        one hour in length, completed at orientation or initial 
        training, and repeated at least once every five years.  At a 
        minimum, the training must address the proper use of child 
        restraint systems based on the child's size, weight, and age, 
        and the proper installation of a car seat or booster seat in the 
        motor vehicle used by the license holder to transport the child 
        or children. 
           (d) Training under paragraph (c) must be provided by 
        individuals who are certified and approved by the Department of 
        Public Safety, Office of Traffic Safety.  License holders may 
        obtain a list of certified and approved trainers through the 
        Department of Public Safety Web site or by contacting the agency.
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 23.  Minnesota Statutes 2004, section 245B.02, 
        subdivision 10, is amended to read: 
           Subd. 10.  [INCIDENT.] "Incident" means any of the 
        following: 
           (1) serious injury as determined by section 245.91, 
        subdivision 6; 
           (2) a consumer's death; 
           (3) any medical emergencies, unexpected serious illnesses, 
        or accidents that require physician treatment or 
        hospitalization; 
           (4) a consumer's unauthorized absence; 
           (5) any fires or other events that require the relocation 
        of services for more than 24 hours, or circumstances involving a 
        law enforcement agency or fire department related to the health, 
        safety, or supervision of a consumer; 
           (6) physical aggression by a consumer against another 
        consumer that causes physical pain, injury, or persistent 
        emotional distress, including, but not limited to, hitting, 
        slapping, kicking, scratching, pinching, biting, pushing, and 
        spitting; 
           (7) any sexual activity between consumers involving force 
        or coercion as defined under section 609.341, subdivisions 3 and 
        14; or 
           (8) a report of child or vulnerable adult maltreatment 
        under section 626.556 or 626.557. 
           Sec. 24.  Minnesota Statutes 2004, section 245B.055, 
        subdivision 7, is amended to read: 
           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.  A staff ratio requirement of one to ten equals 0.100; 
           (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. 
           Sec. 25.  Minnesota Statutes 2004, 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 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. 26.  Minnesota Statutes 2004, section 245C.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSED PROGRAMS.] (a) The commissioner 
        shall conduct a background study on: 
           (1) the 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 or prospective 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; 
           (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:, when the commissioner has reasonable 
        cause; and 
           (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 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. 
           Sec. 27.  Minnesota Statutes 2004, section 245C.07, is 
        amended to read: 
           245C.07 [STUDY SUBJECT AFFILIATED WITH MULTIPLE LICENSED 
        FACILITIES.] 
           (a) When a license holder owns multiple facilities that are 
        licensed by the Department of Human Services, only one 
        background study is required for an individual who provides 
        direct contact services in one or more of the licensed 
        facilities if: 
           (1) the license holder designates one individual with one 
        address and telephone number as the person to receive sensitive 
        background study information for the multiple licensed programs 
        that depend on the same background study; and 
           (2) the individual designated to receive the sensitive 
        background study information is capable of determining, upon 
        request of the department, whether a background study subject is 
        providing direct contact services in one or more of the license 
        holder's programs and, if so, at which location or locations. 
           (b) When a background study is being initiated by a 
        licensed facility or a foster care provider that is also 
        registered under chapter 144D, a study subject affiliated with 
        multiple licensed facilities may attach to the background study 
        form a cover letter indicating the additional facilities' names, 
        addresses, and background study identification numbers. 
           When the commissioner receives a notice, the commissioner 
        shall notify each facility identified by the background study 
        subject of the study results. 
           The background study notice the commissioner sends to the 
        subsequent agencies shall satisfy those facilities' 
        responsibilities for initiating a background study on that 
        individual. 
           Sec. 28.  Minnesota Statutes 2004, section 245C.08, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BACKGROUND STUDIES CONDUCTED BY 
        COMMISSIONER OF HUMAN SERVICES.] (a) For a background study 
        conducted by the commissioner, the commissioner shall review: 
           (1) information related to names of substantiated 
        perpetrators of maltreatment of vulnerable adults that has been 
        received by the commissioner as required under section 626.557, 
        subdivision 9c, paragraph (i); 
           (2) the commissioner's records relating to the maltreatment 
        of minors in licensed programs, and from county agency findings 
        of maltreatment of minors as indicated through the social 
        service information system; 
           (3) information from juvenile courts as required in 
        subdivision 4 for individuals listed in section 245C.03, 
        subdivision 1, clauses (2), (5), and (6); and 
           (4) information from the Bureau of Criminal Apprehension. 
           (b) Notwithstanding expungement by a court, the 
        commissioner may consider information obtained under paragraph 
        (a), clauses (3) and (4), unless the commissioner received 
        notice of the petition for expungement and the court order for 
        expungement is directed specifically to the commissioner. 
           Sec. 29.  Minnesota Statutes 2004, 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); 
           (3) information from the Bureau of Criminal Apprehension; 
        and 
           (4) arrest and investigative records maintained by the 
        Bureau of Criminal Apprehension, county attorneys, county 
        sheriffs, courts, county agencies, local police, the National 
        Criminal Records Repository, and criminal records from other 
        states. 
           (b) If the individual has resided in the county for less 
        than five years, the study shall include the records specified 
        under paragraph (a) for the previous county or counties of 
        residence for the past five years. 
           (c) Notwithstanding expungement by a court, the county or 
        private agency may consider information obtained under paragraph 
        (a), clauses (3) and (4), unless the commissioner received 
        notice of the petition for expungement and the court order for 
        expungement is directed specifically to the commissioner. 
           Sec. 30.  Minnesota Statutes 2004, section 245C.15, 
        subdivision 1, as amended by Laws 2005, chapter 136, article 6, 
        section 2, is amended to read: 
           Subdivision 1.  [PERMANENT DISQUALIFICATION.] (a) An 
        individual is disqualified under section 245C.14 if:  (1) 
        regardless of how much time has passed since the discharge of 
        the sentence imposed, if any, for the offense; and (2) unless 
        otherwise specified, regardless of the level of the conviction 
        offense, the individual is convicted of has committed any of the 
        following offenses:  sections 609.185 (murder in the first 
        degree); 609.19 (murder in the second degree); 609.195 (murder 
        in the third degree); 609.20 (manslaughter in the first degree); 
        609.205 (manslaughter in the second degree); 609.221 or 609.222 
        (assault in the first or second degree); a felony offense under 
        sections 609.2242 and 609.2243 (domestic assault), spousal 
        abuse, child abuse or neglect, or a crime against children; 
        609.228 (great bodily harm caused by distribution of drugs); 
        609.245 (aggravated robbery); 609.25 (kidnapping); 609.2661 
        (murder of an unborn child in the first degree); 609.2662 
        (murder of an unborn child in the second degree); 609.2663 
        (murder of an unborn child in the third degree); 609.322 
        (solicitation, inducement, and promotion of prostitution); a 
        felony offense under 609.324, subdivision 1 (other prohibited 
        acts); 609.342 (criminal sexual conduct in the first degree); 
        609.343 (criminal sexual conduct in the second degree); 609.344 
        (criminal sexual conduct in the third degree); 609.345 (criminal 
        sexual conduct in the fourth degree); 609.3451 (criminal sexual 
        conduct in the fifth degree); 609.3453 (criminal sexual 
        predatory conduct); 609.352 (solicitation of children to engage 
        in sexual conduct); 609.365 (incest); a felony offense under 
        609.377 (malicious punishment of a child); a felony offense 
        under 609.378 (neglect or endangerment of a child); 609.561 
        (arson in the first degree); 609.66, subdivision 1e (drive-by 
        shooting); 609.749, subdivision 3, 4, or 5 (felony-level 
        harassment; stalking); 609.855, subdivision 5 (shooting at or in 
        a public transit vehicle or facility); 617.246 (use of minors in 
        sexual performance prohibited); or 617.247 (possession of 
        pictorial representations of minors).  An individual also is 
        disqualified under section 245C.14 regardless of how much time 
        has passed since the involuntary termination of the individual's 
        parental rights under section 260C.301. 
           (b) An individual's aiding and abetting, attempt, or 
        conspiracy to commit any of the offenses listed in paragraph 
        (a), as each of these offenses is defined in Minnesota Statutes, 
        permanently disqualifies the individual under section 245C.14. 
           (c) An individual's offense in any other state or country, 
        where the elements of the offense are substantially similar to 
        any of the offenses listed in paragraph (a), permanently 
        disqualifies the individual under section 245C.14. 
           (d) When a disqualification is based on a judicial 
        determination other than a conviction, the disqualification 
        period begins from the date of the court order.  When a 
        disqualification is based on an admission, the disqualification 
        period begins from the date of an admission in court.  When a 
        disqualification is based on a preponderance of evidence of a 
        disqualifying act, the disqualification date begins from the 
        date of the dismissal, the date of discharge of the sentence 
        imposed for a conviction for a disqualifying crime of similar 
        elements, or the date of the incident, whichever occurs last. 
           Sec. 31.  Minnesota Statutes 2004, 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, if any, 
        for the offense; and (2) the individual has received a felony 
        conviction for committed a felony-level violation of any of the 
        following offenses:  sections 260C.301 (grounds for termination 
        of parental rights) 256.98 (wrongfully obtaining 
        assistance); 268.182 (false representation; concealment of 
        facts); 393.07, subdivision 10, paragraph (c) (federal Food 
        Stamp Program fraud); 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); 609.466 
        (medical assistance fraud); 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); 609.525 (bringing stolen goods into Minnesota); 609.527 
        (identity theft); 609.53 (receiving stolen property); 609.535 
        (issuance of dishonored checks); 609.562 (arson in the second 
        degree); 609.563 (arson in the third degree); 609.582 
        (burglary); 609.611 (insurance fraud); 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); 609.82 (fraud in obtaining 
        credit); 609.821 (financial transaction card fraud); 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 aiding and 
        abetting, attempt, or conspiracy to commit any of the offenses 
        listed in paragraph (a), as each of these offenses is defined in 
        Minnesota Statutes. 
           (c) For foster care and family child care an individual is 
        disqualified under section 245C.14 if less than 15 years has 
        passed since the individual's voluntary termination of the 
        individual's parental rights under section 260C.301, subdivision 
        1, paragraph (b), or 260C.301, subdivision 3. 
           (d) 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) (e) 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. 
           (f) When a disqualification is based on a judicial 
        determination other than a conviction, the disqualification 
        period begins from the date of the court order.  When a 
        disqualification is based on an admission, the disqualification 
        period begins from the date of an admission in court.  When a 
        disqualification is based on a preponderance of evidence of a 
        disqualifying act, the disqualification date begins from the 
        date of the dismissal, the date of discharge of the sentence 
        imposed for a conviction for a disqualifying crime of similar 
        elements, or the date of the incident, whichever occurs last. 
           Sec. 32.  Minnesota Statutes 2004, 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, if any, 
        for the offense; and (2) the individual has received committed a 
        gross misdemeanor conviction for a misdemeanor-level violation 
        of any of the following offenses:  sections 256.98 (wrongfully 
        obtaining assistance); 268.182 (false representation; 
        concealment of facts); 393.07, subdivision 10, paragraph (c) 
        (federal Food Stamp Program fraud); 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); 609.446 (medical 
        assistance fraud); 609.52 (theft); 609.525 (bringing stolen 
        goods into Minnesota); 609.527 (identity theft); 609.53 
        (receiving stolen property); 609.535 (issuance of dishonored 
        checks); 609.582 (burglary); 609.611 (insurance fraud); 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 aiding and 
        abetting, 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. 
           (e) When a disqualification is based on a judicial 
        determination other than a conviction, the disqualification 
        period begins from the date of the court order.  When a 
        disqualification is based on an admission, the disqualification 
        period begins from the date of an admission in court.  When a 
        disqualification is based on a preponderance of evidence of a 
        disqualifying act, the disqualification date begins from the 
        date of the dismissal, the date of discharge of the sentence 
        imposed for a conviction for a disqualifying crime of similar 
        elements, or the date of the incident, whichever occurs last. 
           Sec. 33.  Minnesota Statutes 2004, 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, if 
        any, for the offense; and (2) the individual has received 
        committed a misdemeanor conviction for a misdemeanor-level 
        violation of any of the following offenses:  sections 256.98 
        (wrongfully obtaining assistance); 268.182 (false 
        representation; concealment of facts); 393.07, subdivision 10, 
        paragraph (c) (federal Food Stamp Program fraud); 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); 609.466 
        (medical assistance fraud); 609.52 (theft); 609.525 (bringing 
        stolen goods into Minnesota); 609.527 (identity theft); 609.53 
        (receiving stolen property); 609.535 (issuance of dishonored 
        checks); 609.611 (insurance fraud); 609.66 (dangerous weapons); 
        609.665 (spring guns); 609.746 (interference with privacy); 
        609.79 (obscene or harassing phone telephone calls); 609.795 
        (letter, telegram, or package; opening; harassment); 609.82 
        (fraud in obtaining credit); 609.821 (financial transaction card 
        fraud); 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, 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 aiding 
        and abetting, 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). 
           (e) When a disqualification is based on a judicial 
        determination other than a conviction, the disqualification 
        period begins from the date of the court order.  When a 
        disqualification is based on an admission, the disqualification 
        period begins from the date of an admission in court.  When a 
        disqualification is based on a preponderance of evidence of a 
        disqualifying act, the disqualification date begins from the 
        date of the dismissal, the date of discharge of the sentence 
        imposed for a conviction for a disqualifying crime of similar 
        elements, or the date of the incident, whichever occurs last. 
           Sec. 34.  Minnesota Statutes 2004, section 245C.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TIME FRAME FOR REQUESTING RECONSIDERATION OF A 
        DISQUALIFICATION.] (a) When the commissioner sends an individual 
        a notice of disqualification based on a finding under section 
        245C.16, subdivision 2, paragraph (a), clause (1) or (2), the 
        disqualified individual must submit the request for a 
        reconsideration within 30 calendar days of the individual's 
        receipt of the notice of disqualification.  If mailed, the 
        request for reconsideration must be postmarked and sent to the 
        commissioner within 30 calendar days of the individual's receipt 
        of the notice of disqualification.  If a request for 
        reconsideration is made by personal service, it must be received 
        by the commissioner within 30 calendar days after the 
        individual's receipt of the notice of disqualification.  Upon 
        showing that the information under subdivision 3 cannot be 
        obtained within 30 days, the disqualified individual may request 
        additional time, not to exceed 30 days, to obtain the 
        information. 
           (b) When the commissioner sends an individual a notice of 
        disqualification based on a finding under section 245C.16, 
        subdivision 2, paragraph (a), clause (3), the disqualified 
        individual must submit the request for reconsideration within 15 
        calendar days of the individual's receipt of the notice of 
        disqualification.  If mailed, the request for reconsideration 
        must be postmarked and sent to the commissioner within 15 
        calendar days of the individual's receipt of the notice of 
        disqualification.  If a request for reconsideration is made by 
        personal service, it must be received by the commissioner within 
        15 calendar days after the individual's receipt of the notice of 
        disqualification. 
           (c) An individual who was determined to have maltreated a 
        child under section 626.556 or a vulnerable adult under section 
        626.557, and who is disqualified on the basis of serious or 
        recurring maltreatment, may request a reconsideration of both 
        the maltreatment and the disqualification determinations.  The 
        request must be submitted within 30 calendar days of the 
        individual's receipt of the notice of disqualification.  If 
        mailed, the request for reconsideration must be postmarked and 
        sent to the commissioner within 30 calendar days of the 
        individual's receipt of the notice of disqualification.  If a 
        request for reconsideration is made by personal service, it must 
        be received by the commissioner within 30 calendar days after 
        the individual's receipt of the notice of disqualification. 
           Sec. 35.  Minnesota Statutes 2004, 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 other entities as provided in this chapter over 
        the interests of the disqualified individual, license holder, 
        applicant, or 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. 
           Sec. 36.  Minnesota Statutes 2004, 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 other 
        entities as provided in this chapter. 
           (b) In determining 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. 
           (c) If the individual requested reconsideration on the 
        basis that the information relied upon to disqualify the 
        individual was incorrect or inaccurate and the commissioner 
        determines that the information relied upon to disqualify the 
        individual is correct, the commissioner must also determine if 
        the individual poses a risk of harm to persons receiving 
        services in accordance with paragraph (b). 
           Sec. 37.  Minnesota Statutes 2004, section 245C.22, 
        subdivision 7, as added by Laws 2005, chapter 136, article 6, 
        section 6, is amended to read: 
           Subd. 7.  [CLASSIFICATION OF CERTAIN DATA AS PUBLIC OR 
        PRIVATE.] (a) Notwithstanding section 13.46, upon setting aside 
        a disqualification under this section, the identity of the 
        disqualified individual who received the set aside and the 
        individual's disqualifying characteristics are public data if 
        the set aside was: 
           (1) for any disqualifying characteristic under section 
        245C.15, when the set aside relates to a child care center or a 
        family child care provider licensed under chapter 245A; or 
           (2) for a disqualifying characteristic under section 
        245C.15, subdivision 2. 
           (b) Notwithstanding section 13.46, upon granting a variance 
        to a license holder under section 245C.30, the identity of the 
        disqualified individual who is the subject of the variance, the 
        individual's disqualifying characteristics under section 
        245C.15, and the terms of the variance are public data, when the 
        variance: 
           (1) is issued to a child care center or a family child care 
        provider licensed under chapter 245A; or 
           (2) relates to an individual with a disqualifying 
        characteristic under section 245C.15, subdivision 2. 
           (c) The identity of a disqualified individual and the 
        reason for disqualification remain private data when: 
           (1) a disqualification is not set aside and no variance is 
        granted; 
           (2) the data are not public under paragraph (a) or (b); or 
           (3) the disqualification is rescinded because the 
        information relied upon to disqualify the individual is 
        incorrect; or 
           (4) the disqualification relates to a license to provide 
        relative child foster care.  As used in this clause, "relative" 
        has the meaning given it under section 260C.007, subdivision 27. 
           (d) Licensed family day care providers and child care 
        centers must notify parents considering enrollment of a child or 
        parents of a child attending the family day care or child care 
        center if the program employs or has living in the home any 
        individual who is the subject of either a set aside or variance. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 38.  Minnesota Statutes 2004, section 245C.23, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER'S NOTICE OF DISQUALIFICATION 
        THAT IS RESCINDED OR SET ASIDE.] (a) Except as provided under 
        paragraph (c), If the commissioner rescinds or sets aside a 
        disqualification, the commissioner shall notify the 
        applicant or, license holder, or other entity in writing or by 
        electronic transmission of the decision.  In the notice from the 
        commissioner that a disqualification has been rescinded, the 
        commissioner must inform the applicant, license holder, or other 
        entity that the information relied upon to disqualify the 
        individual was incorrect.  In the notice from the commissioner 
        that a disqualification has been set aside, the commissioner 
        must inform the applicant, license holder that information about 
        the nature, or other entity of the reason for the individual's 
        disqualification and that information about 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. 39.  Minnesota Statutes 2004, section 245C.24, 
        subdivision 2, as amended by Laws 2005, chapter 136, article 6, 
        section 7, is amended to read: 
           Subd. 2.  [PERMANENT BAR TO SET ASIDE A DISQUALIFICATION.] 
        The commissioner may not set aside the disqualification of an 
        any individual in connection with a license issued or in 
        application status under chapter 245A disqualified pursuant to 
        this chapter, regardless of how much time has passed, if 
        the provider individual was disqualified for a crime or conduct 
        listed in section 245C.15, subdivision 1. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 40.  Minnesota Statutes 2004, section 245C.24, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TEN-YEAR BAR TO SET ASIDE DISQUALIFICATION.] (a) 
        The commissioner may not set aside the disqualification of an 
        individual in connection with a license to provide family child 
        care for children, foster care for children in the provider's 
        home, or foster care or day care services for adults in the 
        provider's home if:  (1) less than ten years has passed since 
        the discharge of the sentence imposed, if any, for the offense; 
        and or (2) when disqualified based on a preponderance of 
        evidence determination under section 245A.14, subdivision 1, 
        paragraph (a), clause (2), or an admission under section 
        245A.14, subdivision 1, paragraph (a), clause (1), and less than 
        ten years has passed since the individual committed the act or 
        admitted to committing the act, whichever is later; and (3) the 
        individual has been convicted of committed a violation of any of 
        the following offenses:  sections 609.165 (felon ineligible to 
        possess firearm); criminal vehicular homicide under 609.21 
        (criminal vehicular homicide and injury); 609.215 (aiding 
        suicide or aiding attempted suicide); felony violations under 
        609.223 or 609.2231 (assault in the third or fourth degree); 
        609.713 (terroristic threats); 609.235 (use of drugs to injure 
        or to facilitate crime); 609.24 (simple robbery); 609.255 (false 
        imprisonment); 609.562 (arson in the second degree); 609.71 
        (riot); 609.498, subdivision 1 or 1b (aggravated first degree or 
        first degree tampering with a witness); burglary in the first or 
        second degree under 609.582 (burglary); 609.66 (dangerous 
        weapon); 609.665 (spring guns); 609.67 (machine guns and 
        short-barreled shotguns); 609.749, subdivision 2 (gross 
        misdemeanor harassment; stalking); 152.021 or 152.022 
        (controlled substance crime in the first or second degree); 
        152.023, subdivision 1, clause (3) or (4) or subdivision 2, 
        clause (4) (controlled substance crime in the third degree); 
        152.024, subdivision 1, clause (2), (3), or (4) (controlled 
        substance crime in the fourth degree); 609.224, subdivision 2, 
        paragraph (c) (fifth-degree assault by a caregiver against a 
        vulnerable adult); 609.23 (mistreatment of persons confined); 
        609.231 (mistreatment of residents or patients); 609.2325 
        (criminal abuse of a vulnerable adult); 609.233 (criminal 
        neglect of a vulnerable adult); 609.2335 (financial exploitation 
        of a vulnerable adult); 609.234 (failure to report); 609.265 
        (abduction); 609.2664 to 609.2665 (manslaughter of an unborn 
        child in the first or second degree); 609.267 to 609.2672 
        (assault of an unborn child in the first, second, or third 
        degree); 609.268 (injury or death of an unborn child in the 
        commission of a crime); 617.293 (disseminating or displaying 
        harmful material to minors); a felony-level conviction involving 
        alcohol or drug use, a gross misdemeanor offense under 609.324, 
        subdivision 1 (other prohibited acts); a gross misdemeanor 
        offense under 609.378 (neglect or endangerment of a child); a 
        gross misdemeanor offense under 609.377 (malicious punishment of 
        a child); or 609.72, subdivision 3 (disorderly conduct against a 
        vulnerable adult). 
           (b) The commissioner may not set aside the disqualification 
        of an individual if less than ten years have passed since the 
        individual's aiding and abetting, attempt, or conspiracy to 
        commit any of the offenses listed in paragraph (a) as each of 
        these offenses is defined in Minnesota Statutes. 
           (c) The commissioner may not set aside the disqualification 
        of an individual if less than ten years have 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). 
           Sec. 41.  Minnesota Statutes 2004, 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 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.  If the individual was disqualified based 
        on a judicial determination, that determination is treated the 
        same as a conviction for purposes of appeal. 
           (d) This subdivision does not apply to a public employee's 
        appeal of a disqualification under section 245C.28, subdivision 
        3. 
           (e) Notwithstanding paragraph (c), if the commissioner does 
        not set aside a disqualification of an individual who was 
        disqualified based on both a preponderance of evidence and a 
        conviction or admission, the individual may request a fair 
        hearing under section 256.045, unless the disqualifications are 
        deemed conclusive under section 245C.29.  The scope of the 
        hearing conducted under section 256.045 with regard to the 
        disqualification based on a conviction or admission shall be 
        limited solely to whether the individual poses a risk of harm, 
        according to section 256.045, subdivision 3b. 
           Sec. 42.  Minnesota Statutes 2004, 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 sent within 30 calendar days after the 
        employee receives notice that the disqualification has not been 
        set aside.  If the individual was disqualified based on a 
        conviction or admission to any crimes listed in section 245C.15, 
        the scope of the contested case hearing shall be limited solely 
        to whether the individual poses a risk of harm pursuant to 
        section 245C.22. 
           (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 an individual 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. 
           Sec. 43.  Minnesota Statutes 2004, section 245C.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSE HOLDER VARIANCE.] (a) Except for 
        any disqualification under section 245C.15, subdivision 1, when 
        the commissioner has not set aside a background study subject's 
        disqualification, and there are conditions under which the 
        disqualified individual may provide direct contact services or 
        have access to people receiving services that minimize the risk 
        of harm to people receiving services, the commissioner may grant 
        a time-limited variance to a license holder. 
           (b) The variance shall state the reason for the 
        disqualification, the services that may be provided by the 
        disqualified individual, and the conditions with which the 
        license holder or applicant must comply for the variance to 
        remain in effect. 
           (c) Except for programs licensed to provide family child 
        care, foster care for children in the provider's own home, or 
        foster care or day care services for adults in the provider's 
        own home, the variance must be requested by the license holder. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 44.  Minnesota Statutes 2004, section 245C.30, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISCLOSURE OF REASON FOR DISQUALIFICATION.] (a) 
        The commissioner may not grant a variance for a disqualified 
        individual unless the applicant or license holder requests the 
        variance and the disqualified individual provides written 
        consent for the commissioner to disclose to the applicant or 
        license holder the reason for the disqualification. 
           (b) This subdivision does not apply to programs licensed to 
        provide family child care for children, foster care for children 
        in the provider's own home, or foster care or day care services 
        for adults in the provider's own home.  When the commissioner 
        grants a variance for a disqualified individual in connection 
        with a license to provide the services specified in this 
        paragraph, the disqualified individual's consent is not required 
        to disclose the reason for the disqualification to the license 
        holder in the variance issued under subdivision 1.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 45.  [245C.301] [NOTIFICATION OF SET-ASIDE OR 
        VARIANCE.] 
           Licensed family child care providers and child care centers 
        must provide a written notification to parents considering 
        enrollment of a child or parents of a child attending the family 
        child care or child care center if the program employs or has 
        living in the home any individual who is the subject of either a 
        set-aside or variance. 
           Sec. 46.  Minnesota Statutes 2004, section 246.13, as 
        amended by Laws 2005, chapter 136, article 5, section 2, is 
        amended to read: 
           246.13 [RECORDS OF PATIENTS AND RESIDENTS RECEIVING 
        STATE-OPERATED SERVICES.] 
           Subdivision 1.  [POWERS, DUTIES, AND AUTHORITY OF 
        COMMISSIONER.] (a) The commissioner of human services' office 
        shall have, accessible only by consent of the commissioner or on 
        the order of a judge or court of record, a record showing the 
        residence, sex, age, nativity, occupation, civil condition, and 
        date of entrance or commitment of every person, in the 
        state-operated services facilities as defined under section 
        246.014 under exclusive control of the commissioner; the date of 
        discharge and whether such discharge was final; the condition of 
        the person when the person left the state-operated services 
        facility; the vulnerable adult abuse prevention associated with 
        the person; and the date and cause of all deaths.  The record 
        shall state every transfer from one state-operated services 
        facility to another, naming each state-operated services 
        facility.  This information shall be furnished to the 
        commissioner of human services by each public agency, along with 
        other obtainable facts as the commissioner may require.  When a 
        patient or resident in a state-operated services facility is 
        discharged, transferred, or dies, the head of the state-operated 
        services facility or designee shall inform the commissioner of 
        human services of these events within ten days on forms 
        furnished by the commissioner.  
           (b) The commissioner of human services shall cause to be 
        devised, installed, and operated an adequate system of records 
        and statistics which shall consist of all basic record forms, 
        including patient personal records and medical record forms, and 
        the manner of their use shall be precisely uniform throughout 
        all state-operated services facilities. 
           Subd. 2.  [DEFINITIONS; RISK ASSESSMENT AND MANAGEMENT.] (a)
        As used in this section: 
           (1) "appropriate and necessary medical and other records" 
        includes patient medical records and other protected health 
        information as defined by Code of Federal Regulations, title 45, 
        section 164.501, relating to a patient in a state-operated 
        services facility including, but not limited to, the patient's 
        treatment plan and abuse prevention plan that is pertinent to 
        the patient's ongoing care, treatment, or placement in a 
        community-based treatment facility or a health care facility 
        that is not operated by state-operated services, and includes 
        information describing the level of risk posed by a patient when 
        the patient enters such a the facility; 
           (2) "community-based treatment" means the community support 
        services listed in section 253B.02, subdivision 4b; 
           (3) "criminal history data" means those data maintained or 
        used by the Departments of Corrections and Public Safety and by 
        the supervisory authorities listed in section 13.84, subdivision 
        1, that relate to an individual's criminal history or propensity 
        for violence;, including data in the Corrections Offender 
        Management System (COMS) and Statewide Supervision System (S3) 
        maintained by the Department of Corrections; the Criminal 
        Justice Information System (CJIS) and the Predatory Offender 
        Registration (POR) system maintained by the Department of Public 
        Safety; and the CriMNet system; 
           (4) "designated agency" means the agency defined in section 
        253B.02, subdivision 5; 
           (5) "law enforcement agency" means the law enforcement 
        agency having primary jurisdiction over the location where the 
        offender expects to reside upon release; 
           (6) "predatory offender" and "offender" mean a person who 
        is required to register as a predatory offender under section 
        243.166; and 
           (7) "treatment facility" means a facility as defined in 
        section 253B.02, subdivision 19. 
           (b) To promote public safety and for the purposes and 
        subject to the requirements of this paragraph (c), the 
        commissioner or the commissioner's designee shall have access 
        to, and may review and disclose, medical and criminal history 
        data as provided by this section. 
           (c) The commissioner or the commissioner's designee shall 
        disseminate data to designated treatment facility staff, special 
        review board members, and end-of-confinement review committee 
        members in accordance with Minnesota Rules, part 1205.0400, to, 
        as necessary to comply with Minnesota Rules, part 1205.0400: 
           (1) to determine whether a patient is required under state 
        law to register as a predatory offender according to section 
        243.166; 
           (2) to facilitate and expedite the responsibilities of the 
        special review board and end-of-confinement review committees by 
        corrections institutions and state treatment facilities; 
           (3) to prepare, amend, or revise the abuse prevention plans 
        required under section 626.557, subdivision 14, and individual 
        patient treatment plans required under section 253B.03, 
        subdivision 7; 
           (4) to facilitate changes of the custody and transfers, 
        supervision, and transport of individuals transferred between 
        the Department of Corrections and the Department of Human 
        Services; and or 
           (5) facilitate the exchange of data between to effectively 
        monitor and supervise individuals who are under the authority of 
        the Department of Corrections, the Department of Human Services, 
        and any of the supervisory authorities listed in section 
        13.84, regarding an individual under the authority of one or 
        more of these entities subdivision 1. 
           (c) The state-operated services treatment facility must 
        make a good faith effort to obtain written authorization from 
        the patient before releasing information from the patient's 
        medical record. 
           (d) If the patient refuses or is unable to give informed 
        consent to authorize the release of information required above, 
        the chief executive officer for state-operated services shall 
        provide the appropriate and necessary medical and other 
        records.  The chief executive officer shall comply with the 
        minimum necessary requirements. 
           (d) If approved by the United States Department of Justice, 
        (e) The commissioner may have access to national criminal 
        history information the National Crime Information Center (NCIC) 
        database, through the Department of Public Safety, in support of 
        the law enforcement function functions described in paragraph 
        (c).  If approval of the United States Department of Justice is 
        not obtained by the commissioner before July 1, 2007, the 
        authorization in this paragraph sunsets on that date (b).  
           Subd. 3.  [COMMUNITY-BASED TREATMENT AND MEDICAL 
        TREATMENT.] (a) When a patient under the care and supervision of 
        state-operated services is released to a community-based 
        treatment facility or facility that provides health care 
        services, state-operated services may disclose all appropriate 
        and necessary health and other information relating to the 
        patient. 
           (b) The information that must be provided to the designated 
        agency, community-based treatment facility, or facility that 
        provides health care services includes, but is not limited to, 
        the patient's abuse prevention plan required under section 
        626.557, subdivision 14, paragraph (b). 
           Subd. 4.  [PREDATORY OFFENDER REGISTRATION NOTIFICATION.] 
        (a) When a state-operated facility determines that a patient is 
        required under section 243.166, subdivision 1, to register as a 
        predatory offender or, under section 243.166, subdivision 4a, to 
        provide notice of a change in status, the facility shall provide 
        written notice to the patient of the requirement. 
           (b) If the patient refuses, is unable, or lacks capacity to 
        comply with the requirement described in paragraph (a) within 
        five days after receiving the notification of the duty to 
        comply, state-operated services staff shall obtain and disclose 
        the necessary data to complete the registration form or change 
        of status notification for the patient.  The treatment facility 
        shall also forward the registration or change of status data 
        that it completes to the Bureau of Criminal Apprehension and, as 
        applicable, the patient's corrections agent and the law 
        enforcement agency in the community in which the patient 
        currently resides.  If, after providing notification, the 
        patient refuses to comply with the requirements described in 
        paragraph (a), the treatment facility shall also notify the 
        county attorney in the county in which the patient is currently 
        residing of the refusal. 
           (c) The duties of state-operated services described in this 
        subdivision do not relieve the patient of the ongoing individual 
        duty to comply with the requirements of section 243.166. 
           Subd. 5.  [LIMITATIONS ON USE OF PROCEDURE FOR BLOODBORNE 
        PATHOGEN TEST RESULTS PATHOGENS.] Sections 246.71, 246.711, 
        246.712, 246.713, 246.714, 246.715, 246.716, 246.717, 246.718, 
        246.719, 246.72, 246.721, and to 246.722 apply to state-operated 
        services facilities. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 47.  Minnesota Statutes 2004, section 260B.163, 
        subdivision 6, is amended to read: 
           Subd. 6.  [GUARDIAN AD LITEM.] (a) The court shall appoint 
        a guardian ad litem to protect the interests of the minor when 
        it appears, at any stage of the proceedings, that the minor is 
        without a parent or guardian, or that the minor's parent is a 
        minor or incompetent, or that the parent or guardian is 
        indifferent or hostile to the minor's interests.  In any other 
        case the court may appoint a guardian ad litem to protect the 
        interests of the minor when the court feels that such an 
        appointment is desirable.  The court shall appoint the guardian 
        ad litem on its own motion or in the manner provided for the 
        appointment of a guardian ad litem in the district court.  The 
        court may appoint separate counsel for the guardian ad litem if 
        necessary.  
           (b) A guardian ad litem shall carry out the following 
        responsibilities: 
           (1) conduct an independent investigation to determine the 
        facts relevant to the situation of the child and the family, 
        which must include, unless specifically excluded by the court, 
        reviewing relevant documents; meeting with and observing the 
        child in the home setting and considering the child's wishes, as 
        appropriate; and interviewing parents, caregivers, and others 
        with knowledge relevant to the case; 
           (2) advocate for the child's best interests by 
        participating in appropriate aspects of the case and advocating 
        for appropriate community services when necessary; 
           (3) maintain the confidentiality of information related to 
        a case, with the exception of sharing information as permitted 
        by law to promote cooperative solutions that are in the best 
        interests of the child; 
           (4) monitor the child's best interests throughout the 
        judicial proceeding; and 
           (5) present written reports on the child's best interests 
        that include conclusions and recommendations and the facts upon 
        which they are based. 
           (c) The court may waive the appointment of a guardian ad 
        litem pursuant to paragraph (a), whenever counsel has been 
        appointed pursuant to subdivision 2 or is retained otherwise, 
        and the court is satisfied that the interests of the minor are 
        protected. 
           (d) In appointing a guardian ad litem pursuant to paragraph 
        (a), the court shall not appoint the party, or any agent or 
        employee thereof, filing a petition pursuant to section 260B.141 
        and 260C.141. 
           (e) The following factors shall be considered when 
        appointing a guardian ad litem in a case involving an Indian or 
        minority child: 
           (1) whether a person is available who is the same racial or 
        ethnic heritage as the child or, if that is not possible; 
           (2) whether a person is available who knows and appreciates 
        the child's racial or ethnic heritage.  
           (f) The court shall require a background study for each 
        guardian ad litem as provided under section 518.165.  The court 
        shall have access to data collected pursuant to section 245C.32 
        for purposes of the background study.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 48.  Minnesota Statutes 2004, section 260C.163, 
        subdivision 5, is amended to read: 
           Subd. 5.  [GUARDIAN AD LITEM.] (a) The court shall appoint 
        a guardian ad litem to protect the interests of the minor when 
        it appears, at any stage of the proceedings, that the minor is 
        without a parent or guardian, or that the minor's parent is a 
        minor or incompetent, or that the parent or guardian is 
        indifferent or hostile to the minor's interests, and in every 
        proceeding alleging a child's need for protection or services 
        under section 260C.007, subdivision 6, except proceedings where 
        the sole allegation is that the child is a runaway or habitual 
        truant.  In any other case the court may appoint a guardian ad 
        litem to protect the interests of the minor when the court feels 
        that such an appointment is desirable.  The court shall appoint 
        the guardian ad litem on its own motion or in the manner 
        provided for the appointment of a guardian ad litem in the 
        district court.  The court may appoint separate counsel for the 
        guardian ad litem if necessary.  
           (b) A guardian ad litem shall carry out the following 
        responsibilities: 
           (1) conduct an independent investigation to determine the 
        facts relevant to the situation of the child and the family, 
        which must include, unless specifically excluded by the court, 
        reviewing relevant documents; meeting with and observing the 
        child in the home setting and considering the child's wishes, as 
        appropriate; and interviewing parents, caregivers, and others 
        with knowledge relevant to the case; 
           (2) advocate for the child's best interests by 
        participating in appropriate aspects of the case and advocating 
        for appropriate community services when necessary; 
           (3) maintain the confidentiality of information related to 
        a case, with the exception of sharing information as permitted 
        by law to promote cooperative solutions that are in the best 
        interests of the child; 
           (4) monitor the child's best interests throughout the 
        judicial proceeding; and 
           (5) present written reports on the child's best interests 
        that include conclusions and recommendations and the facts upon 
        which they are based. 
           (c) Except in cases where the child is alleged to have been 
        abused or neglected, the court may waive the appointment of a 
        guardian ad litem pursuant to clause (a), whenever counsel has 
        been appointed pursuant to subdivision 2 or is retained 
        otherwise, and the court is satisfied that the interests of the 
        minor are protected. 
           (d) In appointing a guardian ad litem pursuant to clause 
        (a), the court shall not appoint the party, or any agent or 
        employee thereof, filing a petition pursuant to section 260C.141.
           (e) The following factors shall be considered when 
        appointing a guardian ad litem in a case involving an Indian or 
        minority child: 
           (1) whether a person is available who is the same racial or 
        ethnic heritage as the child or, if that is not possible; 
           (2) whether a person is available who knows and appreciates 
        the child's racial or ethnic heritage. 
           (f) The court shall require a background study for each 
        guardian ad litem as provided under section 518.165.  The court 
        shall have access to data collected pursuant to section 245C.32 
        for purposes of the background study.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 49.  Minnesota Statutes 2004, section 299C.093, as 
        amended by Laws 2005, chapter 136, article 5, section 4, is 
        amended to read: 
           299C.093 [DATABASE OF REGISTERED PREDATORY OFFENDERS.] 
           The superintendent of the bureau of criminal apprehension 
        shall maintain a computerized data system relating to 
        individuals required to register as predatory offenders under 
        section 243.166.  To the degree feasible, the system must 
        include the data required to be provided under section 243.166, 
        subdivisions 4 and 4a, and indicate the time period that the 
        person is required to register.  The superintendent shall 
        maintain this data in a manner that ensures that it is readily 
        available to law enforcement agencies.  This data is private 
        data on individuals under section 13.02, subdivision 12, but may 
        be used for law enforcement and corrections purposes.  
        State-operated services, as defined in section 246.014, are is 
        also authorized to have access to the data for the purposes 
        described in section 246.13, subdivision 2, paragraph (c) (b). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 50.  Minnesota Statutes 2004, section 518.165, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [BACKGROUND STUDY OF GUARDIAN AD LITEM.] (a) The 
        court shall initiate a background study through the commissioner 
        of human services under section 245C.32 on every guardian ad 
        litem appointed under this section if a background study has not 
        been completed on the guardian ad litem within the past three 
        years.  The background study must be completed before the court 
        appoints the guardian ad litem, unless the court determines that 
        it is in the best interest of the child to appoint a guardian ad 
        litem before a background study can be completed by the 
        commissioner.  The court shall initiate a subsequent background 
        study under this paragraph once every three years after the 
        guardian has been appointed as long as the individual continues 
        to serve as a guardian ad litem. 
           (b) The background study must include criminal history data 
        from the Bureau of Criminal Apprehension, other criminal history 
        data held by the commissioner of human services, and data 
        regarding whether the person has been a perpetrator of 
        substantiated maltreatment of a minor or a vulnerable adult.  
        When the information from the Bureau of Criminal Apprehension 
        indicates that the subject of a study under paragraph (a) is a 
        multistate offender or that the subject's multistate offender 
        status is undetermined, the court shall require a search of the 
        National Criminal Records Repository, and shall provide the 
        commissioner a set of classifiable fingerprints of the subject 
        of the study. 
           (c) The Minnesota Supreme Court shall pay the commissioner 
        a fee for conducting a background study under section 245C.32. 
           (d) Nothing precludes the court from initiating background 
        studies using court data on criminal convictions. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 51.  Minnesota Statutes 2004, section 518.165, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [PROCEDURE, CRIMINAL HISTORY, AND MALTREATMENT 
        RECORDS BACKGROUND STUDY.] (a) When the court requests a 
        background study under subdivision 4, paragraph (a), the request 
        shall be submitted to the Department of Human Services through 
        the department's electronic online background study system. 
           (b) When the court requests a search of the National 
        Criminal Records Repository, the court must provide a set of 
        classifiable fingerprints of the subject of the study on a 
        fingerprint card provided by the commissioner of human services. 
           (c) The commissioner of human services shall provide the 
        court with information from the Bureau of Criminal 
        Apprehension's Criminal Justice Information System, other 
        criminal history data held by the commissioner of human 
        services, and data regarding substantiated maltreatment of a 
        minor under section 626.556, and substantiated maltreatment of a 
        vulnerable adult under section 626.557, within 15 working days 
        of receipt of a request.  If the subject of the study has been 
        determined by the Department of Human Services or the Department 
        of Health to be the perpetrator of substantiated maltreatment of 
        a minor or vulnerable adult in a licensed facility, the response 
        must include a copy of the public portion of the investigation 
        memorandum under section 626.556, subdivision 10f, or the public 
        portion of the investigation memorandum under section 626.557, 
        subdivision 12b.  When the background study shows that the 
        subject has been determined by a county adult protection or 
        child protection agency to have been responsible for 
        maltreatment, the court shall be informed of the county, the 
        date of the finding, and the nature of the maltreatment that was 
        substantiated.  The commissioner shall provide the court with 
        information from the National Criminal Records Repository within 
        three working days of the commissioner's receipt of the data.  
        When the commissioner finds no criminal history or substantiated 
        maltreatment on a background study subject, the commissioner 
        shall make these results available to the court electronically 
        through the secure online background study system. 
           (d) Notwithstanding section 626.556, subdivision 10f, or 
        626.557, subdivision 12b, if the commissioner or county lead 
        agency has information that a person on whom a background study 
        was previously done under this section has been determined to be 
        a perpetrator of maltreatment of a minor or vulnerable adult, 
        the commissioner or the county may provide this information to 
        the court that requested the background study.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 52.  Minnesota Statutes 2004, section 518.165, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [RIGHTS.] The court shall notify the subject of a 
        background study that the subject has the following rights: 
           (1) the right to be informed that the court will request a 
        background study on the subject for the purpose of determining 
        whether the person's appointment or continued appointment is in 
        the best interests of the child; 
           (2) the right to be informed of the results of the study 
        and to obtain from the court a copy of the results; and 
           (3) the right to challenge the accuracy and completeness of 
        the information contained in the results to the agency 
        responsible for creation of the data except to the extent 
        precluded by section 256.045, subdivision 3. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 53.  Minnesota Statutes 2004, section 609A.03, 
        subdivision 7, as amended by Laws 2005, chapter 136, article 12, 
        section 11, is amended to read: 
           Subd. 7.  [LIMITATIONS OF ORDER.] (a) Upon issuance of an 
        expungement order related to a charge supported by probable 
        cause, the DNA samples and DNA records held by the Bureau of 
        Criminal Apprehension and collected under authority other than 
        section 299C.105, shall not be sealed, returned to the subject 
        of the record, or destroyed. 
           (b) Notwithstanding the issuance of an expungement order: 
           (1) an expunged record may be opened for purposes of a 
        criminal investigation, prosecution, or sentencing, upon an ex 
        parte court order; and 
           (2) an expunged record of a conviction may be opened for 
        purposes of evaluating a prospective employee in a criminal 
        justice agency without a court order; and 
           (3) an expunged record of a conviction may be opened for 
        purposes of a background study under section 245C.08 unless the 
        court order for expungement is directed specifically to the 
        commissioner of human services. 
           Upon request by law enforcement, prosecution, or 
        corrections authorities, an agency or jurisdiction subject to an 
        expungement order shall inform the requester of the existence of 
        a sealed record and of the right to obtain access to it as 
        provided by this paragraph.  For purposes of this section, a 
        "criminal justice agency" means courts or a government agency 
        that performs the administration of criminal justice under 
        statutory authority. 
           Sec. 54.  Minnesota Statutes 2004, section 626.556, 
        subdivision 10i, as amended by Laws 2005, chapter 159, article 
        1, section 9, is amended to read: 
           Subd. 10i.  [ADMINISTRATIVE RECONSIDERATION OF FINAL 
        DETERMINATION OF MALTREATMENT AND DISQUALIFICATION BASED ON 
        SERIOUS OR RECURRING MALTREATMENT; REVIEW PANEL.] (a) 
        Administrative reconsideration is not applicable in family 
        assessments since no determination concerning maltreatment is 
        made.  For investigations, 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.  If mailed, the request for reconsideration must be 
        postmarked and sent to the investigating agency within 15 
        calendar days of the individual's or facility's receipt of the 
        final determination.  If the request for reconsideration is made 
        by personal service, it must be received by the investigating 
        agency within 15 calendar days after the individual's or 
        facility's receipt of the final determination.  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.  If mailed, 
        the request for reconsideration of the maltreatment 
        determination and the disqualification must be postmarked and 
        sent to the investigating agency within 30 calendar days of the 
        individual's receipt of the maltreatment determination and 
        notice of disqualification.  If the request for reconsideration 
        is made by personal service, it must be received by the 
        investigating agency within 30 calendar days after the 
        individual's receipt of the notice of disqualification. 
           (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 working 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 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 1400.8505 to 
        1400.8612.  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).  When a fine is based on a determination 
        that the license holder is responsible for maltreatment and the 
        fine is issued at the same time as the maltreatment 
        determination, if the license holder appeals the maltreatment 
        and fine, reconsideration of the maltreatment determination 
        shall not be conducted under this section.  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. 
           Sec. 55.  Minnesota Statutes 2004, 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.  If mailed, the request for reconsideration must 
        be postmarked and sent to the lead agency within 15 calendar 
        days of the individual's or facility's receipt of the final 
        disposition.  If the request for reconsideration is made by 
        personal service, it must be received by the lead agency within 
        15 calendar days of the individual's or facility's receipt of 
        the final disposition.  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 in writing within 30 
        calendar days of the individual's receipt of the notice of 
        disqualification under sections 245C.16 and 245C.17.  If mailed, 
        the request for reconsideration of the maltreatment 
        determination and the disqualification must be postmarked and 
        sent to the lead agency within 30 calendar days of the 
        individual's receipt of the notice of disqualification.  If the 
        request for reconsideration is made by personal service, it must 
        be received by the lead agency within 30 calendar days after the 
        individual's receipt of the notice of disqualification. 
           (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 working 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 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 1400.8505 to 1400.8612.  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).  When a 
        fine is based on a determination that the license holder is 
        responsible for maltreatment and the fine is issued at the same 
        time as the maltreatment determination, if the license holder 
        appeals the maltreatment and fine, reconsideration of the 
        maltreatment determination shall not be conducted under this 
        section.  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. 
           Sec. 56.  Minnesota Statutes 2004, section 626.557, 
        subdivision 14, as amended by Laws 2005, chapter 136, article 5, 
        section 5, is amended to read: 
           Subd. 14.  [ABUSE PREVENTION PLANS.] (a) Each facility, 
        except home health agencies and personal care attendant services 
        providers, shall establish and enforce an ongoing written abuse 
        prevention plan.  The plan shall contain an assessment of the 
        physical plant, its environment, and its population identifying 
        factors which may encourage or permit abuse, and a statement of 
        specific measures to be taken to minimize the risk of abuse.  
        The plan shall comply with any rules governing the plan 
        promulgated by the licensing agency.  
           (b) Each facility, including a home health care agency and 
        personal care attendant services providers, shall develop an 
        individual abuse prevention plan for each vulnerable adult 
        residing there or receiving services from them.  The plan shall 
        contain an individualized assessment of:  (1) the person's 
        susceptibility to abuse by other individuals, including other 
        vulnerable adults; (2) the person's risk of abusing other 
        vulnerable adults; and (3) statements of the specific measures 
        to be taken to minimize the risk of abuse to that person and 
        other vulnerable adults.  For the purposes of this paragraph, 
        the term "abuse" includes self-abuse. 
           (c) If the facility, except home health agencies and 
        personal care attendant services providers, knows that the 
        vulnerable adult has committed a violent crime or an act of 
        physical aggression toward others, the individual abuse 
        prevention plan must detail the measures to be taken to minimize 
        the risk that the vulnerable adult might reasonably be expected 
        to pose to visitors to the facility and persons outside the 
        facility, if unsupervised.  Under this section, a facility knows 
        of a vulnerable adult's history of criminal misconduct or 
        physical aggression if it receives such information from a law 
        enforcement authority or through a medical record prepared by 
        another facility, another health care provider, or the 
        facility's ongoing assessments of the vulnerable adult. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 57.  [EFFECTIVE DATE.] 
           This article is effective August 1, 2005, unless specified 
        otherwise. 

                                   ARTICLE 2 
                           MENTAL AND CHEMICAL HEALTH 
           Section 1.  Minnesota Statutes 2004, section 62J.692, 
        subdivision 3, as amended by Laws 2005, chapter 84, section 1, 
        is amended to read: 
           Subd. 3.  [APPLICATION PROCESS.] (a) A clinical medical 
        education program conducted in Minnesota by a teaching 
        institution to train physicians, doctor of pharmacy 
        practitioners, dentists, chiropractors, or physician assistants 
        is eligible for funds under subdivision 4 if the program: 
           (1) is funded, in part, by patient care revenues; 
           (2) occurs in patient care settings that face increased 
        financial pressure as a result of competition with nonteaching 
        patient care entities; and 
           (3) emphasizes primary care or specialties that are in 
        undersupply in Minnesota. 
           A clinical medical education program that trains 
        pediatricians is requested to include in its program curriculum 
        training in case management and medication management for 
        children suffering from mental illness to be eligible for funds 
        under subdivision 4. 
           (b) A clinical medical education program for advanced 
        practice nursing is eligible for funds under subdivision 4 if 
        the program meets the eligibility requirements in paragraph (a), 
        clauses (1) to (3), and is sponsored by the University of 
        Minnesota Academic Health Center, the Mayo Foundation, or 
        institutions that are part of the Minnesota State Colleges and 
        Universities system or members of the Minnesota Private College 
        Council.  
           (c) Applications must be submitted to the commissioner by a 
        sponsoring institution on behalf of an eligible clinical medical 
        education program and must be received by October 31 of each 
        year for distribution in the following year.  An application for 
        funds must contain the following information: 
           (1) the official name and address of the sponsoring 
        institution and the official name and site address of the 
        clinical medical education programs on whose behalf the 
        sponsoring institution is applying; 
           (2) the name, title, and business address of those persons 
        responsible for administering the funds; 
           (3) for each clinical medical education program for which 
        funds are being sought; the type and specialty orientation of 
        trainees in the program; the name, site address, and medical 
        assistance provider number of each training site used in the 
        program; the total number of trainees at each training site; and 
        the total number of eligible trainee FTEs at each site; and 
           (4) other supporting information the commissioner deems 
        necessary to determine program eligibility based on the criteria 
        in paragraphs (a) and (b) and to ensure the equitable 
        distribution of funds.  
           (d) An application must include the information specified 
        in clauses (1) to (3) for each clinical medical education 
        program on an annual basis for three consecutive years.  After 
        that time, an application must include the information specified 
        in clauses (1) to (3) when requested, at the discretion of the 
        commissioner:  
           (1) audited clinical training costs per trainee for each 
        clinical medical education program when available or estimates 
        of clinical training costs based on audited financial data; 
           (2) a description of current sources of funding for 
        clinical medical education costs, including a description and 
        dollar amount of all state and federal financial support, 
        including Medicare direct and indirect payments; and 
           (3) other revenue received for the purposes of clinical 
        training.  
           (e) An applicant that does not provide information 
        requested by the commissioner shall not be eligible for funds 
        for the current funding cycle. 
           Sec. 2.  Minnesota Statutes 2004, section 245.4661, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [BUDGET FLEXIBILITY.] The commissioner may make 
        budget transfers that do not increase the state share of costs 
        to effectively implement the restructuring of adult mental 
        health services. 
           Sec. 3.  Minnesota Statutes 2004, section 245.4874, as 
        amended by Laws 2005, chapter 98, article 3, section 11, is 
        amended to read: 
           245.4874 [DUTIES OF COUNTY BOARD.] 
           (a) 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) consider 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. 
           (b) When the county board refers clients to providers of 
        children's therapeutic services and supports under section 
        256B.0943, the county board must clearly identify the desired 
        services components not covered under section 256B.0943 and 
        identify the reimbursement source for those requested services, 
        the method of payment, and the payment rate to the provider. 
           Sec. 4.  Minnesota Statutes 2004, section 245.4885, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCREENING REQUIRED ADMISSION CRITERIA.] 
        The county board shall, prior to admission, except in the case 
        of emergency admission, screen determine the needed level of 
        care for all children referred for treatment of severe emotional 
        disturbance to in a treatment foster care setting, residential 
        treatment facility, or informally admitted to a regional 
        treatment center if public funds are used to pay for the 
        services.  The county board shall also screen determine the 
        needed level of care for all children admitted to an acute care 
        hospital for treatment of severe emotional disturbance if public 
        funds other than reimbursement under chapters 256B and 256D are 
        used to pay for the services.  If a child is admitted to a 
        residential treatment facility or acute care hospital for 
        emergency treatment or held for emergency care by a regional 
        treatment center under section 253B.05, subdivision 1, screening 
        must occur within three working days of admission.  
        Screening The level of care determination shall determine 
        whether the proposed treatment:  
           (1) is necessary; 
           (2) is appropriate to the child's individual treatment 
        needs; 
           (3) cannot be effectively provided in the child's home; and 
           (4) provides a length of stay as short as possible 
        consistent with the individual child's need. 
           When a screening level of care determination is conducted, 
        the county board may not determine that referral or admission to 
        a treatment foster care setting, residential treatment facility, 
        or acute care hospital is not appropriate solely because 
        services were not first provided to the child in a less 
        restrictive setting and the child failed to make progress toward 
        or meet treatment goals in the less restrictive 
        setting.  Screening shall include both The level of care 
        determination must be based on a diagnostic assessment and that 
        includes a functional assessment which evaluates family, school, 
        and community living situations; and an assessment of the 
        child's need for care out of the home using a validated tool 
        which assesses a child's functional status and assigns an 
        appropriate level of care.  The validated tool must be approved 
        by the commissioner of human services.  If a diagnostic 
        assessment or including a functional assessment has been 
        completed by a mental health professional within the past 180 
        days, a new diagnostic or functional assessment need not be 
        completed unless in the opinion of the current treating mental 
        health professional the child's mental health status has changed 
        markedly since the assessment was completed.  The child's parent 
        shall be notified if an assessment will not be completed and of 
        the reasons.  A copy of the notice shall be placed in the 
        child's file.  Recommendations developed as part of 
        the screening level of care determination process shall include 
        specific community services needed by the child and, if 
        appropriate, the child's family, and shall indicate whether or 
        not these services are available and accessible to the child and 
        family.  
           During the screening level of care determination process, 
        the child, child's family, or child's legal representative, as 
        appropriate, must be informed of the child's eligibility for 
        case management services and family community support services 
        and that an individual family community support plan is being 
        developed by the case manager, if assigned.  
           Screening The level of care determination shall be in 
        compliance comply with section 260C.212.  Wherever possible, the 
        parent shall be consulted in the screening process, unless 
        clinically inappropriate.  
           The screening process level of care determination, and 
        placement decision, and recommendations for mental health 
        services must be documented in the child's record.  
           An alternate review process may be approved by the 
        commissioner if the county board demonstrates that an alternate 
        review process has been established by the county board and the 
        times of review, persons responsible for the review, and review 
        criteria are comparable to the standards in clauses (1) to (4). 
           [EFFECTIVE DATE.] This section is effective July 1, 2006. 
           Sec. 5.  Minnesota Statutes 2004, section 245.4885, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [EMERGENCY ADMISSION.] Effective July 1, 2006, 
        if a child is admitted to a treatment foster care setting, 
        residential treatment facility, or acute care hospital for 
        emergency treatment or held for emergency care by a regional 
        treatment center under section 253B.05, subdivision 1, the level 
        of care determination must occur within three working days of 
        admission. 
           Sec. 6.  Minnesota Statutes 2004, section 245.4885, 
        subdivision 2, is amended to read: 
           Subd. 2.  [QUALIFICATIONS.] No later than July 1, 1991, 
        Screening Level of care determination of children for treatment 
        foster care, residential, and inpatient services must be 
        conducted by a mental health professional.  Where appropriate 
        and available, culturally informed mental health consultants 
        must participate in the screening level of care determination.  
        Mental health professionals providing screening level of care 
        determination for treatment foster care, inpatient, and 
        residential services must not be financially affiliated with any 
        acute care inpatient hospital, residential treatment facility, 
        or regional treatment center nongovernment entity which may be 
        providing those services.  The commissioner may waive this 
        requirement for mental health professional participation after 
        July 1, 1991, if the county documents that: 
           (1) mental health professionals or mental health 
        practitioners are unavailable to provide this service; and 
           (2) services are provided by a designated person with 
        training in human services who receives clinical supervision 
        from a mental health professional. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006. 
           Sec. 7.  Minnesota Statutes 2004, section 256B.0622, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them.  
           (a) "Intensive nonresidential rehabilitative mental health 
        services" means adult rehabilitative mental health services as 
        defined in section 256B.0623, subdivision 2, paragraph (a), 
        except that these services are provided by a multidisciplinary 
        staff using a total team approach consistent with assertive 
        community treatment, the Fairweather Lodge treatment model, as 
        defined by the standards established by the National Coalition 
        for Community Living, and other evidence-based practices, and 
        directed to recipients with a serious mental illness who require 
        intensive services. 
           (b) "Intensive residential rehabilitative mental health 
        services" means short-term, time-limited services provided in a 
        residential setting to recipients who are in need of more 
        restrictive settings and are at risk of significant functional 
        deterioration if they do not receive these services.  Services 
        are designed to develop and enhance psychiatric stability, 
        personal and emotional adjustment, self-sufficiency, and skills 
        to live in a more independent setting.  Services must be 
        directed toward a targeted discharge date with specified client 
        outcomes and must be consistent with the Fairweather Lodge 
        treatment model as defined in paragraph (a), and other 
        evidence-based practices. 
           (c) "Evidence-based practices" are nationally recognized 
        mental health services that are proven by substantial research 
        to be effective in helping individuals with serious mental 
        illness obtain specific treatment goals. 
           (d) "Overnight staff" means a member of the intensive 
        residential rehabilitative mental health treatment team who is 
        responsible during hours when recipients are typically asleep. 
           (e) "Treatment team" means all staff who provide services 
        under this section to recipients.  At a minimum, this includes 
        the clinical supervisor, mental health professionals, mental 
        health practitioners, and mental health rehabilitation workers. 
           Sec. 8.  Minnesota Statutes 2004, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 46.  [MENTAL HEALTH TELEMEDICINE.] Effective January 
        1, 2006, and subject to federal approval, mental health services 
        that are otherwise covered by medical assistance as direct 
        face-to-face services may be provided via two-way interactive 
        video.  Use of two-way interactive video must be medically 
        appropriate to the condition and needs of the person being 
        served.  Reimbursement is at the same rates and under the same 
        conditions that would otherwise apply to the service.  The 
        interactive video equipment and connection must comply with 
        Medicare standards in effect at the time the service is provided.
           Sec. 9.  Minnesota Statutes 2004, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 47.  [TREATMENT FOSTER CARE SERVICES.] Effective July 
        1, 2006, and subject to federal approval, medical assistance 
        covers treatment foster care services according to section 
        256B.0946. 
           Sec. 10.  Minnesota Statutes 2004, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 48.  [PSYCHIATRIC CONSULTATION TO PRIMARY CARE 
        PRACTITIONERS.] Effective January 1, 2006, medical assistance 
        covers consultation provided by a psychiatrist via telephone, 
        e-mail, facsimile, or other means of communication to primary 
        care practitioners, including pediatricians.  The need for 
        consultation and the receipt of the consultation must be 
        documented in the patient record maintained by the primary care 
        practitioner.  If the patient consents, and subject to federal 
        limitations and data privacy provisions, the consultation may be 
        provided without the patient present. 
           Sec. 11.  Minnesota Statutes 2004, section 256B.0943, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DETERMINATION OF CLIENT ELIGIBILITY.] A client's 
        eligibility to receive children's therapeutic services and 
        supports under this section shall be determined based on a 
        diagnostic assessment by a mental health professional that is 
        performed within 180 days of the initial start of service.  The 
        diagnostic assessment must: 
           (1) include current diagnoses on all five axes of the 
        client's current mental health status; 
           (2) determine whether a child under age 18 has a diagnosis 
        of emotional disturbance or, if the person is between the ages 
        of 18 and 21, whether the person has a mental illness; 
           (3) document children's therapeutic services and supports 
        as medically necessary to address an identified disability, 
        functional impairment, and the individual client's needs and 
        goals; 
           (4) be used in the development of the individualized 
        treatment plan; and 
           (5) be completed annually until age 18.  A client with 
        autism spectrum disorder or pervasive developmental disorder may 
        receive a diagnostic assessment once every three years, at the 
        request of the parent or guardian, if a mental health 
        professional agrees there has been little change in the 
        condition and that an annual assessment is not needed.  For 
        individuals between age 18 and 21, unless a client's mental 
        health condition has changed markedly since the client's most 
        recent diagnostic assessment, annual updating is necessary.  For 
        the purpose of this section, "updating" means a written summary, 
        including current diagnoses on all five axes, by a mental health 
        professional of the client's current mental health status and 
        service needs. 
           Sec. 12.  [256B.0946] [TREATMENT FOSTER CARE.] 
           Subdivision 1.  [COVERED SERVICE.] (a) Effective July 1, 
        2006, and subject to federal approval, medical assistance covers 
        medically necessary services described under paragraph (b) that 
        are provided by a provider entity eligible under subdivision 3 
        to a client eligible under subdivision 2 who is placed in a 
        treatment foster home licensed under Minnesota Rules, parts 
        2960.3000 to 2960.3340. 
           (b) Services to children with severe emotional disturbance 
        residing in treatment foster care settings must meet the 
        relevant standards for mental health services under sections 
        245.487 to 245.4887.  In addition, specific service components 
        reimbursed by medical assistance must meet the following 
        standards: 
           (1) case management service component must meet the 
        standards in Minnesota Rules, parts 9520.0900 to 9520.0926 and 
        9505.0322, excluding subparts 6 and 10; 
           (2) psychotherapy and skills training components must meet 
        the standards for children's therapeutic services and supports 
        in section 256B.0943; and 
           (3) family psychoeducation services under supervision of a 
        mental health professional. 
           Subd. 2.  [DETERMINATION OF CLIENT ELIGIBILITY.] A client's 
        eligibility to receive treatment foster care under this section 
        shall be determined by a diagnostic assessment, an evaluation of 
        level of care needed, and development of an individual treatment 
        plan, as defined in paragraphs (a) to (c). 
           (a) The diagnostic assessment must: 
           (1) be conducted by a psychiatrist, licensed psychologist, 
        or licensed independent clinical social worker that is performed 
        within 180 days prior to the start of service; 
           (2) include current diagnoses on all five axes of the 
        client's current mental health status; 
           (3) determine whether or not a child meets the criteria for 
        severe emotional disturbance in section 245.4871, subdivision 6, 
        or for serious and persistent mental illness in section 245.462, 
        subdivision 20; and 
           (4) be completed annually until age 18.  For individuals 
        between age 18 and 21, unless a client's mental health condition 
        has changed markedly since the client's most recent diagnostic 
        assessment, annual updating is necessary.  For the purpose of 
        this section, "updating" means a written summary, including 
        current diagnoses on all five axes, by a mental health 
        professional of the client's current mental status and service 
        needs. 
           (b) The evaluation of level of care must be conducted by 
        the placing county with an instrument approved by the 
        commissioner of human services.  The commissioner shall update 
        the list of approved level of care instruments annually. 
           (c) The individual treatment plan must be: 
           (1) based on the information in the client's diagnostic 
        assessment; 
           (2) developed through a child-centered, family driven 
        planning process that identifies service needs and 
        individualized, planned, and culturally appropriate 
        interventions that contain specific measurable treatment goals 
        and objectives for the client and treatment strategies for the 
        client's family and foster family; 
           (3) reviewed at least once every 90 days and revised; and 
           (4) signed by the client or, if appropriate, by the 
        client's parent or other person authorized by statute to consent 
        to mental health services for the client. 
           Subd. 3.  [ELIGIBLE PROVIDERS.] For purposes of this 
        section, a provider agency must have an individual placement 
        agreement for each recipient and must be a licensed child 
        placing agency, under Minnesota Rules, parts 9543.0010 to 
        9543.0150, and either: 
           (1) a county; 
           (2) an Indian Health Services facility operated by a tribe 
        or tribal organization under funding authorized by United States 
        Code, title 25, sections 450f to 450n, or title 3 of the Indian 
        Self-Determination Act, Public Law 93-638, section 638 
        (facilities or providers); or 
           (3) a noncounty entity under contract with a county board. 
           Subd. 4.  [ELIGIBLE PROVIDER RESPONSIBILITIES.] (a) To be 
        an eligible provider under this section, a provider must develop 
        written policies and procedures for treatment foster care 
        services consistent with subdivision 1, paragraph (b), clauses 
        (1), (2), and (3). 
           (b) In delivering services under this section, a treatment 
        foster care provider must ensure that staff caseload size 
        reasonably enables the provider to play an active role in 
        service planning, monitoring, delivering, and reviewing for 
        discharge planning to meet the needs of the client, the client's 
        foster family, and the birth family, as specified in each 
        client's individual treatment plan. 
           Subd. 5.  [SERVICE AUTHORIZATION.] The commissioner will 
        administer authorizations for services under this section in 
        compliance with section 256B.0625, subdivision 25. 
           Subd. 6.  [EXCLUDED SERVICES.] (a) Services in clauses (1) 
        to (4) are not eligible as components of treatment foster care 
        services: 
           (1) treatment foster care services provided in violation of 
        medical assistance policy in Minnesota Rules, part 9505.0220; 
           (2) service components of children's therapeutic services 
        and supports simultaneously provided by more than one treatment 
        foster care provider; 
           (3) home and community-based waiver services; and 
           (4) treatment foster care services provided to a child 
        without a level of care determination according to section 
        245.4885, subdivision 1. 
           (b) Children receiving treatment foster care services are 
        not eligible for medical assistance reimbursement for the 
        following services while receiving treatment foster care: 
           (1) mental health case management services under section 
        256B.0625, subdivision 20; and 
           (2) psychotherapy and skill training components of 
        children's therapeutic services and supports under section 
        256B.0625, subdivision 35b. 
           Sec. 13.  [256B.0947] [TRANSITIONAL YOUTH INTENSIVE 
        REHABILITATIVE MENTAL HEALTH SERVICES.] 
           Subdivision 1.  [SCOPE.] Subject to federal approval, 
        medical assistance covers medically necessary, intensive 
        nonresidential rehabilitative mental health services as defined 
        in subdivision 2, for recipients as defined in subdivision 3, 
        when the services are provided by an entity meeting the 
        standards in this section. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them. 
           (a) "Intensive nonresidential rehabilitative mental health 
        services" means child rehabilitative mental health services as 
        defined in section 256B.0943, except that these services are 
        provided by a multidisciplinary staff using a total team 
        approach consistent with assertive community treatment, or other 
        evidence-based practices, and directed to recipients with a 
        serious mental illness who require intensive services. 
           (b) "Evidence-based practices" are nationally recognized 
        mental health services that are proven by substantial research 
        to be effective in helping individuals with serious mental 
        illness obtain specific treatment goals. 
           (c) "Treatment team" means all staff who provide services 
        to recipients under this section.  At a minimum, this includes 
        the clinical supervisor, mental health professionals, mental 
        health practitioners, mental health behavioral aides, and a 
        school representative familiar with the recipient's individual 
        education plan (IEP) if applicable. 
           Subd. 3.  [ELIGIBILITY FOR TRANSITIONAL YOUTH.] An eligible 
        recipient under the age of 18 is an individual who: 
           (1) is age 16 or 17; 
           (2) is diagnosed with a medical condition, such as an 
        emotional disturbance or traumatic brain injury, for which 
        intensive nonresidential rehabilitative mental health services 
        are needed; 
           (3) has substantial disability and functional impairment in 
        three or more of the areas listed in section 245.462, 
        subdivision 11a, so that self-sufficiency upon adulthood or 
        emancipation is unlikely; and 
           (4) has had a recent diagnostic assessment by a qualified 
        professional that documents that intensive nonresidential 
        rehabilitative mental health services are medically necessary to 
        address identified disability and functional impairments and 
        individual recipient goals. 
           Subd. 4.  [PROVIDER CERTIFICATION AND CONTRACT 
        REQUIREMENTS.] (a) The intensive nonresidential rehabilitative 
        mental health services provider must: 
           (1) have a contract with the host county to provide 
        intensive transition youth rehabilitative mental health 
        services; and 
           (2) be certified by the commissioner as being in compliance 
        with this section and section 256B.0943. 
           (b) The commissioner shall develop procedures for counties 
        and providers to submit contracts and other documentation as 
        needed to allow the commissioner to determine whether the 
        standards in this section are met. 
           Subd. 5.  [STANDARDS APPLICABLE TO NONRESIDENTIAL 
        PROVIDERS.] (a) Services must be provided by a certified 
        provider entity as defined in section 256B.0943, subdivision 4 
        that meets the requirements in section 245B.0943, subdivisions 5 
        and 6. 
           (b) The clinical supervisor must be an active member of the 
        treatment team.  The treatment team must meet with the clinical 
        supervisor at least weekly to discuss recipients' progress and 
        make rapid adjustments to meet recipients' needs.  The team 
        meeting shall include recipient-specific case reviews and 
        general treatment discussions among team members.  
        Recipient-specific case reviews and planning must be documented 
        in the individual recipient's treatment record. 
           (c) Treatment staff must have prompt access in person or by 
        telephone to a mental health practitioner or mental health 
        professional.  The provider must have the capacity to promptly 
        and appropriately respond to emergent needs and make any 
        necessary staffing adjustments to assure the health and safety 
        of recipients. 
           (d) The initial functional assessment must be completed 
        within ten days of intake and updated at least every three 
        months or prior to discharge from the service, whichever comes 
        first. 
           (e) The initial individual treatment plan must be completed 
        within ten days of intake and reviewed and updated at least 
        monthly with the recipient. 
           Subd. 6.  [ADDITIONAL STANDARDS FOR NONRESIDENTIAL 
        SERVICES.] The standards in this subdivision apply to intensive 
        nonresidential rehabilitative mental health services. 
           (1) The treatment team must use team treatment, not an 
        individual treatment model. 
           (2) The clinical supervisor must function as a practicing 
        clinician at least on a part-time basis. 
           (3) The staffing ratio must not exceed ten recipients to 
        one full-time equivalent treatment team position. 
           (4) Services must be available at times that meet client 
        needs. 
           (5) The treatment team must actively and assertively engage 
        and reach out to the recipient's family members and significant 
        others, after obtaining the recipient's permission. 
           (6) The treatment team must establish ongoing communication 
        and collaboration between the team, family, and significant 
        others and educate the family and significant others about 
        mental illness, symptom management, and the family's role in 
        treatment. 
           (7) The treatment team must provide interventions to 
        promote positive interpersonal relationships. 
           Subd. 7.  [MEDICAL ASSISTANCE PAYMENT FOR INTENSIVE 
        REHABILITATIVE MENTAL HEALTH SERVICES.] (a) Payment for 
        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.0944. 
           (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 
        nonresidential intensive rehabilitative mental health 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; and 
           (5) the costs of other services that will be separately 
        reimbursed. 
           (d) The rate for intensive rehabilitative mental health 
        services must exclude medical assistance room and board rate, as 
        defined in section 256I.03, subdivision 6, and services not 
        covered under this section, such as partial hospitalization and 
        inpatient services.  Physician services are not a component of 
        the treatment team and may be billed separately.  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. 
           (f) The rate for a provider must not exceed the rate 
        charged by that provider for the same service to other payors. 
           (g) The commissioner shall approve or reject the county's 
        rate recommendation, based on the commissioner's own analysis of 
        the criteria in paragraph (c). 
           Subd. 8.  [PROVIDER ENROLLMENT; RATE SETTING FOR 
        COUNTY-OPERATED ENTITIES.] Counties that employ their own staff 
        to provide services under this section shall apply directly to 
        the commissioner for enrollment and rate setting.  In this case, 
        a county contract is not required and the commissioner shall 
        perform the program review and rate setting duties which would 
        otherwise be required of counties under this section. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006. 
           Sec. 14.  Minnesota Statutes 2004, section 256B.19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DIVISION OF COST.] The state and county 
        share of medical assistance costs not paid by federal funds 
        shall be as follows:  
           (1) beginning January 1, 1992, 50 percent state funds and 
        50 percent county funds for the cost of placement of severely 
        emotionally disturbed children in regional treatment centers; 
           (2) beginning January 1, 2003, 80 percent state funds and 
        20 percent county funds for the costs of nursing facility 
        placements of persons with disabilities under the age of 65 that 
        have exceeded 90 days.  This clause shall be subject to chapter 
        256G and shall not apply to placements in facilities not 
        certified to participate in medical assistance; 
           (3) beginning July 1, 2004, 80 90 percent state funds and 
        20 ten percent county funds for the costs of placements that 
        have exceeded 90 days in intermediate care facilities for 
        persons with mental retardation or a related condition that have 
        seven or more beds.  This provision includes pass-through 
        payments made under section 256B.5015; and 
           (4) beginning July 1, 2004, when state funds are used to 
        pay for a nursing facility placement due to the facility's 
        status as an institution for mental diseases (IMD), the county 
        shall pay 20 percent of the nonfederal share of costs that have 
        exceeded 90 days.  This clause is subject to chapter 256G. 
           For counties that participate in a Medicaid demonstration 
        project under sections 256B.69 and 256B.71, the division of the 
        nonfederal share of medical assistance expenses for payments 
        made to prepaid health plans or for payments made to health 
        maintenance organizations in the form of prepaid capitation 
        payments, this division of medical assistance expenses shall be 
        95 percent by the state and five percent by the county of 
        financial responsibility.  
           In counties where prepaid health plans are under contract 
        to the commissioner to provide services to medical assistance 
        recipients, the cost of court ordered treatment ordered without 
        consulting the prepaid health plan that does not include 
        diagnostic evaluation, recommendation, and referral for 
        treatment by the prepaid health plan is the responsibility of 
        the county of financial responsibility. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 15.  Minnesota Statutes 2004, 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; and 
           (23) mental health telemedicine and psychiatric 
        consultation as covered under section 256B.0625, subdivisions 46 
        and 48. 
           (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 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. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 16.  Minnesota Statutes 2004, section 256D.44, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL NEEDS.] In addition to the state 
        standards of assistance established in subdivisions 1 to 4, 
        payments are allowed for the following special needs of 
        recipients of Minnesota supplemental aid who are not residents 
        of a nursing home, a regional treatment center, or a group 
        residential housing facility. 
           (a) The county agency shall pay a monthly allowance for 
        medically prescribed diets if the cost of those additional 
        dietary needs cannot be met through some other maintenance 
        benefit.  The need for special diets or dietary items must be 
        prescribed by a licensed physician.  Costs for special diets 
        shall be determined as percentages of the allotment for a 
        one-person household under the thrifty food plan as defined by 
        the United States Department of Agriculture.  The types of diets 
        and the percentages of the thrifty food plan that are covered 
        are as follows: 
           (1) high protein diet, at least 80 grams daily, 25 percent 
        of thrifty food plan; 
           (2) controlled protein diet, 40 to 60 grams and requires 
        special products, 100 percent of thrifty food plan; 
           (3) controlled protein diet, less than 40 grams and 
        requires special products, 125 percent of thrifty food plan; 
           (4) low cholesterol diet, 25 percent of thrifty food plan; 
           (5) high residue diet, 20 percent of thrifty food plan; 
           (6) pregnancy and lactation diet, 35 percent of thrifty 
        food plan; 
           (7) gluten-free diet, 25 percent of thrifty food plan; 
           (8) lactose-free diet, 25 percent of thrifty food plan; 
           (9) antidumping diet, 15 percent of thrifty food plan; 
           (10) hypoglycemic diet, 15 percent of thrifty food plan; or 
           (11) ketogenic diet, 25 percent of thrifty food plan. 
           (b) Payment for nonrecurring special needs must be allowed 
        for necessary home repairs or necessary repairs or replacement 
        of household furniture and appliances using the payment standard 
        of the AFDC program in effect on July 16, 1996, for these 
        expenses, as long as other funding sources are not available.  
           (c) A fee for guardian or conservator service is allowed at 
        a reasonable rate negotiated by the county or approved by the 
        court.  This rate shall not exceed five percent of the 
        assistance unit's gross monthly income up to a maximum of $100 
        per month.  If the guardian or conservator is a member of the 
        county agency staff, no fee is allowed. 
           (d) The county agency shall continue to pay a monthly 
        allowance of $68 for restaurant meals for a person who was 
        receiving a restaurant meal allowance on June 1, 1990, and who 
        eats two or more meals in a restaurant daily.  The allowance 
        must continue until the person has not received Minnesota 
        supplemental aid for one full calendar month or until the 
        person's living arrangement changes and the person no longer 
        meets the criteria for the restaurant meal allowance, whichever 
        occurs first. 
           (e) A fee of ten percent of the recipient's gross income or 
        $25, whichever is less, is allowed for representative payee 
        services provided by an agency that meets the requirements under 
        SSI regulations to charge a fee for representative payee 
        services.  This special need is available to all recipients of 
        Minnesota supplemental aid regardless of their living 
        arrangement.  
           (f) Notwithstanding the language in this subdivision, an 
        amount equal to the maximum allotment authorized by the federal 
        Food Stamp Program for a single individual which is in effect on 
        the first day of January of the previous year will be added to 
        the standards of assistance established in subdivisions 1 to 4 
        for individuals under the age of 65 who are relocating from an 
        institution, or an adult mental health residential treatment 
        program under section 256B.0622, and who are shelter needy.  An 
        eligible individual who receives this benefit prior to age 65 
        may continue to receive the benefit after the age of 65. 
           "Shelter needy" means that the assistance unit incurs 
        monthly shelter costs that exceed 40 percent of the assistance 
        unit's gross income before the application of this special needs 
        standard.  "Gross income" for the purposes of this section is 
        the applicant's or recipient's income as defined in section 
        256D.35, subdivision 10, or the standard specified in 
        subdivision 3, whichever is greater.  A recipient of a federal 
        or state housing subsidy, that limits shelter costs to a 
        percentage of gross income, shall not be considered shelter 
        needy for purposes of this paragraph. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 17.  Minnesota Statutes 2004, section 256L.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COVERED HEALTH SERVICES.] For individuals 
        under section 256L.04, subdivision 7, with income no greater 
        than 75 percent of the federal poverty guidelines or for 
        families with children under section 256L.04, subdivision 1, all 
        subdivisions of this section apply.  "Covered health services" 
        means the health services reimbursed under chapter 256B, with 
        the exception of inpatient hospital services, special education 
        services, private duty nursing services, adult dental care 
        services other than services covered under section 256B.0625, 
        subdivision 9, paragraph (b), orthodontic services, nonemergency 
        medical transportation services, personal care assistant and 
        case management services, nursing home or intermediate care 
        facilities services, inpatient mental health services, and 
        chemical dependency services.  Outpatient mental health services 
        covered under the MinnesotaCare program are limited to 
        diagnostic assessments, psychological testing, explanation of 
        findings, mental health telemedicine, psychiatric consultation, 
        medication management by a physician, day treatment, partial 
        hospitalization, and individual, family, and group psychotherapy.
           No public funds shall be used for coverage of abortion 
        under MinnesotaCare except where the life of the female would be 
        endangered or substantial and irreversible impairment of a major 
        bodily function would result if the fetus were carried to term; 
        or where the pregnancy is the result of rape or incest. 
           Covered health services shall be expanded as provided in 
        this section. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 18.  [641.155] [DISCHARGE PLANS; OFFENDERS WITH 
        SERIOUS AND PERSISTENT MENTAL ILLNESS.] 
           The commissioner of corrections shall develop a model 
        discharge planning process for every offender with a serious and 
        persistent mental illness, as defined in section 245.462, 
        subdivision 20, paragraph (c), who has been convicted and 
        sentenced to serve three or more months and is being released 
        from a county jail or county regional jail. 
           An offender with a serious and persistent mental illness, 
        as defined in section 245.462, subdivision 20, paragraph (c), 
        who has been convicted and sentenced to serve three or more 
        months and is being released from a county jail or county 
        regional jail shall be referred to the appropriate staff in the 
        county human services department at least 60 days before being 
        released.  The county human services department may carry out 
        provisions of the model discharge planning process such as: 
           (1) providing assistance in filling out an application for 
        medical assistance, general assistance medical care, or 
        MinnesotaCare; 
           (2) making a referral for case management as outlined under 
        section 245.467, subdivision 4; 
           (3) providing assistance in obtaining a state photo 
        identification; 
           (4) securing a timely appointment with a psychiatrist or 
        other appropriate community mental health providers; and 
           (5) providing prescriptions for a 30-day supply of all 
        necessary medications. 
           Sec. 19.  [PRIORITY IN JANITORIAL CONTRACTS.] 
           When awarding contracts to provide the janitorial services 
        for the new Department of Human Services and Department of 
        Health buildings, the commissioner of administration shall give 
        priority to supported work vendors, provided those vendors 
        submit a bid that is equal to or less than bids submitted by 
        other vendors. 
           Sec. 20.  [ENHANCED SEPARATION.] 
           A state employee covered by a collective bargaining 
        agreement negotiated by the exclusive representatives of the 
        American Federation of State, County and Municipal Employees 
        Council 5, who separates from employment at the Willmar Regional 
        Treatment Center after the center ceases to be a state facility, 
        is governed by the enhanced separation package agreed to by the 
        state of Minnesota and the American Federation of State, County 
        and Municipal Employees Council 5 that is scheduled to take 
        effect August 1, 2005, even if the center ceases to be a state 
        facility before August 1, 2005.  This section is repealed on 
        August 1, 2005, or on the date the memorandum of understanding 
        that includes the enhanced separation package is ratified, 
        whichever occurs later. 
           Sec. 21.  [PENSION COVERAGE.] 
           (a) This section applies to an employee of the Willmar 
        Regional Treatment Center whose position at the treatment center 
        changes from state employment to Kandiyohi County employment 
        during the biennium ending June 30, 2007.  Notwithstanding any 
        law to the contrary, an employee to whom this section applies 
        remains a member of the Minnesota State Retirement System while 
        employed by Kandiyohi County unless the member elects to become 
        a member of the Public Employees Retirement Association. 
           (b) An election to become a member of the Public Employees 
        Retirement Association under this section must be made within 
        six months from the date the position changes from state 
        employment to Kandiyohi County employment, is irrevocable, and 
        must be made in a manner specified by the executive directors of 
        the Minnesota State Retirement System and the Public Employees 
        Retirement Association. 
           Sec. 22.  [EFFECTIVE DATE.] 
           (a) Sections 20 and 21 are effective the day following 
        final enactment. 
           (b) The sections in this article are effective August 1, 
        2005, unless otherwise specified. 

                                   ARTICLE 3 
                                 FAMILY SUPPORT
           Section 1.  Minnesota Statutes 2004, 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)(i) Effective 
        July 1, 2005, the commissioner of human services shall modify 
        the rate tables for child care centers published in Department 
        of Human Services Bulletin No. 03-68-07 so that in counties with 
        regional or statewide cells, the higher of the 100th percentile 
        of the 2002 market rate survey data or the rate currently 
        identified in the bulletin will be the maximum rate.  The rates 
        established in this clause will be considered as the previous 
        year's rates for purposes of the increase in item (iii), and 
        shall be compared to the 100th percentile of current market 
        rates. 
           (ii) For the period between July 1, 2005, and through the 
        full implementation of the new rates under item (iii), the rates 
        published in Department of Human Services Bulletin No. 03-68-07 
        as adjusted by item (i) shall remain in effect. 
           (iii) Beginning January 1, 2006, the maximum rate paid for 
        child care assistance in any county or multicounty region under 
        the child care fund shall be the lesser of the 75th percentile 
        rate for like-care arrangements in the county or multicounty 
        region as surveyed by the commissioner or the previous year's 
        rate for like-care arrangements in the county increased by 1.75 
        percent. 
           (iv) Rate changes shall be implemented for services 
        provided in March 2006 unless a participant eligibility 
        redetermination or a new provider agreement is completed between 
        January 1, 2006, and February 28, 2006.  
           As necessary, appropriate notice of adverse action must be 
        made according to Minnesota Rules, part 3400.0185, subparts 3 
        and 4. 
           New cases approved on or after January 1, 2006, shall have 
        the maximum rates under item (iii) implemented immediately. 
           (b) Not less than once every two years, the commissioner 
        shall survey rates charged by child care providers in Minnesota 
        to determine the 75th percentile for like-care arrangements in 
        counties.  When the commissioner determines that, using the 
        commissioner's established protocol, the number of providers 
        responding to the survey is too small to determine the 75th 
        percentile rate for like-care arrangements in a county or 
        multicounty region, the commissioner may establish the 75th 
        percentile maximum rate based on like-care arrangements in a 
        county, region, or category that the commissioner deems to be 
        similar. 
           (c) A rate which includes a special needs rate paid under 
        subdivision 3 may be in excess of the maximum rate allowed under 
        this subdivision.  
           (d) 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. 
           (e) 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. 2.  Minnesota Statutes 2004, section 119B.13, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [ABSENT DAYS.] Child care providers may not be 
        reimbursed for more than 25 absent days per child, excluding 
        holidays, in a fiscal year, or for more than ten consecutive 
        absent days, unless the child has a documented medical condition 
        that causes more frequent absences.  Documentation of medical 
        conditions must be on the forms and submitted according to the 
        timelines established by the commissioner. 
           [EFFECTIVE DATE.] This section is effective October 1, 2005.
           Sec. 3.  [245A.1445] [CHILD CARE PROVIDER TRAINING; DANGERS 
        OF SHAKING INFANTS AND YOUNG CHILDREN.] 
           The commissioner shall make available for viewing by all 
        licensed and legal nonlicensed child care providers a video 
        presentation on the dangers associated with shaking infants and 
        young children.  The video presentation shall be part of the 
        initial and annual training of licensed child care providers.  
        Legal nonlicensed child care providers may participate at their 
        option in a video presentation session offered under this 
        section.  The commissioner shall provide to child care providers 
        and interested individuals, at cost, copies of a video approved 
        by the commissioner of health under section 144.574 on the 
        dangers associated with shaking infants and young children. 
           Sec. 4.  Minnesota Statutes 2004, section 245A.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ANNUAL LICENSE OR CERTIFICATION FEE FOR PROGRAMS 
        WITH LICENSED CAPACITY.] (a) Child care centers and programs 
        with a licensed capacity shall pay an annual nonrefundable 
        license or certification fee based on the following schedule: 
            Licensed Capacity          Child Care         Other
                                       Center             Program
                                       License Fee        License Fee
             1 to 24 persons               $300   $225        $400
             25 to 49 persons              $450   $340        $600
             50 to 74 persons              $600   $450        $800
             75 to 99 persons              $750   $565      $1,000
             100 to 124 persons            $900   $675      $1,200
             125 to 149 persons          $1,200   $900      $1,400
             150 to 174 persons          $1,400 $1,050      $1,600
             175 to 199 persons          $1,600 $1,200      $1,800
             200 to 224 persons          $1,800 $1,350      $2,000
             225 or more persons         $2,000 $1,500      $2,500
           (b) A day training and habilitation program serving persons 
        with developmental disabilities or related conditions shall be 
        assessed a license fee based on the schedule in paragraph (a) 
        unless the license holder serves more than 50 percent of the 
        same persons at two or more locations in the community.  When a 
        day training and habilitation program serves more than 50 
        percent of the same persons in two or more locations in a 
        community, the day training and habilitation program shall pay a 
        license fee based on the licensed capacity of the largest 
        facility and the other facility or facilities shall be charged a 
        license fee based on a licensed capacity of a residential 
        program serving one to 24 persons. 
           Sec. 5.  Minnesota Statutes 2004, section 252.27, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [CONTRIBUTION AMOUNT.] (a) The natural or 
        adoptive parents of a minor child, including a child determined 
        eligible for medical assistance without consideration of 
        parental income, must contribute to the cost of services used by 
        making monthly payments on a sliding scale based on income, 
        unless the child is married or has been married, parental rights 
        have been terminated, or the child's adoption is subsidized 
        according to section 259.67 or through title IV-E of the Social 
        Security Act. 
           (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 375 545 percent of federal poverty guidelines, the 
        parental contribution shall be determined using a sliding fee 
        scale established by the commissioner of human services which 
        begins at one percent of adjusted gross income at 175 percent of 
        federal poverty guidelines and increases to 7.5 percent of 
        adjusted gross income for those with adjusted gross income up to 
        375 545 percent of federal poverty guidelines; 
           (3) if the adjusted gross income is greater than 375 545 
        percent of federal poverty guidelines and less than 675 percent 
        of federal poverty guidelines, the parental contribution shall 
        be 7.5 percent of adjusted gross income; 
           (4) if the adjusted gross income is equal to or greater 
        than 675 percent of federal poverty guidelines and less than 975 
        percent of federal poverty guidelines, the parental contribution 
        shall be determined using a sliding fee scale established by the 
        commissioner of human services which begins at 7.5 percent of 
        adjusted gross income at 675 percent of federal poverty 
        guidelines and increases to ten percent of adjusted gross income 
        for those with adjusted gross income up to 975 percent of 
        federal poverty guidelines; and 
           (5) if the adjusted gross income is equal to or greater 
        than 975 percent of federal poverty guidelines, the parental 
        contribution shall be 12.5 percent of adjusted gross income. 
           If the child lives with the parent, the annual adjusted 
        gross income is reduced by $2,400 prior to calculating the 
        parental contribution.  If the child resides in an institution 
        specified in section 256B.35, the parent is responsible for the 
        personal needs allowance specified under that section in 
        addition to the parental contribution determined under this 
        section.  The parental contribution is reduced by any amount 
        required to be paid directly to the child pursuant to a court 
        order, but only if actually paid. 
           (c) The household size to be used in determining the amount 
        of contribution under paragraph (b) includes natural and 
        adoptive parents and their dependents, including the child 
        receiving services.  Adjustments in the contribution amount due 
        to annual changes in the federal poverty guidelines shall be 
        implemented on the first day of July following publication of 
        the changes. 
           (d) For purposes of paragraph (b), "income" means the 
        adjusted gross income of the natural or adoptive parents 
        determined according to the previous year's federal tax form, 
        except, effective retroactive to July 1, 2003, taxable capital 
        gains to the extent the funds have been used to purchase a home 
        shall not be counted as income. 
           (e) The contribution shall be explained in writing to the 
        parents at the time eligibility for services is being 
        determined.  The contribution shall be made on a monthly basis 
        effective with the first month in which the child receives 
        services.  Annually upon redetermination or at termination of 
        eligibility, if the contribution exceeded the cost of services 
        provided, the local agency or the state shall reimburse that 
        excess amount to the parents, either by direct reimbursement if 
        the parent is no longer required to pay a contribution, or by a 
        reduction in or waiver of parental fees until the excess amount 
        is exhausted. 
           (f) The monthly contribution amount must be reviewed at 
        least every 12 months; when there is a change in household size; 
        and when there is a loss of or gain in income from one month to 
        another in excess of ten percent.  The local agency shall mail a 
        written notice 30 days in advance of the effective date of a 
        change in the contribution amount.  A decrease in the 
        contribution amount is effective in the month that the parent 
        verifies a reduction in income or change in household size. 
           (g) Parents of a minor child who do not live with each 
        other shall each pay the contribution required under paragraph 
        (a).  An amount equal to the annual court-ordered child support 
        payment actually paid on behalf of the child receiving services 
        shall be deducted from the adjusted gross income of the parent 
        making the payment prior to calculating the parental 
        contribution under paragraph (b). 
           (h) The contribution under paragraph (b) shall be increased 
        by an additional five percent if the local agency determines 
        that insurance coverage is available but not obtained for the 
        child.  For purposes of this section, "available" means the 
        insurance is a benefit of employment for a family member at an 
        annual cost of no more than five percent of the family's annual 
        income.  For purposes of this section, "insurance" means health 
        and accident insurance coverage, enrollment in a nonprofit 
        health service plan, health maintenance organization, 
        self-insured plan, or preferred provider organization. 
           Parents who have more than one child receiving services 
        shall not be required to pay more than the amount for the child 
        with the highest expenditures.  There shall be no resource 
        contribution from the parents.  The parent shall not be required 
        to pay a contribution in excess of the cost of the services 
        provided to the child, not counting payments made to school 
        districts for education-related services.  Notice of an increase 
        in fee payment must be given at least 30 days before the 
        increased fee is due.  
           (i) The contribution under paragraph (b) shall be reduced 
        by $300 per fiscal year if, in the 12 months prior to July 1: 
           (1) the parent applied for insurance for the child; 
           (2) the insurer denied insurance; 
           (3) the parents submitted a complaint or appeal, in writing 
        to the insurer, submitted a complaint or appeal, in writing, to 
        the commissioner of health or the commissioner of commerce, or 
        litigated the complaint or appeal; and 
           (4) as a result of the dispute, the insurer reversed its 
        decision and granted insurance. 
           For purposes of this section, "insurance" has the meaning 
        given in paragraph (h). 
           A parent who has requested a reduction in the contribution 
        amount under this paragraph shall submit proof in the form and 
        manner prescribed by the commissioner or county agency, 
        including, but not limited to, the insurer's denial of 
        insurance, the written letter or complaint of the parents, court 
        documents, and the written response of the insurer approving 
        insurance.  The determinations of the commissioner or county 
        agency under this paragraph are not rules subject to chapter 14. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 6.  Minnesota Statutes 2004, section 254A.035, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEMBERSHIP TERMS, COMPENSATION, REMOVAL AND 
        EXPIRATION.] The membership of this council shall be composed of 
        17 persons who are American Indians and who are appointed by the 
        commissioner.  The commissioner shall appoint one representative 
        from each of the following groups:  Red Lake Band of Chippewa 
        Indians; Fond du Lac Band, Minnesota Chippewa Tribe; Grand 
        Portage Band, Minnesota Chippewa Tribe; Leech Lake Band, 
        Minnesota Chippewa Tribe; Mille Lacs Band, Minnesota Chippewa 
        Tribe; Bois Forte Band, Minnesota Chippewa Tribe; White Earth 
        Band, Minnesota Chippewa Tribe; Lower Sioux Indian Reservation; 
        Prairie Island Sioux Indian Reservation; Shakopee Mdewakanton 
        Sioux Indian Reservation; Upper Sioux Indian Reservation; 
        International Falls Northern Range; Duluth Urban Indian 
        Community; and two representatives from the Minneapolis Urban 
        Indian Community and two from the St. Paul Urban Indian 
        Community.  The terms, compensation, and removal of American 
        Indian Advisory Council members shall be as provided in section 
        15.059.  The council expires June 30, 2001 2008.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        from June 30, 2001. 
           Sec. 7.  Minnesota Statutes 2004, section 254A.04, is 
        amended to read: 
           254A.04 [CITIZENS ADVISORY COUNCIL.] 
           There is hereby created an Alcohol and Other Drug Abuse 
        Advisory Council to advise the Department of Human Services 
        concerning the problems of alcohol and other drug dependency and 
        abuse, composed of ten members.  Five members shall be 
        individuals whose interests or training are in the field of 
        alcohol dependency and abuse; and five members whose interests 
        or training are in the field of dependency and abuse of drugs 
        other than alcohol.  The terms, compensation and removal of 
        members shall be as provided in section 15.059.  The council 
        expires June 30, 2001 2008.  The commissioner of human services 
        shall appoint members whose terms end in even-numbered years.  
        The commissioner of health shall appoint members whose terms end 
        in odd-numbered years. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from June 30, 2001. 
           Sec. 8.  Minnesota Statutes 2004, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 14b.  [AMERICAN INDIAN CHILD WELFARE PROJECTS.] (a) 
        The commissioner of human services may authorize projects to 
        test tribal delivery of child welfare services to American 
        Indian children and their parents and custodians living on the 
        reservation.  The commissioner has authority to solicit and 
        determine which tribes may participate in a project.  Grants may 
        be issued to Minnesota Indian tribes to support the projects.  
        The commissioner may waive existing state rules as needed to 
        accomplish the projects.  Notwithstanding section 626.556, the 
        commissioner may authorize projects to use alternative methods 
        of investigating and assessing reports of child maltreatment, 
        provided that the projects comply with the provisions of section 
        626.556 dealing with the rights of individuals who are subjects 
        of reports or investigations, including notice and appeal rights 
        and data practices requirements.  The commissioner may seek any 
        federal approvals necessary to carry out the projects as well as 
        seek and use any funds available to the commissioner, including 
        use of federal funds, foundation funds, existing grant funds, 
        and other funds.  The commissioner is authorized to advance 
        state funds as necessary to operate the projects.  Federal 
        reimbursement applicable to the projects is appropriated to the 
        commissioner for the purposes of the projects.  The projects 
        must be required to address responsibility for safety, 
        permanency, and well-being of children. 
           (b) For the purposes of this section, "American Indian 
        child" means a person under 18 years of age who is a tribal 
        member or eligible for membership in one of the tribes chosen 
        for a project under this subdivision and who is residing on the 
        reservation of that tribe. 
           (c) In order to qualify for an American Indian child 
        welfare project, a tribe must: 
           (1) be one of the existing tribes with reservation land in 
        Minnesota; 
           (2) have a tribal court with jurisdiction over child 
        custody proceedings; 
           (3) have a substantial number of children for whom 
        determinations of maltreatment have occurred; 
           (4) have capacity to respond to reports of abuse and 
        neglect under section 626.556; 
           (5) provide a wide range of services to families in need of 
        child welfare services; and 
           (6) have a tribal-state title IV-E agreement in effect. 
           (d) Grants awarded under this section may be used for the 
        nonfederal costs of providing child welfare services to American 
        Indian children on the tribe's reservation, including costs 
        associated with: 
           (1) assessment and prevention of child abuse and neglect; 
           (2) family preservation; 
           (3) facilitative, supportive, and reunification services; 
           (4) out-of-home placement for children removed from the 
        home for child protective purposes; and 
           (5) other activities and services approved by the 
        commissioner that further the goals of providing safety, 
        permanency, and well-being of American Indian children. 
           (e) When a tribe has initiated a project and has been 
        approved by the commissioner to assume child welfare 
        responsibilities for American Indian children of that tribe 
        under this section, the affected county social service agency is 
        relieved of responsibility for responding to reports of abuse 
        and neglect under section 626.556 for those children during the 
        time within which the tribal project is in effect and funded.  
        The commissioner shall work with tribes and affected counties to 
        develop procedures for data collection, evaluation, and 
        clarification of ongoing role and financial responsibilities of 
        the county and tribe for child welfare services prior to 
        initiation of the project.  Children who have not been 
        identified by the tribe as participating in the project shall 
        remain the responsibility of the county.  Nothing in this 
        section shall alter responsibilities of the county for law 
        enforcement or court services.  
           (f) The commissioner shall collect information on outcomes 
        relating to child safety, permanency, and well-being of American 
        Indian children who are served in the projects.  Participating 
        tribes must provide information to the state in a format and 
        completeness deemed acceptable by the state to meet state and 
        federal reporting requirements. 
           Sec. 9.  Minnesota Statutes 2004, section 256B.0924, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY.] Persons are eligible to receive 
        targeted case management services under this section if the 
        requirements in paragraphs (a) and (b) are met. 
           (a) The person must be assessed and determined by the local 
        county agency to: 
           (1) be age 18 or older; 
           (2) be receiving medical assistance; 
           (3) have significant functional limitations; and 
           (4) be in need of service coordination to attain or 
        maintain living in an integrated community setting. 
           (b) The person must be a vulnerable adult in need of adult 
        protection as defined in section 626.5572, or is an adult with 
        mental retardation as defined in section 252A.02, subdivision 2, 
        or a related condition as defined in section 252.27, subdivision 
        1a, and is not receiving home and community-based waiver 
        services, or is an adult who lacks a permanent residence and who 
        has been without a permanent residence for at least one year or 
        on at least four occasions in the last three years. 
           Sec. 10.  Minnesota Statutes 2004, section 256B.093, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATE TRAUMATIC BRAIN INJURY PROGRAM.] The 
        commissioner of human services shall: 
           (1) maintain a statewide traumatic brain injury program; 
           (2) supervise and coordinate services and policies for 
        persons with traumatic brain injuries; 
           (3) contract with qualified agencies or employ staff to 
        provide statewide administrative case management and 
        consultation; 
           (4) maintain an advisory committee to provide 
        recommendations in reports to the commissioner regarding program 
        and service needs of persons with traumatic brain injuries; 
           (5) investigate the need for the development of rules or 
        statutes for the traumatic brain injury home and community-based 
        services waiver; 
           (6) investigate present and potential models of service 
        coordination which can be delivered at the local level; and 
           (7) the advisory committee required by clause (4) must 
        consist of no fewer than ten members and no more than 30 
        members.  The commissioner shall appoint all advisory committee 
        members to one- or two-year terms and appoint one member as 
        chair.  Notwithstanding section 15.059, subdivision 5, the 
        advisory committee does not terminate until June 30, 2005 2008. 
           Sec. 11.  Minnesota Statutes 2004, section 256D.06, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ELIGIBILITY; REQUIREMENTS.] (a) Any applicant, 
        otherwise eligible for general assistance and possibly eligible 
        for maintenance benefits from any other source shall (a) (1) 
        make application for those benefits within 30 days of the 
        general assistance application; and (b) (2) execute an interim 
        assistance authorization agreement on a form as directed by the 
        commissioner.  
           (b) The commissioner shall review a denial of an 
        application for other maintenance benefits and may require a 
        recipient of general assistance to file an appeal of the denial 
        if appropriate.  If found eligible for benefits from other 
        sources, and a payment received from another source relates to 
        the period during which general assistance was also being 
        received, the recipient shall be required to reimburse the 
        county agency for the interim assistance paid.  Reimbursement 
        shall not exceed the amount of general assistance paid during 
        the time period to which the other maintenance benefits apply 
        and shall not exceed the state standard applicable to that time 
        period. 
           (c) The commissioner shall adopt rules authorizing county 
        agencies or other client representatives to retain from the 
        amount recovered under an interim assistance agreement 25 
        percent plus actual reasonable fees, costs, and disbursements of 
        appeals and litigation, of providing special assistance to the 
        recipient in processing the recipient's claim for maintenance 
        benefits from another source.  The may contract with the county 
        agencies, qualified agencies, organizations, or persons to 
        provide advocacy and support services to process claims for 
        federal disability benefits for applicants or recipients of 
        services or benefits supervised by the commissioner using money 
        retained under this section shall be from the state share of the 
        recovery.  The commissioner or the county agency may contract 
        with qualified persons to provide the special assistance. 
           (d) The rules adopted by the commissioner shall include the 
        may provide methods by which county agencies shall identify, 
        refer, and assist recipients who may be eligible for benefits 
        under federal programs for the disabled.  This subdivision does 
        not require repayment of per diem payments made to shelters for 
        battered women pursuant to section 256D.05, subdivision 3. 
           (e) The total amount of interim assistance recoveries 
        retained under this section for advocacy, support, and claim 
        processing services shall not exceed 35 percent of the interim 
        assistance recoveries in the prior fiscal year. 
           Sec. 12.  Minnesota Statutes 2004, section 256D.06, 
        subdivision 7, is amended to read: 
           Subd. 7.  [SSI CONVERSIONS AND BACK CLAIMS.] (a)  [SSI 
        CONVERSIONS.] The commissioner of human services shall contract 
        with agencies or organizations capable of ensuring that clients 
        who are presently receiving assistance under sections 256D.01 to 
        256D.21, and who may be eligible for benefits under the federal 
        Supplemental Security Income program, apply and, when eligible, 
        are converted to the federal income assistance program and made 
        eligible for health care benefits under the medical assistance 
        program.  The commissioner shall ensure that money owing to the 
        state under interim assistance agreements is collected.  
           (b)  [BACK CLAIMS FOR FEDERAL HEALTH CARE BENEFITS.] The 
        commissioner shall also directly or through contract implement 
        procedures for collecting federal Medicare and medical 
        assistance funds for which clients converted to SSI are 
        retroactively eligible. 
           (c)  [ADDITIONAL REQUIREMENTS.] The commissioner shall 
        begin contracting contract with agencies to ensure 
        implementation of this section within 14 days after April 29, 
        1992.  County contracts with providers for residential services 
        shall include the requirement that providers screen residents 
        who may be eligible for federal benefits and provide that 
        information to the local agency.  The commissioner shall modify 
        the MAXIS computer system to provide information on clients who 
        have been on general assistance for two years or longer.  The 
        list of clients shall be provided to local services for 
        screening under this section. 
           (d)  [REPORT.] The commissioner shall report to the 
        legislature by January 15, 1993, on the implementation of this 
        section.  The report shall contain information on the following: 
           (1) the number of clients converted from general assistance 
        to SSI, by county; 
           (2) information on the organizations involved; 
           (3) the amount of money collected through interim 
        assistance agreements; 
           (4) the amount of money collected in federal Medicare or 
        Medicaid funds; 
           (5) problems encountered in processing conversions and back 
        claims; and 
           (6) recommended changes to enhance recoveries and maximize 
        the receipt of federal money in the most efficient way possible. 
           Sec. 13.  Minnesota Statutes 2004, section 256I.05, 
        subdivision 1e, is amended to read: 
           Subd. 1e.  [SUPPLEMENTARY RATE FOR CERTAIN FACILITIES.] 
        Notwithstanding the provisions of subdivisions 1a and 1c, 
        beginning July 1, 2001 2005, a county agency shall negotiate a 
        supplementary rate in addition to the rate specified in 
        subdivision 1, equal to 46 percent of the amount specified in 
        subdivision 1a not to exceed $700 per month, including any 
        legislatively authorized inflationary adjustments, for a group 
        residential housing provider that: 
           (1) is located in Hennepin County and has had a group 
        residential housing contract with the county since June 1996; 
           (2) operates in three separate locations a 71-bed 75-bed 
        facility, a 50-bed facility, and two 40-bed facilities a 26-bed 
        facility; and 
           (3) serves a chemically dependent clientele, providing 24 
        hours per day supervision and limiting a resident's maximum 
        length of stay to 13 months out of a consecutive 24-month period.
           Sec. 14.  Minnesota Statutes 2004, section 256J.37, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [TREATMENT OF SUPPLEMENTAL SECURITY INCOME.] 
        Effective July 1, 2003, The county shall reduce the cash portion 
        of the MFIP grant by up to $125 per for an MFIP assistance unit 
        that includes one or more SSI recipient recipients who 
        resides reside in the household, and who would otherwise be 
        included in the MFIP assistance unit under section 256J.24, 
        subdivision 2, but is are excluded solely due to the SSI 
        recipient status under section 256J.24, subdivision 3, paragraph 
        (a), clause (1).  If the SSI recipient receives or recipients 
        receive less than $125 of SSI, only the amount received shall be 
        used in calculating the MFIP cash assistance payment.  This 
        provision does not apply to relative caregivers who could elect 
        to be included in the MFIP assistance unit under section 
        256J.24, subdivision 4, unless the caregiver's children or 
        stepchildren are included in the MFIP assistance unit. 
           [EFFECTIVE DATE.] This section is effective the first day 
        of the second month after the date of approval by the United 
        States Department of Agriculture. 
           Sec. 15.  Minnesota Statutes 2004, 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 for family violence victims; and 
           (9) explains the probationary employment periods new 
        employees may serve after being hired and any assistance with 
        job retention services that may be available. 
           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. 16.  [256K.26] [LONG-TERM HOMELESS SUPPORTIVE 
        SERVICES.] 
           Subdivision 1.  [ESTABLISHMENT AND PURPOSE.] The 
        commissioner shall establish the long-term homeless supportive 
        services fund to provide integrated services needed to stabilize 
        individuals, families, and youth living in supportive housing 
        developed to further the goals set forth in Laws 2003, chapter 
        128, article 15, section 9. 
           Subd. 2.  [IMPLEMENTATION.] The commissioner, in 
        consultation with the commissioners of the Department of 
        Corrections and the Minnesota Housing Finance Agency, counties, 
        providers and funders of supportive housing and services, shall 
        develop application requirements and make funds available 
        according to this section, with the goal of providing maximum 
        flexibility in program design. 
           Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given: 
           (1) "long-term homelessness" means lacking a permanent 
        place to live continuously for one year or more or at least four 
        times in the past three years; and 
           (2) "household" means an individual, family, or 
        unaccompanied minor experiencing long-term homelessness. 
           Subd. 4.  [COUNTY ELIGIBILITY.] Counties are eligible for 
        funding under this section.  Priority will be given to proposals 
        submitted on behalf of multicounty partnerships. 
           Subd. 5.  [CONTENT OF PROPOSALS.] Proposals will be 
        evaluated on the extent to which they: 
           (1) include partnerships with providers of services or 
        other partners; 
           (2) develop strategies to enhance housing stability for 
        people experiencing long-term homelessness by integrating 
        services and establishing consistent services and procedures 
        across jurisdictions as appropriate; 
           (3) evidence a commitment to working with the commissioners 
        of human services, corrections, and the Housing Finance Agency 
        to identify appropriate households to be served under this 
        section and serve households as defined in subdivision 3.  The 
        commissioner may also set criteria for serving people at 
        significant risk of experiencing long-term homelessness, with a 
        priority on serving families with minor children; 
           (4) ensure that projects make maximum use of mainstream 
        resources, including employment, social, and health services, 
        and leverage additional public and private resources in order to 
        serve the maximum number of households; 
           (5) demonstrate cost-effectiveness by identifying and 
        prioritizing those services most necessary for housing 
        stability; and 
           (6) evaluate and report on outcomes of the projects 
        according to protocols developed by the commissioner of human 
        services in cooperation with the commissioners of corrections 
        and the Housing Finance Agency.  Evaluation would include 
        methods for determining the quality of the integrated service 
        approach, improvement in outcomes, cost savings, or reduction in 
        service disparities that may result. 
           Subd. 6.  [OUTCOMES.] Projects will be selected to further 
        the following outcomes: 
           (1) reduce the number of Minnesota individuals and families 
        that experience long-term homelessness; 
           (2) increase the number of housing opportunities with 
        supportive services; 
           (3) develop integrated, cost-effective service models that 
        address the multiple barriers to obtaining housing stability 
        faced by people experiencing long-term homelessness, including 
        abuse, neglect, chemical dependency, disability, chronic health 
        problems, or other factors including ethnicity and race that may 
        result in poor outcomes or service disparities; 
           (4) encourage partnerships among counties, community 
        agencies, schools, and other providers so that the service 
        delivery system is seamless for people experiencing long-term 
        homelessness; 
           (5) increase employability, self-sufficiency, and other 
        social outcomes for individuals and families experiencing 
        long-term homelessness; and 
           (6) reduce inappropriate use of emergency health care, 
        shelter, chemical dependency, foster care, child protection, 
        corrections, and similar services used by people experiencing 
        long-term homelessness. 
           Subd. 7.  [ELIGIBLE SERVICES.] Services eligible for 
        funding under this section are all services needed to maintain 
        households in permanent supportive housing, as determined by the 
        county or counties administering the project or projects. 
           Subd. 8.  [FAMILIES EXPERIENCING LONG-TERM 
        HOMELESSNESS.] The commissioner, in consultation with the 
        commissioners of housing finance and corrections, shall assess 
        whether the definition of long-term homelessness impacts the 
        ability of families with minor children experiencing 
        homelessness to obtain services necessary to support housing 
        stability. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 17.  Minnesota Statutes 2004, section 260.835, is 
        amended to read: 
           260.835 [AMERICAN INDIAN CHILD WELFARE ADVISORY COUNCIL.] 
           Subdivision 1.  [CREATION.] The commissioner shall appoint 
        an American Indian Advisory Council to help formulate policies 
        and procedures relating to Indian child welfare services and to 
        make recommendations regarding approval of grants provided under 
        section 260.785, subdivisions 1, 2, and 3.  The council shall 
        consist of 17 members appointed by the commissioner and must 
        include representatives of each of the 11 Minnesota reservations 
        who are authorized by tribal resolution, one representative from 
        the Duluth Urban Indian Community, three representatives from 
        the Minneapolis Urban Indian Community, and two representatives 
        from the St. Paul Urban Indian Community.  Representatives from 
        the urban Indian communities must be selected through an open 
        appointments process under section 15.0597.  The terms, 
        compensation, and removal of American Indian Child Welfare 
        Advisory Council members shall be as provided in section 15.059. 
           Subd. 2.  [EXPIRATION.] Notwithstanding section 15.059, 
        subdivision 5, the American Indian Child Welfare Advisory 
        Council expires June 30, 2008. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from June 30, 2003. 
           Sec. 18.  [RECOMMENDATIONS ON STANDARD STATEWIDE CHILD CARE 
        LICENSE FEE; REPORT.] 
           The commissioner of human services in conjunction with the 
        Minnesota Association of County Social Service Administrators 
        and the Minnesota Licensed Family Child Care Association, shall 
        examine the feasibility of a statewide standard for setting 
        license fees and background study fees for licensed family child 
        care providers, and shall make recommendations on the 
        feasibility of a statewide standard for setting license fees and 
        background study fees in a report to the chairs of the senate 
        and house of representatives committees having jurisdiction over 
        child care issues.  The report is due January 15, 2006. 
           Sec. 19.  [PARENT FEE SCHEDULE.] 
           (a) Notwithstanding Minnesota Rules, part 3400.0100, 
        subpart 4, the parent fee schedule is as follows: 
        Income Range (as a          Co-payment (as a 
        percent of the federal      percentage of adjusted 
        poverty guidelines)         gross income) 
              0-74.99%              $0/month 
          75.00-99.99%              $5/month 
        100.00-104.99%              3.23% 
        105.00-109.99%              3.23% 
        110.00-114.99%              3.23% 
        115.00-119.99%              3.23% 
        120.00-124.99%              3.60% 
        125.00-129.99%              3.60% 
        130.00-134.99%              3.60% 
        135.00-139.99%              3.60% 
        140.00-144.99%              3.97% 
        145.00-149.99%              3.97% 
        150.00-154.99%              3.97% 
        155.00-159.99%              4.75% 
        160.00-164.99%              4.75% 
        165.00-169.99%              5.51% 
        170.00-174.99%              5.88% 
        175.00-179.99%              6.25% 
        180.00-184.99%              6.98% 
        185.00-189.99%              7.35% 
        190.00-194.99%              7.72% 
        195.00-199.99%              8.45% 
        200.00-204.99%              9.92% 
        205.00-209.99%              12.22% 
        210.00-214.99%              12.65% 
        215.00-219.99%              13.09% 
        220.00-224.99%              13.52% 
        225.00-229.99%              14.35% 
        230.00-234.99%              15.71% 
        235.00-239.99%              16.28% 
        240.00-244.99%              17.37% 
        245.00-249.99%              18.00% 
                  250%              ineligible 
           (b) This schedule is effective January 1, 2006, and shall 
        be implemented at or before the participant's next eligibility 
        redetermination.  The parent fee schedule in Laws 2003, First 
        Special Session chapter 14, article 9, section 36, shall remain 
        in effect until the schedule in this section is fully 
        implemented. 
           (c) A family's monthly co-payment fee is the fixed 
        percentage established for the income range multiplied by the 
        highest possible income within that income range. 
           Sec. 20.  [REPEALER.] 
           (a) Laws 2003, First Special Session chapter 14, article 9, 
        section 34, is repealed. 
           (b) Minnesota Statutes 2004, sections 119B.074, 256D.54, 
        subdivision 3, and 256M.40, subdivision 2, are repealed. 
           Sec. 21.  [EFFECTIVE DATE.] 
           The sections in this article are effective August 1, 2005, 
        unless otherwise specified. 

                                   ARTICLE 4 
                               HEALTH IMPACT FEE 
           Section 1.  [16A.725] [HEALTH IMPACT FUND AND FUND 
        REIMBURSEMENTS.] 
           Subdivision 1.  [HEALTH IMPACT FUND.] There is created in 
        the state treasury a health impact fund to which must be 
        credited all revenue from the health impact fee under section 
        256.9658 and any floor stocks fee enacted into law. 
           Subd. 2.  [CERTIFIED TOBACCO EXPENDITURES.] By April 30 of 
        each year, the commissioner of human services shall certify to 
        the commissioner of finance the state share, by fund, of tobacco 
        use attributable costs for the previous fiscal year in Minnesota 
        health care programs, including medical assistance, general 
        assistance medical care, and MinnesotaCare, or other applicable 
        expenditures. 
           Subd. 3.  [FUND REIMBURSEMENTS.] (a) Each fiscal year, the 
        commissioner of finance shall first transfer from the health 
        impact fund to the general fund an amount sufficient to offset 
        the general fund cost of the certified expenditures under 
        subdivision 2 or the balance of the fund, whichever is less. 
           (b) If any balance remains in the health impact fund after 
        the transfer in paragraph (a), the commissioner of finance shall 
        transfer to the health care access fund the amount sufficient to 
        offset the health care access fund cost of the certified 
        expenditures in subdivision 2, or the balance of the fund, 
        whichever is less. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 2.  [256.9658] [TOBACCO HEALTH IMPACT FEE.] 
           Subdivision 1.  [PURPOSE.] A tobacco use health impact fee 
        is imposed on and collected from cigarette distributors and 
        tobacco products distributors to recover for the state health 
        costs related to or caused by tobacco use and to reduce tobacco 
        use, particularly by youths. 
           Subd. 2.  [DEFINITIONS.] The definitions under section 
        297F.01 apply to this section. 
           Subd. 3.  [FEE IMPOSED.] (a) A fee is imposed upon the sale 
        of cigarettes in this state, upon having cigarettes in 
        possession in this state with intent to sell, upon any person 
        engaged in business as a distributor, and upon the use or 
        storage by consumers of cigarettes.  The fee is imposed at the 
        following rates: 
           (1) on cigarettes weighing not more than three pounds per 
        thousand, 37.5 mills on each cigarette; and 
           (2) on cigarettes weighing more than three pounds per 
        thousand, 75 mills on each cigarette. 
           (b) A fee is imposed upon all tobacco products in this 
        state and upon any person engaged in business as a distributor 
        in an amount equal to the liability for tax under section 
        297F.05, subdivision 3, or on a consumer of tobacco products 
        equal to the tax under section 297F.05, subdivision 4.  
        Liability for the fee is in addition to the tax under section 
        297F.05, subdivision 3 or 4. 
           Subd. 4.  [PAYMENT.] A distributor must pay the fee at the 
        same time and in the same manner as provided for payment of tax 
        under chapter 297F. 
           Subd. 5.  [FEE ON USE OF UNSTAMPED CIGARETTES.] Any person, 
        other than a distributor, that purchases or possesses cigarettes 
        that have not been stamped and on which the fee imposed under 
        this section has not been paid is liable for the fee under this 
        section on the possession or use of those cigarettes. 
           Subd. 6.  [ADMINISTRATION.] The audit, assessment, 
        interest, appeal, refund, penalty, enforcement, administrative, 
        and collection provisions of chapters 270C and 297F apply to the 
        fee imposed under this section. 
           Subd. 7.  [CIGARETTE STAMP.] (a) The stamp in section 
        297F.08 must be affixed to each package and is prima facie 
        evidence that the fee imposed by this section has been paid. 
           (b) Notwithstanding any other provisions of this section, 
        the fee due on the return is based upon actual stamps purchased 
        during the reporting period. 
           Subd. 8.  [LICENSE REVOCATION.] The commissioner of revenue 
        may revoke or suspend the license of a distributor for failure 
        to pay the fee or otherwise comply with the requirements under 
        this section.  The provisions and procedures under section 
        297F.04 apply to a suspension or revocation under this 
        subdivision. 
           Subd. 9.  [DEPOSIT OF REVENUES.] The commissioner of 
        revenue shall deposit the revenues from the fee under this 
        section in the state treasury and credit them to the health 
        impact fund. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 3.  Minnesota Statutes 2004, section 297F.185, is 
        amended to read: 
           297F.185 [REVOCATION OF SALES AND USE TAX PERMITS.] 
           (a) If a retailer purchases for resale from an unlicensed 
        seller more than 20,000 cigarettes or $500 or more worth of 
        tobacco products, the commissioner may revoke the person's sales 
        and use tax permit as provided in section 297A.86. 
           (b) The commissioner may revoke a retailer's sales or use 
        permit as provided in section 297A.86 if the retailer, directly 
        or indirectly, purchases for resale cigarettes without the 
        proper stamp affixed. 
           [EFFECTIVE DATE.] This section is effective for violations 
        occurring on or after August 1, 2005. 
           Sec. 4.  Minnesota Statutes 2004, section 325D.32, 
        subdivision 9, is amended to read: 
           Subd. 9.  [BASIC COST OF CIGARETTES.] "Basic cost of 
        cigarettes" means the gross invoice cost of cigarettes to the 
        wholesaler or retailer plus the full face value of any stamps 
        which may be required by any cigarette tax or fee act of this 
        state, unless included by the manufacturer in the list price.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 5.  [FLOOR STOCKS FEE.] 
           Subdivision 1.  [CIGARETTES.] A floor stocks cigarette fee 
        is imposed on every person engaged in the business in this state 
        as a distributor, retailer, subjobber, vendor, manufacturer, or 
        manufacturer's representative of cigarettes, on the stamped 
        cigarettes and unaffixed stamps in the person's possession or 
        under the person's control at 12:01 a.m. on August 1, 2005.  The 
        fee is imposed at the following rates: 
           (1) on cigarettes weighing not more than three pounds per 
        thousand, 37.5 mills on each cigarette; and 
           (2) on cigarettes weighing more than three pounds per 
        thousand, 75 mills on each cigarette. 
           Each distributor, on or before August 10, 2005, shall file 
        a return with the commissioner of revenue, in the form the 
        commissioner prescribes, showing the stamped cigarettes and 
        unaffixed stamps on hand at 12:01 a.m. on August 1, 2005, and 
        the amount of fee due on the cigarettes and unaffixed stamps.  
        Each retailer, subjobber, vendor, manufacturer, or 
        manufacturer's representative, on or before August 10, 2005, 
        shall file a return with the commissioner of revenue, in the 
        form the commissioner prescribes, showing the cigarettes on hand 
        at 12:01 a.m. on August 1, 2005, and the amount of fee due on 
        the cigarettes.  The fee imposed by this section is due and 
        payable on or before September 7, 2005, and after that date 
        bears interest at the rate of one percent per month. 
           Subd. 2.  [AUDIT AND ENFORCEMENT.] The fee imposed by this 
        section is subject to the audit, assessment, interest, appeal, 
        refund, penalty, enforcement, administrative, and collection 
        provisions of Minnesota Statutes, chapters 270C and 297F.  The 
        commissioner of revenue may require a distributor to receive and 
        maintain copies of floor stocks fee returns filed by all persons 
        requesting a credit for returned cigarettes. 
           Subd. 3.  [DEPOSIT OF PROCEEDS.] The commissioner of 
        revenue shall deposit the revenues from the fee under this 
        section in the state treasury and credit them to the health 
        impact fund. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 6.  [TOBACCO PRODUCTS FLOOR STOCKS FEE.] 
           A floor stocks fee is imposed upon every person engaged in 
        business in this state as a distributor of tobacco products, at 
        the rate of 35 percent of the wholesale sales price of each 
        tobacco product in the distributor's possession or under the 
        distributor's control at 12:01 a.m. on August 1, 2005.  Each 
        distributor, by August 10, 2005, shall file a return with the 
        commissioner, in the form the commissioner prescribes, showing 
        the tobacco products on hand at 12:01 a.m. on August 1, 2005, 
        and the amount of fees due on them.  The fee imposed by this 
        section is due and payable by September 7, 2005, and after that 
        bears interest at the rate of one percent a month. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 

                                   ARTICLE 5 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2004, section 148D.220, 
        subdivision 8, as added by Laws 2005, chapter 147, article 1, 
        section 49, is amended to read: 
           Subd. 8.  [SEXUAL CONDUCT WITH A FORMER CLIENT.] (a) A 
        social worker who has engaged in diagnosing, counseling, or 
        treating a client with mental, emotional, or behavioral 
        disorders must not engage in or suggest sexual conduct with the 
        former client under any circumstances for a period of two years 
        following the termination of the professional relationship.  
        After two years following the termination of the professional 
        relationship, a social worker who has engaged in diagnosing, 
        counseling, or treating a client with mental, emotional, or 
        behavioral disorder must not engage in or suggest sexual conduct 
        with the former client under any circumstances unless: 
           (1) the social worker did not intentionally or 
        unintentionally coerce, exploit, deceive, or manipulate the 
        former client at any time; 
           (2) the social worker did not represent to the former 
        client that sexual conduct with the social worker is consistent 
        with or part of the client's treatment; 
           (3) the social worker's sexual conduct was not detrimental 
        to the former client at any time; 
           (4) the former client is not emotionally dependent on the 
        social worker and does not continue to relate to the social 
        worker as a client; and 
           (5) the social worker is not emotionally dependent on the 
        client and does not continue to relate to the former client as a 
        social worker. 
           (b) If there is an alleged violation of paragraph (a), the 
        social worker assumes the full burden of demonstrating to the 
        board that the social worker did not intentionally or 
        unintentionally coerce, exploit, deceive, or manipulate the 
        client, and the social worker's sexual conduct was not 
        detrimental to the client at any time.  Upon request, a social 
        worker must provide information to the board addressing: 
           (1) the amount of time that has passed since termination of 
        services; 
           (2) the duration, intensity, and nature of services; 
           (3) the circumstances of termination of services; 
           (4) the former client's emotional, mental, and behavioral 
        history; 
           (5) the former client's current emotional, mental, and 
        behavioral status; 
           (6) the likelihood of adverse impact on the former client; 
        and 
           (7) the existence of actions, conduct, or statements made 
        by the social worker during the course of services suggesting or 
        inviting the possibility of a sexual relationship with the 
        client following termination of services. 
           (c) A social worker who has provided social work services 
        other than those described in paragraph (a) to a client must not 
        engage in or suggest sexual conduct with the former client if a 
        reasonable and prudent social worker would conclude after 
        appropriate assessment that engaging in such behavior with the 
        former client would create an unacceptable risk of harm to the 
        former client. 
           Sec. 2.  [151.55] [CANCER DRUG REPOSITORY PROGRAM.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given. 
           (b) "Board" means the Board of Pharmacy.  
           (c) "Cancer drug" means a prescription drug that is used to 
        treat:  
           (1) cancer or the side effects of cancer; or 
           (2) the side effects of any prescription drug that is used 
        to treat cancer or the side effects of cancer.  
           (d) "Cancer drug repository" means a medical facility or 
        pharmacy that has notified the board of its election to 
        participate in the cancer drug repository program.  
           (e) "Cancer supply" or "supplies" means prescription and 
        nonprescription cancer supplies needed to administer a cancer 
        drug.  
           (f) "Dispense" has the meaning given in section 151.01, 
        subdivision 30.  
           (g) "Distribute" means to deliver, other than by 
        administering or dispensing.  
           (h) "Donor" means an individual and not a drug manufacturer 
        or wholesale drug distributor who donates a cancer drug or 
        supply according to the requirements of the cancer drug 
        repository program.  
           (i) "Medical facility" means an institution defined in 
        section 144.50, subdivision 2.  
           (j) "Medical supplies" means any prescription and 
        nonprescription medical supply needed to administer a cancer 
        drug.  
           (k) "Pharmacist" has the meaning given in section 151.01, 
        subdivision 3.  
           (l) "Pharmacy" means any pharmacy registered with the Board 
        of Pharmacy according to section 151.19, subdivision 1.  
           (m) "Practitioner" has the meaning given in section 151.01, 
        subdivision 23.  
           (n) "Prescription drug" means a legend drug as defined in 
        section 151.01, subdivision 17.  
           (o) "Side effects of cancer" means symptoms of cancer.  
           (p) "Single-unit-dose packaging" means a single-unit 
        container for articles intended for administration as a single 
        dose, direct from the container. 
           (q) "Tamper-evident unit dose packaging" means a container 
        within which a drug is sealed so that the contents cannot be 
        opened without obvious destruction of the seal.  
           Subd. 2.  [ESTABLISHMENT.] The Board of Pharmacy shall 
        establish and maintain a cancer drug repository program, under 
        which any person may donate a cancer drug or supply for use by 
        an individual who meets the eligibility criteria specified under 
        subdivision 4.  Under the program, donations may be made on the 
        premises of a medical facility or pharmacy that elects to 
        participate in the program and meets the requirements specified 
        under subdivision 3.  
           Subd. 3.  [REQUIREMENTS FOR PARTICIPATION BY PHARMACIES AND 
        MEDICAL FACILITIES.] (a) To be eligible for participation in the 
        cancer drug repository program, a pharmacy or medical facility 
        must be licensed and in compliance with all applicable federal 
        and state laws and administrative rules.  
           (b) Participation in the cancer drug repository program is 
        voluntary.  A pharmacy or medical facility may elect to 
        participate in the cancer drug repository program by submitting 
        the following information to the board, in a form provided by 
        the board:  
           (1) the name, street address, and telephone number of the 
        pharmacy or medical facility; 
           (2) the name and telephone number of a pharmacist who is 
        employed by or under contract with the pharmacy or medical 
        facility, or other contact person who is familiar with the 
        pharmacy's or medical facility's participation in the cancer 
        drug repository program; and 
           (3) a statement indicating that the pharmacy or medical 
        facility meets the eligibility requirements under paragraph (a) 
        and the chosen level of participation under paragraph (c). 
           (c) A pharmacy or medical facility may fully participate in 
        the cancer drug repository program by accepting, storing, and 
        dispensing or administering donated drugs and supplies, or may 
        limit its participation to only accepting and storing donated 
        drugs and supplies.  If a pharmacy or facility chooses to limit 
        its participation, the pharmacy or facility shall distribute any 
        donated drugs to a fully participating cancer drug repository 
        according to subdivision 8.  
           (d) A pharmacy or medical facility may withdraw from 
        participation in the cancer drug repository program at any time 
        upon notification to the board.  A notice to withdraw from 
        participation may be given by telephone or regular mail.  
           Subd. 4.  [INDIVIDUAL ELIGIBILITY REQUIREMENTS.] Any 
        Minnesota resident who is diagnosed with cancer is eligible to 
        receive drugs or supplies under the cancer drug repository 
        program.  Drugs and supplies shall be dispensed or administered 
        according to the priority given under subdivision 6, paragraph 
        (d).  
           Subd. 5.  [DONATIONS OF CANCER DRUGS AND SUPPLIES.] (a) Any 
        one of the following persons may donate legally obtained cancer 
        drugs or supplies to a cancer drug repository, if the drugs or 
        supplies meet the requirements under paragraph (b) or (c) as 
        determined by a pharmacist who is employed by or under contract 
        with a cancer drug repository:  
           (1) an individual who is 18 years old or older; or 
           (2) a pharmacy, medical facility, drug manufacturer, or 
        wholesale drug distributor, if the donated drugs have not been 
        previously dispensed.  
           (b) A cancer drug is eligible for donation under the cancer 
        drug repository program only if the following requirements are 
        met:  
           (1) the donation is accompanied by a cancer drug repository 
        donor form described under paragraph (d) that is signed by the 
        person making the donation or that person's authorized 
        representative; 
           (2) the drug's expiration date is at least six months later 
        than the date that the drug was donated; 
           (3) the drug is in its original, unopened, tamper-evident 
        unit dose packaging that includes the drug's lot number and 
        expiration date.  Single-unit dose drugs may be accepted if the 
        single-unit-dose packaging is unopened; and 
           (4) the drug is not adulterated or misbranded.  
           (c) Cancer supplies are eligible for donation under the 
        cancer drug repository program only if the following 
        requirements are met:  
           (1) the supplies are not adulterated or misbranded; 
           (2) the supplies are in their original, unopened, sealed 
        packaging; and 
           (3) the donation is accompanied by a cancer drug repository 
        donor form described under paragraph (d) that is signed by the 
        person making the donation or that person's authorized 
        representative.  
           (d) The cancer drug repository donor form must be provided 
        by the board and shall state that to the best of the donor's 
        knowledge the donated drug or supply has been properly stored 
        and that the drug or supply has never been opened, used, 
        tampered with, adulterated, or misbranded.  The board shall make 
        the cancer drug repository donor form available on the Board of 
        Pharmacy's Web site.  
           (e) Controlled substances and drugs and supplies that do 
        not meet the criteria under this subdivision are not eligible 
        for donation or acceptance under the cancer drug repository 
        program. 
           (f) Drugs and supplies may be donated on the premises of a 
        cancer drug repository to a pharmacist designated by the 
        repository.  A drop box may not be used to deliver or accept 
        donations.  
           (g) Cancer drugs and supplies donated under the cancer drug 
        repository program must be stored in a secure storage area under 
        environmental conditions appropriate for the drugs or supplies 
        being stored.  Donated drugs and supplies may not be stored with 
        nondonated inventory.  
           Subd. 6.  [DISPENSING REQUIREMENTS.] (a) Drugs and supplies 
        must be dispensed by a licensed pharmacist pursuant to a 
        prescription by a practitioner or may be dispensed or 
        administered by a practitioner according to the requirements of 
        chapter 151 and within the practitioner's scope of practice. 
           (b) Cancer drugs and supplies shall be visually inspected 
        by the pharmacist or practitioner before being dispensed or 
        administered for adulteration, misbranding, and date of 
        expiration.  Drugs or supplies that have expired or appear upon 
        visual inspection to be adulterated, misbranded, or tampered 
        with in any way may not be dispensed or administered.  
           (c) Before a cancer drug or supply may be dispensed or 
        administered to an individual, the individual must sign a cancer 
        drug repository recipient form provided by the board 
        acknowledging that the individual understands the information 
        stated on the form.  The form shall include the following 
        information:  
           (1) that the drug or supply being dispensed or administered 
        has been donated and may have been previously dispensed; 
           (2) that a visual inspection has been conducted by the 
        pharmacist or practitioner to ensure that the drug has not 
        expired, has not been adulterated or misbranded, and is in its 
        original, unopened packaging; and 
           (3) that the dispensing pharmacist, the dispensing or 
        administering practitioner, the cancer drug repository, the 
        Board of Pharmacy, and any other participant of the cancer drug 
        repository program cannot guarantee the safety of the drug or 
        supply being dispensed or administered and that the pharmacist 
        or practitioner has determined that the drug or supply is safe 
        to dispense or administer based on the accuracy of the donor's 
        form submitted with the donated drug or supply and the visual 
        inspection required to be performed by the pharmacist or 
        practitioner before dispensing or administering.  
        The board shall make the cancer drug repository form available 
        on the Board of Pharmacy's Web site.  
           (d) Drugs and supplies shall only be dispensed or 
        administered to individuals who meet the eligibility 
        requirements in subdivision 4 and in the following order of 
        priority:  
           (1) individuals who are uninsured; 
           (2) individuals who are enrolled in medical assistance, 
        general assistance medical care, MinnesotaCare, Medicare, or 
        other public assistance health care; and 
           (3) all other individuals who are otherwise eligible under 
        subdivision 4 to receive drugs or supplies from a cancer drug 
        repository.  
           Subd. 7.  [HANDLING FEES.] A cancer drug repository may 
        charge the individual receiving a drug or supply a handling fee 
        of no more than 250 percent of the medical assistance program 
        dispensing fee for each cancer drug or supply dispensed or 
        administered.  
           Subd. 8.  [DISTRIBUTION OF DONATED CANCER DRUGS AND 
        SUPPLIES.] (a) Cancer drug repositories may distribute drugs and 
        supplies donated under the cancer drug repository program to 
        other repositories if requested by a participating repository.  
           (b) A cancer drug repository that has elected not to 
        dispense donated drugs or supplies shall distribute any donated 
        drugs and supplies to a participating repository upon request of 
        the repository.  
           (c) If a cancer drug repository distributes drugs or 
        supplies under paragraph (a) or (b), the repository shall 
        complete a cancer drug repository donor form provided by the 
        board.  The completed form and a copy of the donor form that was 
        completed by the original donor under subdivision 5 shall be 
        provided to the fully participating cancer drug repository at 
        the time of distribution. 
           Subd. 9.  [RESALE OF DONATED DRUGS OR SUPPLIES.] Donated 
        drugs and supplies may not be resold.  
           Subd. 10.  [RECORD-KEEPING REQUIREMENTS.] (a) Cancer drug 
        repository donor and recipient forms shall be maintained for at 
        least five years.  
           (b) A record of destruction of donated drugs and supplies 
        that are not dispensed under subdivision 6 shall be maintained 
        by the dispensing repository for at least five years.  For each 
        drug or supply destroyed, the record shall include the following 
        information:  
           (1) the date of destruction; 
           (2) the name, strength, and quantity of the cancer drug 
        destroyed; 
           (3) the name of the person or firm that destroyed the drug; 
        and 
           (4) the source of the drugs or supplies destroyed.  
           Subd. 11.  [LIABILITY.] (a) The manufacturer of a drug or 
        supply is not subject to criminal or civil liability for injury, 
        death, or loss to a person or to property for causes of action 
        described in clauses (1) and (2).  A manufacturer is not liable 
        for: 
           (1) the intentional or unintentional alteration of the drug 
        or supply by a party not under the control of the manufacturer; 
        or 
           (2) the failure of a party not under the control of the 
        manufacturer to transfer or communicate product or consumer 
        information or the expiration date of the donated drug or supply.
           (b) A medical facility or pharmacy participating in the 
        program, a pharmacist dispensing a drug or supply pursuant to 
        the program, a practitioner dispensing or administering a drug 
        or supply pursuant to the program, or a donor of a cancer drug 
        or supply as defined in subdivision 1 is immune from civil 
        liability for an act or omission that causes injury to or the 
        death of an individual to whom the cancer drug or supply is 
        dispensed and no disciplinary action shall be taken against a 
        pharmacist or practitioner so long as the drug or supply is 
        donated, accepted, distributed, and dispensed according to the 
        requirements of this section.  This immunity does not apply if 
        the act or omission involves reckless, wanton, or intentional 
        misconduct, or malpractice unrelated to the quality of the 
        cancer drug or supply. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 3.  Minnesota Statutes 2004, section 241.01, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [PURCHASING FOR PRESCRIPTION DRUGS.] In 
        accordance with section 241.021, subdivision 4, the commissioner 
        may contract with a separate entity to purchase prescription 
        drugs for persons confined in institutions under the control of 
        the commissioner.  Local governments may participate in this 
        purchasing pool in order to purchase prescription drugs for 
        those persons confined in local correctional facilities in which 
        the local government has responsibility for providing health 
        care.  If any county participates, the commissioner shall 
        appoint a county representative to any committee convened by the 
        commissioner for the purpose of establishing a drug formulary to 
        be used for state and local correctional facilities. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 4.  Minnesota Statutes 2004, section 245.4661, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROGRAM DESIGN AND IMPLEMENTATION.] (a) The 
        pilot projects shall be established to design, plan, and improve 
        the mental health service delivery system for adults with 
        serious and persistent mental illness that would: 
           (1) provide an expanded array of services from which 
        clients can choose services appropriate to their needs; 
           (2) be based on purchasing strategies that improve access 
        and coordinate services without cost shifting; 
           (3) incorporate existing state facilities and resources 
        into the community mental health infrastructure through creative 
        partnerships with local vendors; and 
           (4) utilize existing categorical funding streams and 
        reimbursement sources in combined and creative ways, except 
        appropriations to regional treatment centers and all funds that 
        are attributable to the operation of state-operated services are 
        excluded unless appropriated specifically by the legislature for 
        a purpose consistent with this section or section 246.0136, 
        subdivision 1. 
           (b) All projects funded by January 1, 1997, must complete 
        the planning phase and be operational by June 30, 1997; all 
        projects funded by January 1, 1998, must be operational by June 
        30, 1998.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 245.4661, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DUTIES OF COMMISSIONER.] (a) For purposes of the 
        pilot projects, the commissioner shall facilitate integration of 
        funds or other resources as needed and requested by each 
        project.  These resources may include: 
           (1) residential services funds administered under Minnesota 
        Rules, parts 9535.2000 to 9535.3000, in an amount to be 
        determined by mutual agreement between the project's managing 
        entity and the commissioner of human services after an 
        examination of the county's historical utilization of facilities 
        located both within and outside of the county and licensed under 
        Minnesota Rules, parts 9520.0500 to 9520.0690; 
           (2) community support services funds administered under 
        Minnesota Rules, parts 9535.1700 to 9535.1760; 
           (3) other mental health special project funds; 
           (4) medical assistance, general assistance medical care, 
        MinnesotaCare and group residential housing if requested by the 
        project's managing entity, and if the commissioner determines 
        this would be consistent with the state's overall health care 
        reform efforts; and 
           (5) regional treatment center nonfiscal resources to the 
        extent agreed to by the project's managing entity and the 
        regional treatment center consistent with section 246.0136, 
        subdivision 1. 
           (b) The commissioner shall consider the following criteria 
        in awarding start-up and implementation grants for the pilot 
        projects: 
           (1) the ability of the proposed projects to accomplish the 
        objectives described in subdivision 2; 
           (2) the size of the target population to be served; and 
           (3) geographical distribution. 
           (c) The commissioner shall review overall status of the 
        projects initiatives at least every two years and recommend any 
        legislative changes needed by January 15 of each odd-numbered 
        year. 
           (d) The commissioner may waive administrative rule 
        requirements which are incompatible with the implementation of 
        the pilot project. 
           (e) The commissioner may exempt the participating counties 
        from fiscal sanctions for noncompliance with requirements in 
        laws and rules which are incompatible with the implementation of 
        the pilot project. 
           (f) The commissioner may award grants to an entity 
        designated by a county board or group of county boards to pay 
        for start-up and implementation costs of the pilot project. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2004, section 245A.10, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ANNUAL LICENSE OR CERTIFICATION FEE FOR PROGRAMS 
        WITHOUT A LICENSED CAPACITY.] (a) Except as provided 
        in paragraph paragraphs (b) and (c), a program without a stated 
        licensed capacity shall pay a license or certification fee of 
        $400.  
           (b) A mental health center or mental health clinic 
        requesting certification for purposes of insurance and 
        subscriber contract reimbursement under Minnesota Rules, parts 
        9520.0750 to 9520.0870, shall pay a certification fee of $1,000 
        per year.  If the mental health center or mental health clinic 
        provides services at a primary location with satellite 
        facilities, the satellite facilities shall be certified with the 
        primary location without an additional charge. 
           (c) A program licensed to provide residential-based 
        habilitation services under the home and community-based waiver 
        for persons with developmental disabilities shall pay an annual 
        license fee that includes a base rate of $250 plus $38 times the 
        number of clients served on the first day of August of the 
        current license year.  State-operated programs are exempt from 
        the license fee under this paragraph. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 7.  Minnesota Statutes 2004, section 245C.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SUPPLEMENTAL NURSING SERVICES AGENCIES.] The 
        commissioner shall recover the cost of the background studies 
        initiated by supplemental nursing services agencies registered 
        under section 144A.71, subdivision 1, through a fee of no more 
        than $8 $20 per study charged to the agency.  The fees collected 
        under this subdivision are appropriated to the commissioner for 
        the purpose of conducting background studies. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 245C.10, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PERSONAL CARE PROVIDER ORGANIZATIONS.] The 
        commissioner shall recover the cost of background studies 
        initiated by a personal care provider organization under section 
        256B.0627 through a fee of no more than $12 $20 per study 
        charged to the organization responsible for submitting the 
        background study form.  The fees collected under this 
        subdivision are appropriated to the commissioner for the purpose 
        of conducting background studies. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 9.  Minnesota Statutes 2004, section 245C.32, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USE.] (a) The commissioner may also use these 
        systems and records to obtain and provide criminal history data 
        from the Bureau of Criminal Apprehension, criminal history data 
        held by the commissioner, and data about substantiated 
        maltreatment under section 626.556 or 626.557, for other 
        purposes, provided that: 
           (1) the background study is specifically authorized in 
        statute; or 
           (2) the request is made with the informed consent of the 
        subject of the study as provided in section 13.05, subdivision 4.
           (b) An individual making a request under paragraph (a), 
        clause (2), must agree in writing not to disclose the data to 
        any other individual without the consent of the subject of the 
        data. 
           (c) The commissioner may recover the cost of obtaining and 
        providing background study data by charging the individual or 
        entity requesting the study a fee of no more than $12 $20 per 
        study.  The fees collected under this paragraph are appropriated 
        to the commissioner for the purpose of conducting background 
        studies. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 10.  Minnesota Statutes 2004, section 246.0136, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PLANNING FOR ENTERPRISE ACTIVITIES.] The 
        commissioner of human services is directed to study and make 
        recommendations to the legislature on establishing enterprise 
        activities within state-operated services.  Before implementing 
        an enterprise activity, the commissioner must obtain statutory 
        authorization for its implementation, except that the 
        commissioner has authority to implement enterprise activities 
        for adult mental health, adolescent services, and to establish a 
        public group practice without statutory authorization.  
        Enterprise activities are defined as the range of services, 
        which are delivered by state employees, needed by people with 
        disabilities and are fully funded by public or private 
        third-party health insurance or other revenue sources available 
        to clients that provide reimbursement for the services 
        provided.  Enterprise activities within state-operated services 
        shall specialize in caring for vulnerable people for whom no 
        other providers are available or for whom state-operated 
        services may be the provider selected by the payer.  In 
        subsequent biennia after an enterprise activity is established 
        within a state-operated service, the base state appropriation 
        for that state-operated service shall be reduced proportionate 
        to the size of the enterprise activity. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  Minnesota Statutes 2004, section 253.20, is 
        amended to read: 
           253.20 [MINNESOTA SECURITY HOSPITAL.] 
           The commissioner of human services shall erect, equip, and 
        maintain in St. Peter a and other geographic locations under the 
        control of the commissioner of human services suitable 
        building buildings to be known as the Minnesota Security 
        Hospital, for the purpose of providing a secure treatment 
        facility as defined in section 253B.02, subdivision 18a, for 
        persons who may be committed there by courts, or otherwise, or 
        transferred there by the commissioner of human services, and for 
        persons who are found to be mentally ill while confined in any 
        correctional facility, or who may be found to be mentally ill 
        and dangerous, and the commissioner shall supervise and manage 
        the same as in the case of other state hospitals. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 12.  Minnesota Statutes 2004, 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) (bb): 
           (a) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (1) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (2) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (3) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (4) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (5) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; 
           (6) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds; and 
           (7) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (b) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (c) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting 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. 
           (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. 
           (e) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (f) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (g) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (h) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        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. 
           (i) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (j) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (k) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (l) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (1) the secretary of health and human services of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity; and 
           (2) a comprehensive plan, including estimated project 
        costs, shall be approved by the Legislative Advisory Commission 
        and filed with the commissioner of administration.  
           (m) According to federal requirements, establish procedures 
        to be followed by local welfare boards in creating citizen 
        advisory committees, including procedures for selection of 
        committee members. 
           (n) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, medical assistance, or food stamp 
        program in the following manner:  
           (1) one-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance and the AFDC program 
        formerly codified in sections 256.72 to 256.87, disallowances 
        shall be shared by each county board in the same proportion as 
        that county's expenditures for the sanctioned program are to the 
        total of all counties' expenditures for the AFDC program 
        formerly codified in sections 256.72 to 256.87, and medical 
        assistance programs.  For the food stamp program, sanctions 
        shall be shared by each county board, with 50 percent of the 
        sanction being distributed to each county in the same proportion 
        as that county's administrative costs for food stamps are to the 
        total of all food stamp administrative costs for all counties, 
        and 50 percent of the sanctions being distributed to each county 
        in the same proportion as that county's value of food stamp 
        benefits issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due; and 
           (2) notwithstanding the provisions of clause (1), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in clause (1), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to clause (1).  
           (o) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (p) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (q) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (1) the commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced; 
           (2) the county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner; 
           (3) if the required reports are not received by the 
        deadlines established in clause (2), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received; 
           (4) a county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of 
        noncompliance; 
           (5) the final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period; 
           (6) the commissioner may not delay payments, withhold 
        funds, or require repayment under clause (3) or (5) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under clause (3) or (5), the county board may appeal the action 
        according to sections 14.57 to 14.69; and 
           (7) counties subject to withholding of funds under clause 
        (3) or forfeiture or repayment of funds under clause (5) shall 
        not reduce or withhold benefits or services to clients to cover 
        costs incurred due to actions taken by the commissioner under 
        clause (3) or (5). 
           (r) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (s) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (t) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (u) Have the authority to administer a drug rebate program 
        for drugs purchased pursuant to the prescription drug program 
        established under section 256.955 after the beneficiary's 
        satisfaction of any deductible established in the program.  The 
        commissioner shall require a rebate agreement from all 
        manufacturers of covered drugs as defined in section 256B.0625, 
        subdivision 13.  Rebate agreements for prescription drugs 
        delivered on or after July 1, 2002, must include rebates for 
        individuals covered under the prescription drug program who are 
        under 65 years of age.  For each drug, the amount of the rebate 
        shall be equal to the rebate as defined for purposes of the 
        federal rebate program in United States Code, title 42, section 
        1396r-8.  The manufacturers must provide full payment within 30 
        days of receipt of the state invoice for the rebate within the 
        terms and conditions used for the federal rebate program 
        established pursuant to section 1927 of title XIX of the Social 
        Security Act.  The manufacturers must provide the commissioner 
        with any information necessary to verify the rebate determined 
        per drug.  The rebate program shall utilize the terms and 
        conditions used for the federal rebate program established 
        pursuant to section 1927 of title XIX of the Social Security Act.
           (v) Have the authority to administer the federal drug 
        rebate program for drugs purchased under the medical assistance 
        program as allowed by section 1927 of title XIX of the Social 
        Security Act and according to the terms and conditions of 
        section 1927.  Rebates shall be collected for all drugs that 
        have been dispensed or administered in an outpatient setting and 
        that are from manufacturers who have signed a rebate agreement 
        with the United States Department of Health and Human Services. 
           (w) Have the authority to administer a supplemental drug 
        rebate program for drugs purchased under the medical assistance 
        program.  The commissioner may enter into supplemental rebate 
        contracts with pharmaceutical manufacturers and may require 
        prior authorization for drugs that are from manufacturers that 
        have not signed a supplemental rebate contract.  Prior 
        authorization of drugs shall be subject to the provisions of 
        section 256B.0625, subdivision 13. 
           (x) Operate the department's communication systems account 
        established in Laws 1993, First Special Session chapter 1, 
        article 1, section 2, subdivision 2, to manage shared 
        communication costs necessary for the operation of the programs 
        the commissioner supervises.  A communications account may also 
        be established for each regional treatment center which operates 
        communications systems.  Each account must be used to manage 
        shared communication costs necessary for the operations of the 
        programs the commissioner supervises.  The commissioner may 
        distribute the costs of operating and maintaining communication 
        systems to participants in a manner that reflects actual usage. 
        Costs may include acquisition, licensing, insurance, 
        maintenance, repair, staff time and other costs as determined by 
        the commissioner.  Nonprofit organizations and state, county, 
        and local government agencies involved in the operation of 
        programs the commissioner supervises may participate in the use 
        of the department's communications technology and share in the 
        cost of operation.  The commissioner may accept on behalf of the 
        state any gift, bequest, devise or personal property of any 
        kind, or money tendered to the state for any lawful purpose 
        pertaining to the communication activities of the department.  
        Any money received for this purpose must be deposited in the 
        department's communication systems accounts.  Money collected by 
        the commissioner for the use of communication systems must be 
        deposited in the state communication systems account and is 
        appropriated to the commissioner for purposes of this section. 
           (y) Receive any federal matching money that is made 
        available through the medical assistance program for the 
        consumer satisfaction survey.  Any federal money received for 
        the survey is appropriated to the commissioner for this 
        purpose.  The commissioner may expend the federal money received 
        for the consumer satisfaction survey in either year of the 
        biennium. 
           (z) Designate community information and referral call 
        centers and incorporate cost reimbursement claims from the 
        designated community information and referral call centers into 
        the federal cost reimbursement claiming processes of the 
        department according to federal law, rule, and regulations.  
        Existing information and referral centers provided by Greater 
        Twin Cities United Way or existing call centers for which 
        Greater Twin Cities United Way has legal authority to represent, 
        shall be included in these designations upon review by the 
        commissioner and assurance that these services are accredited 
        and in compliance with national standards.  Any reimbursement is 
        appropriated to the commissioner and all designated information 
        and referral centers shall receive payments according to normal 
        department schedules established by the commissioner upon final 
        approval of allocation methodologies from the United States 
        Department of Health and Human Services Division of Cost 
        Allocation or other appropriate authorities. 
           (aa) Develop recommended standards for foster care homes 
        that address the components of specialized therapeutic services 
        to be provided by foster care homes with those services. 
           (bb) Authorize the method of payment to or from the 
        department as part of the human services programs administered 
        by the department.  This authorization includes the receipt or 
        disbursement of funds held by the department in a fiduciary 
        capacity as part of the human services programs administered by 
        the department. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 256.741, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EFFECT OF ASSIGNMENT.] Assignments in this 
        section take effect upon a determination that the applicant is 
        eligible for public assistance.  The amount of support assigned 
        under this subdivision may not exceed the total amount of public 
        assistance issued or the total support obligation, whichever is 
        less.  Child care support collections made according to an 
        assignment under subdivision 2, paragraph (c), must be 
        deposited, subject to any limitations of federal law, by the 
        commissioner of human services in the child support collection 
        account in the special revenue fund and appropriated to the 
        commissioner of education for child care assistance under 
        section 119B.03.  These collections are in addition to state and 
        federal funds appropriated to the child care in the general fund.
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 14.  Minnesota Statutes 2004, section 256M.40, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROJECT OF REGIONAL SIGNIFICANCE; STUDY.] The 
        commissioner shall study whether and how to dedicate a portion 
        of the allocated funds for projects of regional significance.  
        The study shall include an analysis of the amount of annual 
        funding to be dedicated for projects of regional significance 
        and what efforts these projects must support.  The commissioner 
        shall submit a report to the chairs of the house and senate 
        committees with jurisdiction over children and community 
        services grants by January 15, 2005.  The commissioner of 
        finance, in preparing the proposed biennial budget for fiscal 
        years 2006 and 2007, is instructed to include $25 million each 
        year in funding for projects of regional significance under this 
        chapter. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 15.  Minnesota Statutes 2004, section 295.582, as 
        amended by Laws 2005, chapter 77, section 7, is amended to read: 
           295.582 [AUTHORITY.] 
           Subdivision 1.  [WHOLESALE DRUG DISTRIBUTOR TAX.] (a) A 
        hospital, surgical center, or health care provider that is 
        subject to a tax under section 295.52, or a pharmacy that has 
        paid additional expense transferred under this section by a 
        wholesale drug distributor, may transfer additional expense 
        generated by section 295.52 obligations on to all third-party 
        contracts for the purchase of health care services on behalf of 
        a patient or consumer.  Nothing shall prohibit a pharmacy from 
        transferring the additional expense generated under section 
        295.52 to a pharmacy benefits manager.  The additional expense 
        transferred to the third-party purchaser or a pharmacy benefits 
        manager must not exceed the tax percentage specified in section 
        295.52 multiplied against the gross revenues received under the 
        third-party contract, and the tax percentage specified in 
        section 295.52 multiplied against co-payments and deductibles 
        paid by the individual patient or consumer.  The expense must 
        not be generated on revenues derived from payments that are 
        excluded from the tax under section 295.53.  All third-party 
        purchasers of health care services including, but not limited 
        to, third-party purchasers regulated under chapter 60A, 62A, 
        62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 
        471.61 or 471.617, and pharmacy benefits managers must pay the 
        transferred expense in addition to any payments due under 
        existing contracts with the hospital, surgical center, pharmacy, 
        or health care provider, to the extent allowed under federal 
        law.  A third-party purchaser of health care services includes, 
        but is not limited to, a health carrier or community integrated 
        service network that pays for health care services on behalf of 
        patients or that reimburses, indemnifies, compensates, or 
        otherwise insures patients for health care services.  For 
        purposes of this section, a pharmacy benefits manager means an 
        entity that performs pharmacy benefits management.  A 
        third-party purchaser or pharmacy benefits manager shall comply 
        with this section regardless of whether the third-party 
        purchaser or pharmacy benefits manager is a for-profit, 
        not-for-profit, or nonprofit entity.  A wholesale drug 
        distributor may transfer additional expense generated by section 
        295.52 obligations to entities that purchase from the 
        wholesaler, and the entities must pay the additional expense.  
        Nothing in this section limits the ability of a hospital, 
        surgical center, pharmacy, wholesale drug distributor, or health 
        care provider to recover all or part of the section 295.52 
        obligation by other methods, including increasing fees or 
        charges. 
           (b) Any hospital, surgical center, or health care provider 
        subject to a tax under section 295.52 or a pharmacy that has 
        paid additional expense transferred under this section by a 
        wholesale drug distributor may file a complaint with the 
        commissioner responsible for regulating the third-party 
        purchaser if at any time the third-party purchaser fails to 
        comply with paragraph (a).  
           (c) If the commissioner responsible for regulating the 
        third-party purchaser finds at any time that the third-party 
        purchaser has not complied with paragraph (a), the commissioner 
        may take enforcement action against a third-party purchaser 
        which is subject to the commissioner's regulatory jurisdiction 
        and which does not allow a hospital, surgical center, pharmacy, 
        or provider to pass-through the tax.  The commissioner may by 
        order fine or censure the third-party purchaser or revoke or 
        suspend the certificate of authority or license of the 
        third-party purchaser to do business in this state if the 
        commissioner finds that the third-party purchaser has not 
        complied with this section.  The third-party purchaser may 
        appeal the commissioner's order through a contested case hearing 
        in accordance with chapter 14. 
           Subd. 2.  [AGREEMENT.] A contracting agreement between a 
        third-party purchaser or a pharmacy benefits manager and a 
        resident or nonresident pharmacy registered under chapter 151, 
        may not prohibit: 
           (1) a pharmacy that has paid additional expense transferred 
        under this section by a wholesale drug distributor from 
        exercising its option under this section to transfer such 
        additional expenses generated by the section 295.52 obligations 
        on to the third-party purchaser or pharmacy benefits manager; or 
           (2) a pharmacy that is subject to tax under section 295.52, 
        subdivision 4, from exercising its option under this section to 
        recover all or part of the section 295.52 obligations from the 
        third-party purchaser or a pharmacy benefits manager. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 16.  Minnesota Statutes 2004, section 471.61, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [PROVISION OF LONG-TERM CARE INSURANCE.] Any 
        political subdivision, or any two or more political subdivisions 
        acting jointly, may contract with an insurance company licensed 
        to do business in this state for the voluntary purchase of 
        long-term care insurance by the employees and their dependents 
        of the political subdivision or subdivisions.  The coverage may 
        be through a group policy or through individual coverage. 
           Sec. 17.  Minnesota Statutes 2004, section 641.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEDICAL AID.] Except as provided in section 
        466.101, the county board shall pay the costs of medical 
        services provided to prisoners.  The amount paid by the Anoka 
        county board for a medical service shall not exceed the maximum 
        allowed medical assistance payment rate for the service, as 
        determined by the commissioner of human services.  For all other 
        counties, medical providers shall charge no higher than the rate 
        negotiated between the county and the provider.  In the absence 
        of an agreement between the county and the provider, the 
        provider may charge no more than the discounted rate the 
        provider has negotiated with the nongovernmental third-party 
        payer that provided the most revenue to the provider during the 
        previous calendar year.  The county is entitled to reimbursement 
        from the prisoner for payment of medical bills to the extent 
        that the prisoner to whom the medical aid was provided has the 
        ability to pay the bills.  The prisoner shall, at a minimum, 
        incur co-payment obligations for health care services provided 
        by a county correctional facility.  The county board shall 
        determine the co-payment amount.  Notwithstanding any law to the 
        contrary, the co-payment shall be deducted from any of the 
        prisoner's funds held by the county, to the extent possible.  If 
        there is a disagreement between the county and a prisoner 
        concerning the prisoner's ability to pay, the court with 
        jurisdiction over the defendant shall determine the extent, if 
        any, of the prisoner's ability to pay for the medical services.  
        If a prisoner is covered by health or medical insurance or other 
        health plan when medical services are provided, the county 
        providing the medical services has a right of subrogation to be 
        reimbursed by the insurance carrier for all sums spent by it for 
        medical services to the prisoner that are covered by the policy 
        of insurance or health plan, in accordance with the benefits, 
        limitations, exclusions, provider restrictions, and other 
        provisions of the policy or health plan.  The county may 
        maintain an action to enforce this subrogation right.  The 
        county does not have a right of subrogation against the medical 
        assistance program or the general assistance medical care 
        program. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 18.  Laws 2003, First Special Session chapter 14, 
        article 13C, section 2, subdivision 6, is amended to read: 
        Subd. 6.  Basic Health Care Grants 
                      Summary by Fund
        General           1,499,941,000 1,533,016,000
        Health Care Access  268,151,000   282,605,000
        [UPDATING FEDERAL POVERTY GUIDELINES.] 
        Annual updates to the federal poverty 
        guidelines are effective each July 1, 
        following publication by the United 
        States Department of Health and Human 
        Services for health care programs under 
        Minnesota Statutes, chapters 256, 256B, 
        256D, and 256L. 
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) MinnesotaCare Grants 
        Health Care Access 267,401,000   281,855,000
        [MINNESOTACARE FEDERAL RECEIPTS.] 
        Receipts received as a result of 
        federal participation pertaining to 
        administrative costs of the Minnesota 
        health care reform waiver shall be 
        deposited as nondedicated revenue in 
        the health care access fund.  Receipts 
        received as a result of federal 
        participation pertaining to grants 
        shall be deposited in the federal fund 
        and shall offset health care access 
        funds for payments to providers. 
        [MINNESOTACARE FUNDING.] The 
        commissioner may expend money 
        appropriated from the health care 
        access fund for MinnesotaCare in either 
        fiscal year of the biennium. 
        (b) MA Basic Health Care Grants - 
        Families and Children 
        General             568,254,000   582,161,000
        [SERVICES TO PREGNANT WOMEN.] The 
        commissioner shall use available 
        federal money for the State-Children's 
        Health Insurance Program for medical 
        assistance services provided to 
        pregnant women who are not otherwise 
        eligible for federal financial 
        participation beginning in fiscal year 
        2003.  This federal money shall be 
        deposited in the federal fund and shall 
        offset general funds for payments to 
        providers.  Notwithstanding section 14, 
        this paragraph shall not expire. 
        [MANAGED CARE RATE INCREASE.] (a) 
        Effective January 1, 2004, the 
        commissioner of human services shall 
        increase the total payments to managed 
        care plans under Minnesota Statutes, 
        section 256B.69, by an amount equal to 
        the cost increases to the managed care 
        plans from by the elimination of: (1) 
        the exemption from the taxes imposed 
        under Minnesota Statutes, section 
        297I.05, subdivision 5, for premiums 
        paid by the state for medical 
        assistance, general assistance medical 
        care, and the MinnesotaCare program; 
        and (2) the exemption of gross revenues 
        subject to the taxes imposed under 
        Minnesota Statutes, sections 295.50 to 
        295.57, for payments paid by the state 
        for services provided under medical 
        assistance, general assistance medical 
        care, and the MinnesotaCare program.  
        Any increase based on clause (2) must 
        be reflected in provider rates paid by 
        the managed care plan unless the 
        managed care plan is a staff model 
        health plan company. 
        (b) The commissioner of human services 
        shall increase by two percent the 
        applicable tax rate in effect under 
        Minnesota Statutes, section 295.52, the 
        fee-for-service payments under medical 
        assistance, general assistance medical 
        care, and the MinnesotaCare program for 
        services subject to the hospital, 
        surgical center, or health care 
        provider taxes under Minnesota 
        Statutes, sections 295.50 to 295.57, 
        effective for services rendered on or 
        after January 1, 2004.  
        (c) The commissioner of finance shall 
        transfer from the health care access 
        fund to the general fund the following 
        amounts in the fiscal years indicated:  
        2004, $16,587,000; 2005, $46,322,000; 
        2006, $49,413,000; and 2007, 
        $52,659,000. 
        (d) For fiscal years after 2007, the 
        commissioner of finance shall transfer 
        from the health care access fund to the 
        general fund an amount equal to the 
        revenue collected by the commissioner 
        of revenue on the following:  
        (1) gross revenues received by 
        hospitals, surgical centers, and health 
        care providers as payments for services 
        provided under medical assistance, 
        general assistance medical care, and 
        the MinnesotaCare program, including 
        payments received directly from the 
        state or from a prepaid plan, under 
        Minnesota Statutes, sections 295.50 to 
        295.57; and 
        (2) premiums paid by the state under 
        medical assistance, general assistance 
        medical care, and the MinnesotaCare 
        program under Minnesota Statutes, 
        section 297I.05, subdivision 5.  
        The commissioner of finance shall 
        monitor and adjust if necessary the 
        amount transferred each fiscal year 
        from the health care access fund to the 
        general fund to ensure that the amount 
        transferred equals the tax revenue 
        collected for the items described in 
        clauses (1) and (2) for that fiscal 
        year. 
        (e) Notwithstanding section 14, these 
        provisions shall not expire. 
        (c) MA Basic Health Care Grants - Elderly 
        and Disabled 
        General             695,421,000   741,605,000
        [DELAY MEDICAL ASSISTANCE 
        FEE-FOR-SERVICE - ACUTE CARE.] The 
        following payments in fiscal year 2005 
        from the Medicaid Management 
        Information System that would otherwise 
        have been made to providers for medical 
        assistance and general assistance 
        medical care services shall be delayed 
        and included in the first payment in 
        fiscal year 2006: 
        (1) for hospitals, the last two 
        payments; and 
        (2) for nonhospital providers, the last 
        payment. 
        This payment delay shall not include 
        payments to skilled nursing facilities, 
        intermediate care facilities for mental 
        retardation, prepaid health plans, home 
        health agencies, personal care nursing 
        providers, and providers of only waiver 
        services.  The provisions of Minnesota 
        Statutes, section 16A.124, shall not 
        apply to these delayed payments.  
        Notwithstanding section 14, this 
        provision shall not expire. 
        [DEAF AND HARD-OF-HEARING SERVICES.] 
        If, after making reasonable efforts, 
        the service provider for mental health 
        services to persons who are deaf or 
        hearing impaired is not able to earn 
        $227,000 through participation in 
        medical assistance intensive 
        rehabilitation services in fiscal year 
        2005, the commissioner shall transfer 
        $227,000 minus medical assistance 
        earnings achieved by the grantee to 
        deaf and hard-of-hearing grants to 
        enable the provider to continue 
        providing services to eligible persons. 
        (d) General Assistance Medical Care 
        Grants 
        General             223,960,000   196,617,000
        (e) Health Care Grants - Other 
        Assistance 
        General               3,067,000     3,407,000
        Health Care Access      750,000       750,000
        [MINNESOTA PRESCRIPTION DRUG DEDICATED 
        FUND.] Of the general fund 
        appropriation, $284,000 in fiscal year 
        2005 is appropriated to the 
        commissioner for the prescription drug 
        dedicated fund established under the 
        prescription drug discount program. 
        [DENTAL ACCESS GRANTS CARRYOVER 
        AUTHORITY.] Any unspent portion of the 
        appropriation from the health care 
        access fund in fiscal years 2002 and 
        2003 for dental access grants under 
        Minnesota Statutes, section 256B.53, 
        shall not cancel but shall be allowed 
        to carry forward to be spent in the 
        biennium beginning July 1, 2003, for 
        these purposes. 
        [STOP-LOSS FUND ACCOUNT.] The 
        appropriation to the purchasing 
        alliance stop-loss fund account 
        established under Minnesota Statutes, 
        section 256.956, subdivision 2, for 
        fiscal years 2004 and 2005 shall only 
        be available for claim reimbursements 
        for qualifying enrollees who are 
        members of purchasing alliances that 
        meet the requirements described under 
        Minnesota Statutes, section 256.956, 
        subdivision 1, paragraph (f), clauses 
        (1), (2), and (3). 
        (f) Prescription Drug Program 
        General               9,239,000     9,226,000
        [PRESCRIPTION DRUG ASSISTANCE PROGRAM.] 
        Of the general fund appropriation, 
        $702,000 in fiscal year 2004 and 
        $887,000 in fiscal year 2005 are for 
        the commissioner to establish and 
        administer the prescription drug 
        assistance program through the 
        Minnesota board on aging. 
        [REBATE REVENUE RECAPTURE.] Any funds 
        received by the state from a drug 
        manufacturer due to errors in the 
        pharmaceutical pricing used by the 
        manufacturer in determining the 
        prescription drug rebate are 
        appropriated to the commissioner to 
        augment funding of the prescription 
        drug program established in Minnesota 
        Statutes, section 256.955. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 19.  [REPEALER.] 
           Minnesota Statutes 2004, section 119B.074, as amended by 
        Laws 2005, chapter 98, article 1, section 5, is repealed 
        effective August 1, 2005.  House File No. 138, article 11, 
        section 6, if enacted in the 2005 First Special Session, is 
        repealed effective upon final enactment. 

                                   ARTICLE 6 
                               HEALTH DEPARTMENT 
           Section 1.  [62J.495] [HEALTH INFORMATION TECHNOLOGY AND 
        INFRASTRUCTURE ADVISORY COMMITTEE.] 
           Subdivision 1.  [ESTABLISHMENT; MEMBERS; DUTIES.] (a) The 
        commissioner shall establish a Health Information Technology and 
        Infrastructure Advisory Committee governed by section 15.059 to 
        advise the commissioner on the following matters: 
           (1) assessment of the use of health information technology 
        by the state, licensed health care providers and facilities, and 
        local public health agencies; 
           (2) recommendations for implementing a statewide 
        interoperable health information infrastructure, to include 
        estimates of necessary resources, and for determining standards 
        for administrative data exchange, clinical support programs, 
        patient privacy requirements, and maintenance of the security 
        and confidentiality of individual patient data; and 
           (3) other related issues as requested by the commissioner. 
           (b) The members of the Health Information Technology and 
        Infrastructure Advisory Committee shall include the 
        commissioners, or commissioners' designees, of health, human 
        services, administration, and commerce and additional members to 
        be appointed by the commissioner to include persons representing 
        Minnesota's local public health agencies, licensed hospitals and 
        other licensed facilities and providers, private purchasers, the 
        medical and nursing professions, health insurers and health 
        plans, the state quality improvement organization, academic and 
        research institutions, consumer advisory organizations with an 
        interest and expertise in health information technology, and 
        other stakeholders as identified by the Health Information 
        Technology and Infrastructure Advisory Committee. 
           Subd. 2.  [ANNUAL REPORT.] The commissioner shall prepare 
        and issue an annual report not later than January 30 of each 
        year outlining progress to date in implementing a statewide 
        health information infrastructure and recommending future 
        projects. 
           Subd. 3.  [EXPIRATION.] Notwithstanding section 15.059, 
        this section expires June 30, 2009. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 103I.101, 
        subdivision 6, is amended to read: 
           Subd. 6.  [FEES FOR VARIANCES.] The commissioner shall 
        charge a nonrefundable application fee of $150 $175 to cover the 
        administrative cost of processing a request for a variance or 
        modification of rules adopted by the commissioner under this 
        chapter. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006.  
           Sec. 3.  Minnesota Statutes 2004, section 103I.208, 
        subdivision 1, as amended by Laws 2005, chapter 106, section 24, 
        is amended to read: 
           Subdivision 1.  [WELL NOTIFICATION FEE.] The well 
        notification fee to be paid by a property owner is:  
           (1) for a new water supply well, $150 $175, which includes 
        the state core function fee; 
           (2) for a well sealing, $30 $35 for each well, which 
        includes the state core function fee, except that for monitoring 
        wells constructed on a single property, having depths within a 
        25 foot range, and sealed within 48 hours of start of 
        construction, a single fee of $30 $35; and 
           (3) for construction of a dewatering well, $150 $175, which 
        includes the state core function fee, for each dewatering well 
        except a dewatering project comprising five or more dewatering 
        wells shall be assessed a single fee of $750 $875 for the 
        dewatering wells recorded on the notification. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006.  
           Sec. 4.  Minnesota Statutes 2004, section 103I.208, 
        subdivision 2, as amended by Laws 2005, chapter 106, section 25, 
        is amended to read: 
           Subd. 2.  [PERMIT FEE.] The permit fee to be paid by a 
        property owner is:  
           (1) for a water supply well that is not in use under a 
        maintenance permit, $125 $150 annually; 
           (2) for construction of a monitoring well, $150 $175, which 
        includes the state core function fee; 
           (3) for a monitoring well that is unsealed under a 
        maintenance permit, $125 $150 annually; 
           (4) for monitoring wells used as a leak detection device at 
        a single motor fuel retail outlet, a single petroleum bulk 
        storage site excluding tank farms, or a single agricultural 
        chemical facility site, the construction permit fee 
        is $150 $175, which includes the state core function fee, per 
        site regardless of the number of wells constructed on the site, 
        and the annual fee for a maintenance permit for unsealed 
        monitoring wells is $125 $150 per site regardless of the number 
        of monitoring wells located on site; 
           (5) for a groundwater thermal exchange device, in addition 
        to the notification fee for water supply wells, $150 $175, which 
        includes the state core function fee; 
           (6) for a vertical heat exchanger, $150 $175; 
           (7) for a dewatering well that is unsealed under a 
        maintenance permit, $125 $150 annually for each dewatering well, 
        except a dewatering project comprising more than five dewatering 
        wells shall be issued a single permit for $625 $750 annually for 
        dewatering wells recorded on the permit; and 
           (8) for an elevator boring, $150 $175 for each boring. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006.  
           Sec. 5.  Minnesota Statutes 2004, section 103I.235, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISCLOSURE OF WELLS TO BUYER.] (a) Before 
        signing an agreement to sell or transfer real property, the 
        seller must disclose in writing to the buyer information about 
        the status and location of all known wells on the property, by 
        delivering to the buyer either a statement by the seller that 
        the seller does not know of any wells on the property, or a 
        disclosure statement indicating the legal description and 
        county, and a map drawn from available information showing the 
        location of each well to the extent practicable.  In the 
        disclosure statement, the seller must indicate, for each well, 
        whether the well is in use, not in use, or sealed.  
           (b) At the time of closing of the sale, the disclosure 
        statement information, name and mailing address of the buyer, 
        and the quartile, section, township, and range in which each 
        well is located must be provided on a well disclosure 
        certificate signed by the seller or a person authorized to act 
        on behalf of the seller. 
           (c) A well disclosure certificate need not be provided if 
        the seller does not know of any wells on the property and the 
        deed or other instrument of conveyance contains the statement:  
        "The Seller certifies that the Seller does not know of any wells 
        on the described real property."  
           (d) If a deed is given pursuant to a contract for deed, the 
        well disclosure certificate required by this subdivision shall 
        be signed by the buyer or a person authorized to act on behalf 
        of the buyer.  If the buyer knows of no wells on the property, a 
        well disclosure certificate is not required if the following 
        statement appears on the deed followed by the signature of the 
        grantee or, if there is more than one grantee, the signature of 
        at least one of the grantees:  "The Grantee certifies that the 
        Grantee does not know of any wells on the described real 
        property."  The statement and signature of the grantee may be on 
        the front or back of the deed or on an attached sheet and an 
        acknowledgment of the statement by the grantee is not required 
        for the deed to be recordable. 
           (e) This subdivision does not apply to the sale, exchange, 
        or transfer of real property:  
           (1) that consists solely of a sale or transfer of severed 
        mineral interests; or 
           (2) that consists of an individual condominium unit as 
        described in chapters 515 and 515B. 
           (f) For an area owned in common under chapter 515 or 515B 
        the association or other responsible person must report to the 
        commissioner by July 1, 1992, the location and status of all 
        wells in the common area.  The association or other responsible 
        person must notify the commissioner within 30 days of any change 
        in the reported status of wells. 
           (g) For real property sold by the state under section 
        92.67, the lessee at the time of the sale is responsible for 
        compliance with this subdivision. 
           (h) If the seller fails to provide a required well 
        disclosure certificate, the buyer, or a person authorized to act 
        on behalf of the buyer, may sign a well disclosure certificate 
        based on the information provided on the disclosure statement 
        required by this section or based on other available information.
           (i) A county recorder or registrar of titles may not record 
        a deed or other instrument of conveyance dated after October 31, 
        1990, for which a certificate of value is required under section 
        272.115, or any deed or other instrument of conveyance dated 
        after October 31, 1990, from a governmental body exempt from the 
        payment of state deed tax, unless the deed or other instrument 
        of conveyance contains the statement made in accordance with 
        paragraph (c) or (d) or is accompanied by the well disclosure 
        certificate containing all the information required by paragraph 
        (b) or (d).  The county recorder or registrar of titles must not 
        accept a certificate unless it contains all the required 
        information.  The county recorder or registrar of titles shall 
        note on each deed or other instrument of conveyance accompanied 
        by a well disclosure certificate that the well disclosure 
        certificate was received.  The notation must include the 
        statement "No wells on property" if the disclosure certificate 
        states there are no wells on the property.  The well disclosure 
        certificate shall not be filed or recorded in the records 
        maintained by the county recorder or registrar of titles.  After 
        noting "No wells on property" on the deed or other instrument of 
        conveyance, the county recorder or registrar of titles shall 
        destroy or return to the buyer the well disclosure certificate.  
        The county recorder or registrar of titles shall collect from 
        the buyer or the person seeking to record a deed or other 
        instrument of conveyance, a fee of $30 $40 for receipt of a 
        completed well disclosure certificate.  By the tenth day of each 
        month, the county recorder or registrar of titles shall transmit 
        the well disclosure certificates to the commissioner of health.  
        By the tenth day after the end of each calendar quarter, the 
        county recorder or registrar of titles shall transmit to the 
        commissioner of health $27.50 $32.50 of the fee for each well 
        disclosure certificate received during the quarter.  The 
        commissioner shall maintain the well disclosure certificate for 
        at least six years.  The commissioner may store the certificate 
        as an electronic image.  A copy of that image shall be as valid 
        as the original. 
           (j) No new well disclosure certificate is required under 
        this subdivision if the buyer or seller, or a person authorized 
        to act on behalf of the buyer or seller, certifies on the deed 
        or other instrument of conveyance that the status and number of 
        wells on the property have not changed since the last previously 
        filed well disclosure certificate.  The following statement, if 
        followed by the signature of the person making the statement, is 
        sufficient to comply with the certification requirement of this 
        paragraph:  "I am familiar with the property described in this 
        instrument and I certify that the status and number of wells on 
        the described real property have not changed since the last 
        previously filed well disclosure certificate."  The 
        certification and signature may be on the front or back of the 
        deed or on an attached sheet and an acknowledgment of the 
        statement is not required for the deed or other instrument of 
        conveyance to be recordable. 
           (k) The commissioner in consultation with county recorders 
        shall prescribe the form for a well disclosure certificate and 
        provide well disclosure certificate forms to county recorders 
        and registrars of titles and other interested persons. 
           (l) Failure to comply with a requirement of this 
        subdivision does not impair: 
           (1) the validity of a deed or other instrument of 
        conveyance as between the parties to the deed or instrument or 
        as to any other person who otherwise would be bound by the deed 
        or instrument; or 
           (2) the record, as notice, of any deed or other instrument 
        of conveyance accepted for filing or recording contrary to the 
        provisions of this subdivision. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006.  
           Sec. 6.  Minnesota Statutes 2004, section 103I.601, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSE REQUIRED TO MAKE BORINGS.] (a) Except as 
        provided in paragraph (b) (d), a person may must not make an 
        exploratory boring without an exploratory borer's explorer's 
        license.  The fee for an explorer's license is $75.  The 
        explorer's license is valid until the date prescribed in the 
        license by the commissioner. 
           (b) A person must file an application and renewal 
        application fee to renew the explorer's license by the date 
        stated in the license.  The renewal application fee is $75. 
           (c) If the licensee submits an application fee after the 
        required renewal date, the licensee: 
           (1) must include a late fee of $75; and 
           (2) may not conduct activities authorized by an explorer's 
        license until the renewal application, renewal application fee, 
        late fee, and sealing reports required in subdivision 9 are 
        submitted. 
           (d) An explorer may must designate a responsible individual 
        to supervise and oversee the making of exploratory borings.  
        Before an individual supervises or oversees an exploratory 
        boring, the individual must file an application and application 
        fee of $75 to qualify as a responsible individual.  The 
        individual must take and pass an examination relating to 
        construction, location, and sealing of exploratory borings.  A 
        professional engineer registered or geoscientist licensed under 
        sections 326.02 to 326.15 or a certified professional geologist 
        certified by the American Institute of Professional Geologists 
        is not required to take the examination required in this 
        subdivision, but must be licensed certified as a responsible 
        individual to make supervise an exploratory boring. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2004, section 144.122, as 
        amended by Laws 2005, chapter 85, section 1, is amended to read: 
           144.122 [LICENSE, PERMIT, AND SURVEY FEES.] 
           (a) The state commissioner of health, by rule, may 
        prescribe reasonable procedures and fees for filing with the 
        commissioner as prescribed by statute and for the issuance of 
        original and renewal permits, licenses, registrations, and 
        certifications issued under authority of the commissioner.  The 
        expiration dates of the various licenses, permits, 
        registrations, and certifications as prescribed by the rules 
        shall be plainly marked thereon.  Fees may include application 
        and examination fees and a penalty fee for renewal applications 
        submitted after the expiration date of the previously issued 
        permit, license, registration, and certification.  The 
        commissioner may also prescribe, by rule, reduced fees for 
        permits, licenses, registrations, and certifications when the 
        application therefor is submitted during the last three months 
        of the permit, license, registration, or certification period.  
        Fees proposed to be prescribed in the rules shall be first 
        approved by the Department of Finance.  All fees proposed to be 
        prescribed in rules shall be reasonable.  The fees shall be in 
        an amount so that the total fees collected by the commissioner 
        will, where practical, approximate the cost to the commissioner 
        in administering the program.  All fees collected shall be 
        deposited in the state treasury and credited to the state 
        government special revenue fund unless otherwise specifically 
        appropriated by law for specific purposes. 
           (b) The commissioner may charge a fee for voluntary 
        certification of medical laboratories and environmental 
        laboratories, and for environmental and medical laboratory 
        services provided by the department, without complying with 
        paragraph (a) or chapter 14.  Fees charged for environment and 
        medical laboratory services provided by the department must be 
        approximately equal to the costs of providing the services.  
           (c) The commissioner may develop a schedule of fees for 
        diagnostic evaluations conducted at clinics held by the services 
        for children with handicaps program.  All receipts generated by 
        the program are annually appropriated to the commissioner for 
        use in the maternal and child health program. 
           (d) The commissioner shall set license fees for hospitals 
        and nursing homes that are not boarding care homes at the 
        following levels: 
        Joint Commission on Accreditation of Healthcare 
        Organizations (JCAHO)        
        and American Osteopathic  
        Association (AOA) hospitals      $7,055 $7,555 plus $13 per bed
        Non-JCAHO and non-AOA hospitals  $4,680 $5,180 plus $234 
                                                    $247 per bed
        Nursing home                     $183 plus $91 per bed
           The commissioner shall set license fees for outpatient 
        surgical centers, boarding care homes, and supervised living 
        facilities at the following levels: 
        Outpatient surgical centers      $1,512 $3,349
        Boarding care homes              $183 plus $91 per bed
        Supervised living facilities     $183 plus $91 per bed.
           (e) Unless prohibited by federal law, the commissioner of 
        health shall charge applicants the following fees to cover the 
        cost of any initial certification surveys required to determine 
        a provider's eligibility to participate in the Medicare or 
        Medicaid program: 
        Prospective payment surveys for          $  900
        hospitals
        Swing bed surveys for nursing homes      $1,200
        Psychiatric hospitals                    $1,400
        Rural health facilities                  $1,100
        Portable x-ray providers                 $  500
        Home health agencies                     $1,800
        Outpatient therapy agencies              $  800
        End stage renal dialysis providers       $2,100
        Independent therapists                   $  800
        Comprehensive rehabilitation             $1,200
        outpatient facilities
        Hospice providers                        $1,700
        Ambulatory surgical providers            $1,800
        Hospitals                                $4,200
        Other provider categories or             Actual surveyor costs:
        additional resurveys required            average surveyor cost x
        to complete initial certification        number of hours for the
                                                 survey process.
           These fees shall be submitted at the time of the 
        application for federal certification and shall not be 
        refunded.  All fees collected after the date that the imposition 
        of fees is not prohibited by federal law shall be deposited in 
        the state treasury and credited to the state government special 
        revenue fund. 
           (f) The commissioner shall charge the following fees for 
        examinations, registrations, licenses, and inspections: 
        Plumbing examination                         $ 50 
        Water conditioning examination               $ 50 
        Plumbing bond registration fee               $ 40 
        Water conditioning bond registration fee     $ 40 
        Master plumber's license                     $120 
        Journeyman plumber's license                 $ 55 
        Apprentice registration                      $ 25 
        Water conditioning contractor license        $ 70 
        Water conditioning installer license         $ 35 
        Residential inspection fee (each visit)      $ 50 
        Public, commercial, and       Inspection fee 
        industrial inspections 
           25 or fewer drainage 
           fixture units                   $  300 
           26 to 50 drainage 
           fixture units                   $  900 
           51 to 150 drainage 
           fixture units                   $1,200 
           151 to 249 drainage 
           fixture units                   $1,500 
           250 or more drainage 
           fixture units                   $1,800 
           Callback fee (each visit)       $  100
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 144.147, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] "Eligible rural hospital" 
        means any nonfederal, general acute care hospital that: 
           (1) is either located in a rural area, as defined in the 
        federal Medicare regulations, Code of Federal Regulations, title 
        42, section 405.1041, or located in a community with a 
        population of less than 10,000 15,000, according to United 
        States Census Bureau statistics, outside the seven-county 
        metropolitan area; 
           (2) has 50 or fewer beds; and 
           (3) is not for profit. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 9.  Minnesota Statutes 2004, section 144.147, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GRANTS AUTHORIZED.] The commissioner shall 
        establish a program of grants to assist eligible rural 
        hospitals.  The commissioner shall award grants to hospitals and 
        communities for the purposes set forth in paragraphs (a) and (b).
           (a) Grants may be used by hospitals and their communities 
        to develop strategic plans for preserving or enhancing access to 
        health services.  At a minimum, a strategic plan must consist of:
           (1) a needs assessment to determine what health services 
        are needed and desired by the community.  The assessment must 
        include interviews with or surveys of area health professionals, 
        local community leaders, and public hearings; 
           (2) an assessment of the feasibility of providing needed 
        health services that identifies priorities and timeliness for 
        potential changes; and 
           (3) an implementation plan.  
           The strategic plan must be developed by a committee that 
        includes representatives from the hospital, local public health 
        agencies, other health providers, and consumers from the 
        community.  
           (b) The grants may also be used by eligible rural hospitals 
        that have developed strategic plans to implement transition 
        projects to modify the type and extent of services provided, in 
        order to reflect the needs of that plan.  Grants may be used by 
        hospitals under this paragraph to develop hospital-based 
        physician practices that integrate hospital and existing medical 
        practice facilities that agree to transfer their practices, 
        equipment, staffing, and administration to the hospital.  The 
        grants may also be used by the hospital to establish a health 
        provider cooperative, a telemedicine system, an electronic 
        health records system, or a rural health care system or to cover 
        expenses associated with being designated as a critical access 
        hospital for the Medicare rural hospital flexibility program.  
        Not more than one-third of any grant shall be used to offset 
        losses incurred by physicians agreeing to transfer their 
        practices to hospitals.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 10.  [144.1476] [RURAL PHARMACY PLANNING AND 
        TRANSITION GRANT PROGRAM.] 
           Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
        section, the following definitions apply. 
           (b) "Eligible rural community" means: 
           (1) a Minnesota community that is located in a rural area, 
        as defined in the federal Medicare regulations, Code of Federal 
        Regulations, title 42, section 405.1041; or 
           (2) a Minnesota community that has a population of less 
        than 10,000, according to the United States Bureau of 
        Statistics, and that is outside the seven-county metropolitan 
        area, excluding the cities of Duluth, Mankato, Moorhead, 
        Rochester, and St. Cloud. 
           (c) "Health care provider" means a hospital, clinic, 
        pharmacy, long-term care institution, or other health care 
        facility that is licensed, certified, or otherwise authorized by 
        the laws of this state to provide health care. 
           (d) "Pharmacist" means an individual with a valid license 
        issued under chapter 151 to practice pharmacy. 
           (e) "Pharmacy" has the meaning given under section 151.01, 
        subdivision 2. 
           Subd. 2.  [GRANTS AUTHORIZED; ELIGIBILITY.] (a) The 
        commissioner of health shall establish a program to award grants 
        to eligible rural communities or health care providers in 
        eligible rural communities for planning, establishing, keeping 
        in operation, or providing health care services that preserve 
        access to prescription medications and the skills of a 
        pharmacist according to sections 151.01 to 151.40. 
           (b) To be eligible for a grant, an applicant must develop a 
        strategic plan for preserving or enhancing access to 
        prescription medications and the skills of a pharmacist.  At a 
        minimum, a strategic plan must consist of: 
           (1) a needs assessment to determine what pharmacy services 
        are needed and desired by the community.  The assessment must 
        include interviews with or surveys of area and local health 
        professionals, local community leaders, and public officials; 
           (2) an assessment of the feasibility of providing needed 
        pharmacy services that identifies priorities and timelines for 
        potential changes; and 
           (3) an implementation plan. 
           (c) A grant may be used by a recipient that has developed a 
        strategic plan to implement transition projects to modify the 
        type and extent of pharmacy services provided, in order to 
        reflect the needs of the community.  Grants may also be used by 
        recipients: 
           (1) to develop pharmacy practices that integrate pharmacy 
        and existing health care provider facilities; or 
           (2) to establish a pharmacy provider cooperative or 
        initiatives that maintain local access to prescription 
        medications and the skills of a pharmacist. 
           Subd. 3.  [CONSIDERATION OF GRANTS.] In determining which 
        applicants shall receive grants under this section, the 
        commissioner of health shall appoint a committee comprised of 
        members with experience and knowledge about rural pharmacy 
        issues including, but not limited to, two rural pharmacists with 
        a community pharmacy background, two health care providers from 
        rural communities, one representative from a statewide 
        pharmacist organization, and one representative of the Board of 
        Pharmacy.  A representative of the commissioner may serve on the 
        committee in an ex officio status.  In determining who shall 
        receive a grant, the committee shall take into account: 
           (1) improving or maintaining access to prescription 
        medications and the skills of a pharmacist; 
           (2) changes in service populations; 
           (3) the extent community pharmacy needs are not currently 
        met by other providers in the area; 
           (4) the financial condition of the applicant; 
           (5) the integration of pharmacy services into existing 
        health care services; and 
           (6) community support. 
           The commissioner may also take into account other relevant 
        factors. 
           Subd. 4.  [ALLOCATION OF GRANTS.] (a) The commissioner 
        shall establish a deadline for receiving applications and must 
        make a final decision on the funding of each application within 
        60 days of the deadline.  An applicant must apply no later than 
        March 1 of each fiscal year for grants awarded for that fiscal 
        year. 
           (b) Any grant awarded must not exceed $50,000 a year and 
        may not exceed a one-year term. 
           (c) Applicants may apply to the program each year they are 
        eligible. 
           (d) Project grants may not be used to retire debt incurred 
        with respect to any capital expenditure made prior to the date 
        on which the project is initiated. 
           Subd. 5.  [EVALUATION.] The commissioner shall evaluate the 
        overall effectiveness of the grant program and may collect 
        progress reports and other information from grantees needed for 
        program evaluation.  An academic institution that has the 
        expertise in evaluating rural pharmacy outcomes may participate 
        in the program evaluation if asked by a grantee or the 
        commissioner.  The commissioner shall compile summaries of 
        successful grant projects and other model community efforts to 
        preserve access to prescription medications and the skills of a 
        pharmacist, and make this information available to Minnesota 
        communities seeking to address local pharmacy issues. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 11.  Minnesota Statutes 2004, section 144.148, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] (a) For purposes of this 
        section, the following definitions apply. 
           (b) "Eligible rural hospital" means any nonfederal, general 
        acute care hospital that: 
           (1) is either located in a rural area, as defined in the 
        federal Medicare regulations, Code of Federal Regulations, title 
        42, section 405.1041, or located in a community with a 
        population of less than 10,000 15,000, according to United 
        States Census Bureau statistics, outside the seven-county 
        metropolitan area; 
           (2) has 50 or fewer beds; and 
           (3) is not for profit. 
           (c) "Eligible project" means a modernization project to 
        update, remodel, or replace aging hospital facilities and 
        equipment necessary to maintain the operations of a hospital, 
        including establishing an electronic health records system. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 12.  Minnesota Statutes 2004, section 144.1483, is 
        amended to read: 
           144.1483 [RURAL HEALTH INITIATIVES.] 
           The commissioner of health, through the Office of Rural 
        Health, and consulting as necessary with the commissioner of 
        human services, the commissioner of commerce, the Higher 
        Education Services Office, and other state agencies, shall: 
           (1) develop a detailed plan regarding the feasibility of 
        coordinating rural health care services by organizing individual 
        medical providers and smaller hospitals and clinics into 
        referral networks with larger rural hospitals and clinics that 
        provide a broader array of services; 
           (2) develop and implement a program to assist rural 
        communities in establishing community health centers, as 
        required by section 144.1486; 
           (3) develop recommendations regarding health education and 
        training programs in rural areas, including but not limited to a 
        physician assistants' training program, continuing education 
        programs for rural health care providers, and rural outreach 
        programs for nurse practitioners within existing training 
        programs; 
           (4) (3) develop a statewide, coordinated recruitment 
        strategy for health care personnel and maintain a database on 
        health care personnel as required under section 144.1485; 
           (5) (4) develop and administer technical assistance 
        programs to assist rural communities in:  (i) planning and 
        coordinating the delivery of local health care services; and 
        (ii) hiring physicians, nurse practitioners, public health 
        nurses, physician assistants, and other health personnel; 
           (6) (5) study and recommend changes in the regulation of 
        health care personnel, such as nurse practitioners and physician 
        assistants, related to scope of practice, the amount of on-site 
        physician supervision, and dispensing of medication, to address 
        rural health personnel shortages; 
           (7) (6) support efforts to ensure continued funding for 
        medical and nursing education programs that will increase the 
        number of health professionals serving in rural areas; 
           (8) (7) support efforts to secure higher reimbursement for 
        rural health care providers from the Medicare and medical 
        assistance programs; 
           (9) (8) coordinate the development of a statewide plan for 
        emergency medical services, in cooperation with the Emergency 
        Medical Services Advisory Council; 
           (10) (9) establish a Medicare rural hospital flexibility 
        program pursuant to section 1820 of the federal Social Security 
        Act, United States Code, title 42, section 1395i-4, by 
        developing a state rural health plan and designating, consistent 
        with the rural health plan, rural nonprofit or public hospitals 
        in the state as critical access hospitals.  Critical access 
        hospitals shall include facilities that are certified by the 
        state as necessary providers of health care services to 
        residents in the area.  Necessary providers of health care 
        services are designated as critical access hospitals on the 
        basis of being more than 20 miles, defined as official mileage 
        as reported by the Minnesota Department of Transportation, from 
        the next nearest hospital, being the sole hospital in the 
        county, being a hospital located in a county with a designated 
        medically underserved area or health professional shortage area, 
        or being a hospital located in a county contiguous to a county 
        with a medically underserved area or health professional 
        shortage area.  A critical access hospital located in a county 
        with a designated medically underserved area or a health 
        professional shortage area or in a county contiguous to a county 
        with a medically underserved area or health professional 
        shortage area shall continue to be recognized as a critical 
        access hospital in the event the medically underserved area or 
        health professional shortage area designation is subsequently 
        withdrawn; and 
           (11) (10) carry out other activities necessary to address 
        rural health problems. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 13.  Minnesota Statutes 2004, section 144.1501, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the following definitions apply.  
           (b) "Dentist" means an individual who is licensed to 
        practice dentistry. 
           (c) "Designated rural area" means:  
           (1) an area in Minnesota outside the counties of Anoka, 
        Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, 
        excluding the cities of Duluth, Mankato, Moorhead, Rochester, 
        and St. Cloud; or 
           (2) a municipal corporation, as defined under section 
        471.634, that is physically located, in whole or in part, in an 
        area defined as a designated rural area under clause (1).  
           (c) (d) "Emergency circumstances" means those conditions 
        that make it impossible for the participant to fulfill the 
        service commitment, including death, total and permanent 
        disability, or temporary disability lasting more than two years. 
           (d) (e) "Medical resident" means an individual 
        participating in a medical residency in family practice, 
        internal medicine, obstetrics and gynecology, pediatrics, or 
        psychiatry.  
           (e) (f) "Midlevel practitioner" means a nurse practitioner, 
        nurse-midwife, nurse anesthetist, advanced clinical nurse 
        specialist, or physician assistant.  
           (f) (g) "Nurse" means an individual who has completed 
        training and received all licensing or certification necessary 
        to perform duties as a licensed practical nurse or registered 
        nurse.  
           (g) (h) "Nurse-midwife" means a registered nurse who has 
        graduated from a program of study designed to prepare registered 
        nurses for advanced practice as nurse-midwives.  
           (h) (i) "Nurse practitioner" means a registered nurse who 
        has graduated from a program of study designed to prepare 
        registered nurses for advanced practice as nurse practitioners.  
           (i) (j) "Pharmacist" means an individual with a valid 
        license issued under chapter 151. 
           (k) "Physician" means an individual who is licensed to 
        practice medicine in the areas of family practice, internal 
        medicine, obstetrics and gynecology, pediatrics, or psychiatry.  
           (j) (l) "Physician assistant" means a person registered 
        under chapter 147A.  
           (k) (m) "Qualified educational loan" means a government, 
        commercial, or foundation loan for actual costs paid for 
        tuition, reasonable education expenses, and reasonable living 
        expenses related to the graduate or undergraduate education of a 
        health care professional.  
           (l) (n) "Underserved urban community" means a Minnesota 
        urban area or population included in the list of designated 
        primary medical care health professional shortage areas (HPSAs), 
        medically underserved areas (MUAs), or medically underserved 
        populations (MUPs) maintained and updated by the United States 
        Department of Health and Human Services.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 14.  Minnesota Statutes 2004, section 144.1501, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CREATION OF ACCOUNT.] (a) A health professional 
        education loan forgiveness program account is established.  The 
        commissioner of health shall use money from the account to 
        establish a loan forgiveness program: 
           (1) for medical residents agreeing to practice in 
        designated rural areas or underserved urban communities, or 
        specializing in the area of pediatric psychiatry; 
           (2) for midlevel practitioners agreeing to practice in 
        designated rural areas, and or to teach for at least 20 hours 
        per week in the nursing field in a postsecondary program; 
           (3) for nurses who agree to practice in a Minnesota nursing 
        home or intermediate care facility for persons with mental 
        retardation or related conditions or to teach for at least 20 
        hours per week in the nursing field in a postsecondary program; 
           (4) for other health care technicians agreeing to teach for 
        at least 20 hours per week in their designated field in a 
        postsecondary program.  The commissioner, in consultation with 
        the Healthcare Education-Industry Partnership, shall determine 
        the health care fields where the need is the greatest, 
        including, but not limited to, respiratory therapy, clinical 
        laboratory technology, radiologic technology, and surgical 
        technology; 
           (5) for pharmacists who agree to practice in designated 
        rural areas; and 
           (6) for dentists agreeing to deliver at least 25 percent of 
        the dentist's yearly patient encounters to state public program 
        enrollees or patients receiving sliding fee schedule discounts 
        through a formal sliding fee schedule meeting the standards 
        established by the United States Department of Health and Human 
        Services under Code of Federal Regulations, title 42, section 
        51, chapter 303. 
           (b) Appropriations made to the account do not cancel and 
        are available until expended, except that at the end of each 
        biennium, any remaining balance in the account that is not 
        committed by contract and not needed to fulfill existing 
        commitments shall cancel to the fund. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 15.  Minnesota Statutes 2004, section 144.1501, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY.] (a) To be eligible to participate 
        in the loan forgiveness program, an individual must: 
           (1) be a medical or dental resident, a licensed pharmacist 
        or be enrolled in a dentist, midlevel practitioner, registered 
        nurse, or a licensed practical nurse training program; and 
           (2) submit an application to the commissioner of 
        health.  If fewer applications are submitted by dental students 
        or residents than there are dentist participant slots available, 
        the commissioner may consider applications submitted by dental 
        program graduates who are licensed dentists. 
           (b) An applicant selected to participate must sign a 
        contract to agree to serve a minimum three-year full-time 
        service obligation according to subdivision 2, which shall begin 
        no later than March 31 following completion of required training.
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 16.  Minnesota Statutes 2004, section 144.1501, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LOAN FORGIVENESS.] The commissioner of health 
        may select applicants each year for participation in the loan 
        forgiveness program, within the limits of available funding. The 
        commissioner shall distribute available funds for loan 
        forgiveness proportionally among the eligible professions 
        according to the vacancy rate for each profession in the 
        required geographic area or, facility type, teaching area, 
        patient group, or specialty type specified in subdivision 2.  
        The commissioner shall allocate funds for physician loan 
        forgiveness so that 75 percent of the funds available are used 
        for rural physician loan forgiveness and 25 percent of the funds 
        available are used for underserved urban communities and 
        pediatric psychiatry loan forgiveness.  If the commissioner does 
        not receive enough qualified applicants each year to use the 
        entire allocation of funds for urban underserved communities any 
        eligible profession, the remaining funds may be allocated for 
        rural physician loan forgiveness proportionally among the other 
        eligible professions according to the vacancy rate for each 
        profession in the required geographic area, patient group, or 
        facility type specified in subdivision 2.  Applicants are 
        responsible for securing their own qualified educational loans.  
        The commissioner shall select participants based on their 
        suitability for practice serving the required geographic area or 
        facility type specified in subdivision 2, as indicated by 
        experience or training.  The commissioner shall give preference 
        to applicants closest to completing their training.  For each 
        year that a participant meets the service obligation required 
        under subdivision 3, up to a maximum of four years, the 
        commissioner shall make annual disbursements directly to the 
        participant equivalent to 15 percent of the average educational 
        debt for indebted graduates in their profession in the year 
        closest to the applicant's selection for which information is 
        available, not to exceed the balance of the participant's 
        qualifying educational loans.  Before receiving loan repayment 
        disbursements and as requested, the participant must complete 
        and return to the commissioner an affidavit of practice form 
        provided by the commissioner verifying that the participant is 
        practicing as required under subdivisions 2 and 3.  The 
        participant must provide the commissioner with verification that 
        the full amount of loan repayment disbursement received by the 
        participant has been applied toward the designated loans.  After 
        each disbursement, verification must be received by the 
        commissioner and approved before the next loan repayment 
        disbursement is made.  Participants who move their practice 
        remain eligible for loan repayment as long as they practice as 
        required under subdivision 2.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 17.  Minnesota Statutes 2004, section 144.226, 
        subdivision 1, as amended by Laws 2005, chapter 60, section 4, 
        is amended to read: 
           Subdivision 1.  [WHICH SERVICES ARE FOR FEE.] The fees for 
        the following services shall be the following or an amount 
        prescribed by rule of the commissioner: 
           (a) The fee for the issuance of a certified vital record or 
        a certification that the vital record cannot be found is $8 $9.  
        No fee shall be charged for a certified birth, stillbirth, or 
        death record that is reissued within one year of the original 
        issue, if an amendment is made to the vital record and if the 
        previously issued vital record is surrendered.  The fee is 
        nonrefundable. 
           (b) The fee for processing a request for the replacement of 
        a birth record for all events, except when filing a recognition 
        of parentage pursuant to section 257.73, subdivision 1, 
        is $20 $40.  The fee is payable at the time of application and 
        is nonrefundable. 
           (c) The fee for processing a request for the filing of a 
        delayed registration of birth, stillbirth, or death is $20 $40.  
        The fee is payable at the time of application and is 
        nonrefundable.  This fee includes one subsequent review of the 
        request if the request is not acceptable upon the initial 
        receipt. 
           (d) The fee for processing a request for the amendment of 
        any vital record when requested more than 45 days after the 
        filing of the vital record is $20 $40.  No fee shall be charged 
        for an amendment requested within 45 days after the filing of 
        the vital record.  The fee is payable at the time of application 
        and is nonrefundable.  This fee includes one subsequent review 
        of the request if the request is not acceptable upon the initial 
        receipt. 
           (e) The fee for processing a request for the verification 
        of information from vital records is $8 $9 when the applicant 
        furnishes the specific information to locate the vital record.  
        When the applicant does not furnish specific information, the 
        fee is $20 per hour for staff time expended.  Specific 
        information includes the correct date of the event and the 
        correct name of the registrant.  Fees charged shall approximate 
        the costs incurred in searching and copying the vital records.  
        The fee shall be is payable at the time of application and is 
        nonrefundable. 
           (f) The fee for processing a request for the issuance of a 
        copy of any document on file pertaining to a vital record or 
        statement that a related document cannot be found is $8 $9.  The 
        fee is payable at the time of application and is nonrefundable. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 18.  Minnesota Statutes 2004, section 144.226, 
        subdivision 4, as amended by Laws 2005, chapter 60, section 6, 
        is amended to read: 
           Subd. 4.  [VITAL RECORDS SURCHARGE.] (a) In addition to any 
        fee prescribed under subdivision 1, there is a nonrefundable 
        surcharge of $2 for each certified and noncertified birth, 
        stillbirth, or death record, and for a certification that the 
        record cannot be found.  The local or state registrar shall 
        forward this amount to the commissioner of finance to be 
        deposited into the state government special revenue fund.  This 
        surcharge shall not be charged under those circumstances in 
        which no fee for a birth, stillbirth, or death record is 
        permitted under subdivision 1, paragraph (a).  
           (b) Effective August 1, 2005, to June 30, 2009, the 
        surcharge in paragraph (a) shall be $4. 
           Sec. 19.  Minnesota Statutes 2004, section 144.226, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [ELECTRONIC VERIFICATION.] A fee for the 
        electronic verification of a vital event, when the information 
        being verified is obtained from a certified birth or death 
        record, shall be established through contractual or interagency 
        agreements with interested local, state, or federal government 
        agencies. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 20.  Minnesota Statutes 2004, section 144.226, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [ALTERNATIVE PAYMENT METHODS.] Notwithstanding 
        subdivision 1, alternative payment methods may be approved and 
        implemented by the state registrar or a local registrar. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 21.  Minnesota Statutes 2004, section 144.3831, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEE SETTING.] The commissioner of health 
        may assess an annual fee of $5.21 $6.36 for every service 
        connection to a public water supply that is owned or operated by 
        a home rule charter city, a statutory city, a city of the first 
        class, or a town.  The commissioner of health may also assess an 
        annual fee for every service connection served by a water user 
        district defined in section 110A.02. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006. 
           Sec. 22.  Minnesota Statutes 2004, section 144.551, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESTRICTED CONSTRUCTION OR MODIFICATION.] 
        (a) The following construction or modification may not be 
        commenced:  
           (1) any erection, building, alteration, reconstruction, 
        modernization, improvement, extension, lease, or other 
        acquisition by or on behalf of a hospital that increases the bed 
        capacity of a hospital, relocates hospital beds from one 
        physical facility, complex, or site to another, or otherwise 
        results in an increase or redistribution of hospital beds within 
        the state; and 
           (2) the establishment of a new hospital.  
           (b) This section does not apply to:  
           (1) construction or relocation within a county by a 
        hospital, clinic, or other health care facility that is a 
        national referral center engaged in substantial programs of 
        patient care, medical research, and medical education meeting 
        state and national needs that receives more than 40 percent of 
        its patients from outside the state of Minnesota; 
           (2) a project for construction or modification for which a 
        health care facility held an approved certificate of need on May 
        1, 1984, regardless of the date of expiration of the 
        certificate; 
           (3) a project for which a certificate of need was denied 
        before July 1, 1990, if a timely appeal results in an order 
        reversing the denial; 
           (4) a project exempted from certificate of need 
        requirements by Laws 1981, chapter 200, section 2; 
           (5) a project involving consolidation of pediatric 
        specialty hospital services within the Minneapolis-St. Paul 
        metropolitan area that would not result in a net increase in the 
        number of pediatric specialty hospital beds among the hospitals 
        being consolidated; 
           (6) a project involving the temporary relocation of 
        pediatric-orthopedic hospital beds to an existing licensed 
        hospital that will allow for the reconstruction of a new 
        philanthropic, pediatric-orthopedic hospital on an existing site 
        and that will not result in a net increase in the number of 
        hospital beds.  Upon completion of the reconstruction, the 
        licenses of both hospitals must be reinstated at the capacity 
        that existed on each site before the relocation; 
           (7) the relocation or redistribution of hospital beds 
        within a hospital building or identifiable complex of buildings 
        provided the relocation or redistribution does not result in: 
        (i) an increase in the overall bed capacity at that site; (ii) 
        relocation of hospital beds from one physical site or complex to 
        another; or (iii) redistribution of hospital beds within the 
        state or a region of the state; 
           (8) relocation or redistribution of hospital beds within a 
        hospital corporate system that involves the transfer of beds 
        from a closed facility site or complex to an existing site or 
        complex provided that:  (i) no more than 50 percent of the 
        capacity of the closed facility is transferred; (ii) the 
        capacity of the site or complex to which the beds are 
        transferred does not increase by more than 50 percent; (iii) the 
        beds are not transferred outside of a federal health systems 
        agency boundary in place on July 1, 1983; and (iv) the 
        relocation or redistribution does not involve the construction 
        of a new hospital building; 
           (9) a construction project involving up to 35 new beds in a 
        psychiatric hospital in Rice County that primarily serves 
        adolescents and that receives more than 70 percent of its 
        patients from outside the state of Minnesota; 
           (10) a project to replace a hospital or hospitals with a 
        combined licensed capacity of 130 beds or less if:  (i) the new 
        hospital site is located within five miles of the current site; 
        and (ii) the total licensed capacity of the replacement 
        hospital, either at the time of construction of the initial 
        building or as the result of future expansion, will not exceed 
        70 licensed hospital beds, or the combined licensed capacity of 
        the hospitals, whichever is less; 
           (11) the relocation of licensed hospital beds from an 
        existing state facility operated by the commissioner of human 
        services to a new or existing facility, building, or complex 
        operated by the commissioner of human services; from one 
        regional treatment center site to another; or from one building 
        or site to a new or existing building or site on the same 
        campus; 
           (12) the construction or relocation of hospital beds 
        operated by a hospital having a statutory obligation to provide 
        hospital and medical services for the indigent that does not 
        result in a net increase in the number of hospital beds, 
        notwithstanding section 144.552, 27 beds, of which 12 serve 
        mental health needs, may be transferred from Hennepin County 
        Medical Center to Regions Hospital under this clause; 
           (13) a construction project involving the addition of up to 
        31 new beds in an existing nonfederal hospital in Beltrami 
        County; 
           (14) a construction project involving the addition of up to 
        eight new beds in an existing nonfederal hospital in Otter Tail 
        County with 100 licensed acute care beds; 
           (15) a construction project involving the addition of 20 
        new hospital beds used for rehabilitation services in an 
        existing hospital in Carver County serving the southwest 
        suburban metropolitan area.  Beds constructed under this clause 
        shall not be eligible for reimbursement under medical 
        assistance, general assistance medical care, or MinnesotaCare; 
           (16) a project for the construction or relocation of up to 
        20 hospital beds for the operation of up to two psychiatric 
        facilities or units for children provided that the operation of 
        the facilities or units have received the approval of the 
        commissioner of human services; 
           (17) a project involving the addition of 14 new hospital 
        beds to be used for rehabilitation services in an existing 
        hospital in Itasca County; or 
           (18) a project to add 20 licensed beds in existing space at 
        a hospital in Hennepin County that closed 20 rehabilitation beds 
        in 2002, provided that the beds are used only for rehabilitation 
        in the hospital's current rehabilitation building.  If the beds 
        are used for another purpose or moved to another location, the 
        hospital's licensed capacity is reduced by 20 beds; or 
           (19) a critical access hospital established under section 
        144.1483, clause (9), and section 1820 of the federal Social 
        Security Act, United States Code, title 42, section 1395i-4, 
        that delicensed beds since enactment of the Balanced Budget Act 
        of 1997, Public Law 105-33, to the extent that the critical 
        access hospital does not seek to exceed the maximum number of 
        beds permitted such hospital under federal law. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 23.  Minnesota Statutes 2004, section 144.562, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY FOR LICENSE CONDITION.] (a) A 
        hospital is not eligible to receive a license condition for 
        swing beds unless (1) it either has a licensed bed capacity of 
        less than 50 beds defined in the federal Medicare regulations, 
        Code of Federal Regulations, title 42, section 482.66, or it has 
        a licensed bed capacity of 50 beds or more and has swing beds 
        that were approved for Medicare reimbursement before May 1, 
        1985, or it has a licensed bed capacity of less than 65 beds and 
        the available nursing homes within 50 miles have had, in the 
        aggregate, an average occupancy rate of 96 percent or higher in 
        the most recent two years as documented on the statistical 
        reports to the Department of Health; and (2) it is located in a 
        rural area as defined in the federal Medicare regulations, Code 
        of Federal Regulations, title 42, section 482.66.  
           (b) Except for those critical access hospitals established 
        under section 144.1483, clause (9), and section 1820 of the 
        federal Social Security Act, United States Code, title 42, 
        section 1395i-4, that have an attached nursing home or that 
        owned a nursing home located in the same municipality as of May 
        1, 2005, eligible hospitals are allowed a total of 1,460 2,000 
        days of swing bed use per year, provided that no more than ten 
        hospital beds are used as swing beds at any one time.  Critical 
        access hospitals that have an attached nursing home or that 
        owned a nursing home located in the same municipality as of May 
        1, 2005, are allowed swing bed use as provided in federal law.  
           (c) Except for critical access hospitals that have an 
        attached nursing home or that owned a nursing home located in 
        the same municipality as of May 1, 2005, the commissioner of 
        health must may approve swing bed use beyond 1,460 2,000 days as 
        long as there are no Medicare certified skilled nursing facility 
        beds available within 25 miles of that hospital that are willing 
        to admit the patient.  Critical access hospitals exceeding 2,000 
        swing bed days must maintain documentation that they have 
        contacted skilled nursing facilities within 25 miles to 
        determine if any skilled nursing facility beds are available 
        that are willing to admit the patient. 
           (d) After reaching 2,000 days of swing bed use in a year, 
        an eligible hospital to which this limit applies may admit six 
        additional patients to swing beds each year without seeking 
        approval from the commissioner or being in violation of this 
        subdivision.  These six swing bed admissions are exempt from the 
        limit of 2,000 annual swing bed days for hospitals subject to 
        this limit. 
           (e) A health care system that is in full compliance with 
        this subdivision may allocate its total limit of swing bed days 
        among the hospitals within the system, provided that no hospital 
        in the system without an attached nursing home may exceed 2,000 
        swing bed days per year. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 24.  [144.574] [EDUCATION ABOUT THE DANGERS OF SHAKING 
        INFANTS AND YOUNG CHILDREN.] 
           Subdivision 1.  [EDUCATION BY HOSPITALS.] (a) A hospital 
        licensed under sections 144.50 to 144.56 shall make available 
        for viewing by the parents of each newborn baby delivered in the 
        hospital a video presentation on the dangers associated with 
        shaking infants and young children. 
           (b) A hospital shall use a video obtained from the 
        commissioner or approved by the commissioner.  The commissioner 
        shall provide to a hospital and any interested individuals, at 
        cost, copies of an approved video.  The commissioner shall 
        review other video presentations for possible approval upon the 
        request of a hospital.  The commissioner shall not require a 
        hospital to use videos that would require the hospital to pay 
        royalties for use of the video, restrict viewing in order to 
        comply with public viewing or other restrictions, or be subject 
        to other costs or restrictions associated with copyrights. 
           (c) A hospital shall, whenever possible, request both 
        parents to view the video. 
           (d) The showing or distribution of the video shall not 
        subject any person or facility to any action for damages or 
        other relief provided the person or facility acted in good faith.
           Subd. 2.  [EDUCATION BY HEALTH CARE PROVIDERS.] The 
        commissioner shall establish a protocol for health care 
        providers to educate parents and primary caregivers about the 
        dangers associated with shaking infants and young children.  The 
        commissioner shall request family practice physicians, 
        pediatricians, and other pediatric health care providers to 
        review these dangers with the parents and primary caregivers of 
        infants and young children up to the age of three at each 
        well-baby visit. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 25.  [144.602] [DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] For purposes of sections 
        144.601 to 144.608, the terms defined in this section have the 
        meanings given them. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of health.  
           Subd. 3.  [MAJOR TRAUMA.] "Major trauma" means a sudden 
        severe injury or damage to the body caused by an external force 
        that results in potentially life-threatening injuries or that 
        could result in the following disabilities:  
           (1) impairment of cognitive or mental abilities; 
           (2) impairment of physical functioning; or 
           (3) disturbance of behavioral or emotional functioning. 
           Subd. 4.  [TRAUMA HOSPITAL.] "Trauma hospital" means a 
        hospital that voluntarily meets the commissioner's criteria 
        under section 144.603 and that has been designated as a trauma 
        hospital under section 144.605. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 26.  [144.603] [STATEWIDE TRAUMA SYSTEM CRITERIA.] 
           Subdivision 1.  [CRITERIA ESTABLISHED.] The commissioner 
        shall adopt criteria to ensure that severely injured people are 
        promptly transported and treated at trauma hospitals appropriate 
        to the severity of injury.  Minimum criteria shall address 
        emergency medical service trauma triage and transportation 
        guidelines as approved under section 144E.101, subdivision 14, 
        designation of hospitals as trauma hospitals, interhospital 
        transfers, a trauma registry, and a trauma system governance 
        structure.  
           Subd. 2.  [BASIS; VERIFICATION.] The commissioner shall 
        base the establishment, implementation, and modifications to the 
        criteria under subdivision 1 on the department-published 
        Minnesota comprehensive statewide trauma system plan.  The 
        commissioner shall seek the advice of the Trauma Advisory 
        Council in implementing and updating the criteria, using 
        accepted and prevailing trauma transport, treatment, and 
        referral standards of the American College of Surgeons, the 
        American College of Emergency Physicians, the Minnesota 
        Emergency Medical Services Regulatory Board, the national Trauma 
        Resources Network, and other widely recognized trauma experts.  
        The commissioner shall adapt and modify the standards as 
        appropriate to accommodate Minnesota's unique geography and the 
        state's hospital and health professional distribution and shall 
        verify that the criteria are met by each hospital voluntarily 
        participating in the statewide trauma system.  
           Subd. 3.  [RULE EXEMPTION AND REPORT TO THE 
        LEGISLATURE.] In developing and adopting the criteria under this 
        section, the commissioner of health is exempt from chapter 14, 
        including section 14.386.  By September 1, 2009, the 
        commissioner must report to the legislature on implementation of 
        the voluntary trauma system, including recommendations on the 
        need for including the trauma system criteria in rule. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 27.  [144.604] [TRAUMA TRIAGE AND TRANSPORTATION.] 
           Subdivision 1.  [TRANSPORT REQUIREMENT.] Unless the 
        Emergency Medical Services Regulatory Board has approved a 
        licensed ambulance service's deviation from the guidelines under 
        section 144E.101, subdivision 14, the ambulance service must 
        transport major trauma patients from the scene to the highest 
        state-designated trauma hospital within 30 minutes' transport 
        time.  
           Subd. 2.  [GROUND AMBULANCE EXCEPTIONS.] Notwithstanding 
        subdivision 1, ground ambulances must comply with the following: 
           (1) patients with compromised airways must be transported 
        immediately to the nearest designated trauma hospital; and 
           (2) level II trauma hospitals capable of providing 
        definitive trauma care must not be bypassed to reach a level I 
        trauma hospital.  
           Subd. 3.  [UNDESIGNATED HOSPITALS.] No major trauma patient 
        shall be transported to a hospital not participating in the 
        statewide trauma system unless no trauma hospital is available 
        within 30 minutes' transport time. 
           [EFFECTIVE DATE.] This section is effective July 1, 2009. 
           Sec. 28.  [144.605] [DESIGNATING TRAUMA HOSPITALS.] 
           Subdivision 1.  [NAMING PRIVILEGES.] Unless it has been 
        designated a trauma hospital by the commissioner, no hospital 
        shall use the term trauma center or trauma hospital in its name 
        or its advertising or shall otherwise indicate it has trauma 
        treatment capabilities. 
           Subd. 2.  [DESIGNATION; REVERIFICATION.] The commissioner 
        shall designate four levels of trauma hospitals.  A hospital 
        that voluntarily meets the criteria for a particular level of 
        trauma hospital shall apply to the commissioner for designation 
        and, upon the commissioner's verifying the hospital meets the 
        criteria, be designated a trauma hospital at the appropriate 
        level for a three-year period.  Prior to the expiration of the 
        three-year designation, a hospital seeking to remain part of the 
        voluntary system must apply for and successfully complete a 
        reverification process, be awaiting the site visit for the 
        reverification, or be awaiting the results of the site visit.  
        The commissioner may extend a hospital's existing designation 
        for up to 18 months on a provisional basis if the hospital has 
        applied for reverification in a timely manner but has not yet 
        completed the reverification process within the expiration of 
        the three-year designation and the extension is in the best 
        interest of trauma system patient safety.  To be granted a 
        provisional extension, the hospital must be:  
           (1) scheduled and awaiting the site visit for 
        reverification; 
           (2) awaiting the results of the site visit; or 
           (3) responding to and correcting identified deficiencies 
        identified in the site visit. 
           Subd. 3.  [ACS VERIFICATION.] The commissioner shall grant 
        the appropriate level I, II, or III trauma hospital designation 
        to a hospital that successfully completes and passes the 
        American College of Surgeons (ACS) verification standards at the 
        hospital's cost, submits verification documentation to the 
        Trauma Advisory Council, and formally notifies the Trauma 
        Advisory Council of ACS verification.  
           Subd. 4.  [LEVEL III DESIGNATION; NOT ACS VERIFIED.] (a) 
        The commissioner shall grant the appropriate level III trauma 
        hospital designation to a hospital that is not ACS verified but 
        that successfully completes the designation process under 
        paragraph (b).  
           (b) The hospital must complete and submit a self-reported 
        survey and application to the Trauma Advisory Council for 
        review, verifying that the hospital meets the criteria as a 
        level III trauma hospital.  When the Trauma Advisory Council is 
        satisfied the application is complete, the commissioner shall 
        arrange a site review visit.  Upon successful completion of the 
        site review, the review team shall make written recommendations 
        to the Trauma Advisory Council.  If approved by the Trauma 
        Advisory Council, a letter of recommendation shall be sent to 
        the commissioner for final approval and designation.  
           Subd. 5.  [LEVEL IV DESIGNATION.] (a) The commissioner 
        shall grant the appropriate level IV trauma hospital designation 
        to a hospital that successfully completes the designation 
        process under paragraph (b).  
           (b) The hospital must complete and submit a self-reported 
        survey and application to the Trauma Advisory Council for 
        review, verifying that the hospital meets the criteria as a 
        level IV trauma hospital.  When the Trauma Advisory Council is 
        satisfied the application is complete, the council shall review 
        the application and, if the council approves the application, 
        send a letter of recommendation to the commissioner for final 
        approval and designation.  The commissioner shall grant a level 
        IV designation and shall arrange a site review visit within 
        three years of the designation and every three years thereafter, 
        to coincide with the three-year reverification process.  
           Subd. 6.  [CHANGES IN DESIGNATION.] Changes in a trauma 
        hospital's ability to meet the criteria for the hospital's level 
        of designation must be self-reported to the Trauma Advisory 
        Council and to other regional hospitals and local emergency 
        medical services providers and authorities.  If the hospital 
        cannot correct its ability to meet the criteria for its level 
        within six months, the hospital may apply for redesignation at a 
        different level.  
           Subd. 7.  [HIGHER DESIGNATION.] A trauma hospital may apply 
        for a higher trauma hospital designation one time during the 
        hospital's three-year designation by completing the designation 
        process for that level of trauma hospital.  
           Subd. 8.  [LOSS OF DESIGNATION.] The commissioner may 
        refuse to designate or redesignate or may revoke a previously 
        issued trauma hospital designation if a hospital does not meet 
        the criteria of the statewide trauma plan, in the interests of 
        patient safety, or if a hospital denies or refuses a reasonable 
        request by the commissioner or the commissioner's designee to 
        verify information by correspondence or an on-site visit. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 29.  [144.606] [INTERHOSPITAL TRANSFERS.] 
           Subdivision 1.  [WRITTEN PROCEDURES REQUIRED.] A level III 
        or IV trauma hospital must have predetermined, written 
        procedures that direct the internal process for rapidly and 
        efficiently transferring a major trauma patient to definitive 
        care, including: 
           (1) clearly identified anatomic and physiologic criteria 
        that, if met, will immediately initiate transfer to definitive 
        care; 
           (2) a listing of appropriate ground and air transport 
        services, including primary and secondary telephone contact 
        numbers; and 
           (3) immediately available supplies, records, or other 
        necessary resources that will accompany a patient.  
           Subd. 2.  [TRANSFER AGREEMENTS.] (a) A level III or IV 
        trauma hospital may transfer patients to a hospital with which 
        the trauma hospital has a written transfer agreement. 
           (b) Each agreement must be current and with a trauma 
        hospital or trauma hospitals capable of caring for major trauma 
        injuries.  
           (c) A level III or IV trauma hospital must have a current 
        transfer agreement with a hospital that has special capabilities 
        in the treatment of burn injuries and a transfer agreement with 
        a second hospital that has special capabilities in the treatment 
        of burn injuries, should the primary transfer hospital be unable 
        to accept a burn patient. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 30.  [144.607] [TRAUMA REGISTRY.] 
           Subdivision 1.  [REGISTRY PARTICIPATION REQUIRED.] A trauma 
        hospital must participate in the statewide trauma registry.  
           Subd. 2.  [TRAUMA REPORTING.] A trauma hospital must report 
        major trauma injuries as part of the reporting for the traumatic 
        brain injury and spinal cord injury registry required in 
        sections 144.661 to 144.665.  
           Subd. 3.  [APPLICATION OF OTHER LAW.] Sections 144.661 to 
        144.665 apply to a major trauma reported to the statewide trauma 
        registry, with the exception of sections 144.662, clause (2), 
        and 144.664, subdivision 3.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 31.  [144.608] [TRAUMA ADVISORY COUNCIL.] 
           Subdivision 1.  [TRAUMA ADVISORY COUNCIL ESTABLISHED.] (a) 
        A Trauma Advisory Council is established to advise, consult 
        with, and make recommendations to the commissioner on the 
        development, maintenance, and improvement of a statewide trauma 
        system.  
           (b) The council shall consist of the following members:  
           (1) a trauma surgeon certified by the American College of 
        Surgeons who practices in a level I or II trauma hospital; 
           (2) a general surgeon certified by the American College of 
        Surgeons whose practice includes trauma and who practices in a 
        designated rural area as defined under section 144.1501, 
        subdivision 1, paragraph (b); 
           (3) a neurosurgeon certified by the American Board of 
        Neurological Surgery who practices in a level I or II trauma 
        hospital; 
           (4) a trauma program nurse manager or coordinator 
        practicing in a level I or II trauma hospital; 
           (5) an emergency physician certified by the American 
        College of Emergency Physicians whose practice includes 
        emergency room care in a level I, II, III, or IV trauma 
        hospital; 
           (6) an emergency room nurse manager who practices in a 
        level III or IV trauma hospital; 
           (7) a family practice physician whose practice includes 
        emergency room care in a level III or IV trauma hospital located 
        in a designated rural area as defined under section 144.1501, 
        subdivision 1, paragraph (b); 
           (8) a nurse practitioner, as defined under section 
        144.1501, subdivision 1, paragraph (h), or a physician 
        assistant, as defined under section 144.1501, subdivision 1, 
        paragraph (j), whose practice includes emergency room care in a 
        level IV trauma hospital located in a designated rural area as 
        defined under section 144.1501, subdivision 1, paragraph (b); 
           (9) a pediatrician certified by the American Academy of 
        Pediatrics whose practice includes emergency room care in a 
        level I, II, III, or IV trauma hospital; 
           (10) an orthopedic surgeon certified by the American Board 
        of Orthopaedic Surgery whose practice includes trauma and who 
        practices in a level I, II, or III trauma hospital; 
           (11) the state emergency medical services medical director 
        appointed by the Emergency Medical Services Regulatory Board; 
           (12) a hospital administrator of a level III or IV trauma 
        hospital located in a designated rural area as defined under 
        section 144.1501, subdivision 1, paragraph (b); 
           (13) a rehabilitation specialist whose practice includes 
        rehabilitation of patients with major trauma injuries or 
        traumatic brain injuries and spinal cord injuries as defined 
        under section 144.661; 
           (14) an attendant or ambulance director who is an EMT, 
        EMT-I, or EMT-P within the meaning of section 144E.001 and who 
        actively practices with a licensed ambulance service in a 
        primary service area located in a designated rural area as 
        defined under section 144.1501, subdivision 1, paragraph (b); 
        and 
           (15) the commissioner of public safety or the 
        commissioner's designee. 
           (c) Council members whose appointment is dependent on 
        practice in a level III or IV trauma hospital may be appointed 
        to an initial term based upon their statements that the hospital 
        intends to become a level III or IV facility by July 1, 2009.  
           Subd. 2.  [COUNCIL ADMINISTRATION.] (a) The council must 
        meet at least twice a year but may meet more frequently at the 
        call of the chair, a majority of the council members, or the 
        commissioner.  
           (b) The terms, compensation, and removal of members of the 
        council are governed by section 15.059, except that the council 
        expires June 30, 2015. 
           (c) The council may appoint subcommittees and workgroups.  
        Subcommittees shall consist of council members.  Workgroups may 
        include noncouncil members.  Noncouncil members shall be 
        compensated for workgroup activities under section 15.059, 
        subdivision 3, but shall receive expenses only.  
           Subd. 3.  [REGIONAL TRAUMA ADVISORY COUNCILS.] (a) Up to 
        eight regional trauma advisory councils may be formed as needed. 
           (b) Regional trauma advisory councils shall advise, consult 
        with, and make recommendation to the state Trauma Advisory 
        Council on suggested regional modifications to the statewide 
        trauma criteria that will improve patient care and accommodate 
        specific regional needs.  
           (c) Each regional advisory council must have no more than 
        15 members.  The commissioner, in consultation with the 
        Emergency Medical Services Regulatory Board, shall name the 
        council members. 
           (d) Regional council members may receive expenses in the 
        same manner and amount as authorized by the plan adopted under 
        section 43A.18, subdivision 2. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 32.  Minnesota Statutes 2004, section 144.9504, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LEAD RISK ASSESSMENT.] (a) An assessing agency 
        shall conduct a lead risk assessment of a residence according to 
        the venous blood lead level and time frame set forth in clauses 
        (1) to (5) (4) for purposes of secondary prevention: 
           (1) within 48 hours of a child or pregnant female in the 
        residence being identified to the agency as having a venous 
        blood lead level equal to or greater than 70 60 micrograms of 
        lead per deciliter of whole blood; 
           (2) within five working days of a child or pregnant female 
        in the residence being identified to the agency as having a 
        venous blood lead level equal to or greater than 45 micrograms 
        of lead per deciliter of whole blood; 
           (3) within ten working days of a child in the residence 
        being identified to the agency as having a venous blood lead 
        level equal to or greater than 20 15 micrograms of lead per 
        deciliter of whole blood; or 
           (4) within ten working days of a child in the residence 
        being identified to the agency as having a venous blood lead 
        level that persists in the range of 15 to 19 micrograms of lead 
        per deciliter of whole blood for 90 days after initial 
        identification; or 
           (5) within ten working days of a pregnant female in the 
        residence being identified to the agency as having a venous 
        blood lead level equal to or greater than ten micrograms of lead 
        per deciliter of whole blood.  
           (b) Within the limits of available local, state, and 
        federal appropriations, an assessing agency may also conduct a 
        lead risk assessment for children with any elevated blood lead 
        level.  
           (c) In a building with two or more dwelling units, an 
        assessing agency shall assess the individual unit in which the 
        conditions of this section are met and shall inspect all common 
        areas accessible to a child.  If a child visits one or more 
        other sites such as another residence, or a residential or 
        commercial child care facility, playground, or school, the 
        assessing agency shall also inspect the other sites.  The 
        assessing agency shall have one additional day added to the time 
        frame set forth in this subdivision to complete the lead risk 
        assessment for each additional site.  
           (d) Within the limits of appropriations, the assessing 
        agency shall identify the known addresses for the previous 12 
        months of the child or pregnant female with venous blood lead 
        levels of at least 20 15 micrograms per deciliter for the child 
        or at least ten micrograms per deciliter for the pregnant 
        female; notify the property owners, landlords, and tenants at 
        those addresses that an elevated blood lead level was found in a 
        person who resided at the property; and give them primary 
        prevention information.  Within the limits of appropriations, 
        the assessing agency may perform a risk assessment and issue 
        corrective orders in the properties, if it is likely that the 
        previous address contributed to the child's or pregnant female's 
        blood lead level.  The assessing agency shall provide the notice 
        required by this subdivision without identifying the child or 
        pregnant female with the elevated blood lead level.  The 
        assessing agency is not required to obtain the consent of the 
        child's parent or guardian or the consent of the pregnant female 
        for purposes of this subdivision.  This information shall be 
        classified as private data on individuals as defined under 
        section 13.02, subdivision 12.  
           (e) The assessing agency shall conduct the lead risk 
        assessment according to rules adopted by the commissioner under 
        section 144.9508.  An assessing agency shall have lead risk 
        assessments performed by lead risk assessors licensed by the 
        commissioner according to rules adopted under section 144.9508.  
        If a property owner refuses to allow a lead risk assessment, the 
        assessing agency shall begin legal proceedings to gain entry to 
        the property and the time frame for conducting a lead risk 
        assessment set forth in this subdivision no longer applies.  A 
        lead risk assessor or assessing agency may observe the 
        performance of lead hazard reduction in progress and shall 
        enforce the provisions of this section under section 144.9509.  
        Deteriorated painted surfaces, bare soil, and dust must be 
        tested with appropriate analytical equipment to determine the 
        lead content, except that deteriorated painted surfaces or bare 
        soil need not be tested if the property owner agrees to engage 
        in lead hazard reduction on those surfaces.  The lead content of 
        drinking water must be measured if another probable source of 
        lead exposure is not identified.  Within a standard metropolitan 
        statistical area, an assessing agency may order lead hazard 
        reduction of bare soil without measuring the lead content of the 
        bare soil if the property is in a census tract in which soil 
        sampling has been performed according to rules established by 
        the commissioner and at least 25 percent of the soil samples 
        contain lead concentrations above the standard in section 
        144.9508. 
           (f) Each assessing agency shall establish an administrative 
        appeal procedure which allows a property owner to contest the 
        nature and conditions of any lead order issued by the assessing 
        agency.  Assessing agencies must consider appeals that propose 
        lower cost methods that make the residence lead safe.  The 
        commissioner shall use the authority and appeal procedure 
        granted under sections 144.989 to 144.993. 
           (g) Sections 144.9501 to 144.9509 neither authorize nor 
        prohibit an assessing agency from charging a property owner for 
        the cost of a lead risk assessment. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 33.  Minnesota Statutes 2004, section 144.98, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FEES.] (a) An application for certification 
        under subdivision 1 must be accompanied by the biennial fee 
        specified in this subdivision.  The fees are for: 
           (1) nonrefundable base certification fee, $1,200 
        $1,600; and 
           (2) sample preparation techniques fees, $100 per technique; 
        and 
           (3) test category certification fees: 
        Test Category                                   Certification Fee
        Clean water program bacteriology                        $600 $800
        Safe drinking water program bacteriology                $600 $800
        Clean water program inorganic chemistry                 $600 $800
        Safe drinking water program inorganic chemistry         $600 $800
        Clean water program chemistry metals                  $800 $1,200
        Safe drinking water program chemistry metals          $800 $1,200
        Resource conservation and recovery program 
          chemistry metals                                    $800 $1,200
        Clean water program volatile organic compounds      $1,200 $1,500
        Safe drinking water program 
          volatile organic compounds                        $1,200 $1,500
        Resource conservation and recovery program 
          volatile organic compounds                        $1,200 $1,500
        Underground storage tank program
          volatile organic compounds                        $1,200 $1,500
        Clean water program other organic compounds         $1,200 $1,500
        Safe drinking water program other organic compounds $1,200 $1,500
        Resource conservation and recovery program
          other organic compounds                           $1,200 $1,500
        Clean water program radiochemistry                         $2,500
        Safe drinking water program radiochemistry                 $2,500
        Resource conservation and recovery program
          agricultural contaminants                                $2,500
        Resource conservation and recovery program
          emerging contaminants                                    $2,500
           (b) The total biennial certification fee is the base fee 
        plus the applicable test category fees.  
           (c) Laboratories located outside of this state that require 
        an on-site survey will inspection shall be assessed an 
        additional $2,500 $3,750 fee. 
           (c) The total biennial certification fee includes the base 
        fee, the sample preparation techniques fees, the test category 
        fees, and, when applicable, the on-site inspection fee. 
           (d) Fees must be set so that the total fees support the 
        laboratory certification program.  Direct costs of the 
        certification service include program administration, 
        inspections, the agency's general support costs, and attorney 
        general costs attributable to the fee function. 
           (e) A change fee shall be assessed if a laboratory requests 
        additional analytes or methods at any time other than when 
        applying for or renewing its certification.  The change fee is 
        equal to the test category certification fee for the analyte.  
           (f) A variance fee shall be assessed if a laboratory 
        requests and is granted a variance from a rule adopted under 
        this section.  The variance fee is $500 per variance. 
           (g) Refunds or credits shall not be made for analytes or 
        methods requested but not approved.  
           (h) Certification of a laboratory shall not be awarded 
        until all fees are paid. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 34.  Minnesota Statutes 2004, section 144E.101, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [TRAUMA TRIAGE AND TRANSPORT GUIDELINES.] By 
        July 1, 2009, a licensee shall have written age appropriate 
        trauma triage and transport guidelines consistent with the 
        criteria issued by the Trauma Advisory Council established under 
        section 144.608 and approved by the board.  The board may 
        approve a licensee's requested deviations to the guidelines due 
        to the availability of local or regional trauma resources if the 
        changes are in the best interest of the patient's health. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 35.  Minnesota Statutes 2004, section 145.4242, is 
        amended to read: 
           145.4242 [INFORMED CONSENT.] 
           (a) No abortion shall be performed in this state except 
        with the voluntary and informed consent of the female upon whom 
        the abortion is to be performed.  Except in the case of a 
        medical emergency, consent to an abortion is voluntary and 
        informed only if: 
           (1) the female is told the following, by telephone or in 
        person, by the physician who is to perform the abortion or by a 
        referring physician, at least 24 hours before the abortion: 
           (i) the particular medical risks associated with the 
        particular abortion procedure to be employed including, when 
        medically accurate, the risks of infection, hemorrhage, breast 
        cancer, danger to subsequent pregnancies, and infertility; 
           (ii) the probable gestational age of the unborn child at 
        the time the abortion is to be performed; and 
           (iii) the medical risks associated with carrying her child 
        to term; and 
           (iv) for abortions after 20 weeks gestational, whether or 
        not an anesthetic or analgesic would eliminate or alleviate 
        organic pain to the unborn child caused by the particular method 
        of abortion to be employed and the particular medical benefits 
        and risks associated with the particular anesthetic or analgesic.
           The information required by this clause may be provided by 
        telephone without conducting a physical examination or tests of 
        the patient, in which case the information required to be 
        provided may be based on facts supplied to the physician by the 
        female and whatever other relevant information is reasonably 
        available to the physician.  It may not be provided by a tape 
        recording, but must be provided during a consultation in which 
        the physician is able to ask questions of the female and the 
        female is able to ask questions of the physician.  If a physical 
        examination, tests, or the availability of other information to 
        the physician subsequently indicate, in the medical judgment of 
        the physician, a revision of the information previously supplied 
        to the patient, that revised information may be communicated to 
        the patient at any time prior to the performance of the 
        abortion.  Nothing in this section may be construed to preclude 
        provision of required information in a language understood by 
        the patient through a translator; 
           (2) the female is informed, by telephone or in person, by 
        the physician who is to perform the abortion, by a referring 
        physician, or by an agent of either physician at least 24 hours 
        before the abortion: 
           (i) that medical assistance benefits may be available for 
        prenatal care, childbirth, and neonatal care; 
           (ii) that the father is liable to assist in the support of 
        her child, even in instances when the father has offered to pay 
        for the abortion; and 
           (iii) that she has the right to review the printed 
        materials described in section 145.4243, that these materials 
        are available on a state-sponsored Web site, and what the Web 
        site address is.  The physician or the physician's agent shall 
        orally inform the female that the materials have been provided 
        by the state of Minnesota and that they describe the unborn 
        child, list agencies that offer alternatives to abortion, and 
        contain information on fetal pain.  If the female chooses to 
        view the materials other than on the Web site, they shall either 
        be given to her at least 24 hours before the abortion or mailed 
        to her at least 72 hours before the abortion by certified mail, 
        restricted delivery to addressee, which means the postal 
        employee can only deliver the mail to the addressee. 
           The information required by this clause may be provided by 
        a tape recording if provision is made to record or otherwise 
        register specifically whether the female does or does not choose 
        to have the printed materials given or mailed to her; 
           (3) the female certifies in writing, prior to the abortion, 
        that the information described in clauses (1) and (2) has been 
        furnished to her and that she has been informed of her 
        opportunity to review the information referred to in clause (2), 
        subclause (iii); and 
           (4) prior to the performance of the abortion, the physician 
        who is to perform the abortion or the physician's agent obtains 
        a copy of the written certification prescribed by clause (3) and 
        retains it on file with the female's medical record for at least 
        three years following the date of receipt. 
           (b) Prior to administering the anesthetic or analgesic as 
        described in paragraph (a), clause (1), item (iv), the physician 
        must disclose to the woman any additional cost of the procedure 
        for the administration of the anesthetic or analgesic.  If the 
        woman consents to the administration of the anesthetic or 
        analgesic, the physician shall administer the anesthetic or 
        analgesic or arrange to have the anesthetic or analgesic 
        administered.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 36.  Minnesota Statutes 2004, section 145.56, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMMUNITY-BASED PROGRAMS.] (a) To the extent 
        funds are appropriated for the purposes of this subdivision, the 
        commissioner shall establish a grant program to fund: 
           (1) community-based programs to provide education, 
        outreach, and advocacy services to populations who may be at 
        risk for suicide; 
           (2) community-based programs that educate community helpers 
        and gatekeepers, such as family members, spiritual leaders, 
        coaches, and business owners, employers, and coworkers on how to 
        prevent suicide by encouraging help-seeking behaviors; 
           (3) community-based programs that educate populations at 
        risk for suicide and community helpers and gatekeepers that must 
        include information on the symptoms of depression and other 
        psychiatric illnesses, the warning signs of suicide, skills for 
        preventing suicides, and making or seeking effective referrals 
        to intervention and community resources; and 
           (4) community-based programs to provide evidence-based 
        suicide prevention and intervention education to school staff, 
        parents, and students in grades kindergarten through 12.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 37.  Minnesota Statutes 2004, section 145.56, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PERIODIC EVALUATIONS; BIENNIAL REPORTS.] To the 
        extent funds are appropriated for the purposes of this 
        subdivision, the commissioner shall conduct periodic evaluations 
        of the impact of and outcomes from implementation of the state's 
        suicide prevention plan and each of the activities specified in 
        this section.  By July 1, 2002, and July 1 of each even-numbered 
        year thereafter, the commissioner shall report the results of 
        these evaluations to the chairs of the policy and finance 
        committees in the house and senate with jurisdiction over health 
        and human services issues. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 38.  [145.906] [POSTPARTUM DEPRESSION EDUCATION AND 
        INFORMATION.] 
           (a) The commissioner of health shall work with health care 
        facilities, licensed health and mental health care 
        professionals, mental health advocates, consumers, and families 
        in the state to develop materials and information about 
        postpartum depression, including treatment resources, and 
        develop policies and procedures to comply with this section. 
           (b) Physicians, traditional midwives, and other licensed 
        health care professionals providing prenatal care to women must 
        have available to women and their families information about 
        postpartum depression. 
           (c) Hospitals and other health care facilities in the state 
        must provide departing new mothers and fathers and other family 
        members, as appropriate, with written information about 
        postpartum depression, including its symptoms, methods of coping 
        with the illness, and treatment resources. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 39.  Minnesota Statutes 2004, section 145.9268, is 
        amended to read: 
           145.9268 [COMMUNITY CLINIC GRANTS.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "eligible community clinic" means: 
           (1) a nonprofit clinic that provides is established to 
        provide health services under conditions as defined in Minnesota 
        Rules, part 9505.0255, to low income or rural population groups; 
        provides medical, preventive, dental, or mental health primary 
        care services; and utilizes a sliding fee scale or other 
        procedure to determine eligibility for charity care or to ensure 
        that no person will be denied services because of inability to 
        pay; 
           (2) a governmental entity or an Indian tribal government or 
        Indian health service unit that provides services and utilizes a 
        sliding fee scale or other procedure as described under clause 
        (1); or 
           (3) a consortium of clinics comprised of entities under 
        clause (1) or (2); or 
           (4) a nonprofit, tribal, or governmental entity proposing 
        the establishment of a clinic that will provide services and 
        utilize a sliding fee scale or other procedure as described 
        under clause (1). 
           Subd. 2.  [GRANTS AUTHORIZED.] The commissioner of health 
        shall award grants to eligible community clinics to plan, 
        establish, or operate services to improve the ongoing viability 
        of Minnesota's clinic-based safety net providers.  Grants shall 
        be awarded to support the capacity of eligible community clinics 
        to serve low-income populations, reduce current or future 
        uncompensated care burdens, or provide for improved care 
        delivery infrastructure.  The commissioner shall award grants to 
        community clinics in metropolitan and rural areas of the state, 
        and shall ensure geographic representation in grant awards among 
        all regions of the state. 
           Subd. 3.  [ALLOCATION OF GRANTS.] (a) To receive a grant 
        under this section, an eligible community clinic must submit an 
        application to the commissioner of health by the deadline 
        established by the commissioner.  A grant may be awarded upon 
        the signing of a grant contract.  Community clinics may apply 
        for and the commissioner may award grants for one-year or 
        two-year periods. 
           (b) An application must be on a form and contain 
        information as specified by the commissioner but at a minimum 
        must contain: 
           (1) a description of the purpose or project for which grant 
        funds will be used; 
           (2) a description of the problem or problems the grant 
        funds will be used to address; and 
           (3) a description of achievable objectives, a workplan, and 
        a timeline for implementation and completion of processes or 
        projects enabled by the grant; and 
           (4) a process for documenting and evaluating results of the 
        grant. 
           (c) The commissioner shall review each application to 
        determine whether the application is complete and whether the 
        applicant and the project are eligible for a grant.  In 
        evaluating applications according to paragraph (d), the 
        commissioner shall establish criteria including, but not limited 
        to:  the priority level eligibility of the project; the 
        applicant's thoroughness and clarity in describing the problem 
        grant funds are intended to address; a description of the 
        applicant's proposed project; a description of the population 
        demographics and service area of the proposed project; the 
        manner in which the applicant will demonstrate the effectiveness 
        of any projects undertaken; and evidence of efficiencies and 
        effectiveness gained through collaborative efforts.  The 
        commissioner may also take into account other relevant factors, 
        including, but not limited to, the percentage for which 
        uninsured patients represent the applicant's patient base and 
        the degree to which grant funds will be used to support services 
        increasing or maintaining access to health care services.  
        During application review, the commissioner may request 
        additional information about a proposed project, including 
        information on project cost.  Failure to provide the information 
        requested disqualifies an applicant.  The commissioner has 
        discretion over the number of grants awarded. 
           (d) In determining which eligible community clinics will 
        receive grants under this section, the commissioner shall give 
        preference to those grant applications that show evidence of 
        collaboration with other eligible community clinics, hospitals, 
        health care providers, or community organizations.  In addition, 
        the commissioner shall give priority, in declining order, to 
        grant applications for projects that: 
           Subd. 3a.  [AWARDING GRANTS.] (a) The commissioner may 
        award grants for activities to: 
           (1) provide a direct offset to expenses incurred for 
        services provided to the clinic's target population; 
           (2) establish, update, or improve information, data 
        collection, or billing systems, including electronic health 
        records systems; 
           (3) procure, modernize, remodel, or replace equipment used 
        in the delivery of direct patient care at a clinic; 
           (4) provide improvements for care delivery, such as 
        increased translation and interpretation services; or 
           (5) build a new clinic or expand an existing facility; or 
           (6) other projects determined by the commissioner to 
        improve the ability of applicants to provide care to the 
        vulnerable populations they serve. 
           (e) (b) A grant awarded to an eligible community clinic may 
        not exceed $300,000 per eligible community clinic.  For an 
        applicant applying as a consortium of clinics, a grant may not 
        exceed $300,000 per clinic included in the consortium.  The 
        commissioner has discretion over the number of grants awarded.  
           Subd. 4.  [EVALUATION AND REPORT.] The commissioner of 
        health shall evaluate the overall effectiveness of the grant 
        program.  The commissioner shall collect progress reports to 
        evaluate the grant program from the eligible community clinics 
        receiving grants.  Every two years, as part of this evaluation, 
        the commissioner shall report to the legislature on priority 
        areas for grants set under subdivision 3 the needs of community 
        clinics and provide any recommendations for adding or 
        changing priority areas eligible activities. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 40.  Minnesota Statutes 2004, section 147A.08, is 
        amended to read: 
           147A.08 [EXEMPTIONS.] 
           (a) This chapter does not apply to, control, prevent, or 
        restrict the practice, service, or activities of persons listed 
        in section 147.09, clauses (1) to (6) and (8) to (13), persons 
        regulated under section 214.01, subdivision 2, or persons 
        defined in section 144.1501, subdivision 1, paragraphs 
        (e) (f), (g) (h), and (h) (i). 
           (b) Nothing in this chapter shall be construed to require 
        registration of: 
           (1) a physician assistant student enrolled in a physician 
        assistant or surgeon assistant educational program accredited by 
        the Committee on Allied Health Education and Accreditation or by 
        its successor agency approved by the board; 
           (2) a physician assistant employed in the service of the 
        federal government while performing duties incident to that 
        employment; or 
           (3) technicians, other assistants, or employees of 
        physicians who perform delegated tasks in the office of a 
        physician but who do not identify themselves as a physician 
        assistant. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 41.  Minnesota Statutes 2004, section 150A.22, is 
        amended to read: 
           150A.22 [DONATED DENTAL SERVICES.] 
           (a) The Board of Dentistry commissioner of health shall 
        contract with the Minnesota Dental Association, or another 
        appropriate and qualified organization to develop and operate a 
        donated dental services program to provide dental care to public 
        program recipients and the uninsured through dentists who 
        volunteer their services without compensation.  As part of the 
        contract, the board commissioner shall include specific 
        performance and outcome measures that the contracting 
        organization must meet.  The donated dental services program 
        shall: 
           (1) establish a network of volunteer dentists, including 
        dental specialties, to donate dental services to eligible 
        individuals; 
           (2) establish a system to refer eligible individuals to the 
        appropriate volunteer dentists; and 
           (3) develop and implement a public awareness campaign to 
        educate eligible individuals about the availability of the 
        program. 
           (b) Funding for the program may be used for administrative 
        or technical support.  The organization contracting with the 
        board commissioner shall provide an annual report that accounts 
        for funding appropriated to the program by the state, documents 
        the number of individuals served by the program and the number 
        of dentists participating as program providers, and provides 
        data on meeting the specific performance and outcome measures 
        identified by the board commissioner.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 42.  Minnesota Statutes 2004, section 157.011, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [RULE EXEMPTION.] Notwithstanding any rule to the 
        contrary, no food establishment shall be required to acquire 
        equipment or change construction solely because ownership of the 
        food establishment has been transferred. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 43.  Minnesota Statutes 2004, section 157.15, is 
        amended by adding a subdivision to read: 
           Subd. 19.  [STATEWIDE HOSPITALITY FEE.] "Statewide 
        hospitality fee" means a fee to fund statewide food, beverage, 
        and lodging program development activities, including training 
        for inspection staff, technical assistance, maintenance of a 
        statewide integrated food safety and security information 
        system, and other related statewide activities that support the 
        food, beverage, and lodging program activities. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 44.  Minnesota Statutes 2004, section 157.16, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSE RENEWAL.] Initial and renewal licenses 
        for all food and beverage service establishments, hotels, 
        motels, lodging establishments, and resorts shall be issued for 
        the calendar year for which application is made and shall expire 
        on December 31 of such year.  Any person who operates a place of 
        business after the expiration date of a license or without 
        having submitted an application and paid the fee shall be deemed 
        to have violated the provisions of this chapter and shall be 
        subject to enforcement action, as provided in the Health 
        Enforcement Consolidation Act, sections 144.989 to 144.993.  In 
        addition, a penalty of $25 $50 shall be added to the total of 
        the license fee for any food and beverage service establishment 
        operating without a license as a mobile food unit, a seasonal 
        temporary or seasonal permanent food stand, or a special event 
        food stand, and a penalty of $50 $100 shall be added to the 
        total of the license fee for all restaurants, food carts, 
        hotels, motels, lodging establishments, and resorts operating 
        without a license for a period of up to 30 days.  A late fee of 
        $300 shall be added to the license fee for establishments 
        operating more than 30 days without a license. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 45.  Minnesota Statutes 2004, section 157.16, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [FOOD MANAGER CERTIFICATION.] An applicant for 
        certification or certification renewal as a food manager must 
        submit to the commissioner a $28 nonrefundable certification fee 
        payable to the Department of Health. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 46.  Minnesota Statutes 2004, section 157.16, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ESTABLISHMENT FEES; DEFINITIONS.] (a) The 
        following fees are required for food and beverage service 
        establishments, hotels, motels, lodging establishments, and 
        resorts licensed under this chapter.  Food and beverage service 
        establishments must pay the highest applicable fee under 
        paragraph (e) (d), clause (1), (2), (3), or (4), and 
        establishments serving alcohol must pay the highest applicable 
        fee under paragraph (e) (d), clause (6) or (7).  The license fee 
        for new operators previously licensed under this chapter for the 
        same calendar year is one-half of the appropriate annual license 
        fee, plus any penalty that may be required.  The license fee for 
        operators opening on or after October 1 is one-half of the 
        appropriate annual license fee, plus any penalty that may be 
        required. 
           (b) All food and beverage service establishments, except 
        special event food stands, and all hotels, motels, lodging 
        establishments, and resorts shall pay an annual base fee of 
        $145 $150. 
           (c) A special event food stand shall pay a flat fee 
        of $35 $40 annually.  "Special event food stand" means a fee 
        category where food is prepared or served in conjunction with 
        celebrations, county fairs, or special events from a special 
        event food stand as defined in section 157.15. 
           (d) In addition to the base fee in paragraph (b), each food 
        and beverage service establishment, other than a special event 
        food stand, and each hotel, motel, lodging establishment, and 
        resort shall pay an additional annual fee for each fee category 
        as, additional food service, or required additional inspection 
        specified in this paragraph: 
           (1) Limited food menu selection, $40 $50.  "Limited food 
        menu selection" means a fee category that provides one or more 
        of the following: 
           (i) prepackaged food that receives heat treatment and is 
        served in the package; 
           (ii) frozen pizza that is heated and served; 
           (iii) a continental breakfast such as rolls, coffee, juice, 
        milk, and cold cereal; 
           (iv) soft drinks, coffee, or nonalcoholic beverages; or 
           (v) cleaning for eating, drinking, or cooking utensils, 
        when the only food served is prepared off site. 
           (2) Small establishment, including boarding establishments, 
        $75 $100.  "Small establishment" means a fee category that has 
        no salad bar and meets one or more of the following: 
           (i) possesses food service equipment that consists of no 
        more than a deep fat fryer, a grill, two hot holding containers, 
        and one or more microwave ovens; 
           (ii) serves dipped ice cream or soft serve frozen desserts; 
           (iii) serves breakfast in an owner-occupied bed and 
        breakfast establishment; 
           (iv) is a boarding establishment; or 
           (v) meets the equipment criteria in clause (3), item (i) or 
        (ii), and has a maximum patron seating capacity of not more than 
        50.  
           (3) Medium establishment, $210 $260.  "Medium establishment"
        means a fee category that meets one or more of the following: 
           (i) possesses food service equipment that includes a range, 
        oven, steam table, salad bar, or salad preparation area; 
           (ii) possesses food service equipment that includes more 
        than one deep fat fryer, one grill, or two hot holding 
        containers; or 
           (iii) is an establishment where food is prepared at one 
        location and served at one or more separate locations. 
           Establishments meeting criteria in clause (2), item (v), 
        are not included in this fee category.  
           (4) Large establishment, $350 $460.  "Large establishment" 
        means either: 
           (i) a fee category that (A) meets the criteria in clause 
        (3), items (i) or (ii), for a medium establishment, (B) seats 
        more than 175 people, and (C) offers the full menu selection an 
        average of five or more days a week during the weeks of 
        operation; or 
           (ii) a fee category that (A) meets the criteria in clause 
        (3), item (iii), for a medium establishment, and (B) prepares 
        and serves 500 or more meals per day. 
           (5) Other food and beverage service, including food carts, 
        mobile food units, seasonal temporary food stands, and seasonal 
        permanent food stands, $40 $50. 
           (6) Beer or wine table service, $40 $50.  "Beer or wine 
        table service" means a fee category where the only alcoholic 
        beverage service is beer or wine, served to customers seated at 
        tables. 
           (7) Alcoholic beverage service, other than beer or wine 
        table service, $105 $135. 
           "Alcohol beverage service, other than beer or wine table 
        service" means a fee category where alcoholic mixed drinks are 
        served or where beer or wine are served from a bar. 
           (8) Lodging per sleeping accommodation unit, $6 $8, 
        including hotels, motels, lodging establishments, and resorts, 
        up to a maximum of $600 $800.  "Lodging per sleeping 
        accommodation unit" means a fee category including the number of 
        guest rooms, cottages, or other rental units of a hotel, motel, 
        lodging establishment, or resort; or the number of beds in a 
        dormitory. 
           (9) First public swimming pool, $140 $180; each additional 
        public swimming pool, $80 $100.  "Public swimming pool" means a 
        fee category that has the meaning given in Minnesota Rules, part 
        4717.0250, subpart 8. 
           (10) First spa, $80 $110; each additional spa, $40 $50.  
        "Spa pool" means a fee category that has the meaning given in 
        Minnesota Rules, part 4717.0250, subpart 9. 
           (11) Private sewer or water, $40 $50.  "Individual private 
        water" means a fee category with a water supply other than a 
        community public water supply as defined in Minnesota Rules, 
        chapter 4720.  "Individual private sewer" means a fee category 
        with an individual sewage treatment system which uses subsurface 
        treatment and disposal. 
           (12) Additional food service, $130.  "Additional food 
        service" means a location at a food service establishment, other 
        than the primary food preparation and service area, used to 
        prepare or serve food to the public. 
           (13) Additional inspection fee, $300.  "Additional 
        inspection fee" means a fee to conduct the second inspection 
        each year for elementary and secondary education facility school 
        lunch programs when required by the Richard B. Russell National 
        School Lunch Act. 
           (e) A fee of $150 $350 for review of the construction plans 
        must accompany the initial license application for food and 
        beverage service establishments restaurants, hotels, motels, 
        lodging establishments, or resorts with five or more sleeping 
        units. 
           (f) When existing food and beverage service establishments, 
        hotels, motels, lodging establishments, or resorts are 
        extensively remodeled, a fee of $150 $250 must be submitted with 
        the remodeling plans.  A fee of $250 must be submitted for new 
        construction or remodeling for a restaurant with a limited food 
        menu selection, a seasonal permanent food stand, a mobile food 
        unit, or a food cart, or for a hotel, motel, resort, or lodging 
        establishment addition of less than five sleeping units. 
           (g) Seasonal temporary food stands and special event food 
        stands are not required to submit construction or remodeling 
        plans for review. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 47.  Minnesota Statutes 2004, section 157.16, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [STATEWIDE HOSPITALITY FEE.] Every person, firm, 
        or corporation that operates a licensed boarding establishment, 
        food and beverage service establishment, seasonal temporary or 
        permanent food stand, special event food stand, mobile food 
        unit, food cart, resort, hotel, motel, or lodging establishment 
        in Minnesota must submit to the commissioner a $35 annual 
        statewide hospitality fee for each licensed activity.  The fee 
        for establishments licensed by the Department of Health is 
        required at the same time the licensure fee is due.  For 
        establishments licensed by local governments, the fee is due by 
        July 1 of each year.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 48.  Minnesota Statutes 2004, section 157.20, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INSPECTION FREQUENCY.] The frequency of 
        inspections of the establishments shall be based on the degree 
        of health risk. 
           (a) High-risk establishments must be inspected at least 
        once a year every 12 months. 
           (b) Medium-risk establishments must be inspected at least 
        once every 18 months. 
           (c) Low-risk establishments must be inspected at least once 
        every two years 24 months. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 49.  Minnesota Statutes 2004, section 157.20, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [RISK CATEGORIES.] (a)  [HIGH-RISK 
        ESTABLISHMENT.] "High-risk establishment" means any food and 
        beverage service establishment, hotel, motel, lodging 
        establishment, or resort that: 
           (1) serves potentially hazardous foods that require 
        extensive processing on the premises, including manual handling, 
        cooling, reheating, or holding for service; 
           (2) prepares foods several hours or days before service; 
           (3) serves menu items that epidemiologic experience has 
        demonstrated to be common vehicles of food-borne illness; 
           (4) has a public swimming pool; or 
           (5) draws its drinking water from a surface water supply. 
           (b)  [MEDIUM-RISK ESTABLISHMENT.] "Medium-risk 
        establishment" means a food and beverage service establishment, 
        hotel, motel, lodging establishment, or resort that: 
           (1) serves potentially hazardous foods but with minimal 
        holding between preparation and service; or 
           (2) serves foods, such as pizza, that require extensive 
        handling followed by heat treatment. 
           (c)  [LOW-RISK ESTABLISHMENT.] "Low-risk establishment" 
        means a food and beverage service establishment, hotel, motel, 
        lodging establishment, or resort that is not a high-risk or 
        medium-risk establishment. 
           (d)  [RISK EXCEPTIONS.] Mobile food units, seasonal 
        permanent and seasonal temporary food stands, food carts, and 
        special event food stands are not inspected on an established 
        schedule and therefore are not defined as high-risk, 
        medium-risk, or low-risk establishments. 
           (e)  [SCHOOL INSPECTION FREQUENCY.] Elementary and 
        secondary school food service establishments must be inspected 
        according to the assigned risk category or by the frequency 
        required in the Richard B. Russell National School Lunch Act, 
        whichever frequency is more restrictive. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 50.  Minnesota Statutes 2004, section 326.42, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FEES.] Plumbing system plans and specifications 
        that are submitted to the commissioner for review shall be 
        accompanied by the appropriate plan examination fees.  If the 
        commissioner determines, upon review of the plans, that 
        inadequate fees were paid, the necessary additional fees shall 
        be paid prior to plan approval.  The commissioner shall charge 
        the following fees for plan reviews and audits of plumbing 
        installations for public, commercial, and industrial buildings:  
           (1) systems with both water distribution and drain, waste, 
        and vent systems and having:  
           (i) 25 or fewer drainage fixture units, $150; 
           (ii) 26 to 50 drainage fixture units, $250; 
           (iii) 51 to 150 drainage fixture units, $350; 
           (iv) 151 to 249 drainage fixture units, $500; 
           (v) 250 or more drainage fixture units, $3 per drainage 
        fixture unit to a maximum of $4,000; and 
           (vi) interceptors, separators, or catch basins, $70 per 
        interceptor, separator, or catch basin design; 
           (2) building sewer service only, $150; 
           (3) building water service only, $150; 
           (4) building water distribution system only, no drainage 
        system, $5 per supply fixture unit or $150, whichever is 
        greater; 
           (5) storm drainage system, a minimum fee of $150 or: 
           (i) $50 per drain opening, up to a maximum of $500; and 
           (ii) $70 per interceptor, separator, or catch basin design; 
           (6) manufactured home park or campground, one to 25 sites, 
        $300; 
           (7) manufactured home park or campground, 26 to 50 sites, 
        $350; 
           (8) manufactured home park or campground, 51 to 125 sites, 
        $400; 
           (9) manufactured home park or campground, more than 125 
        sites, $500; 
           (10) accelerated review, double the regular fee, one-half 
        to be refunded if no response from the commissioner within 15 
        business days; and 
           (11) revision to previously reviewed or incomplete plans: 
           (i) review of plans for which commissioner has issued two 
        or more requests for additional information, per review, $100 or 
        ten percent of the original fee, whichever is greater; 
           (ii) proposer-requested revision with no increase in 
        project scope, $50 or ten percent of original fee, whichever is 
        greater; and 
           (iii) proposer-requested revision with an increase in 
        project scope, $50 plus the difference between the original 
        project fee and the revised project fee. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 51.  Laws 2005, chapter 107, article 1, section 6, is 
        amended to read: 
        Sec. 6.  COMMISSIONER OF HEALTH           95,000        155,000
        To the commissioner of health to 
        implement new Minnesota Statutes, 
        section 144.1498 144.1501. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 52.  [CERVICAL CANCER ELIMINATION STUDY.] 
           (a) The commissioner of health shall develop a statewide 
        integrated and comprehensive cervical cancer prevention plan, 
        including strategies for promoting and implementing the plan.  
        The plan must include activities that identify and implement 
        methods to improve the cervical cancer screening rates in 
        Minnesota, including, but not limited to: 
           (1) identifying and disseminating appropriate 
        evidence-based cervical cancer screening guidelines to be used 
        in Minnesota; 
           (2) increasing the use of appropriate screening based on 
        these guidelines for patients seen by medical groups in 
        Minnesota and monitoring results of these medical groups; and 
           (3) reducing the number of women who should but have not 
        been screened.  
           (b) In developing the plan, the commissioner shall also 
        identify and examine limitations and barriers in providing 
        cervical cancer screening, diagnosis tools, and treatment, 
        including, but not limited to, medical care reimbursement, 
        treatment costs, and the availability of insurance coverage.  
           (c) The commissioner may work with one or more nonprofit 
        quality improvement organizations in Minnesota to identify 
        evidence-based guidelines for cervical cancer screening and to 
        identify methods to improve the cervical cancer screening rates 
        among medical groups; and may work with one or more nonprofit 
        health care result reporting organizations to monitor results by 
        medical groups in Minnesota.  
           (d) The commissioner may convene an advisory committee that 
        includes representatives of health care providers, the American 
        Cancer Society, health plan companies, the University of 
        Minnesota Academic Health Center, community health boards, and 
        the general public.  
           (e) The commissioner shall submit a report to the 
        legislature by January 15, 2006, on: 
           (1) the statewide cervical cancer prevention plan, 
        including a description of the plan activities and strategies 
        developed for promoting and implementing the plan; 
           (2) methods for monitoring the results by medical groups 
        and by the entire state of cervical cancer screening improvement 
        activities; and 
           (3) recommended changes to existing laws, programs, or 
        services in terms of reducing the occurrence of cervical cancer 
        by improving insurance coverage for the prevention, diagnosis, 
        and treatment for cervical cancer. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 53.  [PUBLIC HEALTH INFORMATION NETWORK.] 
           (a) The commissioner of health shall work with local public 
        health departments to develop a public health information 
        network.  The development of the network must be consistent with 
        the recommendations, goals, and strategies of the Minnesota 
        public health information network report to the 2005 legislature 
        and the e-health initiative.  
           (b) The commissioner of health shall work with the 
        commissioner of human services to determine how data from care 
        systems can be utilized to assist with population health needs 
        assessments and targeted prevention efforts. 
           (c) Before the next biennium, the commissioner of health 
        shall submit to the legislature a status report on the progress 
        of the information network and the e-health initiative.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 54.  [REPORT TO LEGISLATURE ON SWING BED USAGE.] 
           The commissioner of health shall review swing bed and 
        related data reported under Minnesota Statutes, sections 
        144.562, subdivision 3, paragraph (f); 144.564; and 144.698.  
        The commissioner shall report and make any appropriate 
        recommendations to the legislature by January 31, 2007, on: 
           (1) the use of swing bed days by all hospitals and by 
        critical access hospitals; 
           (2) occupancy rates in skilled nursing facilities within 25 
        miles of hospitals with swing beds; and 
           (3) information provided by rural providers on the use of 
        swing beds and the adequacy of rural services across the 
        continuum of care.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 55.  [IMPLEMENTATION OF AN ELECTRONIC HEALTH RECORDS 
        SYSTEM.] 
           The commissioner of health, in consultation with the 
        electronic health record planning work group established in Laws 
        2004, chapter 288, article 7, section 7, shall develop a 
        statewide plan for all hospitals and physician group practices 
        to have in place an interoperable electronic health records 
        system by January 1, 2015.  In developing the plan, the 
        commissioner shall consider:  
           (1) creating financial assistance to hospitals and 
        providers for implementing or updating an electronic health 
        records system, including, but not limited to, the establishment 
        of grants, financial incentives, or low-interest loans; 
           (2) addressing specific needs and concerns of safety-net 
        hospitals, community health clinics, and other health care 
        providers who serve low-income patients in implementing an 
        electronic records system within the hospital or practice; and 
           (3) providing assistance in the development of possible 
        alliances or collaborations among providers.  
           The commissioner shall provide preliminary reports to the 
        chairs of the senate and house committees with jurisdiction over 
        health care policy and finance biennially beginning January 15, 
        2007, on the status of reaching the goal for all hospitals and 
        physician group practices to have an interoperable electronic 
        health records system in place by January 1, 2015.  The reports 
        shall include recommendations on statutory language necessary to 
        implement the plan, including possible financing options. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 56.  [RULE AMENDMENT.] 
           The commissioner of health shall amend Minnesota Rules, 
        part 4626.2015, subparts 3, item C; and 6, item B, to conform 
        with Minnesota Statutes, section 157.16, subdivision 2a.  The 
        commissioner may use the good cause exemption under Minnesota 
        Statutes, section 14.388, subdivision 1, clause (3).  Minnesota 
        Statutes, section 14.386, does not apply, except to the extent 
        provided under Minnesota Statutes, section 14.388. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 57.  [DIRECTION TO COMMISSIONER; DENTAL REVIEW.] 
           The commissioner of health, in consultation with the 
        relevant dental associations, licensed dental and public health 
        professionals, and others, shall review the leadership and 
        advisory role of the Department of Health relative to dental 
        health including the usefulness of utilizing a dental director.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 58.  [REPEALER.] 
           (a) Minnesota Statutes 2004, sections 144.1486; 144.1502; 
        and 157.215, are repealed effective the day following final 
        enactment. 
           (b) Laws 2005, chapter 107, article 2, section 51, is 
        repealed effective the day following final enactment. 

                                   ARTICLE 7 
                       LONG-TERM CARE AND CONTINUING CARE 
           Section 1.  Minnesota Statutes 2004, section 144A.073, is 
        amended by adding a subdivision to read: 
           Subd. 3d.  [PROJECT AMENDMENT AUTHORIZED.] Notwithstanding 
        the provisions of subdivision 3b: 
           (1) the commissioner may approve a request by a nursing 
        facility located in the city of Duluth with 48 licensed beds as 
        of January 1, 2005, that received approval under this section in 
        2002 for a moratorium exception project for amendment of the 
        project design that: 
           (i) reduces the total amount of common space devoted to 
        resident and family uses by more than five percent if the total 
        amount of common space in the facility, including that added by 
        the project, is at least 175 percent of the state requirement 
        for common space; and 
           (ii) reduces the space for no more than two residents' 
        living areas by increasing the size of a majority of the 
        single-bed rooms from the size in the project design as 
        originally approved and converting two single-bed rooms in the 
        project design as originally approved to one semi-private room; 
        and 
           (2) the commissioner may approve a request by a nursing 
        facility located in the city of Duluth with 129 licensed beds as 
        of January 1, 2005, that received approval under this section in 
        2002 for a moratorium exception project for amendment of the 
        project design that: 
           (i) reduces the total amount of common space devoted to 
        resident and family uses by more than five percent if the total 
        amount of common space in the facility, including that added by 
        the project, is at least 175 percent of the state requirement 
        for common space; and 
           (ii) reduces the space for no more than four residents' 
        living areas by increasing the size of a majority of the 
        single-bed rooms from the size in the project design as 
        originally approved and converting four single-bed rooms in the 
        project design as originally approved to two semi-private rooms; 
        and 
           (3) the amended project designs in clauses (1) and (2) must 
        provide solutions to all of the problems addressed by the 
        original application that are at least as effective as the 
        original solutions. 
           Sec. 2.  Minnesota Statutes 2004, section 144A.073, 
        subdivision 10, is amended to read: 
           Subd. 10.  [EXTENSION OF APPROVAL OF MORATORIUM EXCEPTION.] 
        Notwithstanding subdivision 3, the commissioner of health shall 
        extend project approval for an additional 18 36 months for any 
        proposed exception to the nursing home licensure and 
        certification moratorium if the proposal was approved under this 
        section between July 1, 2001, and June 30, 2003. 
           Sec. 3.  [256B.0185] [REQUIRED REPORT.] 
           Subdivision 1.  [PENDING APPLICATION.] By December 15 of 
        both 2005 and 2006, the commissioner must deliver to the 
        legislature a report that identifies: 
           (1) each county in which an application for medical 
        assistance from a person identified as residing in a long-term 
        care facility is or was pending, at any time between January 1 
        and December 1 of the calendar year to which the report relates, 
        for more than 60 days in the case of a person who is disabled, 
        or for more than 45 days in the case of a person who is age 65 
        or older; and 
           (2) for each of the identified counties:  the number of 
        applications described in clause (1), the average number of days 
        the applications were pending, the distribution of days for 
        applications that were pending, and what percentage of the 
        applications, respectively, the county approved and denied. 
           Subd. 2.  [TIME TO PROCESS APPLICATION.] The report must 
        include specific recommendations for how counties, as a group, 
        could shorten the time it takes to act on the applications 
        described in subdivision 1, clause (1). 
           Sec. 4.  Minnesota Statutes 2004, section 256B.057, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
        assistance may be paid for a person who is employed and who: 
           (1) meets the definition of disabled under the supplemental 
        security income program; 
           (2) is at least 16 but less than 65 years of age; 
           (3) meets the asset limits in paragraph (b); and 
           (4) effective November 1, 2003, pays a premium and other 
        obligations under paragraph (d).  
        Any spousal income or assets shall be disregarded for purposes 
        of eligibility and premium determinations. 
           After the month of enrollment, a person enrolled in medical 
        assistance under this subdivision who: 
           (1) is temporarily unable to work and without receipt of 
        earned income due to a medical condition, as verified by a 
        physician, may retain eligibility for up to four calendar 
        months; or 
           (2) effective January 1, 2004, loses employment for reasons 
        not attributable to the enrollee, may retain eligibility for up 
        to four consecutive months after the month of job loss.  To 
        receive a four-month extension, enrollees must verify the 
        medical condition or provide notification of job loss.  All 
        other eligibility requirements must be met and the enrollee must 
        pay all calculated premium costs for continued eligibility. 
           (b) For purposes of determining eligibility under this 
        subdivision, a person's assets must not exceed $20,000, 
        excluding: 
           (1) all assets excluded under section 256B.056; 
           (2) retirement accounts, including individual accounts, 
        401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
           (3) medical expense accounts set up through the person's 
        employer. 
           (c)(1) Effective January 1, 2004, for purposes of 
        eligibility, there will be a $65 earned income disregard.  To be 
        eligible, a person applying for medical assistance under this 
        subdivision must have earned income above the disregard level. 
           (2) Effective January 1, 2004, to be considered earned 
        income, Medicare, Social Security, and applicable state and 
        federal income taxes must be withheld.  To be eligible, a person 
        must document earned income tax withholding. 
           (d)(1) A person whose earned and unearned income is equal 
        to or greater than 100 percent of federal poverty guidelines for 
        the applicable family size must pay a premium to be eligible for 
        medical assistance under this subdivision.  The premium shall be 
        based on the person's gross earned and unearned income and the 
        applicable family size using a sliding fee scale established by 
        the commissioner, which begins at one percent of income at 100 
        percent of the federal poverty guidelines and increases to 7.5 
        percent of income for those with incomes at or above 300 percent 
        of the federal poverty guidelines.  Annual adjustments in the 
        premium schedule based upon changes in the federal poverty 
        guidelines shall be effective for premiums due in July of each 
        year.  
           (2) Effective January 1, 2004, all enrollees must pay a 
        premium to be eligible for medical assistance under this 
        subdivision.  An enrollee shall pay the greater of a $35 premium 
        or the premium calculated in clause (1). 
           (3) Effective November 1, 2003, all enrollees who receive 
        unearned income must pay one-half of one percent of unearned 
        income in addition to the premium amount. 
           (4) Effective November 1, 2003, for enrollees whose income 
        does not exceed 200 percent of the federal poverty guidelines 
        and who are also enrolled in Medicare, the commissioner must 
        reimburse the enrollee for Medicare Part B premiums under 
        section 256B.0625, subdivision 15, paragraph (a).  
           (5) Increases in benefits under title II of the Social 
        Security Act shall not be counted as income for purposes of this 
        subdivision until July 1 of each year.  
           (e) A person's eligibility and premium shall be determined 
        by the local county agency.  Premiums must be paid to the 
        commissioner.  All premiums are dedicated to the commissioner. 
           (f) Any required premium shall be determined at application 
        and redetermined at the enrollee's six-month income review or 
        when a change in income or household size is reported.  
        Enrollees must report any change in income or household size 
        within ten days of when the change occurs.  A decreased premium 
        resulting from a reported change in income or household size 
        shall be effective the first day of the next available billing 
        month after the change is reported.  Except for changes 
        occurring from annual cost-of-living increases, a change 
        resulting in an increased premium shall not affect the premium 
        amount until the next six-month review. 
           (g) Premium payment is due upon notification from the 
        commissioner of the premium amount required.  Premiums may be 
        paid in installments at the discretion of the commissioner. 
           (h) Nonpayment of the premium shall result in denial or 
        termination of medical assistance unless the person demonstrates 
        good cause for nonpayment.  Good cause exists if the 
        requirements specified in Minnesota Rules, part 9506.0040, 
        subpart 7, items B to D, are met.  Except when an installment 
        agreement is accepted by the commissioner, all persons 
        disenrolled for nonpayment of a premium must pay any past due 
        premiums as well as current premiums due prior to being 
        reenrolled.  Nonpayment shall include payment with a returned, 
        refused, or dishonored instrument.  The commissioner may require 
        a guaranteed form of payment as the only means to replace a 
        returned, refused, or dishonored instrument. 
           Sec. 5.  [256B.0571] [LONG-TERM CARE PARTNERSHIP.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them. 
           Subd. 2.  [HOME CARE SERVICE.] "Home care service" means 
        care described in section 144A.43. 
           Subd. 3.  [LONG-TERM CARE INSURANCE.] "Long-term care 
        insurance" means a policy described in section 62S.01. 
           Subd. 4.  [MEDICAL ASSISTANCE.] "Medical assistance" means 
        the program of medical assistance established under section 
        256B.01. 
           Subd. 5.  [NURSING HOME.] "Nursing home" means a nursing 
        home as described in section 144A.01. 
           Subd. 6.  [PARTNERSHIP POLICY.] "Partnership policy" means 
        a long-term care insurance policy that meets the requirements 
        under subdivision 10 or 11, regardless of when the policy was 
        first issued. 
           Subd. 7.  [PARTNERSHIP PROGRAM.] "Partnership program" 
        means the Minnesota partnership for long-term care program 
        established under this section. 
           Subd. 8.  [PROGRAM ESTABLISHED.] (a) The commissioner, in 
        cooperation with the commissioner of commerce, shall establish 
        the Minnesota partnership for long-term care program to provide 
        for the financing of long-term care through a combination of 
        private insurance and medical assistance. 
           (b) An individual who meets the requirements in this 
        paragraph is eligible to participate in the partnership 
        program.  The individual must: 
           (1) be a Minnesota resident; 
           (2) purchase a partnership policy that is delivered, issued 
        for delivery, or renewed on or after the effective date of 
        this section, and 
        maintain the partnership policy in effect 
        throughout the period of participation in the partnership 
        program; and 
           (3) exhaust the minimum benefits under the partnership 
        policy as described in this section.  Benefits received under a 
        long-term care insurance policy before the effective date of 
        this section do 
        not count toward the exhaustion of benefits 
        required in this subdivision. 
           Subd. 9.  [MEDICAL ASSISTANCE ELIGIBILITY.] (a) Upon 
        application of an individual who meets the requirements 
        described in subdivision 8, the commissioner shall determine the 
        individual's eligibility for medical assistance according to 
        paragraphs (b) and (c). 
           (b) After disregarding financial assets exempted under 
        medical assistance eligibility requirements, the commissioner 
        shall disregard an additional amount of financial assets equal 
        to the dollar amount of coverage utilized under the partnership 
        policy. 
           (c) The commissioner shall consider the individual's income 
        according to medical assistance eligibility requirements. 
           Subd. 10.  [DOLLAR-FOR-DOLLAR ASSET PROTECTION 
        POLICIES.] (a) A dollar-for-dollar asset protection policy must 
        meet all of the requirements in paragraphs (b) to (e). 
           (b) The policy must satisfy the requirements of chapter 62S.
           (c) The policy must offer an elimination period of not more 
        than 180 days for an adjusted premium. 
           (d) The policy must satisfy the requirements established by 
        the commissioner of human services under subdivision 14. 
           (e) Minimum daily benefits shall be $130 for nursing home 
        care or $65 for home care, with inflation protection provided in 
        the policy as described in section 62S.23, subdivision 1, clause 
        (1).  These minimum daily benefit amounts shall be adjusted by 
        the commissioner on October 1 of each year by a percentage equal 
        to the inflation protection feature described in section 62S.23, 
        subdivision 1, clause (1), for purposes of setting minimum 
        requirements that a policy must meet in future years in order to 
        initially qualify as an approved policy under this subdivision.  
        Adjusted minimum daily benefit amounts shall be rounded to the 
        nearest whole dollar. 
           Subd. 11.  [TOTAL ASSET PROTECTION POLICIES.] (a) A total 
        asset protection policy must meet all of the requirements in 
        subdivision 10, paragraphs (b) to (d), and this subdivision.  
           (b) Minimum coverage shall be for a period of not less than 
        three years and for a dollar amount equal to 36 months of 
        nursing home care at the minimum daily benefit rate determined 
        and adjusted under paragraph (c).  
           (c) Minimum daily benefits shall be $150 for nursing home 
        care or $75 for home care, with inflation protection provided in 
        the policy as described in section 62S.23, subdivision 1, clause 
        (1).  These minimum daily benefit amounts shall also be adjusted 
        by the commissioner on October 1 of each year by a percentage 
        equal to the inflation protection feature described in section 
        62S.23, subdivision 1, clause (1), for purposes of setting 
        minimum requirements that a policy must meet in future years in 
        order to initially qualify as an approved policy under this 
        subdivision.  Adjusted minimum daily benefit amounts shall be 
        rounded to the nearest whole dollar.  
           (d) The policy must cover all of the following services: 
           (1) nursing home stay; 
           (2) home care service; and 
           (3) care management. 
           Subd. 12.  [COMPLIANCE WITH FEDERAL LAW.] An issuer of a 
        partnership policy must comply with any federal law authorizing 
        partnership policies in Minnesota, including any federal 
        regulations, as amended, adopted under that law.  This paragraph 
        does not require compliance with any provision of this federal 
        law until the date upon which the law requires compliance with 
        the provision.  The commissioner has authority to enforce this 
        paragraph. 
           Subd. 13.  [LIMITATIONS ON ESTATE RECOVERY.] (a) For an 
        individual who exhausts the minimum benefits of a 
        dollar-for-dollar asset protection policy under subdivision 10, 
        and is determined eligible for medical assistance under 
        subdivision 9, the state shall limit recovery under the 
        provisions of section 256B.15 against the estate of the 
        individual or individual's spouse for medical assistance 
        benefits received by that individual to an amount that exceeds 
        the dollar amount of coverage utilized under the partnership 
        policy. 
           (b) For an individual who exhausts the minimum benefits of 
        a total asset protection policy under subdivision 11, and is 
        determined eligible for medical assistance under subdivision 9, 
        the state shall not seek recovery under the provisions of 
        section 256B.15 against the estate of the individual or 
        individual's spouse for medical assistance benefits received by 
        that individual. 
           Subd. 14.  [IMPLEMENTATION.] (a) If federal law is amended 
        or a federal waiver is granted to permit implementation of this 
        section, the commissioner, in consultation with the commissioner 
        of commerce, may alter the requirements of subdivisions 10 and 
        11, and may establish additional requirements for approved 
        policies in order to conform with federal law or waiver 
        authority.  In establishing these requirements, the commissioner 
        shall seek to maximize purchase of qualifying policies by 
        Minnesota residents while controlling medical assistance costs. 
           (b) The commissioner is authorized to suspend 
        implementation of this section until the next session of the 
        legislature if the commissioner, in consultation with the 
        commissioner of commerce, determines that the federal 
        legislation or federal waiver authorizing a partnership program 
        in Minnesota is likely to impose substantial unforeseen costs on 
        the state budget. 
           (c) The commissioner must take action under paragraph (a) 
        or (b) within 45 days of final federal action authorizing a 
        partnership policy in Minnesota. 
           (d) The commissioner must notify the appropriate 
        legislative committees of action taken under this subdivision 
        within 50 days of final federal action authorizing a partnership 
        policy in Minnesota. 
           (e) The commissioner must publish a notice in the State 
        Register of implementation decisions made under this subdivision 
        as soon as practicable. 
           [EFFECTIVE DATE.] (a) If any provision of this section is 
        prohibited by federal law, no provision shall become effective 
        until federal law is changed to permit its full implementation.  
        The commissioner of human services shall notify the revisor of 
        statutes when federal law is enacted or other federal approval 
        is received and publish a notice in the State Register.  The 
        commissioner must include the notice in the first State Register 
        published after the effective date of the federal changes. 
           (b) If federal law is changed to permit a waiver of any 
        provisions prohibited by federal law, the commissioner of human 
        services shall apply to the federal government for a waiver of 
        those prohibitions or other federal authority, and that 
        provision shall become effective upon receipt of a federal 
        waiver or other federal approval, notification to the revisor of 
        statutes, and publication of a notice in the State Register to 
        that effect.  
           Sec. 6.  Minnesota Statutes 2004, section 256B.0621, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TARGETED CASE MANAGEMENT; DEFINITIONS.] For 
        purposes of subdivisions 3 to 10, the following terms have the 
        meanings given them: 
           (1) "home care service recipients" means those individuals 
        receiving the following services under section 256B.0627:  
        skilled nursing visits, home health aide visits, private duty 
        nursing, personal care assistants, or therapies provided through 
        a home health agency; 
           (2) "home care targeted case management" means the 
        provision of targeted case management services for the purpose 
        of assisting home care service recipients to gain access to 
        needed services and supports so that they may remain in the 
        community; 
           (3) "institutions" means hospitals, consistent with Code of 
        Federal Regulations, title 42, section 440.10; regional 
        treatment center inpatient services, consistent with section 
        245.474; nursing facilities; and intermediate care facilities 
        for persons with mental retardation; 
           (4) "relocation targeted case management" means includes 
        the provision of both county targeted case management and public 
        or private vendor service coordination services for the purpose 
        of assisting recipients to gain access to needed services and 
        supports if they choose to move from an institution to the 
        community.  Relocation targeted case management may be provided 
        during the last 180 consecutive days of an eligible recipient's 
        institutional stay; and 
           (5) "targeted case management" means case management 
        services provided to help recipients gain access to needed 
        medical, social, educational, and other services and supports. 
           Sec. 7.  Minnesota Statutes 2004, section 256B.0621, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY.] The following persons are eligible 
        for relocation targeted case management or home care-targeted 
        care targeted case management: 
           (1) medical assistance eligible persons residing in 
        institutions who choose to move into the community are eligible 
        for relocation targeted case management services; and 
           (2) medical assistance eligible persons receiving home care 
        services, who are not eligible for any other medical assistance 
        reimbursable case management service, are eligible for home 
        care-targeted care targeted case management services beginning 
        January 1, 2003 July 1, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 256B.0621, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RELOCATION TARGETED COUNTY CASE MANAGEMENT 
        PROVIDER QUALIFICATIONS.] (a) A relocation targeted county case 
        management provider is an enrolled medical assistance provider 
        who is determined by the commissioner to have all of the 
        following characteristics: 
           (1) the legal authority to provide public welfare under 
        sections 393.01, subdivision 7; and 393.07; or a federally 
        recognized Indian tribe; 
           (2) the demonstrated capacity and experience to provide the 
        components of case management to coordinate and link community 
        resources needed by the eligible population; 
           (3) the administrative capacity and experience to serve the 
        target population for whom it will provide services and ensure 
        quality of services under state and federal requirements; 
           (4) the legal authority to provide complete investigative 
        and protective services under section 626.556, subdivision 10; 
        and child welfare and foster care services under section 393.07, 
        subdivisions 1 and 2; or a federally recognized Indian tribe; 
           (5) a financial management system that provides accurate 
        documentation of services and costs under state and federal 
        requirements; and 
           (6) the capacity to document and maintain individual case 
        records under state and federal requirements. 
           (b) A provider of targeted case management under section 
        256B.0625, subdivision 20, may be deemed a certified provider of 
        relocation targeted case management. 
           (c) A relocation targeted county case management provider 
        may subcontract with another provider to deliver relocation 
        targeted case management services.  Subcontracted providers must 
        demonstrate the ability to provide the services outlined in 
        subdivision 6, and have a procedure in place that notifies the 
        recipient and the recipient's legal representative of any 
        conflict of interest if the contracted targeted case management 
        provider also provides, or will provide, the recipient's 
        services and supports.  Counties must require that contracted 
        providers must provide information on all conflicts of interest 
        and obtain the recipient's informed consent or provide the 
        recipient with alternatives.  
           Sec. 9.  Minnesota Statutes 2004, section 256B.0621, 
        subdivision 5, is amended to read: 
           Subd. 5.  [HOME CARE TARGETED CASE MANAGEMENT AND 
        RELOCATION SERVICE COORDINATION PROVIDER QUALIFICATIONS.] The 
        following qualifications and certification standards must be met 
        by Providers of home care targeted case management and 
        relocation service coordination must meet the qualifications 
        under subdivision 4 for county vendors or the qualifications and 
        certification standards under paragraphs (a) and (b) for private 
        vendors. 
           (a) The commissioner must certify each provider of home 
        care targeted case management and relocation service 
        coordination before enrollment.  The certification process shall 
        examine the provider's ability to meet the requirements in this 
        subdivision and other state and federal requirements of this 
        service. 
           (b) A Both home care targeted case management provider is 
        an providers and relocation service coordination providers are 
        enrolled medical assistance provider providers who has have a 
        minimum of a bachelor's degree or a license in a health or human 
        services field, comparable training and two years of experience 
        in human services, or who have been credentialed by an American 
        Indian tribe under section 256B.02, subdivision 7, and is have 
        been determined by the commissioner to have all of the following 
        characteristics: 
           (1) the demonstrated capacity and experience to provide the 
        components of case management to coordinate and link community 
        resources needed by the eligible population; 
           (2) the administrative capacity and experience to serve the 
        target population for whom it will provide services and ensure 
        quality of services under state and federal requirements; 
           (3) a financial management system that provides accurate 
        documentation of services and costs under state and federal 
        requirements; 
           (4) the capacity to document and maintain individual case 
        records under state and federal requirements; and 
           (5) the capacity to coordinate with county administrative 
        functions; 
           (6) have no financial interest in the provision of 
        out-of-home residential services to persons for whom home care 
        targeted case management or relocation service coordination is 
        provided; and 
           (7) if a provider has a financial interest in services 
        other than out-of-home residential services provided to persons 
        for whom home care targeted case management or relocation 
        service coordination is also provided, the county must determine 
        each year that: 
           (i) any possible conflict of interest is explained annually 
        at a face-to-face meeting and in writing and the person provides 
        written informed consent consistent with section 256B.77, 
        subdivision 2, paragraph (p); and 
           (ii) information on a range of other feasible service 
        provider options has been provided. 
           (c) The state of Minnesota, a county board, or agency 
        acting on behalf of a county board shall not be liable for 
        damages, injuries, or liabilities sustained because of services 
        provided to a client by a private service coordination vendor. 
           Sec. 10.  Minnesota Statutes 2004, section 256B.0621, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ELIGIBLE SERVICES.] (a) Services eligible for 
        medical assistance reimbursement as targeted case management 
        include: 
           (1) assessment of the recipient's need for targeted case 
        management services and for persons choosing to relocate, the 
        county must provide service coordination provider options at the 
        first contact and upon request; 
           (2) development, completion, and regular review of a 
        written individual service plan, which is based upon the 
        assessment of the recipient's needs and choices, and which will 
        ensure access to medical, social, educational, and other related 
        services and supports; 
           (3) routine contact or communication with the recipient, 
        recipient's family, primary caregiver, legal representative, 
        substitute care provider, service providers, or other relevant 
        persons identified as necessary to the development or 
        implementation of the goals of the individual service plan; 
           (4) coordinating referrals for, and the provision of, case 
        management services for the recipient with appropriate service 
        providers, consistent with section 1902(a)(23) of the Social 
        Security Act; 
           (5) coordinating and monitoring the overall service 
        delivery and engaging in advocacy as needed to ensure quality of 
        services, appropriateness, and continued need; 
           (6) completing and maintaining necessary documentation that 
        supports and verifies the activities in this subdivision; 
           (7) traveling assisting individuals in order to access 
        needed services, including travel to conduct a visit with the 
        recipient or other relevant person necessary to develop or 
        implement the goals of the individual service plan; and 
           (8) coordinating with the institution discharge planner in 
        the 180-day period before the recipient's discharge. 
           (b) Relocation targeted county case management includes 
        services under paragraph (a), clauses (1), (2), and (4).  
        Relocation service coordination includes services under 
        paragraph (a), clauses (3) and (5) to (8).  Home care targeted 
        case management includes services under paragraph (a), clauses 
        (1) to (8). 
           Sec. 11.  Minnesota Statutes 2004, section 256B.0621, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TIME LINES.] The following time lines must be 
        met for assigning a case manager: 
           (a) For relocation targeted case management, an eligible 
        recipient must be assigned a county case manager who visits the 
        person within 20 working days of requesting a case manager from 
        their county of financial responsibility as determined under 
        chapter 256G.  
           (1) If a county agency, its contractor, or federally 
        recognized tribe does not provide case management services as 
        required, the recipient may obtain targeted relocation case 
        management services relocation service coordination from an 
        alternative a provider of targeted case management services 
        enrolled by the commissioner qualified under subdivision 5. 
           (2) The commissioner may waive the provider requirements in 
        subdivision 4, paragraph (a), clauses (1) and (4), to ensure 
        recipient access to the assistance necessary to move from an 
        institution to the community.  The recipient or the recipient's 
        legal guardian shall provide written notice to the county or 
        tribe of the decision to obtain services from an alternative 
        provider. 
           (3) Providers of relocation targeted case management 
        enrolled under this subdivision shall: 
           (i) meet the provider requirements under subdivision 4 that 
        are not waived by the commissioner; 
           (ii) be qualified to provide the services specified in 
        subdivision 6; 
           (iii) coordinate efforts with local social service agencies 
        and tribes; and 
           (iv) comply with the conflict of interest provisions 
        established under subdivision 4, paragraph (c). 
           (4) Local social service agencies and federally recognized 
        tribes shall cooperate with providers certified by the 
        commissioner under this subdivision to facilitate the 
        recipient's successful relocation from an institution to the 
        community. 
           (b) For home care targeted case management, an eligible 
        recipient must be assigned a case manager within 20 working days 
        of requesting a case manager from a home care targeted case 
        management provider, as defined in subdivision 5. 
           Sec. 12.  Minnesota Statutes 2004, section 256B.0621, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [DATA USE AGREEMENT AND NOTICE OF RELOCATION 
        TARGETED CASE MANAGEMENT AVAILABILITY.] The commissioner shall 
        execute a data use agreement with the Centers for Medicare and 
        Medicaid Services to obtain the long-term care minimum data set 
        data to assist residents of nursing facilities who have 
        indicated a desire to live in the community.  The commissioner 
        shall in turn enter into agreements with the Centers for 
        Independent Living to provide information about assistance for 
        persons who want to move to the community.  The commissioner 
        shall work with the Centers for Independent Living on both the 
        content of the information to be provided and privacy 
        protections for the individual residents. 
           Sec. 13.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SKILLED AND INTERMEDIATE NURSING CARE.] Medical 
        assistance covers skilled nursing home services and services of 
        intermediate care facilities, including training and 
        habilitation services, as defined in section 252.41, subdivision 
        3, for persons with mental retardation or related conditions who 
        are residing in intermediate care facilities for persons with 
        mental retardation or related conditions.  Medical assistance 
        must not be used to pay the costs of nursing care provided to a 
        patient in a swing bed as defined in section 144.562, unless (a) 
        the facility in which the swing bed is located is eligible as a 
        sole community provider, as defined in Code of Federal 
        Regulations, title 42, section 412.92, or the facility is a 
        public hospital owned by a governmental entity with 15 or fewer 
        licensed acute care beds; (b) the Centers for Medicare and 
        Medicaid Services approves the necessary state plan amendments; 
        (c) the patient was screened as provided by law; (d) the patient 
        no longer requires acute care services; and (e) no nursing home 
        beds are available within 25 miles of the facility.  The 
        commissioner shall exempt a facility from compliance with the 
        sole community provider requirement in clause (a) if, as of 
        January 1, 2004, the facility had an agreement with the 
        commissioner to provide medical assistance swing bed services.  
        Medical assistance also covers up to ten days of nursing care 
        provided to a patient in a swing bed if:  (1) the patient's 
        physician certifies that the patient has a terminal illness or 
        condition that is likely to result in death within 30 days and 
        that moving the patient would not be in the best interests of 
        the patient and patient's family; (2) no open nursing home beds 
        are available within 25 miles of the facility; and (3) no open 
        beds are available in any Medicare hospice program within 50 
        miles of the facility.  The daily medical assistance payment for 
        nursing care for the patient in the swing bed is the statewide 
        average medical assistance skilled nursing care per diem as 
        computed annually by the commissioner on July 1 of each year. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to medical assistance 
        payments for swing bed services provided on or after July 1, 
        2005. 
           Sec. 14.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 19c, is amended to read: 
           Subd. 19c.  [PERSONAL CARE.] Medical assistance covers 
        personal care assistant services provided by an individual who 
        is qualified to provide the services according to subdivision 
        19a and section 256B.0627, where the services are prescribed 
        have a statement of need by a physician, provided in accordance 
        with a plan of treatment, and are supervised by the recipient or 
        a qualified professional.  The physician's statement of need for 
        personal care assistant services shall be documented on a form 
        approved by the commissioner and include the diagnosis or 
        condition of the person that results in a need for personal care 
        assistant services and be updated when the person's medical 
        condition requires a change, but at least annually if the need 
        for personal care assistant services is ongoing. 
        "Qualified professional" means a mental health professional as 
        defined in section 245.462, subdivision 18, or 245.4871, 
        subdivision 27; or a registered nurse as defined in sections 
        148.171 to 148.285, or a licensed social worker as defined in 
        section 148B.21.  As part of the assessment, the county public 
        health nurse will assist the recipient or responsible party to 
        identify the most appropriate person to provide supervision of 
        the personal care assistant.  The qualified professional shall 
        perform the duties described in Minnesota Rules, part 9505.0335, 
        subpart 4.  
           Sec. 15.  Minnesota Statutes 2004, section 256B.0627, 
        subdivision 1, as amended by Laws 2005, chapter 10, article 1, 
        section 49, is amended to read: 
           Subdivision 1.  [DEFINITION.] (a) "Activities of daily 
        living" includes eating, toileting, grooming, dressing, bathing, 
        transferring, mobility, and positioning.  
           (b) "Assessment" means a review and evaluation of a 
        recipient's need for home care services conducted in person.  
        Assessments for private duty nursing shall be conducted by a 
        registered private duty nurse.  Assessments for home health 
        agency services shall be conducted by a home health agency 
        nurse.  Assessments for personal care assistant services shall 
        be conducted by the county public health nurse or a certified 
        public health nurse under contract with the county.  A 
        face-to-face assessment must include:  documentation of health 
        status, determination of need, evaluation of service 
        effectiveness, identification of appropriate services, service 
        plan development or modification, coordination of services, 
        referrals and follow-up to appropriate payers and community 
        resources, completion of required reports, recommendation of 
        service authorization, and consumer education.  Once the need 
        for personal care assistant services is determined under this 
        section, the county public health nurse or certified public 
        health nurse under contract with the county is responsible for 
        communicating this recommendation to the commissioner and the 
        recipient.  A face-to-face assessment for personal care 
        assistant services is conducted on those recipients who have 
        never had a county public health nurse assessment.  A 
        face-to-face assessment must occur at least annually or when 
        there is a significant change in the recipient's condition or 
        when there is a change in the need for personal care assistant 
        services.  A service update may substitute for the annual 
        face-to-face assessment when there is not a significant change 
        in recipient condition or a change in the need for personal care 
        assistant service.  A service update or review for temporary 
        increase includes a review of initial baseline data, evaluation 
        of service effectiveness, redetermination of service need, 
        modification of service plan and appropriate referrals, update 
        of initial forms, obtaining service authorization, and on going 
        consumer education.  Assessments for medical assistance home 
        care services for mental retardation or related conditions and 
        alternative care services for developmentally disabled home and 
        community-based waivered recipients may be conducted by the 
        county public health nurse to ensure coordination and avoid 
        duplication.  Assessments must be completed on forms provided by 
        the commissioner within 30 days of a request for home care 
        services by a recipient or responsible party. 
           (c) "Care plan" means a written description of personal 
        care assistant services developed by the qualified professional 
        or the recipient's physician with the recipient or responsible 
        party to be used by the personal care assistant with a copy 
        provided to the recipient or responsible party. 
           (d) "Complex and regular private duty nursing care" means: 
           (1) complex care is private duty nursing provided to 
        recipients who are ventilator dependent or for whom a physician 
        has certified that were it not for private duty nursing the 
        recipient would meet the criteria for inpatient hospital 
        intensive care unit (ICU) level of care; and 
           (2) regular care is private duty nursing provided to all 
        other recipients. 
           (e) "Health-related functions" means functions that can be 
        delegated or assigned by a licensed health care professional 
        under state law to be performed by a personal care assistant. 
           (f) "Home care services" means a health service, determined 
        by the commissioner as medically necessary, that is ordered by a 
        physician and documented in a service plan that is reviewed by 
        the physician at least once every 60 days for the provision of 
        home health services, or private duty nursing, or at least once 
        every 365 days for personal care.  Home care services are 
        provided to the recipient at the recipient's residence that is a 
        place other than a hospital or long-term care facility or as 
        specified in section 256B.0625.  
           (g) "Instrumental activities of daily living" includes meal 
        planning and preparation, managing finances, shopping for food, 
        clothing, and other essential items, performing essential 
        household chores, communication by telephone and other media, 
        and getting around and participating in the community. 
           (h) "Medically necessary" has the meaning given in 
        Minnesota Rules, parts 9505.0170 to 9505.0475.  
           (i) "Personal care assistant" means a person who:  
           (1) is at least 18 years old, except for persons 16 to 18 
        years of age who participated in a related school-based job 
        training program or have completed a certified home health aide 
        competency evaluation; 
           (2) is able to effectively communicate with the recipient 
        and personal care provider organization; 
           (3) effective July 1, 1996, has completed one of the 
        training requirements as specified in Minnesota Rules, part 
        9505.0335, subpart 3, items A to D; 
           (4) has the ability to, and provides covered personal care 
        assistant services according to the recipient's care plan, 
        responds appropriately to recipient needs, and reports changes 
        in the recipient's condition to the supervising qualified 
        professional or physician; 
           (5) is not a consumer of personal care assistant services; 
        and 
           (6) maintains daily written records detailing: 
           (i) the actual services provided to the recipient; and 
           (ii) the amount of time spent providing the services; and 
           (7) is subject to criminal background checks and procedures 
        specified in chapter 245C.  
           (j) "Personal care provider organization" means an 
        organization enrolled to provide personal care assistant 
        services under the medical assistance program that complies with 
        the following:  
           (1) owners who have a five percent interest or more, and 
        managerial officials are subject to a background study as 
        provided in chapter 245C.  This applies to currently enrolled 
        personal care provider organizations and those agencies seeking 
        enrollment as a personal care provider organization.  An 
        organization will be barred from enrollment if an owner or 
        managerial official of the organization has been convicted of a 
        crime specified in chapter 245C, or a comparable crime in 
        another jurisdiction, unless the owner or managerial official 
        meets the reconsideration criteria specified in chapter 245C; 
           (2) the organization must maintain a surety bond and 
        liability insurance throughout the duration of enrollment and 
        provides proof thereof.  The insurer must notify the Department 
        of Human Services of the cancellation or lapse of policy; and 
        (3) the organization must maintain documentation of services as 
        specified in Minnesota Rules, part 9505.2175, subpart 7, as well 
        as evidence of compliance with personal care assistant training 
        requirements; 
           (3) the organization must maintain documentation and a 
        recipient file and satisfy communication requirements in 
        subdivision 4, paragraph (f); and 
           (4) the organization must comply with all laws and rules 
        governing the provision of personal care assistant services. 
           (k) "Responsible party" means an individual who is capable 
        of providing the support necessary to assist the recipient to 
        live in the community, is at least 18 years old, actively 
        participates in planning and directing of personal care 
        assistant services, and is not the personal care assistant.  The 
        responsible party must be accessible to the recipient and the 
        personal care assistant when personal care services are being 
        provided and monitor the services at least weekly according to 
        the plan of care.  The responsible party must be identified at 
        the time of assessment and listed on the recipient's service 
        agreement and care plan.  Responsible parties who are parents of 
        minors or guardians of minors or incapacitated persons may 
        delegate the responsibility to another adult who is not the 
        personal care assistant during a temporary absence of at least 
        24 hours but not more than six months.  The person delegated as 
        a responsible party must be able to meet the definition of 
        responsible party, except that the delegated responsible party 
        is required to reside with the recipient only while serving as 
        the responsible party.  The delegated responsible party is not 
        required to reside with the recipient while serving as the 
        responsible party if competent supervision to ensure the health 
        and safety of the recipient and monitoring of services provided 
        are stated as part of the person's individual service plan under 
        a home care service or home and community-based waiver program 
        or in conjunction with a home care targeted case management 
        service provider or other case manager.  The responsible party 
        must assure that the delegate performs the functions of the 
        responsible party, is identified at the time of the assessment, 
        and is listed on the service agreement and the care plan.  
        Foster care license holders may be designated the responsible 
        party for residents of the foster care home if case management 
        is provided as required in section 256B.0625, subdivision 19a.  
        For persons who, as of April 1, 1992, are sharing personal care 
        assistant services in order to obtain the availability of 
        24-hour coverage, an employee of the personal care provider 
        organization may be designated as the responsible party if case 
        management is provided as required in section 256B.0625, 
        subdivision 19a. 
           (l) "Service plan" means a written description of the 
        services needed based on the assessment developed by the nurse 
        who conducts the assessment together with the recipient or 
        responsible party.  The service plan shall include a description 
        of the covered home care services, frequency and duration of 
        services, and expected outcomes and goals.  The recipient and 
        the provider chosen by the recipient or responsible party must 
        be given a copy of the completed service plan within 30 calendar 
        days of the request for home care services by the recipient or 
        responsible party. 
           (m) "Skilled nurse visits" are provided in a recipient's 
        residence under a plan of care or service plan that specifies a 
        level of care which the nurse is qualified to provide.  These 
        services are: 
           (1) nursing services according to the written plan of care 
        or service plan and accepted standards of medical and nursing 
        practice in accordance with chapter 148; 
           (2) services which due to the recipient's medical condition 
        may only be safely and effectively provided by a registered 
        nurse or a licensed practical nurse; 
           (3) assessments performed only by a registered nurse; and 
           (4) teaching and training the recipient, the recipient's 
        family, or other caregivers requiring the skills of a registered 
        nurse or licensed practical nurse. 
           (n) "Telehomecare" means the use of telecommunications 
        technology by a home health care professional to deliver home 
        health care services, within the professional's scope of 
        practice, to a patient located at a site other than the site 
        where the practitioner is located. 
           Sec. 16.  Minnesota Statutes 2004, section 256B.0627, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PERSONAL CARE ASSISTANT SERVICES.] (a) The 
        personal care assistant services that are eligible for payment 
        are services and supports furnished to an individual, as needed, 
        to assist in accomplishing activities of daily living; 
        instrumental activities of daily living; health-related 
        functions through hands-on assistance, supervision, and cuing; 
        and redirection and intervention for behavior including 
        observation and monitoring.  
           (b) Payment for services will be made within the limits 
        approved using the prior authorized process established in 
        subdivision 5. 
           (c) The amount and type of services authorized shall be 
        based on an assessment of the recipient's needs in these areas: 
           (1) bowel and bladder care; 
           (2) skin care to maintain the health of the skin; 
           (3) repetitive maintenance range of motion, muscle 
        strengthening exercises, and other tasks specific to maintaining 
        a recipient's optimal level of function; 
           (4) respiratory assistance; 
           (5) transfers and ambulation; 
           (6) bathing, grooming, and hairwashing necessary for 
        personal hygiene; 
           (7) turning and positioning; 
           (8) assistance with furnishing medication that is 
        self-administered; 
           (9) application and maintenance of prosthetics and 
        orthotics; 
           (10) cleaning medical equipment; 
           (11) dressing or undressing; 
           (12) assistance with eating and meal preparation and 
        necessary grocery shopping; 
           (13) accompanying a recipient to obtain medical diagnosis 
        or treatment; 
           (14) assisting, monitoring, or prompting the recipient to 
        complete the services in clauses (1) to (13); 
           (15) redirection, monitoring, and observation that are 
        medically necessary and an integral part of completing the 
        personal care assistant services described in clauses (1) to 
        (14); 
           (16) redirection and intervention for behavior, including 
        observation and monitoring; 
           (17) interventions for seizure disorders, including 
        monitoring and observation if the recipient has had a seizure 
        that requires intervention within the past three months; 
           (18) tracheostomy suctioning using a clean procedure if the 
        procedure is properly delegated by a registered nurse.  Before 
        this procedure can be delegated to a personal care assistant, a 
        registered nurse must determine that the tracheostomy suctioning 
        can be accomplished utilizing a clean rather than a sterile 
        procedure and must ensure that the personal care assistant has 
        been taught the proper procedure; and 
           (19) incidental household services that are an integral 
        part of a personal care service described in clauses (1) to (18).
        For purposes of this subdivision, monitoring and observation 
        means watching for outward visible signs that are likely to 
        occur and for which there is a covered personal care service or 
        an appropriate personal care intervention.  For purposes of this 
        subdivision, a clean procedure refers to a procedure that 
        reduces the numbers of microorganisms or prevents or reduces the 
        transmission of microorganisms from one person or place to 
        another.  A clean procedure may be used beginning 14 days after 
        insertion. 
           (d) The personal care assistant services that are not 
        eligible for payment are the following:  
           (1) services not ordered by the physician provided without 
        a physician's statement of need as required by section 
        256B.0625, subdivision 19c, and included in the personal care 
        provider agency's file for the recipient; 
           (2) assessments by personal care assistant provider 
        organizations or by independently enrolled registered nurses; 
           (3) services that are not in the service plan; 
           (4) services provided by the recipient's spouse, legal 
        guardian for an adult or child recipient, or parent of a 
        recipient under age 18; 
           (5) services provided by a foster care provider of a 
        recipient who cannot direct the recipient's own care, unless 
        monitored by a county or state case manager under section 
        256B.0625, subdivision 19a; 
           (6) services provided by the residential or program license 
        holder in a residence for more than four persons; 
           (7) services that are the responsibility of a residential 
        or program license holder under the terms of a service agreement 
        and administrative rules; 
           (8) sterile procedures; 
           (9) injections of fluids into veins, muscles, or skin; 
           (10) homemaker services that are not an integral part of a 
        personal care assistant services; 
           (11) home maintenance or chore services; 
           (12) services not specified under paragraph (a); and 
           (13) services not authorized by the commissioner or the 
        commissioner's designee. 
           (e) The recipient or responsible party may choose to 
        supervise the personal care assistant or to have a qualified 
        professional, as defined in section 256B.0625, subdivision 19c, 
        provide the supervision.  As required under section 256B.0625, 
        subdivision 19c, the county public health nurse, as a part of 
        the assessment, will assist the recipient or responsible party 
        to identify the most appropriate person to provide supervision 
        of the personal care assistant.  Health-related delegated tasks 
        performed by the personal care assistant will be under the 
        supervision of a qualified professional or the direction of the 
        recipient's physician.  If the recipient has a qualified 
        professional, Minnesota Rules, part 9505.0335, subpart 4, 
        applies. 
           (f) In order to be paid for personal care assistant 
        services, personal care provider organizations, and personal 
        care assistant choice providers are required: 
           (1) to maintain a recipient file for each recipient for 
        whom services are being billed that contains: 
           (i) the current physician's statement of need as required 
        by section 256B.0625, subdivision 19c; 
           (ii) the service plan, including the monthly authorized 
        hours, or flexible use plan; 
           (iii) the care plan, signed by the recipient and the 
        qualified professional, if required or designated, detailing the 
        personal care assistant services to be provided; 
           (iv) documentation, on a form approved by the commissioner 
        and signed by the personal care assistant, specifying the day, 
        month, year, arrival, and departure times, with AM and PM 
        notation, for all services provided to the recipient.  The form 
        must include a notice that it is a federal crime to provide 
        false information on personal care service billings for medical 
        assistance payment; and 
           (v) all notices to the recipient regarding personal care 
        service use exceeding authorized hours; and 
           (2) to communicate, by telephone if available, and in 
        writing, with the recipient or the responsible party about the 
        schedule for use of authorized hours and to notify the recipient 
        and the county public health nurse in advance and as soon as 
        possible, on a form approved by the commissioner, if the monthly 
        number of hours authorized is likely to be exceeded for the 
        month. 
           (g) The commissioner shall establish an ongoing audit 
        process for potential fraud and abuse for personal care 
        assistant services.  The audit process must include, at a 
        minimum, a requirement that the documentation of hours of care 
        provided be on a form approved by the commissioner and include 
        the personal care assistant's signature attesting that the hours 
        shown on each bill were provided by the personal care assistant 
        on the dates and the times specified.  
           Sec. 17.  Minnesota Statutes 2004, section 256B.0627, 
        subdivision 5, as amended by Laws 2005, chapter 10, article 1, 
        section 50, is amended to read: 
           Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
        payments for home care services shall be limited according to 
        this subdivision.  
           (a)  [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A 
        recipient may receive the following home care services during a 
        calendar year: 
           (1) up to two face-to-face assessments to determine a 
        recipient's need for personal care assistant services; 
           (2) one service update done to determine a recipient's need 
        for personal care assistant services; and 
           (3) up to nine skilled nurse visits.  
           (b)  [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care 
        services above the limits in paragraph (a) must receive the 
        commissioner's prior authorization, except when: 
           (1) the home care services were required to treat an 
        emergency medical condition that if not immediately treated 
        could cause a recipient serious physical or mental disability, 
        continuation of severe pain, or death.  The provider must 
        request retroactive authorization no later than five working 
        days after giving the initial service.  The provider must be 
        able to substantiate the emergency by documentation such as 
        reports, notes, and admission or discharge histories; 
           (2) the home care services were provided on or after the 
        date on which the recipient's eligibility began, but before the 
        date on which the recipient was notified that the case was 
        opened.  Authorization will be considered if the request is 
        submitted by the provider within 20 working days of the date the 
        recipient was notified that the case was opened; 
           (3) a third-party payor for home care services has denied 
        or adjusted a payment.  Authorization requests must be submitted 
        by the provider within 20 working days of the notice of denial 
        or adjustment.  A copy of the notice must be included with the 
        request; 
           (4) the commissioner has determined that a county or state 
        human services agency has made an error; or 
           (5) the professional nurse determines an immediate need for 
        up to 40 skilled nursing or home health aide visits per calendar 
        year and submits a request for authorization within 20 working 
        days of the initial service date, and medical assistance is 
        determined to be the appropriate payer. 
           (c)  [RETROACTIVE AUTHORIZATION.] A request for retroactive 
        authorization will be evaluated according to the same criteria 
        applied to prior authorization requests.  
           (d)  [ASSESSMENT AND SERVICE PLAN.] Assessments under 
        section 256B.0627, subdivision 1, paragraph (b), shall be 
        conducted initially, and at least annually thereafter, in person 
        with the recipient and result in a completed service plan using 
        forms specified by the commissioner.  Within 30 days of 
        recipient or responsible party request for home care services, 
        the assessment, the service plan, and other information 
        necessary to determine medical necessity such as diagnostic or 
        testing information, social or medical histories, and hospital 
        or facility discharge summaries shall be submitted to the 
        commissioner.  Notwithstanding the provisions of section 
        256B.0627, subdivision 12, the commissioner shall maximize 
        federal financial participation to pay for public health nurse 
        assessments for personal care services.  For personal care 
        assistant services: 
           (1) The amount and type of service authorized based upon 
        the assessment and service plan will follow the recipient if the 
        recipient chooses to change providers.  
           (2) If the recipient's medical need changes, the 
        recipient's provider may assess the need for a change in service 
        authorization and request the change from the county public 
        health nurse.  Within 30 days of the request, the public health 
        nurse will determine whether to request the change in services 
        based upon the provider assessment, or conduct a home visit to 
        assess the need and determine whether the change is 
        appropriate.  If the change in service need is due to a change 
        in medical condition, a new physician's statement of need 
        required by section 256B.0625, subdivision 19c, must be obtained.
           (3) To continue to receive personal care assistant services 
        after the first year, the recipient or the responsible party, in 
        conjunction with the public health nurse, may complete a service 
        update on forms developed by the commissioner according to 
        criteria and procedures in subdivision 1.  
           (e)  [PRIOR AUTHORIZATION.] The commissioner, or the 
        commissioner's designee, shall review the assessment, service 
        update, request for temporary services, request for flexible use 
        option, service plan, and any additional information that is 
        submitted.  The commissioner shall, within 30 days after 
        receiving a complete request, assessment, and service plan, 
        authorize home care services as follows:  
           (1)  [HOME HEALTH SERVICES.] All home health services 
        provided by a home health aide must be prior authorized by the 
        commissioner or the commissioner's designee.  Prior 
        authorization must be based on medical necessity and 
        cost-effectiveness when compared with other care options.  When 
        home health services are used in combination with personal care 
        and private duty nursing, the cost of all home care services 
        shall be considered for cost-effectiveness.  The commissioner 
        shall limit home health aide visits to no more than one visit 
        each per day.  The commissioner, or the commissioner's designee, 
        may authorize up to two skilled nurse visits per day. 
           (2)  [PERSONAL CARE ASSISTANT SERVICES.] (i) All personal 
        care assistant services and supervision by a qualified 
        professional, if requested by the recipient, must be prior 
        authorized by the commissioner or the commissioner's designee 
        except for the assessments established in paragraph (a).  The 
        amount of personal care assistant services authorized must be 
        based on the recipient's home care rating.  A child may not be 
        found to be dependent in an activity of daily living if because 
        of the child's age an adult would either perform the activity 
        for the child or assist the child with the activity and the 
        amount of assistance needed is similar to the assistance 
        appropriate for a typical child of the same age.  Based on 
        medical necessity, the commissioner may authorize: 
           (A) up to two times the average number of direct care hours 
        provided in nursing facilities for the recipient's comparable 
        case mix level; or 
           (B) up to three times the average number of direct care 
        hours provided in nursing facilities for recipients who have 
        complex medical needs or are dependent in at least seven 
        activities of daily living and need physical assistance with 
        eating or have a neurological diagnosis; or 
           (C) up to 60 percent of the average reimbursement rate, as 
        of July 1, 1991, for care provided in a regional treatment 
        center for recipients who have Level I behavior, plus any 
        inflation adjustment as provided by the legislature for personal 
        care service; or 
           (D) up to the amount the commissioner would pay, as of July 
        1, 1991, plus any inflation adjustment provided for home care 
        services, for care provided in a regional treatment center for 
        recipients referred to the commissioner by a regional treatment 
        center preadmission evaluation team.  For purposes of this 
        clause, home care services means all services provided in the 
        home or community that would be included in the payment to a 
        regional treatment center; or 
           (E) up to the amount medical assistance would reimburse for 
        facility care for recipients referred to the commissioner by a 
        preadmission screening team established under section 256B.0911 
        or 256B.092; and 
           (F) a reasonable amount of time for the provision of 
        supervision by a qualified professional of personal care 
        assistant services, if a qualified professional is requested by 
        the recipient or responsible party.  
           (ii) The number of direct care hours shall be determined 
        according to the annual cost report submitted to the department 
        by nursing facilities.  The average number of direct care hours, 
        as established by May 1, 1992, shall be calculated and 
        incorporated into the home care limits on July 1, 1992.  These 
        limits shall be calculated to the nearest quarter hour. 
           (iii) The home care rating shall be determined by the 
        commissioner or the commissioner's designee based on information 
        submitted to the commissioner by the county public health nurse 
        on forms specified by the commissioner.  The home care rating 
        shall be a combination of current assessment tools developed 
        under sections 256B.0911 and 256B.501 with an addition for 
        seizure activity that will assess the frequency and severity of 
        seizure activity and with adjustments, additions, and 
        clarifications that are necessary to reflect the needs and 
        conditions of recipients who need home care including children 
        and adults under 65 years of age.  The commissioner shall 
        establish these forms and protocols under this section and shall 
        use an advisory group, including representatives of recipients, 
        providers, and counties, for consultation in establishing and 
        revising the forms and protocols. 
           (iv) A recipient shall qualify as having complex medical 
        needs if the care required is difficult to perform and because 
        of recipient's medical condition requires more time than 
        community-based standards allow or requires more skill than 
        would ordinarily be required and the recipient needs or has one 
        or more of the following: 
           (A) daily tube feedings; 
           (B) daily parenteral therapy; 
           (C) wound or decubiti care; 
           (D) postural drainage, percussion, nebulizer treatments, 
        suctioning, tracheotomy care, oxygen, mechanical ventilation; 
           (E) catheterization; 
           (F) ostomy care; 
           (G) quadriplegia; or 
           (H) other comparable medical conditions or treatments the 
        commissioner determines would otherwise require institutional 
        care.  
           (v) A recipient shall qualify as having Level I behavior if 
        there is reasonable supporting evidence that the recipient 
        exhibits, or that without supervision, observation, or 
        redirection would exhibit, one or more of the following 
        behaviors that cause, or have the potential to cause: 
           (A) injury to the recipient's own body; 
           (B) physical injury to other people; or 
           (C) destruction of property. 
           (vi) Time authorized for personal care relating to Level I 
        behavior in subclause (v), items (A) to (C), shall be based on 
        the predictability, frequency, and amount of intervention 
        required. 
           (vii) A recipient shall qualify as having Level II behavior 
        if the recipient exhibits on a daily basis one or more of the 
        following behaviors that interfere with the completion of 
        personal care assistant services under subdivision 4, paragraph 
        (a): 
           (A) unusual or repetitive habits; 
           (B) withdrawn behavior; or 
           (C) offensive behavior. 
           (viii) A recipient with a home care rating of Level II 
        behavior in subclause (vii), items (A) to (C), shall be rated as 
        comparable to a recipient with complex medical needs under 
        subclause (iv).  If a recipient has both complex medical needs 
        and Level II behavior, the home care rating shall be the next 
        complex category up to the maximum rating under subclause (i), 
        item (B). 
           (3)  [PRIVATE DUTY NURSING SERVICES.] All private duty 
        nursing services shall be prior authorized by the commissioner 
        or the commissioner's designee.  Prior authorization for private 
        duty nursing services shall be based on medical necessity and 
        cost-effectiveness when compared with alternative care options.  
        The commissioner may authorize medically necessary private duty 
        nursing services in quarter-hour units when: 
           (i) the recipient requires more individual and continuous 
        care than can be provided during a nurse visit; or 
           (ii) the cares are outside of the scope of services that 
        can be provided by a home health aide or personal care assistant.
           The commissioner may authorize: 
           (A) up to two times the average amount of direct care hours 
        provided in nursing facilities statewide for case mix 
        classification "K" as established by the annual cost report 
        submitted to the department by nursing facilities in May 1992; 
           (B) private duty nursing in combination with other home 
        care services up to the total cost allowed under clause (2); 
           (C) up to 16 hours per day if the recipient requires more 
        nursing than the maximum number of direct care hours as 
        established in item (A) and the recipient meets the hospital 
        admission criteria established under Minnesota Rules, parts 
        9505.0501 to 9505.0540.  
           The commissioner may authorize up to 16 hours per day of 
        medically necessary private duty nursing services or up to 24 
        hours per day of medically necessary private duty nursing 
        services until such time as the commissioner is able to make a 
        determination of eligibility for recipients who are 
        cooperatively applying for home care services under the 
        community alternative care program developed under section 
        256B.49, or until it is determined by the appropriate regulatory 
        agency that a health benefit plan is or is not required to pay 
        for appropriate medically necessary health care services.  
        Recipients or their representatives must cooperatively assist 
        the commissioner in obtaining this determination.  Recipients 
        who are eligible for the community alternative care program may 
        not receive more hours of nursing under this section than would 
        otherwise be authorized under section 256B.49.  
           (4)  [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is 
        ventilator-dependent, the monthly medical assistance 
        authorization for home care services shall not exceed what the 
        commissioner would pay for care at the highest cost hospital 
        designated as a long-term hospital under the Medicare program.  
        For purposes of this clause, home care services means all 
        services provided in the home that would be included in the 
        payment for care at the long-term hospital.  
        "Ventilator-dependent" means an individual who receives 
        mechanical ventilation for life support at least six hours per 
        day and is expected to be or has been dependent for at least 30 
        consecutive days.  
           (f)  [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner 
        or the commissioner's designee shall determine the time period 
        for which a prior authorization shall be effective and, if 
        flexible use has been requested, whether to allow the flexible 
        use option.  If the recipient continues to require home care 
        services beyond the duration of the prior authorization, the 
        home care provider must request a new prior authorization.  
        Under no circumstances, other than the exceptions in paragraph 
        (b), shall a prior authorization be valid prior to the date the 
        commissioner receives the request or for more than 12 months.  A 
        recipient who appeals a reduction in previously authorized home 
        care services may continue previously authorized services, other 
        than temporary services under paragraph (h), pending an appeal 
        under section 256.045.  The commissioner must provide a detailed 
        explanation of why the authorized services are reduced in amount 
        from those requested by the home care provider.  
           (g)  [APPROVAL OF HOME CARE SERVICES.] The commissioner or 
        the commissioner's designee shall determine the medical 
        necessity of home care services, the level of caregiver 
        according to subdivision 2, and the institutional comparison 
        according to this subdivision, the cost-effectiveness of 
        services, and the amount, scope, and duration of home care 
        services reimbursable by medical assistance, based on the 
        assessment, primary payer coverage determination information as 
        required, the service plan, the recipient's age, the cost of 
        services, the recipient's medical condition, and diagnosis or 
        disability.  The commissioner may publish additional criteria 
        for determining medical necessity according to section 256B.04. 
           (h)  [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] 
        The agency nurse, the independently enrolled private duty nurse, 
        or county public health nurse may request a temporary 
        authorization for home care services by telephone.  The 
        commissioner may approve a temporary level of home care services 
        based on the assessment, and service or care plan information, 
        and primary payer coverage determination information as required.
        Authorization for a temporary level of home care services 
        including nurse supervision is limited to the time specified by 
        the commissioner, but shall not exceed 45 days, unless extended 
        because the county public health nurse has not completed the 
        required assessment and service plan, or the commissioner's 
        determination has not been made.  The level of services 
        authorized under this provision shall have no bearing on a 
        future prior authorization. 
           (i)  [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] 
        Home care services provided in an adult or child foster care 
        setting must receive prior authorization by the department 
        according to the limits established in paragraph (a). 
           The commissioner may not authorize: 
           (1) home care services that are the responsibility of the 
        foster care provider under the terms of the foster care 
        placement agreement and administrative rules; 
           (2) personal care assistant services when the foster care 
        license holder is also the personal care provider or personal 
        care assistant unless the recipient can direct the recipient's 
        own care, or case management is provided as required in section 
        256B.0625, subdivision 19a; 
           (3) personal care assistant services when the responsible 
        party is an employee of, or under contract with, or has any 
        direct or indirect financial relationship with the personal care 
        provider or personal care assistant, unless case management is 
        provided as required in section 256B.0625, subdivision 19a; or 
           (4) personal care assistant and private duty nursing 
        services when the number of foster care residents is greater 
        than four unless the county responsible for the recipient's 
        foster placement made the placement prior to April 1, 1992, 
        requests that personal care assistant and private duty nursing 
        services be provided, and case management is provided as 
        required in section 256B.0625, subdivision 19a. 
           Sec. 18.  Minnesota Statutes 2004, section 256B.0627, 
        subdivision 9, is amended to read: 
           Subd. 9.  [OPTION FOR FLEXIBLE USE OF PERSONAL CARE 
        ASSISTANT HOURS.] (a) "Flexible use option" means the scheduled 
        use of authorized hours of personal care assistant services, 
        which vary within the length of the a service authorization 
        period covering no more than six months, in order to more 
        effectively meet the needs and schedule of the 
        recipient.  Authorized hours not used within the six-month 
        period may not be carried over to another time period.  The 
        flexible use of personal care assistant hours for a six-month 
        period must be prior authorized by the commissioner, based on a 
        request submitted on a form approved by the commissioner.  The 
        request must include the assessment and the annual service plan 
        prepared by the county public health nurse.  
           (b) The recipient or responsible party, together with the 
        case manager, if the recipient has case management services, and 
        the county public health nurse, shall determine whether flexible 
        use is an appropriate option based on the needs, abilities, 
        preferences, and history of service use of the recipient or 
        responsible party, and if appropriate, must ensure that the 
        allocation of hours covers the ongoing needs of the recipient 
        over an entire year divided into two six-month periods of 
        flexible use.  A recipient who has terminated personal care 
        assistant services before the end of the 12-month authorization 
        period shall not receive additional hours upon reapplying during 
        the same 12-month authorization period, except if a change in 
        condition is documented.  Services shall be prorated for the 
        remainder of the 12-month authorization period based on earlier 
        assessment.  
           (c) If prior authorized, recipients may use their approved 
        hours flexibly within the service authorization period for 
        medically necessary covered services specified in the assessment 
        required in subdivision 1.  The flexible use of authorized hours 
        does not increase the total amount of authorized hours available 
        to a recipient as determined under subdivision 5.  The 
        commissioner shall not authorize additional personal care 
        assistant services to supplement a service authorization that is 
        exhausted before the end date under a flexible service use plan, 
        unless the county public health nurse determines a change in 
        condition and a need for increased services is established. 
           (b) (d) The personal care provider organization and the 
        recipient or responsible party, together with the provider, or 
        the personal care assistant choice provider must work to monitor 
        and document the use of authorized hours and ensure that a 
        recipient is able to manage services effectively throughout the 
        authorized period.  Upon request of the recipient or responsible 
        party, the provider must furnish regular updates to the 
        recipient or responsible party on the amount of personal care 
        assistant services used develop a written month-to-month plan of 
        the projected use of personal care assistant services that is 
        part of the care plan and ensures: 
           (1) that the health and safety needs of the recipient will 
        be met; 
           (2) that the total annual authorization will not be used 
        before the end of the authorization period; and 
           (3) monthly monitoring will be conducted of hours used as a 
        percentage of the authorized amount. 
           (e) The provider shall notify the recipient or responsible 
        party, any case manager for the recipient, and the county public 
        health nurse in advance and as soon as possible, on a form 
        approved by the commissioner, if the monthly amount of hours 
        authorized is likely to be exceeded for the month. 
           (f) The commissioner shall provide written notice to the 
        provider, the recipient or responsible party, any case manager 
        for the recipient, and the county public health nurse, when a 
        flexible use recipient exceeds the personal care assistant 
        service authorization for the month by an amount determined by 
        the commissioner.  If the use of hours exceeds the monthly 
        service authorization by the amount determined by the 
        commissioner for two months during any three-month period, the 
        commissioner shall notify the recipient and the county public 
        health nurse that the flexible use authorization will be revoked 
        beginning the following month.  The revocation will not become 
        effective if, within ten working days of the commissioner's 
        notice of flexible use revocation, the county public health 
        nurse requests prior authorization for an increase in the 
        service authorization or continuation of the flexible use 
        option, or the recipient appeals and assistance pending appeal 
        is ordered.  The commissioner shall determine whether to approve 
        the increase and continued flexible use. 
           (g) The recipient or responsible party may stop the 
        flexible use of hours by notifying the personal care provider 
        organization or the personal care assistance choice provider and 
        county public health nurse in writing.  
           (h) The recipient or responsible party may appeal the 
        commissioner's action according to section 256.045.  The denial 
        or revocation of the flexible use option shall not affect the 
        recipient's authorized level of personal care assistant services 
        as determined under subdivision 5. 
           Sec. 19.  Minnesota Statutes 2004, section 256B.0627, is 
        amended by adding a subdivision to read: 
           Subd. 18.  [OVERSIGHT OF ENROLLED PERSONAL CARE ASSISTANT 
        SERVICES PROVIDERS.] The commissioner may request from providers 
        documentation of compliance with laws, rules, and policies 
        governing the provision of personal care assistant services.  A 
        personal care assistant service provider must provide the 
        requested documentation to the commissioner within ten business 
        days of the request.  Failure to provide information to 
        demonstrate substantial compliance with laws, rules, or policies 
        may result in suspension, denial, or termination of the provider 
        agreement. 
           Sec. 20.  Minnesota Statutes 2004, section 256B.0913, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY FOR SERVICES.] Alternative care 
        services are available to Minnesotans age 65 or older who would 
        be eligible for medical assistance within 180 135 days of 
        admission to a nursing facility and subject to subdivisions 4 to 
        13. 
           Sec. 21.  Minnesota Statutes 2004, section 256B.0913, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBILITY FOR FUNDING FOR SERVICES FOR 
        NONMEDICAL ASSISTANCE RECIPIENTS.] (a) Funding for services 
        under the alternative care program is available to persons who 
        meet the following criteria: 
           (1) the person has been determined by a community 
        assessment under section 256B.0911 to be a person who would 
        require the level of care provided in a nursing facility, but 
        for the provision of services under the alternative care 
        program; 
           (2) the person is age 65 or older; 
           (3) the person would be eligible for medical assistance 
        within 180 135 days of admission to a nursing facility; 
           (4) the person is not ineligible for the medical assistance 
        program due to an asset transfer penalty; 
           (5) the person needs services that are not funded through 
        other state or federal funding; 
           (6) the monthly cost of the alternative care services 
        funded by the program for this person does not exceed 75 percent 
        of the monthly limit described under section 256B.0915, 
        subdivision 3a.  This monthly limit does not prohibit the 
        alternative care client from payment for additional services, 
        but in no case may the cost of additional services purchased 
        under this section exceed the difference between the client's 
        monthly service limit defined under section 256B.0915, 
        subdivision 3, and the alternative care program monthly service 
        limit defined in this paragraph.  If medical supplies and 
        equipment or environmental modifications are or will be 
        purchased for an alternative care services recipient, the costs 
        may be prorated on a monthly basis for up to 12 consecutive 
        months beginning with the month of purchase.  If the monthly 
        cost of a recipient's other alternative care services exceeds 
        the monthly limit established in this paragraph, the annual cost 
        of the alternative care services shall be determined.  In this 
        event, the annual cost of alternative care services shall not 
        exceed 12 times the monthly limit described in this paragraph; 
        and 
           (7) the person is making timely payments of the assessed 
        monthly fee. 
        A person is ineligible if payment of the fee is over 60 days 
        past due, unless the person agrees to: 
           (i) the appointment of a representative payee; 
           (ii) automatic payment from a financial account; 
           (iii) the establishment of greater family involvement in 
        the financial management of payments; or 
           (iv) another method acceptable to the county to ensure 
        prompt fee payments. 
           The county shall extend the client's eligibility as 
        necessary while making arrangements to facilitate payment of 
        past-due amounts and future premium payments.  Following 
        disenrollment due to nonpayment of a monthly fee, eligibility 
        shall not be reinstated for a period of 30 days. 
           (b) Alternative care funding under this subdivision is not 
        available for a person who is a medical assistance recipient or 
        who would be eligible for medical assistance without a spenddown 
        or waiver obligation.  A person whose initial application for 
        medical assistance and the elderly waiver program is being 
        processed may be served under the alternative care program for a 
        period up to 60 days.  If the individual is found to be eligible 
        for medical assistance, medical assistance must be billed for 
        services payable under the federally approved elderly waiver 
        plan and delivered from the date the individual was found 
        eligible for the federally approved elderly waiver plan.  
        Notwithstanding this provision, alternative care funds may not 
        be used to pay for any service the cost of which:  (i) is 
        payable by medical assistance; (ii) is used by a recipient to 
        meet a waiver obligation; or (iii) is used to pay a medical 
        assistance income spenddown for a person who is eligible to 
        participate in the federally approved elderly waiver program 
        under the special income standard provision. 
           (c) Alternative care funding is not available for a person 
        who resides in a licensed nursing home, certified boarding care 
        home, hospital, or intermediate care facility, except for case 
        management services which are provided in support of the 
        discharge planning process for a nursing home resident or 
        certified boarding care home resident to assist with a 
        relocation process to a community-based setting. 
           (d) Alternative care funding is not available for a person 
        whose income is greater than the maintenance needs allowance 
        under section 256B.0915, subdivision 1d, but equal to or less 
        than 120 percent of the federal poverty guideline effective July 
        1 in the year for which alternative care eligibility is 
        determined, who would be eligible for the elderly waiver with a 
        waiver obligation. 
           Sec. 22.  Minnesota Statutes 2004, section 256B.0913, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SERVICES COVERED UNDER ALTERNATIVE CARE.] 
        Alternative care funding may be used for payment of costs of: 
           (1) adult foster care; 
           (2) adult day care; 
           (3) (2) home health aide; 
           (4) (3) homemaker services; 
           (5) (4) personal care; 
           (6) (5) case management; 
           (7) (6) respite care; 
           (8) assisted living; 
           (9) residential care services; 
           (10) (7) care-related supplies and equipment; 
           (11) (8) meals delivered to the home; 
           (12) (9) transportation; 
           (13) (10) nursing services; 
           (14) (11) chore services; 
           (15) (12) companion services; 
           (16) (13) nutrition services; 
           (17) (14) training for direct informal caregivers; 
           (18) (15) telehome care to provide services in their own 
        homes in conjunction with in-home visits; 
           (19) (16) discretionary services, for which counties may 
        make payment from their alternative care program allocation or 
        services not otherwise defined in this section or section 
        256B.0625, following approval by the commissioner; 
           (20) (17) environmental modifications; and 
           (21) (18) direct cash payments for which counties may make 
        payment from their alternative care program allocation to 
        clients for the purpose of purchasing services, following 
        approval by the commissioner, and subject to the provisions of 
        subdivision 5h, until approval and implementation of 
        consumer-directed services through the federally approved 
        elderly waiver plan.  Upon implementation, consumer-directed 
        services under the alternative care program are available 
        statewide and limited to the average monthly expenditures 
        representative of all alternative care program participants for 
        the same case mix resident class assigned in the most recent 
        fiscal year for which complete expenditure data is available. 
           Total annual payments for discretionary services and direct 
        cash payments, until the federally approved consumer-directed 
        service option is implemented statewide, for all clients within 
        a county may not exceed 25 percent of that county's annual 
        alternative care program base allocation.  Thereafter, 
        discretionary services are limited to 25 percent of the county's 
        annual alternative care program base allocation. 
           Sec. 23.  Minnesota Statutes 2004, section 256B.0913, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [SERVICES; SERVICE DEFINITIONS; SERVICE 
        STANDARDS.] (a) Unless specified in statute, the services, 
        service definitions, and standards for alternative care services 
        shall be the same as the services, service definitions, and 
        standards specified in the federally approved elderly waiver 
        plan, except for transitional support services, assisted living 
        services, adult foster care services, and residential care 
        services. 
           (b) The county agency must ensure that the funds are not 
        used to supplant services available through other public 
        assistance or services programs.  For a provider of supplies and 
        equipment when the monthly cost of the supplies and equipment is 
        less than $250, persons or agencies must be employed by or under 
        a contract with the county agency or the public health nursing 
        agency of the local board of health in order to receive funding 
        under the alternative care program.  Supplies and equipment may 
        be purchased from a vendor not certified to participate in the 
        Medicaid program if the cost for the item is less than that of a 
        Medicaid vendor.  
           (c) Personal care services must meet the service standards 
        defined in the federally approved elderly waiver plan, except 
        that a county agency may contract with a client's relative who 
        meets the relative hardship waiver requirements or a relative 
        who meets the criteria and is also the responsible party under 
        an individual service plan that ensures the client's health and 
        safety and supervision of the personal care services by a 
        qualified professional as defined in section 256B.0625, 
        subdivision 19c.  Relative hardship is established by the county 
        when the client's care causes a relative caregiver to do any of 
        the following:  resign from a paying job, reduce work hours 
        resulting in lost wages, obtain a leave of absence resulting in 
        lost wages, incur substantial client-related expenses, provide 
        services to address authorized, unstaffed direct care time, or 
        meet special needs of the client unmet in the formal service 
        plan. 
           Sec. 24.  Minnesota Statutes 2004, section 256B.095, is 
        amended to read: 
           256B.095 [QUALITY ASSURANCE SYSTEM ESTABLISHED.] 
           (a) Effective July 1, 1998, a quality assurance system for 
        persons with developmental disabilities, which includes an 
        alternative quality assurance licensing system for programs, is 
        established in Dodge, Fillmore, Freeborn, Goodhue, Houston, 
        Mower, Olmsted, Rice, Steele, Wabasha, and Winona Counties for 
        the purpose of improving the quality of services provided to 
        persons with developmental disabilities.  A county, at its 
        option, may choose to have all programs for persons with 
        developmental disabilities located within the county licensed 
        under chapter 245A using standards determined under the 
        alternative quality assurance licensing system or may continue 
        regulation of these programs under the licensing system operated 
        by the commissioner.  The project expires on June 30, 2007 2009. 
           (b) Effective July 1, 2003, a county not listed in 
        paragraph (a) may apply to participate in the quality assurance 
        system established under paragraph (a).  The commission 
        established under section 256B.0951 may, at its option, allow 
        additional counties to participate in the system. 
           (c) Effective July 1, 2003, any county or group of counties 
        not listed in paragraph (a) may establish a quality assurance 
        system under this section.  A new system established under this 
        section shall have the same rights and duties as the system 
        established under paragraph (a).  A new system shall be governed 
        by a commission under section 256B.0951.  The commissioner shall 
        appoint the initial commission members based on recommendations 
        from advocates, families, service providers, and counties in the 
        geographic area included in the new system.  Counties that 
        choose to participate in a new system shall have the duties 
        assigned under section 256B.0952.  The new system shall 
        establish a quality assurance process under section 256B.0953.  
        The provisions of section 256B.0954 shall apply to a new system 
        established under this paragraph.  The commissioner shall 
        delegate authority to a new system established under this 
        paragraph according to section 256B.0955. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 25.  Minnesota Statutes 2004, section 256B.0951, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] The Quality Assurance 
        Commission is established.  The commission consists of at least 
        14 but not more than 21 members as follows:  at least three but 
        not more than five members representing advocacy organizations; 
        at least three but not more than five members representing 
        consumers, families, and their legal representatives; at least 
        three but not more than five members representing service 
        providers; at least three but not more than five members 
        representing counties; and the commissioner of human services or 
        the commissioner's designee.  The first commission shall 
        establish membership guidelines for the transition and 
        recruitment of membership for the commission's ongoing 
        existence.  Members of the commission who do not receive a 
        salary or wages from an employer for time spent on commission 
        duties may receive a per diem payment when performing commission 
        duties and functions.  All members may be reimbursed for 
        expenses related to commission activities.  Notwithstanding the 
        provisions of section 15.059, subdivision 5, the commission 
        expires on June 30, 2007 2009. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 26.  Minnesota Statutes 2004, section 256B.0952, 
        subdivision 5, is amended to read: 
           Subd. 5.  [QUALITY ASSURANCE TEAMS.] Quality assurance 
        teams shall be comprised of county staff; providers; consumers, 
        families, and their legal representatives; members of advocacy 
        organizations; and other involved community members.  Team 
        members must satisfactorily complete the training program 
        approved by the commission and must demonstrate 
        performance-based competency.  Team members are not considered 
        to be county employees for purposes of workers' compensation, 
        unemployment insurance, or state retirement laws solely on the 
        basis of participation on a quality assurance team.  The county 
        may pay a per diem to team members who do not receive a salary 
        or wages from an employer for time spent on alternative quality 
        assurance process matters.  All team members may be reimbursed 
        for expenses related to their participation in the alternative 
        process. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 27.  Minnesota Statutes 2004, section 256B.0953, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROCESS COMPONENTS.] (a) The quality 
        assurance licensing process consists of an evaluation by a 
        quality assurance team of the facility, program, or service 
        according to outcome-based measurements.  The process must 
        include an evaluation of a random sample of program consumers.  
        The sample must be representative of each service provided.  The 
        sample size must be at least five percent of consumers but not 
        less than three two consumers.  
           (b) All consumers must be given the opportunity to be 
        included in the quality assurance process in addition to those 
        chosen for the random sample. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 28.  Minnesota Statutes 2004, section 256B.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POLICY, APPLICABILITY, PURPOSE, AND 
        CONSTRUCTION; DEFINITION.] (a) It is the policy of this state 
        that individuals or couples, either or both of whom participate 
        in the medical assistance program, use their own assets to pay 
        their share of the total cost of their care during or after 
        their enrollment in the program according to applicable federal 
        law and the laws of this state.  The following provisions apply: 
           (1) subdivisions 1c to 1k shall not apply to claims arising 
        under this section which are presented under section 525.313; 
           (2) the provisions of subdivisions 1c to 1k expanding the 
        interests included in an estate for purposes of recovery under 
        this section give effect to the provisions of United States 
        Code, title 42, section 1396p, governing recoveries, but do not 
        give rise to any express or implied liens in favor of any other 
        parties not named in these provisions; 
           (3) the continuation of a recipient's life estate or joint 
        tenancy interest in real property after the recipient's death 
        for the purpose of recovering medical assistance under this 
        section modifies common law principles holding that these 
        interests terminate on the death of the holder; 
           (4) all laws, rules, and regulations governing or involved 
        with a recovery of medical assistance shall be liberally 
        construed to accomplish their intended purposes; 
           (5) a deceased recipient's life estate and joint tenancy 
        interests continued under this section shall be owned by the 
        remaindermen or surviving joint tenants as their interests may 
        appear on the date of the recipient's death.  They shall not be 
        merged into the remainder interest or the interests of the 
        surviving joint tenants by reason of ownership.  They shall be 
        subject to the provisions of this section.  Any conveyance, 
        transfer, sale, assignment, or encumbrance by a remainderman, a 
        surviving joint tenant, or their heirs, successors, and assigns 
        shall be deemed to include all of their interest in the deceased 
        recipient's life estate or joint tenancy interest continued 
        under this section; and 
           (6) the provisions of subdivisions 1c to 1k continuing a 
        recipient's joint tenancy interests in real property after the 
        recipient's death do not apply to a homestead owned of record, 
        on the date the recipient dies, by the recipient and the 
        recipient's spouse as joint tenants with a right of 
        survivorship.  Homestead means the real property occupied by the 
        surviving joint tenant spouse as their sole residence on the 
        date the recipient dies and classified and taxed to the 
        recipient and surviving joint tenant spouse as homestead 
        property for property tax purposes in the calendar year in which 
        the recipient dies.  For purposes of this exemption, real 
        property the recipient and their surviving joint tenant spouse 
        purchase solely with the proceeds from the sale of their prior 
        homestead, own of record as joint tenants, and qualify as 
        homestead property under section 273.124 in the calendar year in 
        which the recipient dies and prior to the recipient's death 
        shall be deemed to be real property classified and taxed to the 
        recipient and their surviving joint tenant spouse as homestead 
        property in the calendar year in which the recipient dies.  The 
        surviving spouse, or any person with personal knowledge of the 
        facts, may provide an affidavit describing the homestead 
        property affected by this clause and stating facts showing 
        compliance with this clause.  The affidavit shall be prima facie 
        evidence of the facts it states. 
           (b) For purposes of this section, "medical assistance" 
        includes the medical assistance program under this chapter and 
        the general assistance medical care program under chapter 256D 
        and alternative care for nonmedical assistance recipients under 
        section 256B.0913. 
           (c) All provisions in this subdivision, and subdivisions 
        1d, 1f, 1g, 1h, 1i, and 1j, related to the continuation of a 
        recipient's life estate or joint tenancy interests in real 
        property after the recipient's death for the purpose of 
        recovering medical assistance, are effective only for life 
        estates and joint tenancy interests established on or after 
        August 1, 2003.  For purposes of this paragraph, medical 
        assistance does not include alternative care. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from August 1, 2003. 
           Sec. 29.  Minnesota Statutes 2004, section 256B.15, 
        subdivision 4, is amended to read: 
           Subd. 4.  [OTHER SURVIVORS.] If the decedent who was single 
        or the surviving spouse of a married couple is survived by one 
        of the following persons, a claim exists against the estate in 
        an amount not to exceed payable first from the value of the 
        nonhomestead property included in the estate and the personal 
        representative shall make, execute, and deliver to the county 
        agency a lien against the homestead property in the estate for 
        any unpaid balance of the claim to the claimant as provided 
        under this section: 
           (a) a sibling who resided in the decedent medical 
        assistance recipient's home at least one year before the 
        decedent's institutionalization and continuously since the date 
        of institutionalization; or 
           (b) a son or daughter or a grandchild who resided in the 
        decedent medical assistance recipient's home for at least two 
        years immediately before the parent's or grandparent's 
        institutionalization and continuously since the date of 
        institutionalization, and who establishes by a preponderance of 
        the evidence having provided care to the parent or grandparent 
        who received medical assistance, that the care was provided 
        before institutionalization, and that the care permitted the 
        parent or grandparent to reside at home rather than in an 
        institution. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005, 
        and applies to persons dying on and after that date and to 
        probates commenced on and after that date. 
           Sec. 30.  Minnesota Statutes 2004, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [ESTABLISHMENT OF LIFE ESTATE OR JOINT TENANCY 
        INTEREST.] For purposes of subdivision 1 and section 514.981, 
        subdivision 6, a life estate or joint tenancy interest is 
        established upon the earlier of: 
           (1) the date the instrument creating the interest is 
        recorded or filed in the office of the county recorder or 
        registrar of titles where the real estate interest it describes 
        is located; 
           (2) the date of delivery by the grantor to the grantee of 
        the signed instrument as stated in an affidavit made by a person 
        with knowledge of the facts; 
           (3) the date on which the judicial order creating the 
        interest was issued by the court; or 
           (4) the date upon which the interest devolves under section 
        524.3-101. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from August 1, 2003. 
           Sec. 31.  Minnesota Statutes 2004, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [LIEN NOTICES.] Medical assistance liens and 
        liens under notices of potential claims that are of record 
        against life estate or joint tenancy interests established prior 
        to August 1, 2003, shall end, become unenforceable, and cease to 
        be liens on those interests upon the death of the person named 
        in the lien or notice of potential claim, shall be disregarded 
        by examiners of title after the death of the life tenant or 
        joint tenant, and shall not be carried forward to a subsequent 
        certificate of title.  This subdivision shall not apply to life 
        estates that continue to exist after the death of the person 
        named in the lien or notice of potential claim under the terms 
        of the instrument creating or reserving the life estate until 
        the life estate ends as provided for in the instrument. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from August 1, 2003. 
           Sec. 32.  Minnesota Statutes 2004, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [IMMUNITY.] The commissioner of human services, 
        county agencies, and elected officials and their employees are 
        immune from all liability for any action taken implementing Laws 
        2003, First Special Session chapter 14, article 12, sections 40 
        to 52 and 90, as those laws existed at the time the action was 
        taken, and section 514.981, subdivision 6. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from August 1, 2003. 
           Sec. 33.  Minnesota Statutes 2004, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 41.  [NURSING FACILITY RATE INCREASES FOR OCTOBER 1, 
        2005, AND OCTOBER 1, 2006.] (a) For the rate period beginning 
        October 1, 2005, the commissioner shall make available to each 
        nursing facility reimbursed under this section or section 
        256B.434 an adjustment equal to 2.2553 percent of the total 
        operating payment rate, and for the rate year beginning October 
        1, 2006, the commissioner shall make available to each nursing 
        facility reimbursed under this section or section 256B.434 an 
        adjustment equal to 1.2553 percent of the total operating 
        payment rate.  
           (b) 75 percent of the money resulting from the rate 
        adjustment under paragraph (a) must be used to increase wages 
        and benefits and pay associated costs for all employees, except 
        management fees, the administrator, and central office staff.  
        Except as provided in paragraph (c), 75 percent of the money 
        received by a facility as a result of the rate adjustment 
        provided in paragraph (a) must be used only for wage, benefit, 
        and staff increases implemented on or after the effective date 
        of the rate increase each year, and must not be used for 
        increases implemented prior to that date. 
           (c) With respect only to the October 1, 2005, rate 
        increase, a nursing facility that incurred costs for salary and 
        employee benefit increases first provided after July 1, 2003, 
        may count those costs towards the amount required to be spent on 
        salaries and benefits under paragraph (b).  These costs must be 
        reported to the commissioner in the form and manner specified by 
        the commissioner. 
           (d) Nursing facilities may apply for the portion of the 
        rate adjustment under paragraph (a) for employee wages and 
        benefits and associated costs.  The application must be made to 
        the commissioner and contain a plan by which the nursing 
        facility will distribute the funds according to paragraph (b).  
        For nursing facilities in which the employees are represented by 
        an exclusive bargaining representative, an agreement negotiated 
        and agreed to by the employer and the exclusive bargaining 
        representative constitutes the plan.  A negotiated agreement may 
        constitute the plan only if the agreement is finalized after the 
        date of enactment of all increases for the rate year and signed 
        by both parties prior to submission to the commissioner.  The 
        commissioner shall review the plan to ensure that the rate 
        adjustments are used as provided in paragraph (b).  To be 
        eligible, a facility must submit its distribution plan by March 
        31, 2006, and March 31, 2007, respectively.  The commissioner 
        may approve distribution plans on or before June 30, 2006, and 
        June 30, 2007, respectively.  If a facility's distribution plan 
        is effective after the first day of the applicable rate period 
        that the funds are available, the rate adjustments are effective 
        the same date as the facility's plan. 
           (e) A copy of the approved distribution plan must be made 
        available to all employees by giving each employee a copy or by 
        posting a copy in an area of the nursing facility to which all 
        employees have access.  If an employee does not receive the wage 
        and benefit adjustment described in the facility's approved plan 
        and is unable to resolve the problem with the facility's 
        management or through the employee's union representative, the 
        employee may contact the commissioner at an address or telephone 
        number provided by the commissioner and included in the approved 
        plan. 
           Sec. 34.  Minnesota Statutes 2004, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 42.  [INCENTIVE TO ESTABLISH SINGLE-BED ROOMS.] (a) 
        Beginning July 1, 2005, the operating payment rate for nursing 
        facilities reimbursed under this section, section 256B.434, or 
        256B.441 shall be increased by 20 percent multiplied by the 
        ratio of the number of new single-bed rooms created divided by 
        the number of active beds on July 1, 2005, for each bed closure 
        that results in the creation of a single-bed room after July 1, 
        2005.  The commissioner may implement rate adjustments for up to 
        3,000 new single-bed rooms each year.  For eligible bed closures 
        for which the commissioner receives a notice from a facility 
        during a calendar quarter that a bed has been delicensed and a 
        new single-bed room has been established, the rate adjustment in 
        this paragraph shall be effective on the first day of the second 
        month following that calendar quarter.  
           (b) A nursing facility is prohibited from discharging 
        residents for purposes of establishing single-bed rooms.  A 
        nursing facility must submit documentation to the commissioner 
        in a form prescribed by the commissioner, certifying the 
        occupancy status of beds closed to create single-bed rooms.  In 
        the event that the commissioner determines that a facility has 
        discharged a resident for purposes of establishing a single-bed 
        room, the commissioner shall not provide a rate adjustment under 
        paragraph (a).  
           (c) If after the date of enactment of this section and 
        before December 31, 2007, more than 4,000 nursing home beds are 
        removed from service, a portion of the appropriation for nursing 
        homes shall be transferred to the alternative care program.  The 
        amount of this transfer shall equal the number of beds removed 
        from service less 4,000, multiplied by the average monthly 
        per-person cost for alternative care, multiplied by 12, and 
        further multiplied by 0.3. 
           Sec. 35.  Minnesota Statutes 2004, section 256B.432, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them. 
           (a) "Management agreement" means an agreement in which one 
        or more of the following criteria exist:  
           (1) the central, affiliated, or corporate office has or is 
        authorized to assume day-to-day operational control of the 
        nursing facility for any six-month period within a 24-month 
        period.  "Day-to-day operational control" means that the 
        central, affiliated, or corporate office has the authority to 
        require, mandate, direct, or compel the employees of the nursing 
        facility to perform or refrain from performing certain acts, or 
        to supplant or take the place of the top management of the 
        nursing facility.  "Day-to-day operational control" includes the 
        authority to hire or terminate employees or to provide an 
        employee of the central, affiliated, or corporate office to 
        serve as administrator of the nursing facility; 
           (2) the central, affiliated, or corporate office performs 
        or is authorized to perform two or more of the following:  the 
        execution of contracts; authorization of purchase orders; 
        signature authority for checks, notes, or other financial 
        instruments; requiring the nursing facility to use the group or 
        volume purchasing services of the central, affiliated, or 
        corporate office; or the authority to make annual capital 
        expenditures for the nursing facility exceeding $50,000, or $500 
        per licensed bed, whichever is less, without first securing the 
        approval of the nursing facility board of directors; 
           (3) the central, affiliated, or corporate office becomes or 
        is required to become the licensee under applicable state law; 
           (4) the agreement provides that the compensation for 
        services provided under the agreement is directly related to any 
        profits made by the nursing facility; or 
           (5) the nursing facility entering into the agreement is 
        governed by a governing body that meets fewer than four times a 
        year, that does not publish notice of its meetings, or that does 
        not keep formal records of its proceedings.  
           (b) "Consulting agreement" means any agreement the purpose 
        of which is for a central, affiliated, or corporate office to 
        advise, counsel, recommend, or suggest to the owner or operator 
        of the nonrelated nursing facility measures and methods for 
        improving the operations of the nursing facility.  
           (c) "Nursing facility" means a nursing facility whose 
        medical assistance rates are determined according to section 
        256B.431 with a medical assistance provider agreement that is 
        licensed as a nursing home under chapter 144A or as a boarding 
        care home under sections 144.50 to 144.56. 
           Sec. 36.  Minnesota Statutes 2004, section 256B.432, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EFFECTIVE DATE.] For rate years beginning on or 
        after July 1, 1990, the central, affiliated, or corporate office 
        cost allocations in subdivisions 3 to 6 must be used when 
        determining medical assistance rates under section 256B.431, 
        256B.434, or 256B.441.  
           Sec. 37.  Minnesota Statutes 2004, section 256B.432, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [ALLOCATION; COSTS ALLOCABLE ON A FUNCTIONAL 
        BASIS.] (a) Costs that have not been directly identified must be 
        allocated to nursing facilities on a basis designed to equitably 
        allocate the costs to the nursing facilities or activities 
        receiving the benefits of the costs.  This allocation must be 
        made in a manner reasonably related to the services received by 
        the nursing facilities.  Where practical and the amounts are 
        material, these costs must be allocated on a functional basis.  
        The functions, or cost centers used to allocate central office 
        costs, and the unit bases used to allocate the costs, including 
        those central office costs allocated according to subdivision 5, 
        must be used consistently from one central office accounting 
        period to another. 
           (b) If the central office wishes to change its allocation 
        bases and believes the change will result in more appropriate 
        and more accurate allocations, the central office must make a 
        written request, with its justification, to the commissioner for 
        approval of the change no later than 120 days after the 
        beginning of the central office accounting period to which the 
        change is to apply.  The commissioner's approval of a central 
        office request will be furnished to the central office in 
        writing.  Where the commissioner approves the central office 
        request, the change must be applied to the accounting period for 
        which the request was made, and to all subsequent central office 
        accounting periods unless the commissioner approves a subsequent 
        request for change by the central office.  The effective date of 
        the change will be the beginning of the accounting period for 
        which the request was made. 
           Sec. 38.  Minnesota Statutes 2004, section 256B.432, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ALLOCATION OF REMAINING COSTS; ALLOCATION 
        RATIO.] (a) After the costs that can be directly identified 
        according to subdivisions 3 and 4 have been allocated, the 
        remaining central, affiliated, or corporate office costs must be 
        allocated between the nursing facility operations and the other 
        activities or facilities unrelated to the nursing facility 
        operations based on the ratio of total operating 
        costs.  However, in the event that these remaining costs are 
        partially attributable to the start-up of home and 
        community-based services intended to fill a gap identified by 
        the local agency, the facility may assign these remaining costs 
        to the appropriate cost category of the facility for a period 
        not to exceed two years. 
           (b) For purposes of allocating these remaining central, 
        affiliated, or corporate office costs, the numerator for the 
        allocation ratio shall be determined as follows:  
           (1) for nursing facilities that are related organizations 
        or are controlled by a central, affiliated, or corporate office 
        under a management agreement, the numerator of the allocation 
        ratio shall be equal to the sum of the total operating costs 
        incurred by each related organization or controlled nursing 
        facility; 
           (2) for a central, affiliated, or corporate office 
        providing goods or services to related organizations that are 
        not nursing facilities, the numerator of the allocation ratio 
        shall be equal to the sum of the total operating costs incurred 
        by the nonnursing facility related organizations; 
           (3) for a central, affiliated, or corporate office 
        providing goods or services to unrelated nursing facilities 
        under a consulting agreement, the numerator of the allocation 
        ratio shall be equal to the greater of directly identified 
        central, affiliated, or corporate costs or the contracted 
        amount; or 
           (4) for business activities that involve the providing of 
        goods or services to unrelated parties which are not nursing 
        facilities, the numerator of the allocation ratio shall be equal 
        to the greater of directly identified costs or revenues 
        generated by the activity or function.  
           (c) The denominator for the allocation ratio is the sum of 
        the numerators in paragraph (b), clauses (1) to (4). 
           Sec. 39.  Minnesota Statutes 2004, section 256B.432, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [RELATED ORGANIZATION COSTS.] (a) Costs 
        applicable to services, capital assets, and supplies directly or 
        indirectly furnished to the nursing facility by any related 
        organization are includable in the allowable cost of the nursing 
        facility at the purchase price paid by the related organization 
        for capital assets or supplies and at the cost incurred by the 
        related organization for the provision of services to the 
        nursing facility if these prices or costs do not exceed the 
        price of comparable services, capital assets, or supplies that 
        could be purchased elsewhere.  For this purpose, the related 
        organization's costs must not include an amount for markup or 
        profit. 
           (b) If the related organization in the normal course of 
        business sells services, capital assets, or supplies to 
        nonrelated organizations, the cost to the nursing facility shall 
        be the nonrelated organization's price provided that sales to 
        nonrelated organizations constitute at least 50 percent of total 
        annual sales of similar services, capital assets, or supplies. 
           Sec. 40.  Minnesota Statutes 2004, section 256B.434, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DURATION AND TERMINATION OF CONTRACTS.] (a) 
        Subject to available resources, the commissioner may begin to 
        execute contracts with nursing facilities November 1, 1995. 
           (b) All contracts entered into under this section are for a 
        term of one year not to exceed four years.  Either party may 
        terminate a contract at any time without cause by providing 90 
        calendar days advance written notice to the other party.  The 
        decision to terminate a contract is not appealable.  
        Notwithstanding section 16C.05, subdivision 2, paragraph (a), 
        clause (5), the contract shall be renegotiated for 
        additional one-year terms of up to four years, unless either 
        party provides written notice of termination.  The provisions of 
        the contract shall be renegotiated annually at a minimum of 
        every four years by the parties prior to the expiration date of 
        the contract.  The parties may voluntarily renegotiate the terms 
        of the contract at any time by mutual agreement. 
           (c) If a nursing facility fails to comply with the terms of 
        a contract, the commissioner shall provide reasonable notice 
        regarding the breach of contract and a reasonable opportunity 
        for the facility to come into compliance.  If the facility fails 
        to come into compliance or to remain in compliance, the 
        commissioner may terminate the contract.  If a contract is 
        terminated, the contract payment remains in effect for the 
        remainder of the rate year in which the contract was terminated, 
        but in all other respects the provisions of this section do not 
        apply to that facility effective the date the contract is 
        terminated.  The contract shall contain a provision governing 
        the transition back to the cost-based reimbursement system 
        established under section 256B.431 and Minnesota Rules, parts 
        9549.0010 to 9549.0080.  A contract entered into under this 
        section may be amended by mutual agreement of the parties. 
           Sec. 41.  Minnesota Statutes 2004, section 256B.434, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
        nursing facilities which have their payment rates determined 
        under this section rather than section 256B.431, the 
        commissioner shall establish a rate under this subdivision.  The 
        nursing facility must enter into a written contract with the 
        commissioner. 
           (b) A nursing facility's case mix payment rate for the 
        first rate year of a facility's contract under this section is 
        the payment rate the facility would have received under section 
        256B.431. 
           (c) A nursing facility's case mix payment rates for the 
        second and subsequent years of a facility's contract under this 
        section are the previous rate year's contract payment rates plus 
        an inflation adjustment and, for facilities reimbursed under 
        this section or section 256B.431, an adjustment to include the 
        cost of any increase in Health Department licensing fees for the 
        facility taking effect on or after July 1, 2001.  The index for 
        the inflation adjustment must be based on the change in the 
        Consumer Price Index-All Items (United States City average) 
        (CPI-U) forecasted by the commissioner of finance's national 
        economic consultant, as forecasted in the fourth quarter of the 
        calendar year preceding the rate year.  The inflation adjustment 
        must be based on the 12-month period from the midpoint of the 
        previous rate year to the midpoint of the rate year for which 
        the rate is being determined.  For the rate years beginning on 
        July 1, 1999, July 1, 2000, July 1, 2001, July 1, 2002, July 1, 
        2003, and July 1, 2004, July 1, 2005, July 1, 2006, July 1, 
        2007, and July 1, 2008, this paragraph shall apply only to the 
        property-related payment rate, except that adjustments to 
        include the cost of any increase in Health Department licensing 
        fees taking effect on or after July 1, 2001, shall be provided.  
        Beginning in 2005, adjustment to the property payment rate under 
        this section and section 256B.431 shall be effective on October 
        1.  In determining the amount of the property-related payment 
        rate adjustment under this paragraph, the commissioner shall 
        determine the proportion of the facility's rates that are 
        property-related based on the facility's most recent cost 
        report.  Beginning October 1, 2006, facilities reimbursed under 
        this section shall be allowed to receive a property rate 
        adjustment for building projects under section 144A.071, 
        subdivision 2. 
           (d) The commissioner shall develop additional 
        incentive-based payments of up to five percent above the 
        standard contract rate for achieving outcomes specified in each 
        contract.  The specified facility-specific outcomes must be 
        measurable and approved by the commissioner.  The commissioner 
        may establish, for each contract, various levels of achievement 
        within an outcome.  After the outcomes have been specified the 
        commissioner shall assign various levels of payment associated 
        with achieving the outcome.  Any incentive-based payment cancels 
        if there is a termination of the contract.  In establishing the 
        specified outcomes and related criteria the commissioner shall 
        consider the following state policy objectives: 
           (1) improved cost effectiveness and quality of life as 
        measured by improved clinical outcomes; 
           (2) successful diversion or discharge to community 
        alternatives; 
           (3) decreased acute care costs; 
           (4) improved consumer satisfaction; 
           (5) the achievement of quality; or 
           (6) any additional outcomes proposed by a nursing facility 
        that the commissioner finds desirable. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 42.  Minnesota Statutes 2004, section 256B.434, is 
        amended by adding a subdivision to read: 
           Subd. 18.  [FACILITIES WITHOUT APS CONTRACTS AS OF OCTOBER 
        1, 2006.] Effective October 1, 2006, payment rates for property 
        shall no longer be determined under section 256B.431.  A 
        facility that does not have a contract with the commissioner 
        under this section shall not be eligible for a rate increase. 
           Sec. 43.  [256B.441] [NURSING FACILITY REIMBURSEMENT SYSTEM 
        EFFECTIVE OCTOBER 1, 2007.] 
           Subdivision 1.  [IN GENERAL.] (a) The commissioner shall 
        establish a value-based nursing facility reimbursement system 
        which will provide facility-specific, prospective rates for 
        nursing facilities participating in the medical assistance 
        program.  The rates shall be determined using an annual 
        statistical and cost report filed by each nursing facility.  The 
        total payment rate shall be composed of four rate components:  
        direct care services, support services, external fixed, and 
        property-related rate components.  The payment rate shall be 
        derived from statistical measures of actual costs incurred in 
        facility operation of nursing facilities.  From this cost basis, 
        the components of the total payment rate shall be adjusted for 
        quality of services provided, recognition of staffing levels, 
        geographic variation in labor costs, and resident acuity. 
           (b) Rates shall be rebased annually.  Each cost reporting 
        year shall begin on October 1 and end on the following September 
        30.  Beginning in 2006, a statistical and cost report shall be 
        filed by each nursing facility by January 15.  Notice of rates 
        shall be distributed by August 15 and the rates shall go into 
        effect on October 1 for one year. 
           (c)  The commissioner shall begin to phase in the new 
        reimbursement system beginning October 1, 2007.  Full phase-in 
        shall be completed by October 1, 2011. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        terms in subdivisions 3 to 42 have the meanings given unless 
        otherwise provided for in this section. 
           Subd. 3.  [ACTIVE BEDS.] "Active beds" means licensed beds 
        that are not currently in layaway status. 
           Subd. 4.  [ACTIVITIES COSTS.] "Activities costs" means the 
        costs for the salaries and wages of the supervisor and other 
        activities workers, associated fringe benefits and payroll 
        taxes, supplies, services, and consultants. 
           Subd. 5.  [ADMINISTRATIVE COSTS.] "Administrative costs" 
        means the direct costs for administering the overall activities 
        of the nursing home.  These costs include salaries and wages of 
        the administrator, assistant administrator, business office 
        employees, security guards, and associated fringe benefits and 
        payroll taxes, fees, contracts, or purchases related to business 
        office functions, licenses, and permits except as provided in 
        the external fixed costs category, employee recognition, travel 
        including meals and lodging, training, voice and data 
        communication or transmission, office supplies, liability 
        insurance and other forms of insurance not designated to other 
        areas, personnel recruitment, legal services, accounting 
        services, management or business consultants, data processing, 
        central or home office costs, business meetings and seminars, 
        postage, fees for professional organizations, subscriptions, 
        security services, advertising, board of director's fees, 
        working capital interest expense, and bad debts and bad debt 
        collection fees. 
           Subd. 6.  [ALLOWED COSTS.] "Allowed costs" means the 
        amounts reported by the facility which are necessary for the 
        operation of the facility and the care of residents and which 
        are reviewed by the department for accuracy, reasonableness, and 
        compliance with this section and generally accepted accounting 
        principles. 
           Subd. 7.  [CENTER FOR MEDICARE AND MEDICAID 
        SERVICES.] "Center for Medicare and Medicaid services" means the 
        federal agency, in the United States Department of Health and 
        Human Services that administers Medicaid, also referred to as 
        "CMS." 
           Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of human services unless specified otherwise. 
           Subd. 9.  [DESK AUDIT.] "Desk audit" means the 
        establishment of the payment rate based on the commissioner's 
        review and analysis of required reports, supporting 
        documentation, and work sheets submitted by the nursing facility.
           Subd. 10.  [DIETARY COSTS.] "Dietary costs" means the costs 
        for the salaries and wages of the dietary supervisor, 
        dietitians, chefs, cooks, dishwashers, and other employees 
        assigned to the kitchen and dining room, and associated fringe 
        benefits and payroll taxes.  Dietary costs also includes the 
        salaries or fees of dietary consultants, direct costs of raw 
        food (both normal and special diet food), dietary supplies, and 
        food preparation and serving.  Also included are special dietary 
        supplements used for tube feeding or oral feeding, such as 
        elemental high nitrogen diet, even if written as a prescription 
        item by a physician. 
           Subd. 11.  [DIRECT CARE COSTS CATEGORY.] "Direct care costs 
        category" means costs for nursing services, activities, and 
        social services. 
           Subd. 12.  [ECONOMIC DEVELOPMENT REGIONS.] "Economic 
        development regions" are as defined in section 462.385, 
        subdivision 1. 
           Subd. 13.  [EXTERNAL FIXED COSTS CATEGORY.] "External fixed 
        costs category" means costs related to the nursing home 
        surcharge under section 256.9657, subdivision 1; licensure fees 
        under section 144.122; long-term care consultation fees under 
        section 256B.0911, subdivision 6; family advisory council fee 
        under section 144A.35; scholarships under section 256B.431, 
        subdivision 36; planned closure rate adjustments under section 
        256B.437; property taxes and property insurance; and PERA. 
           Subd. 14.  [FACILITY AVERAGE CASE MIX INDEX 
        (CMI).] "Facility average case mix index" or "CMI" means a 
        numerical value score that describes the relative resource use 
        for all residents within the groups under the resource 
        utilization group (RUG-III) classification system prescribed by 
        the commissioner based on an assessment of each resident.  The 
        facility average CMI shall be computed as the standardized days 
        divided by total days for all residents in the facility. 
           Subd. 15.  [FIELD AUDIT.] "Field audit" means the 
        examination, verification, and review of the financial records, 
        statistical records, and related supporting documentation on the 
        nursing home and any related organization. 
           Subd. 16.  [FINAL RATE.] "Final rate" means the rate 
        established after any adjustment by the commissioner, including, 
        but not limited to, adjustments resulting from audits. 
           Subd. 17.  [FRINGE BENEFIT COSTS.] "Fringe benefit costs" 
        means the costs for group life, health, dental, workers' 
        compensation, and other employee insurances and pension, 
        profit-sharing, and retirement plans for which the employer pays 
        all or a portion of the costs and that are available to at least 
        all employees who work at least 20 hours per week. 
           Subd. 18.  [GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.] 
        "Generally Accepted Accounting Principles" means the body of 
        pronouncements adopted by the American Institute of Certified 
        Public Accountants regarding proper accounting procedures, 
        guidelines, and rules. 
           Subd. 19.  [HOSPITAL-ATTACHED NURSING FACILITY STATUS.] (a) 
        For the purpose of setting rates under this section, for rate 
        years beginning after September 30, 2006, "hospital-attached 
        nursing facility" means a nursing facility which meets the 
        requirements of clauses (1) and (2); or (3); or (4), or had 
        hospital-attached status prior to January 1, 1995, and has been 
        recognized as having hospital-attached status by CMS 
        continuously since that date: 
           (1) the nursing facility is recognized by the federal 
        Medicare program to be a hospital-based nursing facility; 
           (2) the hospital and nursing facility are physically 
        attached or connected by a corridor; 
           (3) a nursing facility and hospital, which have applied for 
        hospital-based nursing facility status under the federal 
        Medicare program during the reporting year, shall be considered 
        a hospital-attached nursing facility for purposes of setting 
        payment rates under this section.  The nursing facility must 
        file its cost report for that reporting year using Medicare 
        principles and Medicare's recommended cost allocation methods 
        had the Medicare program's hospital-based nursing facility 
        status been granted to the nursing facility.  For each 
        subsequent rate year, the nursing facility must meet the 
        definition requirements in clauses (1) and (2).  If the nursing 
        facility is denied hospital-based nursing facility status under 
        the Medicare program, the nursing facility's payment rates for 
        the rate years the nursing facility was considered to be a 
        hospital-attached nursing facility according to this paragraph 
        shall be recalculated treating the nursing facility as a 
        non-hospital-attached nursing facility; 
           (4) if a nonprofit or community-operated hospital and 
        attached nursing facility suspend operation of the hospital, the 
        remaining nursing facility must be allowed to continue its 
        status as hospital-attached for rate calculations in the three 
        rate years subsequent to the one in which the hospital ceased 
        operations. 
           (b) The nursing facility's cost report filed as 
        hospital-attached facility shall use the same cost allocation 
        principles and methods used in the reports filed for the 
        Medicare program.  Direct identification of costs to the nursing 
        facility cost center will be permitted only when the comparable 
        hospital costs have also been directly identified to a cost 
        center which is not allocated to the nursing facility. 
           Subd. 20.  [HOUSEKEEPING COSTS.] "Housekeeping costs" means 
        the costs for the salaries and wages of the housekeeping 
        supervisor, housekeepers, and other cleaning employees and 
        associated fringe benefits and payroll taxes.  It also includes 
        the cost of housekeeping supplies, including cleaning and 
        lavatory supplies and contract services.  
           Subd. 21.  [LABOR-RELATED PORTION.] The "labor-related 
        portion" of direct care costs and of support service costs shall 
        be that portion of costs that is attributable to wages for all 
        compensated hours, payroll taxes, and fringe benefits. 
           Subd. 22.  [LAUNDRY COSTS.] "Laundry costs" means the costs 
        for the salaries and wages of the laundry supervisor and other 
        laundry employees, associated fringe benefits, and payroll 
        taxes.  It also includes the costs of linen and bedding, the 
        laundering of resident clothing, laundry supplies, and contract 
        services. 
           Subd. 23.  [LICENSEE.] "Licensee" means the individual or 
        organization listed on the form issued by the Minnesota 
        Department of Health under chapter 144A or sections 144.50 to 
        144.56. 
           Subd. 24.  [MAINTENANCE AND PLANT OPERATIONS 
        COSTS.] "Maintenance and plant operations costs" means the costs 
        for the salaries and wages of the maintenance supervisor, 
        engineers, heating-plant employees, and other maintenance 
        employees and associated fringe benefits and payroll taxes.  It 
        also includes direct costs for maintenance and operation of the 
        building and grounds, including fuel, electricity, medical waste 
        and garbage removal, water, sewer, supplies, tools, and repairs. 
           Subd. 25.  [NORMALIZED DIRECT CARE COSTS PER 
        DAY.] "Normalized direct care costs per day" means direct care 
        costs divided by standardized days.  It is the costs per day for 
        direct care services associated with a RUG's index of 1.00. 
           Subd. 26.  [NURSING COSTS.] "Nursing costs" means the costs 
        for the wages of nursing administration, staff education, and 
        direct care registered nurses, licensed practical nurses, 
        certified nursing assistants, and trained medication aides; 
        mental health workers and other direct care employees, and 
        associated fringe benefits and payroll taxes; services from a 
        supplemental nursing services agency and supplies that are 
        stocked at nursing stations or on the floor and distributed or 
        used individually, including:  alcohol, applicators, cotton 
        balls, incontinence pads, disposable ice bags, dressings, 
        bandages, water pitchers, tongue depressors, disposable gloves, 
        enemas, enema equipment, soap, medication cups, diapers, plastic 
        waste bags, sanitary products, thermometers, hypodermic needles 
        and syringes, and clinical reagents or similar diagnostic 
        agents, and drugs which are not paid on a separate fee schedule 
        by the medical assistance program or any other payer. 
           Subd. 27.  [NURSING FACILITY.] "Nursing facility" means a 
        facility with a medical assistance provider agreement that is 
        licensed as a nursing home under chapter 144A or as a boarding 
        care home under sections 144.50 to 144.56. 
           Subd. 28.  [OPERATING COSTS.] "Operating costs" means costs 
        associated with the direct care costs category and the support 
        services costs category. 
           Subd. 29.  [PAYROLL TAXES.] "Payroll taxes" means the costs 
        for the employer's share of the FICA and Medicare withholding 
        tax, and state and federal unemployment compensation taxes.  
           Subd. 30.  [PEER GROUPS.] Facilities shall be classified 
        into three groups, called "peer groups," which shall consist of: 
           (1) C&NC/Short Stay/R80 - facilities that have three or 
        more admissions per bed per year, are hospital-attached, or are 
        licensed under Minnesota Rules, parts 9570.2000 to 9570.3600; 
           (2) boarding care homes - facilities that have more than 50 
        percent of their beds licensed as boarding care homes; and 
           (3) standard - all other facilities. 
           Subd. 31.  [PRIOR RATE-SETTING METHOD.] "Prior rate-setting 
        method" means the rate determination process in effect prior to 
        October 1, 2006, under Minnesota Rules and Minnesota Statutes. 
           Subd. 32.  [PRIVATE PAYING RESIDENT.] "Private paying 
        resident" means a nursing facility resident who is not a medical 
        assistance recipient and whose payment rate is not established 
        by another third party, including the veterans administration or 
        Medicare. 
           Subd. 33.  [RATE YEAR.] "Rate year" means the 12-month 
        period beginning on October 1 following the second most recent 
        reporting year. 
           Subd. 34.  [RELATED ORGANIZATION.] "Related organization" 
        means a person that furnishes goods or services to a nursing 
        facility and that is a close relative of a nursing facility, an 
        affiliate of a nursing facility, a close relative of an 
        affiliate of a nursing facility, or an affiliate of a close 
        relative of an affiliate of a nursing facility.  As used in this 
        subdivision, paragraphs (a) to (d) apply: 
           (a) "Affiliate" means a person that directly, or indirectly 
        through one or more intermediaries, controls or is controlled 
        by, or is under common control with another person. 
           (b) "Person" means an individual, a corporation, a 
        partnership, an association, a trust, an unincorporated 
        organization, or a government or political subdivision. 
           (c) "Close relative of an affiliate of a nursing facility" 
        means an individual whose relationship by blood, marriage, or 
        adoption to an individual who is an affiliate of a nursing 
        facility is no more remote than first cousin. 
           (d) "Control" including the terms "controlling," 
        "controlled by," and "under common control with" means the 
        possession, direct or indirect, of the power to direct or cause 
        the direction of the management, operations, or policies of a 
        person, whether through the ownership of voting securities, by 
        contract, or otherwise, or to influence in any manner other than 
        through an arms length, legal transaction. 
           Subd. 35.  [REPORTING PERIOD.] "Reporting period" means the 
        one-year period beginning on October 1 and ending on the 
        following September 30 during which incurred costs are 
        accumulated and then reported on the statistical and cost report.
           Subd. 36.  [RESIDENT DAY OR ACTUAL RESIDENT DAY.] "Resident 
        day" or "actual resident day" means a day for which nursing 
        services are rendered and billable, or a day for which a bed is 
        held and billed.  The day of admission is considered a resident 
        day, regardless of the time of admission.  The day of discharge 
        is not considered a resident day, regardless of the time of 
        discharge. 
           Subd. 37.  [SALARIES AND WAGES.] "Salaries and wages" means 
        amounts earned by and paid to employees or on behalf of 
        employees to compensate for necessary services provided.  
        Salaries and wages include accrued vested vacation and accrued 
        vested sick leave pay.  Salaries and wages must be paid within 
        30 days of the end of the reporting period in order to be 
        allowable costs of the reporting period. 
           Subd. 38.  [SOCIAL SERVICES COSTS.] "Social services costs" 
        means the costs for the salaries and wages of the supervisor and 
        other social work employees, associated fringe benefits and 
        payroll taxes, supplies, services, and consultants. 
           Subd. 39.  [STAKEHOLDERS.] "Stakeholders" means individuals 
        and representatives of organizations interested in long-term 
        care, including nursing homes, consumers, and labor unions. 
           Subd. 40.  [STANDARDIZED DAYS.] "Standardized days" means 
        the sum of resident days by case mix category multiplied by the 
        RUG index for each category. 
           Subd. 41.  [STATISTICAL AND COST REPORT.] "Statistical and 
        cost report" means the forms supplied by the commissioner for 
        annual reporting of nursing facility expenses and statistics, 
        including instructions and definitions of items in the report. 
           Subd. 42.  [SUPPORT SERVICES COSTS CATEGORY.] "Support 
        services costs category" means the costs for dietary, 
        housekeeping, laundry, maintenance, and administration. 
           Subd. 43.  [REPORTING OF STATISTICAL AND COST 
        INFORMATION.] (a) Beginning in 2006, all nursing facilities 
        shall provide information annually to the commissioner on a form 
        and in a manner determined by the commissioner.  The 
        commissioner may also require nursing facilities to provide 
        statistical and cost information for a subset of the items in 
        the annual report on a semiannual basis.  Nursing facilities 
        shall report only costs directly related to the operation of the 
        nursing facility.  The facility shall not include costs which 
        are separately reimbursed by residents, medical assistance, or 
        other payors.  Allocations of costs from central, affiliated, or 
        corporate office and related organization transactions shall be 
        reported according to section 256B.432.  The commissioner may 
        grant to facilities one extension of up to 15 days for the 
        filing of this report if the extension is requested by December 
        15 and the commissioner determines that the extension will not 
        prevent the commissioner from establishing rates in a timely 
        manner required by law.  The commissioner may separately require 
        facilities to submit in a manner specified by the commissioner 
        documentation of statistical and cost information included in 
        the report to ensure accuracy in establishing payment rates and 
        to perform audit and appeal review functions under this section. 
        Facilities shall retain all records necessary to document 
        statistical and cost information on the report for a period of 
        no less than seven years.  The commissioner may amend 
        information in the report according to subdivision 47.  The 
        commissioner may reject a report filed by a nursing facility 
        under this section if the commissioner determines that the 
        report has been filed in a form that is incomplete or inaccurate 
        and the information is insufficient to establish accurate 
        payment rates.  In the event that a complete report is not 
        submitted in a timely manner, the commissioner shall reduce the 
        reimbursement payments to a nursing facility to 85 percent of 
        amounts due until the information is filed.  The release of 
        withheld payments shall be retroactive for no more than 90 
        days.  A nursing facility that does not submit a report or whose 
        report is filed in a timely manner but determined to be 
        incomplete shall be given written notice that a payment 
        reduction is to be implemented and allowed ten days to complete 
        the report prior to any payment reduction.  The commissioner may 
        delay the payment withhold under exceptional circumstances to be 
        determined at the sole discretion of the commissioner. 
           (b) Nursing facilities may, within 12 months of the due 
        date of a statistical and cost report, file an amendment when 
        errors or omissions in the annual statistical and cost report 
        are discovered and an amendment would result in a rate increase 
        of at least 0.15 percent of the statewide weighted average 
        operating payment rate and shall, at any time, file an amendment 
        which would result in a rate reduction of at least 0.15 percent 
        of the statewide weighted average operating payment rate.  The 
        commissioner shall make retroactive adjustments to the total 
        payment rate of a nursing facility if an amendment is accepted.  
        Where a retroactive adjustment is to be made as a result of an 
        amended report, audit findings, or other determination of an 
        incorrect payment rate, the commissioner may settle the payment 
        error through a negotiated agreement with the facility and a 
        gross adjustment of the payments to the facility.  Retroactive 
        adjustments shall not be applied to private pay residents.  An 
        error or omission for purposes of this item does not include a 
        nursing facility's determination that an election between 
        permissible alternatives was not advantageous and should be 
        changed. 
           (c) If the commissioner determines that a nursing facility 
        knowingly supplied inaccurate or false information or failed to 
        file an amendment to a statistical and cost report that resulted 
        in or would result in an overpayment, the commissioner shall 
        immediately adjust the nursing facility's payment rate and 
        recover the entire overpayment.  The commissioner may also 
        terminate the commissioner's agreement with the nursing facility 
        and prosecute under applicable state or federal law. 
           Subd. 44.  [CALCULATION OF A QUALITY SCORE.] (a) The 
        commissioner shall determine a quality score for each nursing 
        facility using quality measures established in section 256B.439, 
        according to methods determined by the commissioner in 
        consultation with stakeholders and experts.  These methods shall 
        be exempt from the rulemaking requirements under chapter 14.  
           (b) For each quality measure, a score shall be determined 
        with a maximum number of points available and number of points 
        assigned as determined by the commissioner using the methodology 
        established according to this subdivision.  The scores 
        determined for all quality measures shall be totaled.  The 
        determination of the quality measures to be used and the methods 
        of calculating scores may be revised annually by the 
        commissioner.  
           (c) For the initial rate year under the new payment system, 
        the quality measures shall include: 
           (1) staff turnover; 
           (2) staff retention; 
           (3) use of pool staff; 
           (4) quality indicators from the minimum data set; and 
           (5) survey deficiencies. 
           (d) For rate years beginning after October 1, 2006, when 
        making revisions to the quality measures or method for 
        calculating scores, the commissioner shall publish the 
        methodology in the State Register at least 15 months prior to 
        the start of the rate year for which the revised methodology is 
        to be used for rate-setting purposes.  The quality score used to 
        determine payment rates shall be established for a rate year 
        using data submitted in the statistical and cost report from the 
        associated reporting year, and using data from other sources 
        related to a period beginning no more than six months prior to 
        the associated reporting year. 
           Subd. 45.  [CALCULATION OF OPERATING PAYMENT RATE FOR 
        DIRECT CARE AND SUPPORT SERVICES.] The commissioner shall 
        provide recommendations to the legislature by February 15, 2006, 
        on specific methodology for the establishment of the operating 
        payment rate for direct care and support services under the new 
        system.  The recommendations must not increase expenditures for 
        the new payment system beyond the limits of the appropriation.  
        The commissioner shall include recommendations on options for 
        recognizing changes in staffing and services that may require a 
        supplemental appropriation in the future.  
           Subd. 46.  [CALCULATION OF QUALITY ADD-ON.] The payment 
        rate for the quality add-on shall be a variable amount based on 
        each facility's quality score. 
           (a) For the rate year beginning October 1, 2006, the 
        maximum quality add-on percent shall be 2.4 percent and this 
        add-on shall not be subject to a phase-in.  The determination of 
        the quality score to be used in calculating the quality add-on 
        for October 1, 2006, shall be based on a report which must be 
        filed with the commissioner, according to the requirements in 
        subdivision 43, for a six-month period ending January 31, 2006.  
        This report shall be filed with the commissioner by February 28, 
        2006.  The commissioner shall prorate the six months of data to 
        a full year.  When new quality measures are incorporated into 
        the quality score methodology and when existing quality measures 
        are updated or improved, the commissioner may increase the 
        maximum quality add-on percent. 
           (b) For each facility, determine the operating payment rate.
           (c) For each facility determine a ratio of the quality 
        score of the facility determined in subdivision 44, less 40 and 
        then divided by 60.  If this value is less than zero, use the 
        value zero. 
           (d) For each facility, the quality add-on shall be the 
        value determined in paragraph (b) times the value determined in 
        paragraph (c) times the maximum quality add-on percent. 
           Subd. 47.  [AUDIT AUTHORITY.] (a) The commissioner may 
        subject reports and supporting documentation to desk and field 
        audits to determine compliance with this section.  Retroactive 
        adjustments shall be made as a result of desk or field audit 
        findings if the cumulative impact of the finding would result in 
        a rate adjustment of at least 0.15 percent of the statewide 
        weighted average operating payment rate.  If a field audit 
        reveals inadequacies in a nursing facility's record keeping or 
        accounting practices, the commissioner may require the nursing 
        facility to engage competent professional assistance to correct 
        those inadequacies within 90 days so that the field audit may 
        proceed. 
           (b) Field audits may cover the four most recent annual 
        statistical and cost reports for which desk audits have been 
        completed and payment rates have been established.  The field 
        audit must be an independent review of the nursing facility's 
        statistical and cost report.  All transactions, invoices, or 
        other documentation that support or relate to the statistics and 
        costs claimed on the annual statistical and cost reports are 
        subject to review by the field auditor.  If the provider fails 
        to provide the field auditor access to supporting documentation 
        related to the information reported on the statistical and cost 
        report within the time period specified by the commissioner, the 
        commissioner shall calculate the total payment rate by 
        disallowing the cost of the items for which access to the 
        supporting documentation is not provided. 
           (c) Changes in the total payment rate which result from 
        desk or field audit adjustments to statistical and cost reports 
        for reporting years earlier than the four most recent annual 
        cost reports must be made to the four most recent annual 
        statistical and cost reports, the current statistical and cost 
        report, and future statistical and cost reports to the extent 
        that those adjustments affect the total payment rate established 
        by those reporting years. 
           (d) The commissioner shall extend the period for retention 
        of records under subdivision 43 for purposes of performing field 
        audits as necessary to enforce section 256B.48 with written 
        notice to the facility postmarked no later than 90 days prior to 
        the expiration of the record retention requirement. 
           Sec. 44.  Minnesota Statutes 2004, section 256B.49, 
        subdivision 16, is amended to read: 
           Subd. 16.  [SERVICES AND SUPPORTS.] (a) Services and 
        supports included in the home and community-based waivers for 
        persons with disabilities shall meet the requirements set out in 
        United States Code, title 42, section 1396n.  The services and 
        supports, which are offered as alternatives to institutional 
        care, shall promote consumer choice, community inclusion, 
        self-sufficiency, and self-determination. 
           (b) Beginning January 1, 2003, the commissioner shall 
        simplify and improve access to home and community-based waivered 
        services, to the extent possible, through the establishment of a 
        common service menu that is available to eligible recipients 
        regardless of age, disability type, or waiver program. 
           (c) Consumer directed community support services shall be 
        offered as an option to all persons eligible for services under 
        subdivision 11, by January 1, 2002. 
           (d) Services and supports shall be arranged and provided 
        consistent with individualized written plans of care for 
        eligible waiver recipients. 
           (e) A transitional supports allowance shall be available to 
        all persons under a home and community-based waiver who are 
        moving from a licensed setting to a community setting. 
        "Transitional supports allowance" means a onetime payment of up 
        to $3,000, to cover the costs, not covered by other sources, 
        associated with moving from a licensed setting to a community 
        setting.  Covered costs include: 
           (1) lease or rent deposits; 
           (2) security deposits; 
           (3) utilities set-up costs, including telephone; 
           (4) essential furnishings and supplies; and 
           (5) personal supports and transports needed to locate and 
        transition to community settings. 
           (f) The state of Minnesota and county agencies that 
        administer home and community-based waivered services for 
        persons with disabilities, shall not be liable for damages, 
        injuries, or liabilities sustained through the purchase of 
        supports by the individual, the individual's family, legal 
        representative, or the authorized representative with funds 
        received through the consumer-directed community support service 
        under this section.  Liabilities include but are not limited 
        to:  workers' compensation liability, the Federal Insurance 
        Contributions Act (FICA), or the Federal Unemployment Tax Act 
        (FUTA). 
           [EFFECTIVE DATE.] This section is effective upon federal 
        approval and to the extent approved as a federal waiver 
        amendment. 
           Sec. 45.  Minnesota Statutes 2004, section 256B.5012, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [ICF/MR RATE INCREASES BEGINNING OCTOBER 1, 2005, 
        AND OCTOBER 1, 2006.] (a) For the rate periods beginning October 
        1, 2005, and October 1, 2006, the commissioner shall make 
        available to each facility reimbursed under this section an 
        adjustment to the total operating payment rate of 2.2553 percent.
           (b) 75 percent of the money resulting from the rate 
        adjustment under paragraph (a) must be used to increase wages 
        and benefits and pay associated costs for all employees, except 
        for administrative and central office employees.  75 percent of 
        the money received by a facility as a result of the rate 
        adjustment provided in paragraph (a) must be used only for wage, 
        benefit, and staff increases implemented on or after the 
        effective date of the rate increase each year, and must not be 
        used for increases implemented prior to that date. 
           (c) For each facility, the commissioner shall make 
        available an adjustment using the percentage specified in 
        paragraph (a) multiplied by the total payment rate, excluding 
        the property-related payment rate, in effect on the preceding 
        day.  The total payment rate shall include the adjustment 
        provided in section 256B.501, subdivision 12. 
           (d) A facility whose payment rates are governed by closure 
        agreements, receivership agreements, or Minnesota Rules, part 
        9553.0075, is not eligible for an adjustment otherwise granted 
        under this subdivision.  
           (e) A facility may apply for the portion of the payment 
        rate adjustment provided under paragraph (a) for employee wages 
        and benefits and associated costs.  The application must be made 
        to the commissioner and contain a plan by which the facility 
        will distribute the funds according to paragraph (b).  For 
        facilities in which the employees are represented by an 
        exclusive bargaining representative, an agreement negotiated and 
        agreed to by the employer and the exclusive bargaining 
        representative constitutes the plan.  A negotiated agreement may 
        constitute the plan only if the agreement is finalized after the 
        date of enactment of all rate increases for the rate year.  The 
        commissioner shall review the plan to ensure that the payment 
        rate adjustment per diem is used as provided in this 
        subdivision.  To be eligible, a facility must submit its plan by 
        March 31, 2006, and December 31, 2006, respectively.  If a 
        facility's plan is effective for its employees after the first 
        day of the applicable rate period that the funds are available, 
        the payment rate adjustment per diem is effective the same date 
        as its plan. 
           (f) A copy of the approved distribution plan must be made 
        available to all employees by giving each employee a copy or by 
        posting it in an area of the facility to which all employees 
        have access.  If an employee does not receive the wage and 
        benefit adjustment described in the facility's approved plan and 
        is unable to resolve the problem with the facility's management 
        or through the employee's union representative, the employee may 
        contact the commissioner at an address or telephone number 
        provided by the commissioner and included in the approved plan. 
           Sec. 46.  Minnesota Statutes 2004, section 256B.69, 
        subdivision 23, is amended to read: 
           Subd. 23.  [ALTERNATIVE INTEGRATED LONG-TERM CARE SERVICES; 
        ELDERLY AND DISABLED PERSONS.] (a) The commissioner may 
        implement demonstration projects to create alternative 
        integrated delivery systems for acute and long-term care 
        services to elderly persons and persons with disabilities as 
        defined in section 256B.77, subdivision 7a, that provide 
        increased coordination, improve access to quality services, and 
        mitigate future cost increases.  The commissioner may seek 
        federal authority to combine Medicare and Medicaid capitation 
        payments for the purpose of such demonstrations.  Medicare funds 
        and services shall be administered according to the terms and 
        conditions of the federal waiver and demonstration provisions.  
        For the purpose of administering medical assistance funds, 
        demonstrations under this subdivision are subject to 
        subdivisions 1 to 22.  The provisions of Minnesota Rules, parts 
        9500.1450 to 9500.1464, apply to these demonstrations, with the 
        exceptions of parts 9500.1452, subpart 2, item B; and 9500.1457, 
        subpart 1, items B and C, which do not apply to persons 
        enrolling in demonstrations under this section.  An initial open 
        enrollment period may be provided.  Persons who disenroll from 
        demonstrations under this subdivision remain subject to 
        Minnesota Rules, parts 9500.1450 to 9500.1464.  When a person is 
        enrolled in a health plan under these demonstrations and the 
        health plan's participation is subsequently terminated for any 
        reason, the person shall be provided an opportunity to select a 
        new health plan and shall have the right to change health plans 
        within the first 60 days of enrollment in the second health 
        plan.  Persons required to participate in health plans under 
        this section who fail to make a choice of health plan shall not 
        be randomly assigned to health plans under these demonstrations. 
        Notwithstanding section 256L.12, subdivision 5, and Minnesota 
        Rules, part 9505.5220, subpart 1, item A, if adopted, for the 
        purpose of demonstrations under this subdivision, the 
        commissioner may contract with managed care organizations, 
        including counties, to serve only elderly persons eligible for 
        medical assistance, elderly and disabled persons, or disabled 
        persons only.  For persons with primary diagnoses of mental 
        retardation or a related condition, serious and persistent 
        mental illness, or serious emotional disturbance, the 
        commissioner must ensure that the county authority has approved 
        the demonstration and contracting design.  Enrollment in these 
        projects for persons with disabilities shall be voluntary.  The 
        commissioner shall not implement any demonstration project under 
        this subdivision for persons with primary diagnoses of mental 
        retardation or a related condition, serious and persistent 
        mental illness, or serious emotional disturbance, without 
        approval of the county board of the county in which the 
        demonstration is being implemented.  
           (b) Notwithstanding chapter 245B, sections 252.40 to 
        252.46, 256B.092, 256B.501 to 256B.5015, and Minnesota Rules, 
        parts 9525.0004 to 9525.0036, 9525.1200 to 9525.1330, 9525.1580, 
        and 9525.1800 to 9525.1930, the commissioner may implement under 
        this section projects for persons with developmental 
        disabilities.  The commissioner may capitate payments for ICF/MR 
        services, waivered services for mental retardation or related 
        conditions, including case management services, day training and 
        habilitation and alternative active treatment services, and 
        other services as approved by the state and by the federal 
        government.  Case management and active treatment must be 
        individualized and developed in accordance with a 
        person-centered plan.  Costs under these projects may not exceed 
        costs that would have been incurred under fee-for-service. 
        Beginning July 1, 2003, and until two years after the pilot 
        project implementation date, subcontractor participation in the 
        long-term care developmental disability pilot is limited to a 
        nonprofit long-term care system providing ICF/MR services, home 
        and community-based waiver services, and in-home services to no 
        more than 120 consumers with developmental disabilities in 
        Carver, Hennepin, and Scott Counties.  The commissioner shall 
        report to the legislature prior to expansion of the 
        developmental disability pilot project.  This paragraph expires 
        two years after the implementation date of the pilot project.  
           (c) Before implementation of a demonstration project for 
        disabled persons, the commissioner must provide information to 
        appropriate committees of the house of representatives and 
        senate and must involve representatives of affected disability 
        groups in the design of the demonstration projects. 
           (d) A nursing facility reimbursed under the alternative 
        reimbursement methodology in section 256B.434 may, in 
        collaboration with a hospital, clinic, or other health care 
        entity provide services under paragraph (a).  The commissioner 
        shall amend the state plan and seek any federal waivers 
        necessary to implement this paragraph. 
           (e) The commissioner, in consultation with the 
        commissioners of commerce and health, may approve and implement 
        programs for all-inclusive care for the elderly (PACE) according 
        to federal laws and regulations governing that program and state 
        laws or rules applicable to participating providers.  The 
        process for approval of these programs shall begin only after 
        the commissioner receives grant money in an amount sufficient to 
        cover the state share of the administrative and actuarial costs 
        to implement the programs during state fiscal years 2006 and 
        2007.  Grant amounts for this purpose shall be deposited in an 
        account in the special revenue fund and are appropriated to the 
        commissioner to be used solely for the purpose of PACE 
        administrative and actuarial costs.  A PACE provider is not 
        required to be licensed or certified as a health plan company as 
        defined in section 62Q.01, subdivision 4.  Persons age 55 and 
        older who have been screened by the county and found to be 
        eligible for services under the elderly waiver or community 
        alternatives for disabled individuals or who are already 
        eligible for Medicaid but meet level of care criteria for 
        receipt of waiver services may choose to enroll in the PACE 
        program.  Medicare and Medicaid services will be provided 
        according to this subdivision and federal Medicare and Medicaid 
        requirements governing PACE providers and programs.  PACE 
        enrollees will receive Medicaid home and community-based 
        services through the PACE provider as an alternative to services 
        for which they would otherwise be eligible through home and 
        community-based waiver programs and Medicaid State Plan 
        Services.  The commissioner shall establish Medicaid rates for 
        PACE providers that do not exceed costs that would have been 
        incurred under fee-for-service or other relevant managed care 
        programs operated by the state. 
           (f) The commissioner shall seek federal approval to expand 
        the Minnesota disability health options (MnDHO) program 
        established under this subdivision in stages, first to regional 
        population centers outside the seven-county metro area and then 
        to all areas of the state. 
           (g) Notwithstanding section 256B.0261, health plans 
        providing services under this section are responsible for home 
        care targeted case management and relocation targeted case 
        management.  Services must be provided according to the terms of 
        the waivers and contracts approved by the federal government. 
           Sec. 47.  [256B.762] [REIMBURSEMENT FOR HEALTH CARE 
        SERVICES.] 
           Effective for services provided on or after October 1, 
        2005, payment rates for the following services shall be 
        increased by five percent over the rates in effect on September 
        30, 2005, when these services are provided as home health 
        services under section 256B.0625, subdivision 6a: 
           (1) skilled nursing visit; 
           (2) physical therapy visit; 
           (3) occupational therapy visit; 
           (4) speech therapy visit; and 
           (5) home health aide visit. 
           Sec. 48.  Minnesota Statutes 2004, section 256I.06, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [COMMUNITY LIVING ADJUSTMENT.] Effective August 
        1, 2005, persons eligible for and residing in group residential 
        housing under section 256I.04 shall receive a group residential 
        housing community living adjustment of $12 per month. 
           Sec. 49.  Minnesota Statutes 2004, section 514.981, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TIME LIMITS; CLAIM LIMITS; LIENS ON LIFE ESTATES 
        AND JOINT TENANCIES.] (a) A medical assistance lien is a lien on 
        the real property it describes for a period of ten years from 
        the date it attaches according to section 514.981, subdivision 
        2, paragraph (a), except as otherwise provided for in sections 
        514.980 to 514.985.  The agency may renew a medical assistance 
        lien for an additional ten years from the date it would 
        otherwise expire by recording or filing a certificate of renewal 
        before the lien expires.  The certificate shall be recorded or 
        filed in the office of the county recorder or registrar of 
        titles for the county in which the lien is recorded or filed.  
        The certificate must refer to the recording or filing data for 
        the medical assistance lien it renews.  The certificate need not 
        be attested, certified, or acknowledged as a condition for 
        recording or filing.  The registrar of titles or the recorder 
        shall file, record, index, and return the certificate of renewal 
        in the same manner as provided for medical assistance liens in 
        section 514.982, subdivision 2. 
           (b) A medical assistance lien is not enforceable against 
        the real property of an estate to the extent there is a 
        determination by a court of competent jurisdiction, or by an 
        officer of the court designated for that purpose, that there are 
        insufficient assets in the estate to satisfy the agency's 
        medical assistance lien in whole or in part because of the 
        homestead exemption under section 256B.15, subdivision 4, the 
        rights of the surviving spouse or minor children under section 
        524.2-403, paragraphs (a) and (b), or claims with a priority 
        under section 524.3-805, paragraph (a), clauses (1) to (4).  For 
        purposes of this section, the rights of the decedent's adult 
        children to exempt property under section 524.2-403, paragraph 
        (b), shall not be considered costs of administration under 
        section 524.3-805, paragraph (a), clause (1). 
           (c) Notwithstanding any law or rule to the contrary, the 
        provisions in clauses (1) to (7) apply if a life estate subject 
        to a medical assistance lien ends according to its terms, or if 
        a medical assistance recipient who owns a life estate or any 
        interest in real property as a joint tenant that is subject to a 
        medical assistance lien dies. 
           (1) The medical assistance recipient's life estate or joint 
        tenancy interest in the real property shall not end upon the 
        recipient's death but shall merge into the remainder interest or 
        other interest in real property the medical assistance recipient 
        owned in joint tenancy with others.  The medical assistance lien 
        shall attach to and run with the remainder or other interest in 
        the real property to the extent of the medical assistance 
        recipient's interest in the property at the time of the 
        recipient's death as determined under this section. 
           (2) If the medical assistance recipient's interest was a 
        life estate in real property, the lien shall be a lien against 
        the portion of the remainder equal to the percentage factor for 
        the life estate of a person the medical assistance recipient's 
        age on the date the life estate ended according to its terms or 
        the date of the medical assistance recipient's death as listed 
        in the Life Estate Mortality Table in the health care program's 
        manual. 
           (3) If the medical assistance recipient owned the interest 
        in real property in joint tenancy with others, the lien shall be 
        a lien against the portion of that interest equal to the 
        fractional interest the medical assistance recipient would have 
        owned in the jointly owned interest had the medical assistance 
        recipient and the other owners held title to that interest as 
        tenants in common on the date the medical assistance recipient 
        died. 
           (4) The medical assistance lien shall remain a lien against 
        the remainder or other jointly owned interest for the length of 
        time and be renewable as provided in paragraph (a). 
           (5) Subdivision 5, paragraph (a), clause (4), paragraph 
        (b), clauses (1) and (2); and subdivision 6, paragraph (b), do 
        not apply to medical assistance liens which attach to interests 
        in real property as provided under this subdivision. 
           (6) The continuation of a medical assistance recipient's 
        life estate or joint tenancy interest in real property after the 
        medical assistance recipient's death for the purpose of 
        recovering medical assistance provided for in sections 514.980 
        to 514.985 modifies common law principles holding that these 
        interests terminate on the death of the holder. 
           (7) Notwithstanding any law or rule to the contrary, no 
        release, satisfaction, discharge, or affidavit under section 
        256B.15 shall extinguish or terminate the life estate or joint 
        tenancy interest of a medical assistance recipient subject to a 
        lien under sections 514.980 to 514.985 on the date the recipient 
        dies. 
           (8) The provisions of clauses (1) to (7) do not apply to a 
        homestead owned of record, on the date the recipient dies, by 
        the recipient and the recipient's spouse as joint tenants with a 
        right of survivorship.  Homestead means the real property 
        occupied by the surviving joint tenant spouse as their sole 
        residence on the date the recipient dies and classified and 
        taxed to the recipient and surviving joint tenant spouse as 
        homestead property for property tax purposes in the calendar 
        year in which the recipient dies.  For purposes of this 
        exemption, real property the recipient and their surviving joint 
        tenant spouse purchase solely with the proceeds from the sale of 
        their prior homestead, own of record as joint tenants, and 
        qualify as homestead property under section 273.124 in the 
        calendar year in which the recipient dies and prior to the 
        recipient's death shall be deemed to be real property classified 
        and taxed to the recipient and their surviving joint tenant 
        spouse as homestead property in the calendar year in which the 
        recipient dies.  The surviving spouse, or any person with 
        personal knowledge of the facts, may provide an affidavit 
        describing the homestead property affected by this clause and 
        stating facts showing compliance with this clause.  The 
        affidavit shall be prima facie evidence of the facts it states. 
        All provisions in this paragraph related to the continuation of 
        a recipient's life estate or joint tenancy interests in real 
        property after the recipient's death, for the purpose of 
        recovering medical assistance but not alternative care, are 
        effective only for life estates and joint tenancy interests 
        established on or after August 1, 2003. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from August 1, 2003. 
           Sec. 50.  [CONSUMER-DIRECTED COMMUNITY SUPPORTS 
        METHODOLOGY.] 
           (a) Effective upon federal approval, for persons using the 
        home and community-based waiver for persons with developmental 
        disabilities whose consumer-directed community supports budgets 
        were reduced by the October 2004, state-set budget methodology, 
        the commissioner of human services must allow exceptions to 
        exceed the state-set budget formula up to the daily average cost 
        during calendar year 2004 or for persons who graduated from 
        school during 2004, the average daily cost during July through 
        December 2004, less one-half of case management and home 
        modifications over $5,000 when the individual's county of 
        financial responsibility determines that: 
           (1) necessary alternative services will cost the same or 
        more than the person's current budget; and 
           (2) administrative expenses or provider rates will result 
        in fewer hours of needed staffing for the person than under the 
        consumer-directed community supports option.  Any exceptions the 
        county grants must be within the county's allowable aggregate 
        amount for the home and community-based waiver for persons with 
        developmental disabilities. 
           (b) This section expires on the date the commissioner of 
        human services implements a new consumer-directed community 
        supports budget methodology that is based on information about 
        the services and supports intensity needs of persons using the 
        option and that adequately accounts for the increased costs of 
        adults who graduate from school and need services funded by the 
        waiver during the day. 
           Sec. 51.  [COSTS ASSOCIATED WITH PHYSICAL ACTIVITIES.] 
           Effective upon federal approval, the expenses allowed for 
        adults under the consumer-directed community supports option 
        shall include the costs at the lowest rate available considering 
        daily, monthly, semi-annual, annual, or membership rates, 
        including transportation, associated with physical exercise or 
        other physical activities to maintain or improve the person's 
        health and functioning. 
           Sec. 52.  [WAIVER AMENDMENT.] 
           The commissioner of human services shall submit an 
        amendment to the Centers for Medicare and Medicaid Services 
        consistent with sections 50 and 51 by October 1, 2005. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 53.  [INDEPENDENT EVALUATION AND REVIEW OF UNALLOWABLE 
        ITEMS.] 
           The commissioner of human services shall include in the 
        independent evaluation of the consumer-directed community 
        supports option provided through the home and community-based 
        services waivers for persons with disabilities under 65 years of 
        age: 
           (1) provision for ongoing, regular participation by 
        stakeholder representatives through June 30, 2007; 
           (2) recommendations on whether changes to the unallowable 
        items should be made to meet the health, safety, or welfare 
        needs of participants in the consumer-directed community 
        supports option within the allowed budget amounts.  The 
        recommendations on allowable items shall be provided to the 
        senate and house of representatives committees with jurisdiction 
        over human services policy and finance issues by January 15, 
        2006; and 
           (3) a review of the statewide caseload changes for the 
        disability waiver programs for persons under 65 years of age 
        that occurred since the state-set budget methodology 
        implementation on October 1, 2004, and recommendations on the 
        fiscal impact of the budget methodology on use of the 
        consumer-directed community supports option. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 54.  [FEDERAL APPROVAL.] 
           By October 1, 2005, the commissioner of human services 
        shall request any federal approval and plan amendments necessary 
        to implement (1) the transitional supports allowance under 
        Minnesota Statutes, sections 256B.0916, subdivision 10, and 
        256B.49, subdivision 16; and (2) the choice of case management 
        service coordination provisions under Minnesota Statutes, 
        section 256B.0621, subdivisions 4, 5, 6, and 7. 
           Sec. 55.  [COMMUNITY SERVICES PROVIDER RATE INCREASES.] 
           (a) The commissioner of human services shall increase 
        reimbursement rates or rate limits, as applicable, by 2.2553 
        percent for the rate period beginning October 1, 2005, and the 
        rate period beginning October 1, 2006, effective for services 
        rendered on or after those dates. 
           (b) The 2.2553 percent annual rate increase described in 
        this section must be provided to: 
           (1) home and community-based waivered services for persons 
        with mental retardation or related conditions under Minnesota 
        Statutes, section 256B.501; 
           (2) home and community-based waivered services for the 
        elderly under Minnesota Statutes, section 256B.0915; 
           (3) waivered services under community alternatives for 
        disabled individuals under Minnesota Statutes, section 256B.49; 
           (4) community alternative care waivered services under 
        Minnesota Statutes, section 256B.49; 
           (5) traumatic brain injury waivered services under 
        Minnesota Statutes, section 256B.49; 
           (6) nursing services and home health services under 
        Minnesota Statutes, section 256B.0625, subdivision 6a; 
           (7) personal care services and nursing supervision of 
        personal care services under Minnesota Statutes, section 
        256B.0625, subdivision 19a; 
           (8) private duty nursing services under Minnesota Statutes, 
        section 256B.0625, subdivision 7; 
           (9) day training and habilitation services for adults with 
        mental retardation or related conditions under Minnesota 
        Statutes, sections 252.40 to 252.46; 
           (10) alternative care services under Minnesota Statutes, 
        section 256B.0913; 
           (11) adult residential program grants under Minnesota 
        Rules, parts 9535.2000 to 9535.3000; 
           (12) adult and family community support grants under 
        Minnesota Rules, parts 9535.1700 to 9535.1760; 
           (13) the group residential housing supplementary service 
        rate under Minnesota Statutes, section 256I.05, subdivision 1a; 
           (14) adult mental health integrated fund grants under 
        Minnesota Statutes, section 245.4661; 
           (15) semi-independent living services under Minnesota 
        Statutes, section 252.275, including SILS funding under county 
        social services grants formerly funded under Minnesota Statutes, 
        chapter 256I; 
           (16) community support services for deaf and 
        hard-of-hearing adults with mental illness who use or wish to 
        use sign language as their primary means of communication; 
           (17) living skills training programs for persons with 
        intractable epilepsy who need assistance in the transition to 
        independent living; 
           (18) physical therapy services under sections 256B.0625, 
        subdivision 8, and 256D.03, subdivision 4; 
           (19) occupational therapy services under sections 
        256B.0625, subdivision 8a, and 256D.03, subdivision 4; 
           (20) speech-language therapy services under section 
        256D.03, subdivision 4, and Minnesota Rules, part 9505.0390; and 
           (21) respiratory therapy services under section 256D.03, 
        subdivision 4, and Minnesota Rules, part 9505.0295. 
           (c) Providers that receive a rate increase under this 
        section shall use 75 percent of the additional revenue to 
        increase wages and benefits and pay associated costs for all 
        employees, except for management fees, the administrator, and 
        central office staffs. 
           (d) For public employees, the increase for wages and 
        benefits for certain staff is available and pay rates shall be 
        increased only to the extent that they comply with laws 
        governing public employees collective bargaining.  Money 
        received by a provider for pay increases under this section may 
        be used only for increases implemented on or after the first day 
        of the rate period in which the increase is available and must 
        not be used for increases implemented prior to that date. 
           (e) A copy of the provider's plan for complying with 
        paragraph (c) must be made available to all employees by giving 
        each employee a copy or by posting a copy in an area of the 
        provider's operation to which all employees have access.  If an 
        employee does not receive the adjustment, if any, described in 
        the plan and is unable to resolve the problem with the provider, 
        the employee may contact the employee's union representative.  
        If the employee is not covered by a collective bargaining 
        agreement, the employee may contact the commissioner at a 
        telephone number provided by the commissioner and included in 
        the provider's plan. 
           Sec. 56.  [COMMISSIONER'S DUTIES RELATED TO CHANGE IN 
        EFFECTIVE DATE FOR LIFE ESTATE AND JOINT TENANCY INTEREST 
        PROVISIONS.] 
           (a) The commissioner of human services or a county agency 
        that has recovered medical assistance or alternative care 
        payments for recipients after they die from their life estates 
        or jointly owned interests in real property that were 
        established prior to August 1, 2003, and that were continued in 
        existence or merged into another interest in real property after 
        their death due solely to the provisions of section 256B.15 or 
        514.981, subdivision 6, paragraph (c), as those provisions 
        existed prior to the amendments in this act, shall refund those 
        recoveries, without interest.  The refunds shall be paid to the 
        surviving record owners of the real property in which the 
        recipient had a life estate or a jointly owned interest on the 
        date of the recipient's death in proportion to their record 
        interests on that date.  The commissioner and a county agency 
        are not required to refund any other recoveries attributable to 
        any other interests or assets of the deceased recipient.  For 
        purposes of this paragraph, a life estate or jointly owned 
        interest in real property is established as of the date provided 
        for in Minnesota Statutes, section 256B.15, subdivision 6. 
           (b) If the commissioner of human services or a county 
        agency determines a person entitled to any refund under this act 
        is dead, they may pay the refund due that person to their estate 
        if it is still open.  If the person's estate is closed or if a 
        court has entered a decree of distribution for that person under 
        section 525.312 that is a final decree, the commissioner or the 
        county agency may, in their absolute discretion, pay the 
        person's refund to their heirs or devisees as finally determined 
        in any completed probate or under any final decree of 
        distribution.  In all other cases including, but not limited to, 
        those in which the commissioner or a county agency determines 
        they cannot identify or locate a person entitled to a refund 
        under this section, they may, at their discretion, declare such 
        person's refund to be abandoned property and pay and deliver it 
        to the commissioner of commerce.  The commissioner of commerce 
        shall administer and dispose of the refunds according to 
        sections 345.31 to 345.60.  Neither the commissioner of human 
        services, the Department of Human Services, a county agency, or 
        the employees of the department or agency, shall be liable to 
        anyone with respect to the refund after paying or delivering the 
        refund as provided for in this section. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from August 1, 2003. 
           Sec. 57.  [DIRECTION TO THE COMMISSIONER; LICENSING AND 
        ALTERNATIVE QUALITY ASSURANCE STUDY.] 
           The commissioner of human services shall arrange for a 
        study, including recommendations for statewide development and 
        implementation of regional or local quality assurance models for 
        disability services.  The study shall include a review of 
        current projects or models; make findings regarding the best 
        components, role, and function of such models within a statewide 
        quality assurance system; and shall estimate the cost and 
        sources of funding for regional and local quality assurance 
        models on a statewide basis.  The study shall be done in 
        consultation with counties, consumers of service, providers, and 
        representatives of the Quality Assurance Commission under 
        Minnesota Statutes, section 256B.0951, subdivision 1. 
           The study shall be submitted to the chairs of the 
        legislative committees with jurisdiction over health and human 
        services with recommendations on implementation of a statewide 
        system of quality assurance and licensing by July 1, 2006.  The 
        commissioner shall submit proposed legislation for 
        implementation of a statewide system of quality assurance to the 
        chairs of the legislative committees with jurisdiction over 
        health and human services by December 15, 2006. 
           Sec. 58.  [DISABILITY SERVICES INTERAGENCY WORK GROUP.] 
           Subdivision 1.  [MEMBERSHIP.] The Department of Human 
        Services, the Minnesota Housing Finance Agency, and the 
        Minnesota State Council on Disability shall convene an 
        interagency work group which includes interested stakeholders 
        including other state agencies, counties, public housing 
        authorities, the Metropolitan Council, disability service 
        providers, and representatives from disability advocacy 
        organizations to identify barriers, strengthen coordination, 
        recommend policy and funding changes, and pursue federal 
        financing that will assist Minnesotans with disabilities who are 
        attempting to relocate from or avoid placement in institutional 
        settings. 
           Subd. 2.  [WORK GROUP ACTIVITIES.] The work group shall 
        make recommendations to the state agencies and the legislature 
        related to: 
           (1) coordinating the availability of housing, 
        transportation, and support services needed to discharge persons 
        with disabilities from institutions; 
           (2) improving information and assistance needed to make an 
        informed choice about relocating from an institutional placement 
        to community-based services; 
           (3) identifying gaps in human services, transportation, or 
        housing access which are barriers to moving to community 
        services; 
           (4) identifying strategies which would result in earlier 
        identification of persons most at risk of institutional 
        placement in order to promote diversion to community service or 
        reduce length of stay in an institutional facility; 
           (5) identifying funding mechanisms and financial strategies 
        to assure a financially sustainable community support system 
        that diverts and relocates individuals from institutional 
        placement; and 
           (6) identifying state changes needed to address any federal 
        changes affecting policies, benefits, or funding used to support 
        persons with disabilities to avoid institutional placement.  
           Subd. 3.  [RECOMMENDATIONS.] Recommendations of the work 
        group will be submitted to each participating state agency and 
        to the chairs of the health and human services policy and 
        finance committees of the senate and house of representatives by 
        October 15, 2006.  This section expires October 15, 2006. 
           Sec. 59.  [REPORT TO LEGISLATURE.] 
           The commissioner shall report to the legislature by 
        December 15, 2006, on the redesign of case management services.  
        In preparing the report, the commissioner shall consult with 
        representatives for consumers, consumer advocates, counties, and 
        service providers.  The report shall include draft legislation 
        for case management changes that will: 
           (1) streamline administration; 
           (2) improve consumer access to case management services; 
           (3) address the use of a comprehensive universal assessment 
        protocol for persons seeking community supports; 
           (4) establish case management performance measures; 
           (5) provide for consumer choice of the case management 
        service vendor; and 
           (6) provide a method of payment for case management 
        services that is cost-effective and best supports the draft 
        legislation in clauses (1) to (5). 
           Sec. 60.  [RECOMMENDATIONS FOR PROPERTY PAYMENT SYSTEM FOR 
        NURSING FACILITIES.] 
           The commissioner of human services shall provide 
        recommendations to the legislature by February 15, 2007, on 
        changes to the current nursing facility property payment system. 
           Sec. 61.  [REPEALER.] 
           Minnesota Statutes 2004, sections 514.991; 514.992; 
        514.993; 514.994; and 514.995, are repealed retroactively from 
        July 1, 2005.  On and after the repeal date all alternative care 
        liens of record shall be of no force and effect, shall not be 
        liens on real property, and examiners of title shall disregard 
        these liens and shall not carry them forward to subsequent 
        certificates of title. 
           Sec. 62.  [EFFECTIVE DATE.] 
           The sections in this article are effective August 1, 2005, 
        unless another date is specified. 

                                   ARTICLE 8 
                            HEALTH CARE - DEPARTMENT 
                               OF HUMAN SERVICES 
           Section 1.  Minnesota Statutes 2004, section 16A.724, is 
        amended to read: 
           16A.724 [HEALTH CARE ACCESS FUND.] 
           Subdivision 1.  [CREATION OF FUND.] A health care access 
        fund is created in the state treasury.  The fund is a direct 
        appropriated special revenue fund.  The commissioner shall 
        deposit to the credit of the fund money made available to the 
        fund.  Notwithstanding section 11A.20, after June 30, 1997, all 
        investment income and all investment losses attributable to the 
        investment of the health care access fund not currently needed 
        shall be credited to the health care access fund. 
           Subd. 2.  [TRANSFERS.] (a) Notwithstanding section 295.581, 
        to the extent available resources in the health care access fund 
        exceed expenditures in that fund, effective with the biennium 
        beginning July 1, 2007, the commissioner of finance shall 
        transfer the excess funds from the health care access fund to 
        the general fund on June 30 of each year, provided that the 
        amount transferred in any fiscal biennium shall not exceed 
        $96,000,000. 
           (b) For fiscal years 2006 to 2009, MinnesotaCare shall be a 
        forecasted program, and, if necessary, the commissioner shall 
        reduce these transfers from the health care access fund to the 
        general fund to meet annual MinnesotaCare expenditures or, if 
        necessary, transfer sufficient funds from the general fund to 
        the health care access fund to meet annual MinnesotaCare 
        expenditures. 
           Sec. 2.  [62J.82] [HOSPITAL CHARGE DISCLOSURE.] 
           The Minnesota Hospital Association shall develop a 
        Web-based system, available to the public free of charge, for 
        reporting charge information, for Minnesota residents, 
        including, but not limited to, number of discharges, average 
        length of stay, average charge, average charge per day, and 
        median charge, for each of the 50 most common inpatient 
        diagnosis-related groups and the 25 most common outpatient 
        surgical procedures as specified by the Minnesota Hospital 
        Association.  The Web site must provide information that 
        compares hospital-specific data to hospital statewide data.  The 
        Web site must be established by October 1, 2006, and must be 
        updated annually.  If a hospital does not provide this 
        information to the Minnesota Hospital Association, the 
        commissioner may require the hospital to do so.  The 
        commissioner shall provide a link to this information on the 
        department's Web site. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 3.  Minnesota Statutes 2004, section 62Q.251, as added 
        by Laws 2005, chapter 147, article 11, section 3, is amended to 
        read: 
           62Q.251 [DISCOUNTED PAYMENTS.] 
           (a) Notwithstanding any other provision of law, a health 
        care provider may provide care to a patient at a discounted 
        payment amount, provided that the discount does not reduce the 
        payment below the Medicare-approved payment level.  
           (b) A health plan company or other insurer must not 
        consider, in determining a provider's usual and customary 
        payment, standard payment, or allowable payment used as a basis 
        for determining the provider's payment by the health plan 
        company or other insurer, the following discounted payment 
        situations: 
           (1) care provided to relatives of the provider; and 
           (2) care for which a discount is given for hardship 
        situations; and 
           (3) care for which a discount is given in exchange for cash 
        payment. 
           (c) This section does not disallow Nothing in this section 
        shall prohibit a provider from providing charity care for 
        hardship situations in which the care is provided for free. 
           (d) A provider may not charge an uninsured person more than 
        the provider charges a health plan company or other insurer. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 4.  Minnesota Statutes 2004, section 62Q.37, 
        subdivision 7, is amended to read: 
           Subd. 7.  [HUMAN SERVICES.] (a) The commissioner of human 
        services shall implement this section in a manner that is 
        consistent with applicable federal laws and regulations and that 
        avoids the duplication of review activities performed by a 
        nationally recognized independent organization. 
           (b) By December 31 of each year, the commissioner shall 
        submit to the legislature a written report identifying the 
        number of audits performed by a nationally recognized 
        independent organization that were accepted, partially accepted, 
        or rejected by the commissioner under this section.  The 
        commissioner shall provide the rationale for partial acceptance 
        or rejection.  If the rationale for the partial acceptance or 
        rejection was based on the commissioner's determination that the 
        standards used in the audit were not equivalent to state law, 
        regulation, or contract requirement, the report must document 
        the variances between the audit standards and the applicable 
        state requirements.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 5.  Minnesota Statutes 2004, 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) (cc): 
           (a) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (1) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (2) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (3) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (4) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (5) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; 
           (6) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds; and 
           (7) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (b) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (c) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting 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. 
           (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. 
           (e) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (f) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (g) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (h) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        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. 
           (i) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (j) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (k) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (l) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (1) the secretary of health and human services of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity; and 
           (2) a comprehensive plan, including estimated project 
        costs, shall be approved by the Legislative Advisory Commission 
        and filed with the commissioner of administration.  
           (m) According to federal requirements, establish procedures 
        to be followed by local welfare boards in creating citizen 
        advisory committees, including procedures for selection of 
        committee members. 
           (n) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, medical assistance, or food stamp 
        program in the following manner:  
           (1) one-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance and the AFDC program 
        formerly codified in sections 256.72 to 256.87, disallowances 
        shall be shared by each county board in the same proportion as 
        that county's expenditures for the sanctioned program are to the 
        total of all counties' expenditures for the AFDC program 
        formerly codified in sections 256.72 to 256.87, and medical 
        assistance programs.  For the food stamp program, sanctions 
        shall be shared by each county board, with 50 percent of the 
        sanction being distributed to each county in the same proportion 
        as that county's administrative costs for food stamps are to the 
        total of all food stamp administrative costs for all counties, 
        and 50 percent of the sanctions being distributed to each county 
        in the same proportion as that county's value of food stamp 
        benefits issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due; and 
           (2) notwithstanding the provisions of clause (1), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in clause (1), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to clause (1).  
           (o) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (p) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (q) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (1) the commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced; 
           (2) the county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner; 
           (3) if the required reports are not received by the 
        deadlines established in clause (2), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received; 
           (4) a county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of 
        noncompliance; 
           (5) the final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period; 
           (6) the commissioner may not delay payments, withhold 
        funds, or require repayment under clause (3) or (5) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under clause (3) or (5), the county board may appeal the action 
        according to sections 14.57 to 14.69; and 
           (7) counties subject to withholding of funds under clause 
        (3) or forfeiture or repayment of funds under clause (5) shall 
        not reduce or withhold benefits or services to clients to cover 
        costs incurred due to actions taken by the commissioner under 
        clause (3) or (5). 
           (r) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (s) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (t) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (u) Have the authority to administer a drug rebate program 
        for drugs purchased pursuant to the prescription drug program 
        established under section 256.955 after the beneficiary's 
        satisfaction of any deductible established in the program.  The 
        commissioner shall require a rebate agreement from all 
        manufacturers of covered drugs as defined in section 256B.0625, 
        subdivision 13.  Rebate agreements for prescription drugs 
        delivered on or after July 1, 2002, must include rebates for 
        individuals covered under the prescription drug program who are 
        under 65 years of age.  For each drug, the amount of the rebate 
        shall be equal to the rebate as defined for purposes of the 
        federal rebate program in United States Code, title 42, section 
        1396r-8.  The manufacturers must provide full payment within 30 
        days of receipt of the state invoice for the rebate within the 
        terms and conditions used for the federal rebate program 
        established pursuant to section 1927 of title XIX of the Social 
        Security Act.  The manufacturers must provide the commissioner 
        with any information necessary to verify the rebate determined 
        per drug.  The rebate program shall utilize the terms and 
        conditions used for the federal rebate program established 
        pursuant to section 1927 of title XIX of the Social Security Act.
           (v) Have the authority to administer the federal drug 
        rebate program for drugs purchased under the medical assistance 
        program as allowed by section 1927 of title XIX of the Social 
        Security Act and according to the terms and conditions of 
        section 1927.  Rebates shall be collected for all drugs that 
        have been dispensed or administered in an outpatient setting and 
        that are from manufacturers who have signed a rebate agreement 
        with the United States Department of Health and Human Services. 
           (w) Have the authority to administer a supplemental drug 
        rebate program for drugs purchased under the medical assistance 
        program.  The commissioner may enter into supplemental rebate 
        contracts with pharmaceutical manufacturers and may require 
        prior authorization for drugs that are from manufacturers that 
        have not signed a supplemental rebate contract.  Prior 
        authorization of drugs shall be subject to the provisions of 
        section 256B.0625, subdivision 13. 
           (x) Operate the department's communication systems account 
        established in Laws 1993, First Special Session chapter 1, 
        article 1, section 2, subdivision 2, to manage shared 
        communication costs necessary for the operation of the programs 
        the commissioner supervises.  A communications account may also 
        be established for each regional treatment center which operates 
        communications systems.  Each account must be used to manage 
        shared communication costs necessary for the operations of the 
        programs the commissioner supervises.  The commissioner may 
        distribute the costs of operating and maintaining communication 
        systems to participants in a manner that reflects actual usage. 
        Costs may include acquisition, licensing, insurance, 
        maintenance, repair, staff time and other costs as determined by 
        the commissioner.  Nonprofit organizations and state, county, 
        and local government agencies involved in the operation of 
        programs the commissioner supervises may participate in the use 
        of the department's communications technology and share in the 
        cost of operation.  The commissioner may accept on behalf of the 
        state any gift, bequest, devise or personal property of any 
        kind, or money tendered to the state for any lawful purpose 
        pertaining to the communication activities of the department.  
        Any money received for this purpose must be deposited in the 
        department's communication systems accounts.  Money collected by 
        the commissioner for the use of communication systems must be 
        deposited in the state communication systems account and is 
        appropriated to the commissioner for purposes of this section. 
           (y) Receive any federal matching money that is made 
        available through the medical assistance program for the 
        consumer satisfaction survey.  Any federal money received for 
        the survey is appropriated to the commissioner for this 
        purpose.  The commissioner may expend the federal money received 
        for the consumer satisfaction survey in either year of the 
        biennium. 
           (z) Designate community information and referral call 
        centers and incorporate cost reimbursement claims from the 
        designated community information and referral call centers into 
        the federal cost reimbursement claiming processes of the 
        department according to federal law, rule, and regulations.  
        Existing information and referral centers provided by Greater 
        Twin Cities United Way or existing call centers for which 
        Greater Twin Cities United Way has legal authority to represent, 
        shall be included in these designations upon review by the 
        commissioner and assurance that these services are accredited 
        and in compliance with national standards.  Any reimbursement is 
        appropriated to the commissioner and all designated information 
        and referral centers shall receive payments according to normal 
        department schedules established by the commissioner upon final 
        approval of allocation methodologies from the United States 
        Department of Health and Human Services Division of Cost 
        Allocation or other appropriate authorities. 
           (aa) Develop recommended standards for foster care homes 
        that address the components of specialized therapeutic services 
        to be provided by foster care homes with those services. 
           (bb) Have the authority to administer a drug rebate program 
        for drugs purchased for persons eligible for general assistance 
        medical care under section 256D.03, subdivision 3.  For 
        manufacturers that agree to participate in the general 
        assistance medical care rebate program, the commissioner shall 
        enter into a rebate agreement for covered drugs as defined in 
        section 256B.0625, subdivisions 13 and 13d.  For each drug, the 
        amount of the rebate shall be equal to the rebate as defined for 
        purposes of the federal rebate program in United States Code, 
        title 42, section 1396r-8.  The manufacturers must provide 
        payment within the terms and conditions used for the federal 
        rebate program established under section 1927 of title XIX of 
        the Social Security Act.  The rebate program shall utilize the 
        terms and conditions used for the federal rebate program 
        established under section 1927 of title XIX of the Social 
        Security Act. 
           Effective January 1, 2006, drug coverage under general 
        assistance medical care shall be limited to those prescription 
        drugs that: 
           (1) are covered under the medical assistance program as 
        described in section 256B.0625, subdivisions 13 and 13d; and 
           (2) are provided by manufacturers that have fully executed 
        general assistance medical care rebate agreements with the 
        commissioner and comply with such agreements.  Prescription drug 
        coverage under general assistance medical care shall conform to 
        coverage under the medical assistance program according to 
        section 256B.0625, subdivisions 13 to 13g. 
           The rebate revenues collected under the drug rebate program 
        are deposited in the general fund. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 6.  Minnesota Statutes 2004, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [AUTHORIZATION FOR TEST SITES FOR HEALTH CARE 
        PROGRAMS.] In coordination with the development and 
        implementation of HealthMatch, an automated eligibility system 
        for medical assistance, general assistance medical care, and 
        MinnesotaCare, the commissioner, in cooperation with county 
        agencies, is authorized to test and compare a variety of 
        administrative models to demonstrate and evaluate outcomes of 
        integrating health care program business processes and points of 
        access.  The models will be evaluated for ease of enrollment for 
        health care program applicants and recipients and administrative 
        efficiencies.  Test sites will combine the administration of all 
        three programs and will include both local county and 
        centralized statewide customer assistance.  The duration of each 
        approved test site shall be no more than one year.  Based on the 
        evaluation, the commissioner shall recommend the most efficient 
        and effective administrative model for statewide implementation. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 7.  Minnesota Statutes 2004, section 256.019, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RETENTION RATES.] When an assistance 
        recovery amount is collected and posted by a county agency under 
        the provisions governing public assistance programs including 
        general assistance medical care, general assistance, and 
        Minnesota supplemental aid, the county may keep one-half of the 
        recovery made by the county agency using any method other than 
        recoupment.  For medical assistance, if the recovery is made by 
        a county agency using any method other than recoupment, the 
        county may keep one-half of the nonfederal share of the recovery.
        For MinnesotaCare, if the recovery is collected and posted by 
        the county agency, the county may keep one-half of the 
        nonfederal share of the recovery. 
           This does not apply to recoveries from medical providers or 
        to recoveries begun by the Department of Human Services' 
        Surveillance and Utilization Review Division, State Hospital 
        Collections Unit, and the Benefit Recoveries Division or, by the 
        attorney general's office, or child support collections.  In the 
        food stamp or food support program, the nonfederal share of 
        recoveries in the federal tax offset program only will be 
        divided equally between the state agency and the involved county 
        agency. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 256.045, 
        subdivision 3, as amended by Laws 2005, chapter 98, article 3, 
        section 18, 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) an 
        applicant aggrieved by an adverse decision to an application or 
        redetermination for a Medicare Part D prescription drug subsidy 
        under section 256B.04, subdivision 4a; (9) 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) (10) 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) (9) and a disqualification under this clause in which the 
        basis for a disqualification is serious or recurring 
        maltreatment, which has not been set aside 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) (9), or (9) (10) 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) (9) apply only to incidents 
        of maltreatment that occur on or after July 1, 1997.  A hearing 
        for an individual or facility under clause (8) (9) 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 prescribed under chapter 
        256M or other social services the person is eligible for under 
        state law. 
           (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 retroactively 
        from July 1, 2005. 
           Sec. 9.  Minnesota Statutes 2004, section 256.045, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [PREPAID HEALTH PLAN APPEALS.] (a) All prepaid 
        health plans under contract to the commissioner under chapter 
        256B or 256D must provide for a complaint system according to 
        section 62D.11.  When a prepaid health plan denies, reduces, or 
        terminates a health service or denies a request to authorize a 
        previously authorized health service, the prepaid health plan 
        must notify the recipient of the right to file a complaint or an 
        appeal.  The notice must include the name and telephone number 
        of the ombudsman and notice of the recipient's right to request 
        a hearing under paragraph (b).  When a complaint is filed, the 
        prepaid health plan must notify the ombudsman within three 
        working days.  Recipients may request the assistance of the 
        ombudsman in the complaint system process.  The prepaid health 
        plan must issue a written resolution of the complaint to the 
        recipient within 30 days after the complaint is filed with the 
        prepaid health plan.  A recipient is not required to exhaust the 
        complaint system procedures in order to request a hearing under 
        paragraph (b). 
           (b) Recipients enrolled in a prepaid health plan under 
        chapter 256B or 256D may contest a prepaid health plan's denial, 
        reduction, or termination of health services, a prepaid health 
        plan's denial of a request to authorize a previously authorized 
        health service, or the prepaid health plan's written resolution 
        of a complaint by submitting a written request for a hearing 
        according to subdivision 3.  A state human services referee 
        shall conduct a hearing on the matter and shall recommend an 
        order to the commissioner of human services.  The commissioner 
        need not grant a hearing if the sole issue raised by a recipient 
        is the commissioner's authority to require mandatory enrollment 
        in a prepaid health plan in a county where prepaid health plans 
        are under contract with the commissioner.  The state human 
        services referee may order a second medical opinion from the 
        prepaid health plan or may order a second medical opinion from a 
        nonprepaid health plan provider at the expense of the prepaid 
        health plan.  Recipients may request the assistance of the 
        ombudsman in the appeal process. 
           (c) In the written request for a hearing to appeal from a 
        prepaid health plan's denial, reduction, or termination of a 
        health service, a prepaid health plan's denial of a request to 
        authorize a previously authorized service, or the prepaid health 
        plan's written resolution to a complaint, a recipient may 
        request an expedited hearing.  If an expedited appeal is 
        warranted, the state human services referee shall hear the 
        appeal and render a decision within a time commensurate with the 
        level of urgency involved, based on the individual circumstances 
        of the case. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 10.  Minnesota Statutes 2004, 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 
        Department of Human Services, in lieu of a local agency, may 
        initiate an administrative fraud disqualification hearing when 
        the state agency is directly responsible for administration of 
        the health care program for which benefits were wrongfully 
        obtained.  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. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 11.  Minnesota Statutes 2004, section 256.9657, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [WITHHOLDING.] If any provider obligated to pay 
        an annual surcharge under this section is more than two months 
        delinquent in the timely payment of a monthly surcharge 
        installment payment, the provisions in paragraphs (a) to (f) 
        apply. 
           (a) The department may withhold some or all of the amount 
        of the delinquent surcharge, together with any interest and 
        penalties due and owing on those amounts, from any money the 
        department owes to the provider.  The department may, at its 
        discretion, also withhold future surcharge installment payments 
        from any money the department owes the provider as those 
        installments become due and owing.  The department may continue 
        this withholding until the department determines there is no 
        longer any need to do so. 
           (b) The department shall give prior notice of the 
        department's intention to withhold by mailing a written notice 
        to the provider at the address to which remittance advices are 
        mailed or faxing a copy of the notice to the provider at least 
        ten business days before the date of the first payment period 
        for which the withholding begins.  The notice may be sent by 
        ordinary or certified mail, or facsimile, and shall be deemed 
        received as of the date of mailing or receipt of the facsimile.  
        The notice shall: 
           (i) state the amount of the delinquent surcharge; 
           (ii) state the amount of the withholding per payment 
        period; 
           (iii) state the date on which the withholding is to begin; 
           (iv) state whether the department intends to withhold 
        future installments of the provider's surcharge payments; 
           (v) inform the provider of their rights to informally 
        object to the proposed withholding and to appeal the withholding 
        as provided for in this subdivision; 
           (vi) state that the provider may prevent the withholding 
        during the pendency of their appeal by posting a bond; and 
           (vii) state other contents as the department deems 
        appropriate. 
           (c) The provider may informally object to the withholding 
        in writing anytime before the withholding begins.  An informal 
        objection shall not stay or delay the commencement of the 
        withholding.  The department may postpone the commencement of 
        the withholding as deemed appropriate and shall not be required 
        to give another notice at the end of the postponement and before 
        commencing the withholding.  The provider shall have the right 
        to appeal any withholding from remittances by filing an appeal 
        with Ramsey County District Court and serving notice of the 
        appeal on the department within 30 days of the date of the 
        written notice of the withholding.  Notice shall be given and 
        the appeal shall be heard no later than 45 days after the appeal 
        is filed.  In a hearing of the appeal, the department's action 
        shall be sustained if the department proves the amount of the 
        delinquent surcharges or overpayment the provider owes, plus any 
        accrued interest and penalties, has not been repaid.  The 
        department may continue withholding for delinquent and current 
        surcharge installment payments during the pendency of an appeal 
        unless the provider posts a bond from a surety company licensed 
        to do business in Minnesota in favor of the department in an 
        amount equal to two times the provider's total annual surcharge 
        payment for the fiscal year in which the appeal is filed with 
        the department. 
           (d) The department shall refund any amounts due to the 
        provider under any final administrative or judicial order or 
        decree which fully and finally resolves the appeal together with 
        interest on those amounts at the rate of three percent per annum 
        simple interest computed from the date of each withholding, as 
        soon as practical after entry of the order or decree. 
           (e) The commissioner, or the commissioner's designee, may 
        enter into written settlement agreements with a provider to 
        resolve disputes and other matters involving unpaid surcharge 
        installment payments or future surcharge installment payments. 
           (f) Notwithstanding any law to the contrary, all unpaid 
        surcharges, plus any accrued interest and penalties, shall be 
        overpayments for purposes of section 256B.0641. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 12.  Minnesota Statutes 2004, section 256.969, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [PAYMENTS.] (a) Acute care hospital billings 
        under the medical assistance program must not be submitted until 
        the recipient is discharged.  However, the commissioner shall 
        establish monthly interim payments for inpatient hospitals that 
        have individual patient lengths of stay over 30 days regardless 
        of diagnostic category.  Except as provided in section 256.9693, 
        medical assistance reimbursement for treatment of mental illness 
        shall be reimbursed based on diagnostic classifications.  
        Individual hospital payments established under this section and 
        sections 256.9685, 256.9686, and 256.9695, in addition to third 
        party and recipient liability, for discharges occurring during 
        the rate year shall not exceed, in aggregate, the charges for 
        the medical assistance covered inpatient services paid for the 
        same period of time to the hospital.  This payment limitation 
        shall be calculated separately for medical assistance and 
        general assistance medical care services.  The limitation on 
        general assistance medical care shall be effective for 
        admissions occurring on or after July 1, 1991.  Services that 
        have rates established under subdivision 11 or 12, must be 
        limited separately from other services.  After consulting with 
        the affected hospitals, the commissioner may consider related 
        hospitals one entity and may merge the payment rates while 
        maintaining separate provider numbers.  The operating and 
        property base rates per admission or per day shall be derived 
        from the best Medicare and claims data available when rates are 
        established.  The commissioner shall determine the best Medicare 
        and claims data, taking into consideration variables of recency 
        of the data, audit disposition, settlement status, and the 
        ability to set rates in a timely manner.  The commissioner shall 
        notify hospitals of payment rates by December 1 of the year 
        preceding the rate year.  The rate setting data must reflect the 
        admissions data used to establish relative values.  Base year 
        changes from 1981 to the base year established for the rate year 
        beginning January 1, 1991, and for subsequent rate years, shall 
        not be limited to the limits ending June 30, 1987, on the 
        maximum rate of increase under subdivision 1.  The commissioner 
        may adjust base year cost, relative value, and case mix index 
        data to exclude the costs of services that have been 
        discontinued by the October 1 of the year preceding the rate 
        year or that are paid separately from inpatient services.  
        Inpatient stays that encompass portions of two or more rate 
        years shall have payments established based on payment rates in 
        effect at the time of admission unless the date of admission 
        preceded the rate year in effect by six months or more.  In this 
        case, operating payment rates for services rendered during the 
        rate year in effect and established based on the date of 
        admission shall be adjusted to the rate year in effect by the 
        hospital cost index. 
           (b) For fee-for-service admissions occurring on or after 
        July 1, 2002, the total payment, before third-party liability 
        and spenddown, made to hospitals for inpatient services is 
        reduced by .5 percent from the current statutory rates.  
           (c) In addition to the reduction in paragraph (b), the 
        total payment for fee-for-service admissions occurring on or 
        after July 1, 2003, made to hospitals for inpatient services 
        before third-party liability and spenddown, is reduced five 
        percent from the current statutory rates.  Mental health 
        services within diagnosis related groups 424 to 432, and 
        facilities defined under subdivision 16 are excluded from this 
        paragraph. 
           (d) In addition to the reduction in paragraphs (b) and (c), 
        the total payment for fee-for-service admissions occurring on or 
        after July 1, 2005, made to hospitals for inpatient services 
        before third-party liability and spenddown, is reduced 6.0 
        percent from the current statutory rates.  Mental health 
        services within diagnosis related groups 424 to 432 and 
        facilities defined under subdivision 16 are excluded from this 
        paragraph.  Notwithstanding section 256.9686, subdivision 7, for 
        purposes of this paragraph, medical assistance does not include 
        general assistance medical care.  Payments made to managed care 
        plans shall be reduced for services provided on or after January 
        1, 2006, to reflect this reduction. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 256.969, 
        subdivision 9, is amended to read: 
           Subd. 9.  [DISPROPORTIONATE NUMBERS OF LOW-INCOME PATIENTS 
        SERVED.] (a) For admissions occurring on or after October 1, 
        1992, through December 31, 1992, the medical assistance 
        disproportionate population adjustment shall comply with federal 
        law and shall be paid to a hospital, excluding regional 
        treatment centers and facilities of the federal Indian Health 
        Service, with a medical assistance inpatient utilization rate in 
        excess of the arithmetic mean.  The adjustment must be 
        determined as follows: 
           (1) for a hospital with a medical assistance inpatient 
        utilization rate above the arithmetic mean for all hospitals 
        excluding regional treatment centers and facilities of the 
        federal Indian Health Service but less than or equal to one 
        standard deviation above the mean, the adjustment must be 
        determined by multiplying the total of the operating and 
        property payment rates by the difference between the hospital's 
        actual medical assistance inpatient utilization rate and the 
        arithmetic mean for all hospitals excluding regional treatment 
        centers and facilities of the federal Indian Health Service; and 
           (2) for a hospital with a medical assistance inpatient 
        utilization rate above one standard deviation above the mean, 
        the adjustment must be determined by multiplying the adjustment 
        that would be determined under clause (1) for that hospital by 
        1.1.  If federal matching funds are not available for all 
        adjustments under this subdivision, the commissioner shall 
        reduce payments on a pro rata basis so that all adjustments 
        qualify for federal match.  The commissioner may establish a 
        separate disproportionate population operating payment rate 
        adjustment under the general assistance medical care program.  
        For purposes of this subdivision medical assistance does not 
        include general assistance medical care.  The commissioner shall 
        report annually on the number of hospitals likely to receive the 
        adjustment authorized by this paragraph.  The commissioner shall 
        specifically report on the adjustments received by public 
        hospitals and public hospital corporations located in cities of 
        the first class. 
           (b) For admissions occurring on or after July 1, 1993, the 
        medical assistance disproportionate population adjustment shall 
        comply with federal law and shall be paid to a hospital, 
        excluding regional treatment centers and facilities of the 
        federal Indian Health Service, with a medical assistance 
        inpatient utilization rate in excess of the arithmetic mean.  
        The adjustment must be determined as follows: 
           (1) for a hospital with a medical assistance inpatient 
        utilization rate above the arithmetic mean for all hospitals 
        excluding regional treatment centers and facilities of the 
        federal Indian Health Service but less than or equal to one 
        standard deviation above the mean, the adjustment must be 
        determined by multiplying the total of the operating and 
        property payment rates by the difference between the hospital's 
        actual medical assistance inpatient utilization rate and the 
        arithmetic mean for all hospitals excluding regional treatment 
        centers and facilities of the federal Indian Health Service; 
           (2) for a hospital with a medical assistance inpatient 
        utilization rate above one standard deviation above the mean, 
        the adjustment must be determined by multiplying the adjustment 
        that would be determined under clause (1) for that hospital by 
        1.1.  The commissioner may establish a separate disproportionate 
        population operating payment rate adjustment under the general 
        assistance medical care program.  For purposes of this 
        subdivision, medical assistance does not include general 
        assistance medical care.  The commissioner shall report annually 
        on the number of hospitals likely to receive the adjustment 
        authorized by this paragraph.  The commissioner shall 
        specifically report on the adjustments received by public 
        hospitals and public hospital corporations located in cities of 
        the first class; and 
           (3) for a hospital that had medical assistance 
        fee-for-service payment volume during calendar year 1991 in 
        excess of 13 percent of total medical assistance fee-for-service 
        payment volume, a medical assistance disproportionate population 
        adjustment shall be paid in addition to any other 
        disproportionate payment due under this subdivision as follows:  
        $1,515,000 due on the 15th of each month after noon, beginning 
        July 15, 1995.  For a hospital that had medical assistance 
        fee-for-service payment volume during calendar year 1991 in 
        excess of eight percent of total medical assistance 
        fee-for-service payment volume and was the primary hospital 
        affiliated with the University of Minnesota, a medical 
        assistance disproportionate population adjustment shall be paid 
        in addition to any other disproportionate payment due under this 
        subdivision as follows:  $505,000 due on the 15th of each month 
        after noon, beginning July 15, 1995; and 
           (4) effective August 1, 2005, the payments in paragraph 
        (b), clause (3), shall be reduced to zero. 
           (c) The commissioner shall adjust rates paid to a health 
        maintenance organization under contract with the commissioner to 
        reflect rate increases provided in paragraph (b), clauses (1) 
        and (2), on a nondiscounted hospital-specific basis but shall 
        not adjust those rates to reflect payments provided in clause 
        (3). 
           (d) If federal matching funds are not available for all 
        adjustments under paragraph (b), the commissioner shall reduce 
        payments under paragraph (b), clauses (1) and (2), on a pro rata 
        basis so that all adjustments under paragraph (b) qualify for 
        federal match. 
           (e) For purposes of this subdivision, medical assistance 
        does not include general assistance medical care. 
           (f) For hospital services occurring on or after July 1, 
        2005, to June 30, 2007, general assistance medical care 
        expenditures made by the department and by prepaid health plans 
        participating in general assistance medical care shall be 
        considered Medicaid disproportionate share hospital payments, 
        except as limited below: 
           (1) only the portion of Minnesota's disproportionate share 
        hospital allotment under section 1923(f) of the Social Security 
        Act that is not spent on the disproportionate population 
        adjustments in paragraph (b), clauses (1) and (2), may be used 
        for general assistance medical care expenditures; 
           (2) only those general assistance medical care expenditures 
        made to hospitals that qualify for disproportionate share 
        payments under section 1923 of the Social Security Act and the 
        Medicaid state plan may be considered disproportionate share 
        hospital payments; 
           (3) only those general assistance medical care expenditures 
        made to an individual hospital that would not cause the hospital 
        to exceed its individual hospital limits under section 1923 of 
        the Social Security Act may be considered; and 
           (4) general assistance medical care expenditures may be 
        considered only to the extent of Minnesota's aggregate allotment 
        under section 1923 of the Social Security Act. 
        All hospitals and prepaid health plans participating in general 
        assistance medical care must provide any necessary expenditure, 
        cost, and revenue information required by the commissioner as 
        necessary for purposes of obtaining federal Medicaid matching 
        funds for general assistance medical care expenditures. 
           [EFFECTIVE DATE.] Upon federal approval of the related 
        state plan amendment, paragraph (f) is effective retroactively 
        from July 1, 2005, or the earliest effective date approved by 
        the Centers for Medicare and Medicaid Services. 
           Sec. 14.  Minnesota Statutes 2004, section 256.969, 
        subdivision 26, is amended to read: 
           Subd. 26.  [GREATER MINNESOTA PAYMENT ADJUSTMENT AFTER JUNE 
        30, 2001.] (a) For admissions occurring after June 30, 2001, the 
        commissioner shall pay fee-for-service inpatient admissions for 
        the diagnosis-related groups specified in paragraph (b) at 
        hospitals located outside of the seven-county metropolitan area 
        at the higher of: 
           (1) the hospital's current payment rate for the diagnostic 
        category to which the diagnosis-related group belongs, exclusive 
        of disproportionate population adjustments received under 
        subdivision 9 and hospital payment adjustments received under 
        subdivision 23; or 
           (2) 90 percent of the average payment rate for that 
        diagnostic category for hospitals located within the 
        seven-county metropolitan area, exclusive of disproportionate 
        population adjustments received under subdivision 9 and hospital 
        payment adjustments received under subdivisions 20 and 23.  The 
        commissioner may adjust this percentage each year so that the 
        estimated payment increases under this paragraph are equal to 
        the funding provided under section 256B.195 for this purpose. 
           (b) The payment increases provided in paragraph (a) apply 
        to the following diagnosis-related groups, as they fall within 
        the diagnostic categories: 
           (1) 370 cesarean section with complicating diagnosis; 
           (2) 371 cesarean section without complicating diagnosis; 
           (3) 372 vaginal delivery with complicating diagnosis; 
           (4) 373 vaginal delivery without complicating diagnosis; 
           (5) 386 extreme immaturity and respiratory distress 
        syndrome, neonate; 
           (6) 388 full-term neonates with other problems; 
           (7) 390 prematurity without major problems; 
           (8) 391 normal newborn; 
           (9) 385 neonate, died or transferred to another acute care 
        facility; 
           (10) 425 acute adjustment reaction and psychosocial 
        dysfunction; 
           (11) 430 psychoses; 
           (12) 431 childhood mental disorders; and 
           (13) 164-167 appendectomy. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 15.  Minnesota Statutes 2004, section 256.969, is 
        amended by adding a subdivision to read: 
           Subd. 27.  [QUARTERLY PAYMENT ADJUSTMENT.] (a) In addition 
        to any other payment under this section, the commissioner shall 
        make the following payments effective July 1, 2007: 
           (1) for a hospital located in Minnesota and not eligible 
        for payments under subdivision 20, with a medical assistance 
        inpatient utilization rate greater than 17.8 percent of total 
        patient days as of the base year in effect on July 1, 2005, a 
        payment equal to 13 percent of the total of the operating and 
        property payment rates; 
           (2) for a hospital located in Minnesota in a specified 
        urban area outside of the seven-county metropolitan area and not 
        eligible for payments under subdivision 20, with a medical 
        assistance inpatient utilization rate less than or equal to 17.8 
        percent of total patient days as of the base year in effect on 
        July 1, 2005, a payment equal to ten percent of the total of the 
        operating and property payment rates.  For purposes of this 
        clause, the following cities are specified urban areas:  Detroit 
        Lakes, Rochester, Willmar, Alexandria, Austin, Cambridge, 
        Brainerd, Hibbing, Mankato, Duluth, St. Cloud, Grand Rapids, 
        Wyoming, Fergus Falls, Albert Lea, Winona, Virginia, Thief River 
        Falls, and Wadena; and 
           (3) for a hospital located in Minnesota but not located in 
        a specified urban area under clause (2), with a medical 
        assistance inpatient utilization rate less than or equal to 17.8 
        percent of total patient days as of the base year in effect on 
        July 1, 2005, a payment equal to four percent of the total of 
        the operating and property payment rates.  A hospital located in 
        Woodbury and not in existence during the base year shall be 
        reimbursed under this clause. 
           (b) The state share of payments under paragraph (a) shall 
        be equal to federal reimbursements to the commissioner to 
        reimburse nonstate expenditures reported under section 
        256B.199.  The commissioner shall ratably reduce or increase 
        payments under this subdivision in order to ensure that these 
        payments equal the amount of reimbursement received by the 
        commissioner under section 256B.199, except that payments shall 
        be ratably reduced by an amount equivalent to the state share of 
        a four percent reduction in MinnesotaCare and medical assistance 
        payments for inpatient hospital services. 
           (c) The payments under paragraph (a) shall be paid 
        quarterly beginning on July 15, 2007, or upon federal approval 
        of federal reimbursements under section 256B.199, whichever 
        occurs later. 
           (d) The commissioner shall not adjust rates paid to a 
        prepaid health plan under contract with the commissioner to 
        reflect payments provided in paragraph (a).  
           (e) The commissioner shall maximize the use of available 
        federal money for disproportionate share hospital payments and 
        shall maximize payments to qualifying hospitals.  In order to 
        accomplish these purposes, the commissioner may, in consultation 
        with the nonstate entities identified in section 256B.199, 
        adjust, on a pro rata basis if feasible, the amounts reported by 
        nonstate entities under section 256B.199 when application for 
        reimbursement is made to the federal government, and otherwise 
        adjust the provisions of this subdivision. 
           (f) By January 15 of each year, beginning January 15, 2006, 
        the commissioner shall report to the chairs of the house and 
        senate finance committees and divisions with jurisdiction over 
        funding for the Department of Human Services the following 
        estimates for the current and upcoming federal and state fiscal 
        years: 
           (1) the difference between the Medicare upper payment limit 
        and actual or anticipated medical assistance payments for 
        hospital services; 
           (2) the amount of federal disproportionate share hospital 
        funding available to Minnesota and the amount expected to be 
        claimed by the state; and 
           (3) the methodology used to calculate the results reported 
        for clauses (1) and (2). 
           (g) For purposes of this subdivision, medical assistance 
        does not include general assistance medical care. 
           (h) This section sunsets on June 30, 2009.  The 
        commissioner shall report to the legislature by December 15, 
        2008, with recommendations for maximizing federal 
        disproportionate share hospital payments after June 30, 2009. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 16.  Minnesota Statutes 2004, section 256.975, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PRESCRIPTION DRUG ASSISTANCE.] (a) The Minnesota 
        Board on Aging shall establish and administer a prescription 
        drug assistance program to assist individuals in accessing 
        programs offered by pharmaceutical manufacturers that provide 
        free or discounted prescription drugs or provide coverage for 
        prescription drugs.  The board shall use computer software 
        programs to: 
           (1) list eligibility requirements for pharmaceutical 
        assistance programs offered by manufacturers; 
           (2) list drugs that are included in a supplemental rebate 
        contract between the commissioner and a pharmaceutical 
        manufacturer under section 256.01, subdivision 2, clause (23); 
        and 
           (3) link individuals with the pharmaceutical assistance 
        programs most appropriate for the individual.  The board shall 
        make information on the prescription drug assistance program 
        available to interested individuals and health care providers 
        and shall coordinate the program with the statewide information 
        and assistance service provided through the Senior LinkAge Line 
        under subdivision 7. 
           (b) The board shall work with the commissioner and county 
        social service agencies to coordinate the enrollment of 
        individuals who are referred to the prescription drug assistance 
        program from the prescription drug program, as required under 
        section 256.955, subdivision 4a. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 17.  Minnesota Statutes 2004, section 256B.02, 
        subdivision 12, is amended to read: 
           Subd. 12.  [THIRD-PARTY PAYER.] "Third-party payer" means a 
        person, entity, or agency or government program that has a 
        probable obligation to pay all or part of the costs of a medical 
        assistance recipient's health services.  Third-party payer 
        includes an entity under contract with the recipient to cover 
        all or part of the recipient's medical costs. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 18.  Minnesota Statutes 2004, section 256B.04, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [MEDICARE PRESCRIPTION DRUG SUBSIDY.] The 
        commissioner shall perform all duties necessary to administer 
        eligibility determinations for the Medicare Part D prescription 
        drug subsidy and facilitate the enrollment of eligible medical 
        assistance recipients into Medicare prescription drug plans as 
        required by the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003 (MMA), Public Law 108-173, and Code of 
        Federal Regulations, title 42, sections 423.30 to 423.56 and 
        423.771 to 423.800. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 19.  Minnesota Statutes 2004, section 256B.055, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [PERSONS DETAINED BY LAW.] (a) Medical 
        assistance may be paid for an inmate of a correctional facility 
        who is conditionally released as authorized under section 
        241.26, 244.065, or 631.425, if the individual does not require 
        the security of a public detention facility and is housed in a 
        halfway house or community correction center, or under house 
        arrest and monitored by electronic surveillance in a residence 
        approved by the commissioner of corrections, and if the 
        individual meets the other eligibility requirements of this 
        chapter.  
           (b) An individual, regardless of age, who is considered an 
        inmate of a public institution as defined in Code of Federal 
        Regulations, title 42, section 435.1009, is not eligible for 
        medical assistance. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 20.  Minnesota Statutes 2004, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 3d.  [REDUCTION OF EXCESS ASSETS.] Assets in excess 
        of the limits in subdivisions 3 to 3c may be reduced to 
        allowable limits as follows: 
           (a) Assets may be reduced in any of the three calendar 
        months before the month of application in which the applicant 
        seeks coverage by: 
           (1) designating burial funds up to $1,500 for each 
        applicant, spouse, and MA-eligible dependent child; and 
           (2) paying health service bills incurred in the retroactive 
        period for which the applicant seeks eligibility, starting with 
        the oldest bill.  After assets are reduced to allowable limits, 
        eligibility begins with the next dollar of MA-covered health 
        services incurred in the retroactive period.  Applicants 
        reducing assets under this subdivision who also have excess 
        income shall first spend excess assets to pay health service 
        bills and may meet the income spenddown on remaining bills. 
           (b) Assets may be reduced beginning the month of 
        application by: 
           (1) paying bills for health services that would otherwise 
        be paid by medical assistance; and 
           (2) using any means other than a transfer of assets for 
        less than fair market value as defined in section 256B.0595, 
        subdivision 1, paragraph (b). 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 21.  Minnesota Statutes 2004, section 256B.056, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXCESS INCOME.] A person who has excess income 
        is eligible for medical assistance if the person has expenses 
        for medical care that are more than the amount of the person's 
        excess income, computed by deducting incurred medical expenses 
        from the excess income to reduce the excess to the income 
        standard specified in subdivision 5c.  The person shall elect to 
        have the medical expenses deducted at the beginning of a 
        one-month budget period or at the beginning of a six-month 
        budget period.  The commissioner shall allow persons eligible 
        for assistance on a one-month spenddown basis under this 
        subdivision to elect to pay the monthly spenddown amount in 
        advance of the month of eligibility to the state agency in order 
        to maintain eligibility on a continuous basis.  If the recipient 
        does not pay the spenddown amount on or before the 20th last 
        business day of the month, the recipient is ineligible for this 
        option for the following month.  The local agency shall code the 
        Medicaid Management Information System (MMIS) to indicate that 
        the recipient has elected this option.  The state agency shall 
        convey recipient eligibility information relative to the 
        collection of the spenddown to providers through the Electronic 
        Verification System (EVS).  A recipient electing advance payment 
        must pay the state agency the monthly spenddown amount on or 
        before noon on the 20th last business day of the month in order 
        to be eligible for this option in the following month.  
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 22.  Minnesota Statutes 2004, section 256B.056, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [INDIVIDUALS ON FIXED OR EXCLUDED INCOME.] 
        Recipients of medical assistance who receive only fixed unearned 
        or excluded income, when that income is excluded from 
        consideration as income or unvarying in amount and timing of 
        receipt throughout the year, shall report and verify their 
        income annually every 12 months.  The 12-month period begins 
        with the month of application. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 23.  Minnesota Statutes 2004, section 256B.056, 
        subdivision 5b, is amended to read: 
           Subd. 5b.  [INDIVIDUALS WITH LOW INCOME.] Recipients of 
        medical assistance not residing in a long-term care facility who 
        have slightly fluctuating income which is below the medical 
        assistance income limit shall report and verify their income on 
        a semiannual basis every six months.  The six-month period 
        begins the month of application. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 24.  Minnesota Statutes 2004, section 256B.056, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PERIOD OF ELIGIBILITY.] Eligibility is available 
        for the month of application and for three months prior to 
        application if the person was eligible in those prior 
        months.  Eligibility for months prior to application is 
        determined independently from eligibility for the month of 
        application and future months.  A redetermination of eligibility 
        must occur every 12 months.  The 12-month period begins with the 
        month of application. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 25.  Minnesota Statutes 2004, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [NOTICE.] The state agency must be given notice 
        of monetary claims against a person, entity, or corporation that 
        may be liable to pay all or part of the cost of medical care 
        when the state agency has paid or becomes liable for the cost of 
        that care.  Notice must be given according to paragraphs (a) to 
        (d). 
           (a) An applicant for medical assistance shall notify the 
        state or local agency of any possible claims when the applicant 
        submits the application.  A recipient of medical assistance 
        shall notify the state or local agency of any possible claims 
        when those claims arise. 
           (b) A person providing medical care services to a recipient 
        of medical assistance shall notify the state agency when the 
        person has reason to believe that a third party may be liable 
        for payment of the cost of medical care. 
           (c) A party to a claim that may be assigned to the state 
        agency under this section shall notify the state agency of its 
        potential assignment claim in writing at each of the following 
        stages of a claim: 
           (1) when a claim is filed; 
           (2) when an action is commenced; and 
           (3) when a claim is concluded by payment, award, judgment, 
        settlement, or otherwise.  
           (d) Every party involved in any stage of a claim under this 
        subdivision is required to provide notice to the state agency at 
        that stage of the claim.  However, when one of the parties to 
        the claim provides notice at that stage, every other party to 
        the claim is deemed to have provided the required notice for 
        that stage of the claim.  If the required notice under this 
        paragraph is not provided to the state agency, all parties to 
        the claim are deemed to have failed to provide the required 
        notice.  A party to the claim includes the injured person or the 
        person's legal representative, the plaintiff, the defendants, or 
        persons alleged to be responsible for compensating the injured 
        person or plaintiff, and any other party to the cause of action 
        or claim, regardless of whether the party knows the state agency 
        has a potential or actual assignment claim. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 26.  Minnesota Statutes 2004, section 256B.056, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [ELIGIBILITY VERIFICATION.] (a) The commissioner 
        shall require women who are applying for the continuation of 
        medical assistance coverage following the end of the 60-day 
        postpartum period to update their income and asset information 
        and to submit any required income or asset verification. 
           (b) The commissioner shall determine the eligibility of 
        private-sector health care coverage for infants less than one 
        year of age eligible under section 256B.055, subdivision 10, or 
        256B.057, subdivision 1, paragraph (d), and shall pay for 
        private-sector coverage if this is determined to be 
        cost-effective. 
           (c) The commissioner shall modify the application for 
        Minnesota health care programs to require more detailed 
        information related to verification of assets and income, and 
        shall verify assets and income for all applicants, and for all 
        recipients upon renewal. 
           (d) The commissioner shall require Minnesota health care 
        program recipients to report new or an increase in earned income 
        within ten days of the change, and to verify new or an increase 
        in earned income that affects eligibility within ten days of 
        notification by the agency that the new or increased earned 
        income affects eligibility.  Recipients who fail to verify new 
        or an increase in earned income that affects eligibility shall 
        be disenrolled. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005, except that paragraph (a) is effective September 1, 2005, 
        or upon federal approval, whichever is later.  Prior to the 
        implementation of HealthMatch, the commissioner shall implement 
        this section to the fullest extent possible, including the use 
        of manual processing.  Upon implementation of HealthMatch, the 
        commissioner shall implement this section in a manner consistent 
        with the procedures and requirements of HealthMatch. 
           Sec. 27.  Minnesota Statutes 2004, section 256B.0575, is 
        amended to read: 
           256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
        PERSONS.] 
           When an institutionalized person is determined eligible for 
        medical assistance, the income that exceeds the deductions in 
        paragraphs (a) and (b) must be applied to the cost of 
        institutional care.  
           (a) The following amounts must be deducted from the 
        institutionalized person's income in the following order: 
           (1) the personal needs allowance under section 256B.35 or, 
        for a veteran who does not have a spouse or child, or a 
        surviving spouse of a veteran having no child, the amount of an 
        improved pension received from the veteran's administration not 
        exceeding $90 per month; 
           (2) the personal allowance for disabled individuals under 
        section 256B.36; 
           (3) if the institutionalized person has a legally appointed 
        guardian or conservator, five percent of the recipient's gross 
        monthly income up to $100 as reimbursement for guardianship or 
        conservatorship services; 
           (4) a monthly income allowance determined under section 
        256B.058, subdivision 2, but only to the extent income of the 
        institutionalized spouse is made available to the community 
        spouse; 
           (5) a monthly allowance for children under age 18 which, 
        together with the net income of the children, would provide 
        income equal to the medical assistance standard for families and 
        children according to section 256B.056, subdivision 4, for a 
        family size that includes only the minor children.  This 
        deduction applies only if the children do not live with the 
        community spouse and only to the extent that the deduction is 
        not included in the personal needs allowance under section 
        256B.35, subdivision 1, as child support garnished under a court 
        order; 
           (6) a monthly family allowance for other family members, 
        equal to one-third of the difference between 122 percent of the 
        federal poverty guidelines and the monthly income for that 
        family member; 
           (7) reparations payments made by the Federal Republic of 
        Germany and reparations payments made by the Netherlands for 
        victims of Nazi persecution between 1940 and 1945; 
           (8) all other exclusions from income for institutionalized 
        persons as mandated by federal law; and 
           (9) amounts for reasonable expenses incurred for necessary 
        medical or remedial care for the institutionalized person that 
        are not medical assistance covered expenses and that are not 
        subject to payment by a third party.  
           Reasonable expenses are limited to expenses that have not 
        been previously used as a deduction from income and are incurred 
        during the enrollee's current period of eligibility, including 
        retroactive months associated with the current period of 
        eligibility, for medical assistance payment of long-term care 
        services. 
           For purposes of clause (6), "other family member" means a 
        person who resides with the community spouse and who is a minor 
        or dependent child, dependent parent, or dependent sibling of 
        either spouse.  "Dependent" means a person who could be claimed 
        as a dependent for federal income tax purposes under the 
        Internal Revenue Code. 
           (b) Income shall be allocated to an institutionalized 
        person for a period of up to three calendar months, in an amount 
        equal to the medical assistance standard for a family size of 
        one if:  
           (1) a physician certifies that the person is expected to 
        reside in the long-term care facility for three calendar months 
        or less; 
           (2) if the person has expenses of maintaining a residence 
        in the community; and 
           (3) if one of the following circumstances apply:  
           (i) the person was not living together with a spouse or a 
        family member as defined in paragraph (a) when the person 
        entered a long-term care facility; or 
           (ii) the person and the person's spouse become 
        institutionalized on the same date, in which case the allocation 
        shall be applied to the income of one of the spouses.  
        For purposes of this paragraph, a person is determined to be 
        residing in a licensed nursing home, regional treatment center, 
        or medical institution if the person is expected to remain for a 
        period of one full calendar month or more. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 28.  Minnesota Statutes 2004, 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, or eligible for medical assistance as described 
        in paragraph (j), and who are not covered by a group health plan 
        or health insurance coverage according to Code of Federal 
        Regulations, title 42, section 457.310, and 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 including labor and delivery, to the extent 
        federal funds are available under Title XXI of the Social 
        Security Act, and the state children's health insurance program, 
        followed by 60 days postpartum, except for labor and 
        delivery without federal financial participation.  
           (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 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. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005. 
           Sec. 29.  Minnesota Statutes 2004, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [SERVICES PROVIDED IN A HOSPITAL EMERGENCY 
        ROOM.] Medical assistance does not cover visits to a hospital 
        emergency room that are not for emergency and emergency 
        poststabilization care or urgent care, and does not pay for any 
        services provided in a hospital emergency room that are not for 
        emergency and emergency poststabilization care or urgent care. 
           [EFFECTIVE DATE.] This section is effective October 1, 2005.
           Sec. 30.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [GENDER SEX REASSIGNMENT SURGERY.] Gender Sex 
        reassignment surgery and other gender reassignment medical 
        procedures including drug therapy for gender reassignment are is 
        not covered unless the individual began receiving gender 
        reassignment services prior to July 1, 1998. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 31.  Minnesota Statutes 2004, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 3f.  [CIRCUMCISION FOR NEWBORNS.] Newborn 
        circumcision is not covered, unless the procedure is medically 
        necessary or required because of a well-established religious 
        practice. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005, and applies to services provided on or after that date. 
           Sec. 32.  Minnesota Statutes 2004, 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) restorative services; and 
           (3) emergency services. 
           Emergency services, dentures, and extractions related to 
        dentures are not included in the $500 annual benefit limit. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 33.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
        except for fertility drugs when specifically used to enhance 
        fertility, if prescribed by a licensed practitioner and 
        dispensed by a licensed pharmacist, by a physician enrolled in 
        the medical assistance program as a dispensing physician, or by 
        a physician or a nurse practitioner employed by or under 
        contract with a community health board as defined in section 
        145A.02, subdivision 5, for the purposes of communicable disease 
        control.  
           (b) The dispensed quantity of a prescription drug must not 
        exceed a 34-day supply, unless authorized by the commissioner.  
           (c) Medical assistance covers the following 
        over-the-counter drugs when prescribed by a licensed 
        practitioner or by a licensed pharmacist who meets standards 
        established by the commissioner, in consultation with the board 
        of pharmacy:  antacids, acetaminophen, family planning products, 
        aspirin, insulin, products for the treatment of lice, vitamins 
        for adults with documented vitamin deficiencies, vitamins for 
        children under the age of seven and pregnant or nursing women, 
        and any other over-the-counter drug identified by the 
        commissioner, in consultation with the formulary committee, as 
        necessary, appropriate, and cost-effective for the treatment of 
        certain specified chronic diseases, conditions, or disorders, 
        and this determination shall not be subject to the requirements 
        of chapter 14.  A pharmacist may prescribe over-the-counter 
        medications as provided under this paragraph for purposes of 
        receiving reimbursement under Medicaid.  When prescribing 
        over-the-counter drugs under this paragraph, licensed 
        pharmacists must consult with the recipient to determine 
        necessity, provide drug counseling, review drug therapy for 
        potential adverse interactions, and make referrals as needed to 
        other health care professionals. 
           (d) Effective January 1, 2006, medical assistance shall not 
        cover drugs that are coverable under Medicare Part D as defined 
        in the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003, Public Law 108-173, section 
        1860D-2(e), for individuals eligible for drug coverage as 
        defined in the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003, Public Law 108-173, section 
        1860D-1(a)(3)(A).  For these individuals, medical assistance may 
        cover drugs from the drug classes listed in United States Code, 
        title 42, section 1396r-8(d)(2), subject to this subdivision and 
        subdivisions 13a to 13g, except that drugs listed in United 
        States Code, title 42, section 1396r-8(d)(2)(E), shall not be 
        covered. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 34.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 13a, is amended to read: 
           Subd. 13a.  [DRUG UTILIZATION REVIEW BOARD.] The 
        commissioner, after receiving recommendations from professional 
        medical associations, professional pharmacy associations, and 
        consumer groups shall designate a nine-member Drug Utilization 
        Review Board is established.  The board is shall be comprised of 
        at least three but no more than four licensed physicians 
        actively engaged in the practice of medicine in Minnesota; at 
        least three licensed pharmacists actively engaged in the 
        practice of pharmacy in Minnesota; and one consumer 
        representative; the remainder to be made up of health care 
        professionals who are licensed in their field and have 
        recognized knowledge in the clinically appropriate prescribing, 
        dispensing, and monitoring of covered outpatient drugs.  The 
        board shall be staffed by an employee of the department who 
        shall serve as an ex officio nonvoting member of the board.  The 
        department's medical director shall also serve as an ex officio, 
        nonvoting member of the board.  The members of the board shall 
        be appointed by the commissioner and shall serve three-year 
        terms.  The members shall be selected from lists submitted by 
        professional associations.  The commissioner shall appoint the 
        initial members of the board for terms expiring as follows:  
        three members for terms expiring June 30, 1996; three members 
        for terms expiring June 30, 1997; and three members for terms 
        expiring June 30, 1998.  Members may be reappointed once by the 
        commissioner.  The board shall annually elect a chair from among 
        the members. 
           The commissioner shall, with the advice of the board: 
           (1) implement a medical assistance retrospective and 
        prospective drug utilization review program as required by 
        United States Code, title 42, section 1396r-8(g)(3); 
           (2) develop and implement the predetermined criteria and 
        practice parameters for appropriate prescribing to be used in 
        retrospective and prospective drug utilization review; 
           (3) develop, select, implement, and assess interventions 
        for physicians, pharmacists, and patients that are educational 
        and not punitive in nature; 
           (4) establish a grievance and appeals process for 
        physicians and pharmacists under this section; 
           (5) publish and disseminate educational information to 
        physicians and pharmacists regarding the board and the review 
        program; 
           (6) adopt and implement procedures designed to ensure the 
        confidentiality of any information collected, stored, retrieved, 
        assessed, or analyzed by the board, staff to the board, or 
        contractors to the review program that identifies individual 
        physicians, pharmacists, or recipients; 
           (7) establish and implement an ongoing process to (i) 
        receive public comment regarding drug utilization review 
        criteria and standards, and (ii) consider the comments along 
        with other scientific and clinical information in order to 
        revise criteria and standards on a timely basis; and 
           (8) adopt any rules necessary to carry out this section. 
           The board may establish advisory committees.  The 
        commissioner may contract with appropriate organizations to 
        assist the board in carrying out the board's duties.  The 
        commissioner may enter into contracts for services to develop 
        and implement a retrospective and prospective review program. 
           The board shall report to the commissioner annually on the 
        date the Drug Utilization Review Annual Report is due to the 
        Centers for Medicare and Medicaid Services.  This report is to 
        cover the preceding federal fiscal year.  The commissioner shall 
        make the report available to the public upon request.  The 
        report must include information on the activities of the board 
        and the program; the effectiveness of implemented interventions; 
        administrative costs; and any fiscal impact resulting from the 
        program.  An honorarium of $100 per meeting and reimbursement 
        for mileage shall be paid to each board member in attendance. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 35.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 13c, is amended to read: 
           Subd. 13c.  [FORMULARY COMMITTEE.] The commissioner, after 
        receiving recommendations from professional medical associations 
        and professional pharmacy associations, and consumer groups 
        shall designate a Formulary Committee to carry out duties as 
        described in subdivisions 13 to 13g.  The Formulary Committee 
        shall be comprised of four licensed physicians actively engaged 
        in the practice of medicine in Minnesota one of whom must be 
        actively engaged in the treatment of persons with mental 
        illness; at least three licensed pharmacists actively engaged in 
        the practice of pharmacy in Minnesota; and one consumer 
        representative; the remainder to be made up of health care 
        professionals who are licensed in their field and have 
        recognized knowledge in the clinically appropriate prescribing, 
        dispensing, and monitoring of covered outpatient drugs.  Members 
        of the Formulary Committee shall not be employed by the 
        Department of Human Services, but the committee shall be staffed 
        by an employee of the department who shall serve as an ex 
        officio, nonvoting member of the board.  The department's 
        medical director shall also serve as an ex officio, nonvoting 
        member for the committee.  Committee members shall serve 
        three-year terms and may be reappointed by the commissioner.  
        The Formulary Committee shall meet at least quarterly.  The 
        commissioner may require more frequent Formulary Committee 
        meetings as needed.  An honorarium of $100 per meeting and 
        reimbursement for mileage shall be paid to each committee member 
        in attendance.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 36.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 13d, is amended to read: 
           Subd. 13d.  [DRUG FORMULARY.] The commissioner shall 
        establish a drug formulary.  Its establishment and publication 
        shall not be subject to the requirements of the Administrative 
        Procedure Act, but the Formulary Committee shall review and 
        comment on the formulary contents.  
           The formulary shall not include:  
           (1) drugs or products for which there is no federal 
        funding; 
           (2) over-the-counter drugs, except as provided in 
        subdivision 13; 
           (3) drugs used for weight loss, except that medically 
        necessary lipase inhibitors may be covered for a recipient with 
        type II diabetes; 
           (4) drugs when used for the treatment of impotence or 
        erectile dysfunction; 
           (5) drugs for which medical value has not been established; 
        and 
           (5) (6) drugs from manufacturers who have not signed a 
        rebate agreement with the Department of Health and Human 
        Services pursuant to section 1927 of title XIX of the Social 
        Security Act. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005. 
           Sec. 37.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 13e, as amended by Laws 2005, chapter 155, article 
        3, section 5, is amended to read: 
           Subd. 13e.  [PAYMENT RATES.] (a) The basis for determining 
        the amount of payment shall be the lower of the actual 
        acquisition costs of the drugs plus a fixed dispensing fee; the 
        maximum allowable cost set by the federal government or by the 
        commissioner plus the fixed dispensing fee; or the usual and 
        customary price charged to the public.  The amount of payment 
        basis must be reduced to reflect all discount amounts applied to 
        the charge by any provider/insurer agreement or contract for 
        submitted charges to medical assistance programs.  The net 
        submitted charge may not be greater than the patient liability 
        for the service.  The pharmacy dispensing fee shall be $3.65, 
        except that the dispensing fee for intravenous solutions which 
        must be compounded by the pharmacist shall be $8 per bag, $14 
        per bag for cancer chemotherapy products, and $30 per bag for 
        total parenteral nutritional products dispensed in one liter 
        quantities, or $44 per bag for total parenteral nutritional 
        products dispensed in quantities greater than one liter.  Actual 
        acquisition cost includes quantity and other special discounts 
        except time and cash discounts.  The actual acquisition cost of 
        a drug shall be estimated by the commissioner, at average 
        wholesale price minus 11.5 12 percent, except that where a drug 
        has had its wholesale price reduced as a result of the actions 
        of the National Association of Medicaid Fraud Control Units, the 
        estimated actual acquisition cost shall be the reduced average 
        wholesale price, without the 11.5 percent deduction.  The actual 
        acquisition cost of antihemophilic factor drugs shall be 
        estimated at the average wholesale price minus 30 percent.  The 
        maximum allowable cost of a multisource drug may be set by the 
        commissioner and it shall be comparable to, but no higher than, 
        the maximum amount paid by other third-party payors in this 
        state who have maximum allowable cost programs.  Establishment 
        of the amount of payment for drugs shall not be subject to the 
        requirements of the Administrative Procedure Act.  
           (b) An additional dispensing fee of $.30 may be added to 
        the dispensing fee paid to pharmacists for legend drug 
        prescriptions dispensed to residents of long-term care 
        facilities when a unit dose blister card system, approved by the 
        department, is used.  Under this type of dispensing system, the 
        pharmacist must dispense a 30-day supply of drug.  The National 
        Drug Code (NDC) from the drug container used to fill the blister 
        card must be identified on the claim to the department.  The 
        unit dose blister card containing the drug must meet the 
        packaging standards set forth in Minnesota Rules, part 
        6800.2700, that govern the return of unused drugs to the 
        pharmacy for reuse.  The pharmacy provider will be required to 
        credit the department for the actual acquisition cost of all 
        unused drugs that are eligible for reuse.  Over-the-counter 
        medications must be dispensed in the manufacturer's unopened 
        package.  The commissioner may permit the drug clozapine to be 
        dispensed in a quantity that is less than a 30-day supply.  
           (c) Whenever a generically equivalent product is available, 
        payment shall be on the basis of the actual acquisition cost of 
        the generic drug, or on the maximum allowable cost established 
        by the commissioner. 
           (d) The basis for determining the amount of payment for 
        drugs administered in an outpatient setting shall be the lower 
        of the usual and customary cost submitted by the provider or the 
        amount established for Medicare by the United States Department 
        of Health and Human Services pursuant to title XVIII, section 
        1847a of the federal Social Security Act. 
           (e) The commissioner may negotiate lower reimbursement 
        rates for specialty pharmacy products than the rates specified 
        in paragraph (a).  The commissioner may require individuals 
        enrolled in the health care programs administered by the 
        department to obtain specialty pharmacy products from providers 
        with whom the commissioner has negotiated lower reimbursement 
        rates.  Specialty pharmacy products are defined as those used by 
        a small number of recipients or recipients with complex and 
        chronic diseases that require expensive and challenging drug 
        regimens.  Examples of these conditions include, but are not 
        limited to:  multiple sclerosis, HIV/AIDS, transplantation, 
        hepatitis C, growth hormone deficiency, Crohn's Disease, 
        rheumatoid arthritis, and certain forms of cancer.  Specialty 
        pharmaceutical products include injectable and infusion 
        therapies, biotechnology drugs, high-cost therapies, and 
        therapies that require complex care.  The commissioner shall 
        consult with the formulary committee to develop a list of 
        specialty pharmacy products subject to this paragraph.  In 
        consulting with the formulary committee in developing this list, 
        the commissioner shall take into consideration the population 
        served by specialty pharmacy products, the current delivery 
        system and standard of care in the state, and access to care 
        issues.  The commissioner shall have the discretion to adjust 
        the reimbursement rate to prevent access to care issues. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 38.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 13f, as amended by Laws 2005, chapter 155, article 
        3, section 6, is amended to read: 
           Subd. 13f.  [PRIOR AUTHORIZATION.] (a) The Formulary 
        Committee shall review and recommend drugs which require prior 
        authorization.  The Formulary Committee shall establish general 
        criteria to be used for the prior authorization of brand-name 
        drugs for which generically equivalent drugs are available, but 
        the committee is not required to review each brand-name drug for 
        which a generically equivalent drug is available.  
           (b) Prior authorization may be required by the commissioner 
        before certain formulary drugs are eligible for payment.  The 
        Formulary Committee may recommend drugs for prior authorization 
        directly to the commissioner.  The commissioner may also request 
        that the Formulary Committee review a drug for prior 
        authorization.  Before the commissioner may require prior 
        authorization for a drug: 
           (1) the commissioner must provide information to the 
        Formulary Committee on the impact that placing the drug on prior 
        authorization may have on the quality of patient care and on 
        program costs, information regarding whether the drug is subject 
        to clinical abuse or misuse, and relevant data from the state 
        Medicaid program if such data is available; 
           (2) the Formulary Committee must review the drug, taking 
        into account medical and clinical data and the information 
        provided by the commissioner; and 
           (3) the Formulary Committee must hold a public forum and 
        receive public comment for an additional 15 days. 
        The commissioner must provide a 15-day notice period before 
        implementing the prior authorization.  
           (c) Prior authorization shall not be required or utilized 
        for any atypical antipsychotic drug prescribed for the treatment 
        of mental illness if: 
           (1) there is no generically equivalent drug available; and 
           (2) the drug was initially prescribed for the recipient 
        prior to July 1, 2003; or 
           (3) the drug is part of the recipient's current course of 
        treatment. 
        This paragraph applies to any multistate preferred drug list or 
        supplemental drug rebate program established or administered by 
        the commissioner.  Prior authorization shall automatically be 
        granted for 60 days for brand name drugs prescribed for 
        treatment of mental illness within 60 days of when a generically 
        equivalent drug becomes available, provided that the brand name 
        drug was part of the recipient's course of treatment at the time 
        the generically equivalent drug became available. 
           (d) Prior authorization shall not be required or utilized 
        for any antihemophilic factor drug prescribed for the treatment 
        of hemophilia and blood disorders where there is no generically 
        equivalent drug available if the prior authorization is used in 
        conjunction with any supplemental drug rebate program or 
        multistate preferred drug list established or administered by 
        the commissioner.  This paragraph expires July 1, 2005. 
           (e) The commissioner may require prior authorization for 
        brand name drugs whenever a generically equivalent product is 
        available, even if the prescriber specifically indicates 
        "dispense as written-brand necessary" on the prescription as 
        required by section 151.21, subdivision 2. 
           (f) Notwithstanding this subdivision, the commissioner may 
        automatically require prior authorization, for a period not to 
        exceed 180 days, for any drug that is approved by the United 
        States Food and Drug Administration on or after July 1, 2005.  
        The 180-day period begins no later than the first day that a 
        drug is available for shipment to pharmacies within the state.  
        The Formulary Committee shall recommend to the commissioner 
        general criteria to be used for the prior authorization of the 
        drugs, but the committee is not required to review each 
        individual drug.  In order to continue prior authorizations for 
        a drug after the 180-day period has expired, the commissioner 
        must follow the provisions of this subdivision. 
           [EFFECTIVE DATE.] Paragraph (c) is effective August 1, 
        2005, and paragraph (d) is effective retroactively from June 30, 
        2005. 
           Sec. 39.  Minnesota Statutes 2004, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 13h.  [MEDICATION THERAPY MANAGEMENT CARE.] (a) 
        Medical assistance and general assistance medical care cover 
        medication therapy management services for a recipient taking 
        four or more prescriptions to treat or prevent two or more 
        chronic medical conditions, or a recipient with a drug therapy 
        problem that is identified or prior authorized by the 
        commissioner that has resulted or is likely to result in 
        significant nondrug program costs.  The commissioner may cover 
        medical therapy management services under MinnesotaCare if the 
        commissioner determines this is cost-effective.  For purposes of 
        this subdivision, "medication therapy management" means the 
        provision of the following pharmaceutical care services by a 
        licensed pharmacist to optimize the therapeutic outcomes of the 
        patient's medications:  
           (1) performing or obtaining necessary assessments of the 
        patient's health status; 
           (2) formulating a medication treatment plan; 
           (3) monitoring and evaluating the patient's response to 
        therapy, including safety and effectiveness; 
           (4) performing a comprehensive medication review to 
        identify, resolve, and prevent medication-related problems, 
        including adverse drug events; 
           (5) documenting the care delivered and communicating 
        essential information to the patient's other primary care 
        providers; 
           (6) providing verbal education and training designed to 
        enhance patient understanding and appropriate use of the 
        patient's medications; 
           (7) providing information, support services, and resources 
        designed to enhance patient adherence with the patient's 
        therapeutic regimens; and 
           (8) coordinating and integrating medication therapy 
        management services within the broader health care management 
        services being provided to the patient.  
        Nothing in this subdivision shall be construed to expand or 
        modify the scope of practice of the pharmacist as defined in 
        section 151.01, subdivision 27. 
           (b) To be eligible for reimbursement for services under 
        this subdivision, a pharmacist must meet the following 
        requirements:  
           (1) have a valid license issued under chapter 151; 
           (2) have graduated from an accredited college of pharmacy 
        on or after May 1996, or completed a structured and 
        comprehensive education program approved by the Board of 
        Pharmacy and the American Council of Pharmaceutical Education 
        for the provision and documentation of pharmaceutical care 
        management services that has both clinical and didactic 
        elements; 
           (3) be practicing in an ambulatory care setting as part of 
        a multidisciplinary team or have developed a structured patient 
        care process that is offered in a private or semiprivate patient 
        care area that is separate from the commercial business that 
        also occurs in the setting; and 
           (4) make use of an electronic patient record system that 
        meets state standards.  
           (c) For purposes of reimbursement for medication therapy 
        management services, the commissioner may enroll individual 
        pharmacists as medical assistance and general assistance medical 
        care providers.  The commissioner may also establish contact 
        requirements between the pharmacist and recipient, including 
        limiting the number of reimbursable consultations per recipient. 
           (d) The commissioner, after receiving recommendations from 
        professional medical associations, professional pharmacy 
        associations, and consumer groups, shall convene an 11-member 
        Medication Therapy Management Advisory Committee to advise the 
        commissioner on the implementation and administration of 
        medication therapy management services.  The committee shall be 
        comprised of:  two licensed physicians; two licensed 
        pharmacists; two consumer representatives; two health plan 
        company representatives; and three members with expertise in the 
        area of medication therapy management, who may be licensed 
        physicians or licensed pharmacists.  The committee is governed 
        by section 15.059, except that committee members do not receive 
        compensation or reimbursement for expenses.  The advisory 
        committee expires on June 30, 2007. 
           (e) The commissioner shall evaluate the effect of 
        medication therapy management on quality of care, patient 
        outcomes, and program costs, and shall include a description of 
        any savings generated in the medical assistance and general 
        assistance medical care programs that can be attributable to 
        this coverage.  The evaluation shall be submitted to the 
        legislature by December 15, 2007.  The commissioner may contract 
        with a vendor or an academic institution that has expertise in 
        evaluating health care outcomes for the purpose of completing 
        the evaluation. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 40.  Minnesota Statutes 2004, section 256B.0625, 
        subdivision 17, is amended to read: 
           Subd. 17.  [TRANSPORTATION COSTS.] (a) Medical assistance 
        covers transportation costs incurred solely for obtaining 
        emergency medical care or transportation costs incurred by 
        eligible persons in obtaining emergency or nonemergency medical 
        care when paid directly to an ambulance company, common carrier, 
        or other recognized providers of transportation services.  
           (b) Medical assistance covers special transportation, as 
        defined in Minnesota Rules, part 9505.0315, subpart 1, item F, 
        if the recipient has a physical or mental impairment that would 
        prohibit the recipient from safely accessing and using a bus, 
        taxi, other commercial transportation, or private automobile.  
        The commissioner may use an order by the recipient's attending 
        physician to certify that the recipient requires special 
        transportation services.  Special transportation includes 
        driver-assisted service to eligible individuals.  
        Driver-assisted service includes passenger pickup at and return 
        to the individual's residence or place of business, assistance 
        with admittance of the individual to the medical facility, and 
        assistance in passenger securement or in securing of wheelchairs 
        or stretchers in the vehicle.  Special transportation providers 
        must obtain written documentation from the health care service 
        provider who is serving the recipient being transported, 
        identifying the time that the recipient arrived.  Special 
        transportation providers may not bill for separate base rates 
        for the continuation of a trip beyond the original destination.  
        Special transportation providers must take recipients to the 
        nearest appropriate health care provider, using the most direct 
        route available.  The maximum medical assistance reimbursement 
        rates for special transportation services are: 
           (1) $18 $17 for the base rate and $1.40 $1.35 per mile for 
        services to eligible persons who need a wheelchair-accessible 
        van; 
           (2) $12 $11.50 for the base rate and $1.35 $1.30 per mile 
        for services to eligible persons who do not need a 
        wheelchair-accessible van; and 
           (3) $36 $60 for the base rate and $1.40 $2.40 per mile, and 
        an attendant rate of $9 per trip, for services to eligible 
        persons who need a stretcher-accessible vehicle. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 41.  Minnesota Statutes 2004, section 256B.0631, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CO-PAYMENTS.] (a) Except as provided in 
        subdivision 2, the medical assistance benefit plan shall include 
        the following co-payments for all recipients, effective for 
        services provided on or after October 1, 2003: 
           (1) $3 per nonpreventive visit.  For purposes of this 
        subdivision, a visit means an episode of service which is 
        required because of a recipient's symptoms, diagnosis, or 
        established illness, and which is delivered in an ambulatory 
        setting by a physician or physician ancillary, chiropractor, 
        podiatrist, nurse midwife, advanced practice nurse, audiologist, 
        optician, or optometrist; 
           (2) $3 for eyeglasses; 
           (3) $6 for nonemergency visits to a hospital-based 
        emergency room; and 
           (4) $3 per brand-name drug prescription and $1 per generic 
        drug prescription, subject to a $20 $12 per month maximum for 
        prescription drug co-payments.  No co-payments shall apply to 
        antipsychotic drugs when used for the treatment of mental 
        illness. 
           (b) Recipients of medical assistance are responsible for 
        all co-payments in this subdivision. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 42.  Minnesota Statutes 2004, section 256B.0631, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COLLECTION.] The medical assistance 
        reimbursement to the provider shall be reduced by the amount of 
        the co-payment, except that reimbursement for prescription drugs 
        shall not be reduced once a recipient has reached the $20 $12 
        per month maximum for prescription drug co-payments.  The 
        provider collects the co-payment from the recipient.  Providers 
        may not deny services to recipients who are unable to pay the 
        co-payment, except as provided in subdivision 4. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 43.  [256B.072] [PERFORMANCE REPORTING AND QUALITY 
        IMPROVEMENT SYSTEM.] 
           (a) The commissioner of human services shall establish a 
        performance reporting system for health care providers who 
        provide health care services to public program recipients 
        covered under chapters 256B, 256D, and 256L, reporting 
        separately for managed care and fee-for-service recipients.  
           (b) The measures used for the performance reporting system 
        for medical groups shall include measures of care for asthma, 
        diabetes, hypertension, and coronary artery disease and measures 
        of preventive care services.  The measures used for the 
        performance reporting system for inpatient hospitals shall 
        include measures of care for acute myocardial infarction, heart 
        failure, and pneumonia, and measures of care and prevention of 
        surgical infections.  In the case of a medical group, the 
        measures used shall be consistent with measures published by 
        nonprofit Minnesota or national organizations that produce and 
        disseminate health care quality measures or evidence-based 
        health care guidelines.  In the case of inpatient hospital 
        measures, the commissioner shall appoint the Minnesota Hospital 
        Association and Stratis Health to advise on the development of 
        the performance measures to be used for hospital reporting.  To 
        enable a consistent measurement process across the community, 
        the commissioner may use measures of care provided for patients 
        in addition to those identified in paragraph (a).  The 
        commissioner shall ensure collaboration with other health care 
        reporting organizations so that the measures described in this 
        section are consistent with those reported by those 
        organizations and used by other purchasers in Minnesota.  
           (c) The commissioner may require providers to submit 
        information in a required format to a health care reporting 
        organization or to cooperate with the information collection 
        procedures of that organization.  The commissioner may 
        collaborate with a reporting organization to collect information 
        reported and to prevent duplication of reporting.  
           (d) By October 1, 2007, and annually thereafter, the 
        commissioner shall report through a public Web site the results 
        by medical groups and hospitals, where possible, of the measures 
        under this section, and shall compare the results by medical 
        groups and hospitals for patients enrolled in public programs to 
        patients enrolled in private health plans.  To achieve this 
        reporting, the commissioner may collaborate with a health care 
        reporting organization that operates a Web site suitable for 
        this purpose. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 44.  Minnesota Statutes 2004, section 256B.075, 
        subdivision 2, is amended to read: 
           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. 
           (c) The commissioner shall develop and implement a pilot 
        intensive care management program for medical assistance 
        children with complex and chronic medical issues who are not 
        able to participate in the metro-based U Special Kids program 
        due to geographic distance. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 45.  Minnesota Statutes 2004, section 256B.0911, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [DEFINITIONS.] For purposes of this section, the 
        following definitions apply: 
           (a) "Long-term care consultation services" means: 
           (1) providing information and education to the general 
        public regarding availability of the services authorized under 
        this section; 
           (2) an intake process that provides access to the services 
        described in this section; 
           (3) assessment of the health, psychological, and social 
        needs of referred individuals; 
           (4) assistance in identifying services needed to maintain 
        an individual in the least restrictive environment; 
           (5) providing recommendations on cost-effective community 
        services that are available to the individual; 
           (6) development of an individual's community support plan; 
           (7) providing information regarding eligibility for 
        Minnesota health care programs; 
           (8) preadmission screening to determine the need for a 
        nursing facility level of care; 
           (9) preliminary determination of Minnesota health care 
        programs eligibility for individuals who need a nursing facility 
        level of care, with appropriate referrals for final 
        determination; 
           (10) providing recommendations for nursing facility 
        placement when there are no cost-effective community services 
        available; and 
           (11) assistance to transition people back to community 
        settings after facility admission. 
           (b) "Minnesota health care programs" means the medical 
        assistance program under chapter 256B, and the alternative care 
        program under section 256B.0913, and the prescription drug 
        program under section 256.955. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 46.  Minnesota Statutes 2004, section 256B.0916, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [TRANSITIONAL SUPPORTS ALLOWANCE.] A 
        transitional supports allowance shall be available to all 
        persons under a home and community-based waiver who are moving 
        from a licensed setting to a community setting.  "Transitional 
        supports allowance" means a onetime payment of up to $3,000, to 
        cover the costs, not covered by other sources, associated with 
        moving from a licensed setting to a community setting.  Covered 
        costs include: 
           (1) lease or rent deposits; 
           (2) security deposits; 
           (3) utilities set-up costs, including telephone; 
           (4) essential furnishings and supplies; and 
           (5) personal supports and transports needed to locate and 
        transition to community settings. 
           [EFFECTIVE DATE.] This section is effective upon federal 
        approval and to the extent approved as a federal waiver 
        amendment. 
           Sec. 47.  [256B.0918] [EMPLOYEE SCHOLARSHIP COSTS.] 
           Subdivision 1.  [PROGRAM CRITERIA.] Beginning on or after 
        October 1, 2005, within the limits of appropriations 
        specifically available for this purpose, the commissioner shall 
        provide funding to qualified provider applicants for employee 
        scholarships for education in nursing and other health care 
        fields.  Employee scholarships must be for a course of study 
        that is expected to lead to career advancement with the provider 
        or in the field of long-term care, including home care or care 
        of persons with disabilities, or nursing.  Providers that secure 
        this funding must use it to award scholarships to employees who 
        work an average of at least 20 hours per week for the provider.  
        Management staff, registered nurses, and therapists are not 
        eligible to receive scholarships under this section. 
           Subd. 2.  [PARTICIPATING PROVIDERS.] The commissioner shall 
        publish a request for proposals in the State Register by August 
        15, 2005, specifying provider eligibility requirements, provider 
        selection criteria, program specifics, funding mechanism, and 
        methods of evaluation.  The commissioner may publish additional 
        requests for proposals in subsequent years.  Providers who 
        provide services funded through the following programs are 
        eligible to apply to participate in the scholarship program: 
        home and community-based waivered services for persons with 
        mental retardation or related conditions under section 256B.501; 
        home and community-based waivered services for the elderly under 
        section 256B.0915; waivered services under community 
        alternatives for disabled individuals under section 256B.49; 
        community alternative care waivered services under section 
        256B.49; traumatic brain injury waivered services under section 
        256B.49; nursing services and home health services under section 
        256B.0625, subdivision 6a; personal care services and nursing 
        supervision of personal care services under section 256B.0625, 
        subdivision 19a; private duty nursing services under section 
        256B.0625, subdivision 7; day training and habilitation services 
        for adults with mental retardation or related conditions under 
        sections 252.40 to 252.46; and intermediate care facilities for 
        persons with mental retardation under section 256B.5012. 
           Subd. 3.  [PROVIDER SELECTION CRITERIA.] To be considered 
        for scholarship funding, the provider shall submit a completed 
        application within the time frame specified by the 
        commissioner.  In awarding funding, the commissioner shall 
        consider the following: 
           (1) the size of the provider as measured in annual billing 
        to the medical assistance program.  To be eligible, a provider 
        must receive at least $500,000 annually in medical assistance 
        payments; 
           (2) the percentage of employees meeting the scholarship 
        program recipient requirements; 
           (3) staff retention rates for paraprofessionals; and 
           (4) other criteria determined by the commissioner. 
           Subd. 4.  [FUNDING SPECIFICS.] Within the limits of 
        appropriations specifically available for this purpose, for the 
        rate period beginning on or after October 1, 2005, to September 
        30, 2007, the commissioner shall provide to each provider listed 
        in subdivision 2 and awarded funds under subdivision 3 a medical 
        assistance rate increase to fund scholarships up to two-tenths 
        percent of the medical assistance reimbursement rate.  The 
        commissioner shall require providers to repay any portion of 
        funds awarded under subdivision 3 that is not used to fund 
        scholarships.  If applications exceed available funding, funding 
        shall be targeted to providers that employ a higher percentage 
        of paraprofessional staff or have lower rates of turnover of 
        paraprofessional staff.  During the subsequent years of the 
        program, the rate adjustment may be recalculated, at the 
        discretion of the commissioner.  In making a recalculation the 
        commissioner may consider the provider's success at granting 
        scholarships based on the amount spent during the previous year 
        and the availability of appropriations to continue the program. 
           Subd. 5.  [REPORTING REQUIREMENTS.] Participating providers 
        shall report to the commissioner on a schedule determined by the 
        commissioner and on a form supplied by the commissioner for a 
        scholarship rate for rate periods beginning October 1, 2007.  
        The report shall include the amount spent during the reporting 
        period on eligible scholarships, and, for each scholarship 
        recipient, the name of the recipient, the amount awarded, the 
        educational institution attended, the nature of the educational 
        program, the expected or actual program completion date, and a 
        determination of the amount spent as a percentage of the 
        provider's reimbursement.  The commissioner shall require 
        providers to repay all of the funds awarded under subdivision 3 
        if the report required in this subdivision is not filled 
        according to the schedule determined by the commissioner. 
           Subd. 6.  [EVALUATION.] The commissioner shall report to 
        the legislature annually, beginning March 15, 2007, on the use 
        of these funds. 
           Sec. 48.  Minnesota Statutes 2004, section 256B.19, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [ADDITIONAL PORTION OF NONFEDERAL SHARE.] (a) 
        Hennepin County shall be responsible for a monthly transfer 
        payment of $1,500,000, due before noon on the 15th of each month 
        and the University of Minnesota shall be responsible for a 
        monthly transfer payment of $500,000 due before noon on the 15th 
        of each month, beginning July 15, 1995.  These sums shall be 
        part of the designated governmental unit's portion of the 
        nonfederal share of medical assistance costs. 
           (b) Beginning July 1, 2001, Hennepin county's payment under 
        paragraph (a) shall be $2,066,000 each month. 
           (c) Beginning July 1, 2001, the commissioner shall increase 
        annual capitation payments to the metropolitan health plan under 
        section 256B.69 for the prepaid medical assistance program by 
        approximately $3,400,000, plus any available federal matching 
        funds, to recognize higher than average medical education costs. 
           (d) Effective August 1, 2005, Hennepin County's payment 
        under paragraphs (a) and (b) shall be reduced to $566,000, and 
        the University of Minnesota's payment under paragraph (a) shall 
        be reduced to zero. 
           Sec. 49.  Minnesota Statutes 2004, section 256B.195, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS TO CERTAIN SAFETY NET PROVIDERS.] (a) 
        Effective July 15, 2001, the commissioner shall make the 
        following payments to the hospitals indicated after noon on the 
        15th of each month: 
           (1) to Hennepin County Medical Center, any federal matching 
        funds available to match the payments received by the medical 
        center under subdivision 2, to increase payments for medical 
        assistance admissions and to recognize higher medical assistance 
        costs in institutions that provide high levels of charity care; 
        and 
           (2) to Regions Hospital, any federal matching funds 
        available to match the payments received by the hospital under 
        subdivision 2, to increase payments for medical assistance 
        admissions and to recognize higher medical assistance costs in 
        institutions that provide high levels of charity care.  
           (b) Effective July 15, 2001, the following percentages of 
        the transfers under subdivision 2 shall be retained by the 
        commissioner for deposit each month into the general fund: 
           (1) 18 percent, plus any federal matching funds, shall be 
        allocated for the following purposes: 
           (i) during the fiscal year beginning July 1, 2001, of the 
        amount available under this clause, 39.7 percent shall be 
        allocated to make increased hospital payments under section 
        256.969, subdivision 26; 34.2 percent shall be allocated to fund 
        the amounts due from small rural hospitals, as defined in 
        section 144.148, for overpayments under section 256.969, 
        subdivision 5a, resulting from a determination that medical 
        assistance and general assistance payments exceeded the charge 
        limit during the period from 1994 to 1997; and 26.1 percent 
        shall be allocated to the commissioner of health for rural 
        hospital capital improvement grants under section 144.148; and 
           (ii) during fiscal years beginning on or after July 1, 
        2002, of the amount available under this clause, 55 percent 
        shall be allocated to make increased hospital payments under 
        section 256.969, subdivision 26, and 45 percent shall be 
        allocated to the commissioner of health for rural hospital 
        capital improvement grants under section 144.148; and 
           (2) 11 percent shall be allocated to the commissioner of 
        health to fund community clinic grants under section 145.9268. 
           (c) This subdivision shall apply to fee-for-service 
        payments only and shall not increase capitation payments or 
        payments made based on average rates.  The allocation in 
        paragraph (b), clause (1), item (ii), to increase hospital 
        payments under section 256.969, subdivision 26, shall not limit 
        payments under that section. 
           (d) Medical assistance rate or payment changes, including 
        those required to obtain federal financial participation under 
        section 62J.692, subdivision 8, shall precede the determination 
        of intergovernmental transfer amounts determined in this 
        subdivision.  Participation in the intergovernmental transfer 
        program shall not result in the offset of any health care 
        provider's receipt of medical assistance payment increases other 
        than limits resulting from hospital-specific charge limits and 
        limits on disproportionate share hospital payments. 
           (e) Effective July 1, 2003, if the amount available for 
        allocation under paragraph (b) is greater than the amounts 
        available during March 2003, after any increase in 
        intergovernmental transfers and payments that result from 
        section 256.969, subdivision 3a, paragraph (c), are paid to the 
        general fund, any additional amounts available under this 
        subdivision after reimbursement of the transfers under 
        subdivision 2 shall be allocated to increase medical assistance 
        payments, subject to hospital-specific charge limits and limits 
        on disproportionate share hospital payments, as follows: 
           (1) if the payments under subdivision 5 are approved, the 
        amount shall be paid to the largest ten percent of hospitals as 
        measured by 2001 payments for medical assistance, general 
        assistance medical care, and MinnesotaCare in the nonstate 
        government hospital category.  Payments shall be allocated 
        according to each hospital's proportionate share of the 2001 
        payments; or 
           (2) if the payments under subdivision 5 are not approved, 
        the amount shall be paid to the largest ten percent of hospitals 
        as measured by 2001 payments for medical assistance, general 
        assistance medical care, and MinnesotaCare in the nonstate 
        government category and to the largest ten percent of hospitals 
        as measured by payments for medical assistance, general 
        assistance medical care, and MinnesotaCare in the nongovernment 
        hospital category.  Payments shall be allocated according to 
        each hospital's proportionate share of the 2001 payments in 
        their respective category of nonstate government and 
        nongovernment.  The commissioner shall determine which hospitals 
        are in the nonstate government and nongovernment hospital 
        categories. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 50.  [256B.199] [PAYMENTS REPORTED BY GOVERNMENTAL 
        ENTITIES.] 
           (a) Hennepin County, Hennepin County Medical Center, Ramsey 
        County, Regions Hospital, the University of Minnesota, and 
        Fairview-University Medical Center shall report quarterly to the 
        commissioner beginning June 1, 2007, payments made during the 
        second previous quarter that may qualify for reimbursement under 
        federal law.  
           (b) Based on these reports, the commissioner shall apply 
        for federal matching funds.  These funds are appropriated to the 
        commissioner for the payments under section 256.969, subdivision 
        27. 
           (c) By May 1 of each year, beginning May 1, 2007, the 
        commissioner shall inform the nonstate entities listed in 
        paragraph (a) of the amount of federal disproportionate share 
        hospital payment money expected to be available in the current 
        federal fiscal year.  
           (d) This section sunsets on June 30, 2009.  The 
        commissioner shall report to the legislature by December 15, 
        2008, with recommendations for maximizing federal 
        disproportionate share hospital payments after June 30, 2009. 
           Sec. 51.  Minnesota Statutes 2004, 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 non-Medicare 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 September 1, 
        2005. 
           Sec. 52.  Minnesota Statutes 2004, section 256D.03, 
        subdivision 3, as amended by Laws 2005, chapter 98, article 2, 
        section 14, 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; 
           (ii) who has gross countable income above 75 percent of the 
        federal poverty guidelines but not in excess of 175 percent of 
        the federal poverty guidelines for the family size, using a 
        six-month budget period, whose equity in assets is not in excess 
        of the limits in section 256B.056, subdivision 3c, and who 
        applies during an inpatient hospitalization; or 
           (iii) the commissioner shall adjust the income standards 
        under this section each July 1 by the annual update of the 
        federal poverty guidelines following publication by the United 
        States Department of Health and Human Services. 
           (b) Effective for applications and renewals processed on or 
        after September 1, 2006, general assistance medical care may not 
        be paid for applicants or recipients who 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 who are not described in paragraph 
        (e). 
           (c) Effective for applications and renewals processed on or 
        after September 1, 2006, general assistance medical care may be 
        paid for applicants and recipients who meet all eligibility 
        requirements of paragraph (a), clause (2), item (i), for a 
        temporary period beginning the date of application.  Immediately 
        following approval of general assistance medical care, enrollees 
        shall be enrolled in MinnesotaCare under section 256L.04, 
        subdivision 7, with covered services as provided in section 
        256L.03 for the rest of the six-month eligibility period, until 
        their six-month renewal. 
           (d) To be eligible for general assistance medical care 
        following enrollment in MinnesotaCare as required by paragraph 
        (c), an individual must complete a new application.  
           (e) Applicants and recipients eligible under paragraph (a), 
        clause (1), or who have applied for and are awaiting a 
        determination of blindness or disability by the state medical 
        review team or a determination of eligibility for Supplemental 
        Security Income or Social Security Disability Insurance by the 
        Social Security Administration, or who fail to meet the 
        requirements of section 256L.09, subdivision 2, are exempt from 
        the MinnesotaCare enrollment requirements of this subdivision. 
           (c) (f) For applications received on or after October 1, 
        2003, eligibility may begin no earlier than the date of 
        application.  For individuals eligible under paragraph (a), 
        clause (2), item (i), a redetermination of eligibility must 
        occur every 12 months.  Individuals are eligible under paragraph 
        (a), clause (2), item (ii), only during inpatient 
        hospitalization but may reapply if there is a subsequent period 
        of inpatient hospitalization.  
           (g) Beginning January September 1, 2000 2006, Minnesota 
        health care program applications and renewals completed by 
        recipients and applicants who are persons described in 
        paragraph (b), may be returned (c) and submitted 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 shall be determined for MinnesotaCare 
        eligibility by the county agency.  If all other eligibility 
        requirements of this subdivision are met, eligibility for 
        general assistance medical care shall be available in any month 
        during which a MinnesotaCare eligibility determination and 
        enrollment are is pending.  Upon notification of eligibility for 
        MinnesotaCare, notice of termination for eligibility for general 
        assistance medical care shall be sent to an applicant or 
        recipient.  If all other eligibility requirements of this 
        subdivision are met, eligibility for general assistance medical 
        care shall be available until enrollment in MinnesotaCare 
        subject to the provisions of paragraph (e) paragraphs (c), (e), 
        and (f). 
           (d) (h) The date of an initial Minnesota health care 
        program application necessary to begin a determination of 
        eligibility shall be the date the applicant has provided a name, 
        address, and Social Security number, signed and dated, to the 
        county agency or the Department of Human Services.  If the 
        applicant is unable to provide a name, address, Social Security 
        number, and signature when health care is delivered due to a 
        medical condition or disability, a health care provider may act 
        on an applicant's behalf to establish the date of an initial 
        Minnesota health care program application by providing the 
        county agency or Department of Human Services with provider 
        identification and a temporary unique identifier for the 
        applicant.  The applicant must complete the remainder of the 
        application and provide necessary verification before 
        eligibility can be determined.  The county agency must assist 
        the applicant in obtaining verification if necessary.  
           (e) (i) County agencies are authorized to use all automated 
        databases containing information regarding recipients' or 
        applicants' income in order to determine eligibility for general 
        assistance medical care or MinnesotaCare.  Such use shall be 
        considered sufficient in order to determine eligibility and 
        premium payments by the county agency. 
           (f) (j) General assistance medical care is not available 
        for a person in a correctional facility unless the person is 
        detained by law for less than one year in a county correctional 
        or detention facility as a person accused or convicted of a 
        crime, or admitted as an inpatient to a hospital on a criminal 
        hold order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (g) (k) General assistance medical care is not available 
        for applicants or recipients who do not cooperate with the 
        county agency to meet the requirements of medical assistance.  
           (h) (l) In determining the amount of assets of an 
        individual eligible under paragraph (a), clause (2), item (i), 
        there shall be included any asset or interest in an asset, 
        including an asset excluded under paragraph (a), that was given 
        away, sold, or disposed of for less than fair market value 
        within the 60 months preceding application for general 
        assistance medical care or during the period of eligibility.  
        Any transfer described in this paragraph shall be presumed to 
        have been for the purpose of establishing eligibility for 
        general assistance medical care, unless the individual furnishes 
        convincing evidence to establish that the transaction was 
        exclusively for another purpose.  For purposes of this 
        paragraph, the value of the asset or interest shall be the fair 
        market value at the time it was given away, sold, or disposed 
        of, less the amount of compensation received.  For any 
        uncompensated transfer, the number of months of ineligibility, 
        including partial months, shall be calculated by dividing the 
        uncompensated transfer amount by the average monthly per person 
        payment made by the medical assistance program to skilled 
        nursing facilities for the previous calendar year.  The 
        individual shall remain ineligible until this fixed period has 
        expired.  The period of ineligibility may exceed 30 months, and 
        a reapplication for benefits after 30 months from the date of 
        the transfer shall not result in eligibility unless and until 
        the period of ineligibility has expired.  The period of 
        ineligibility begins in the month the transfer was reported to 
        the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (i) (m) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        104-193, sections 421 and 422, and subsequently set out in 
        federal rules. 
           (j) (n) Undocumented noncitizens and nonimmigrants are 
        ineligible for general assistance medical care.  For purposes of 
        this subdivision, a nonimmigrant is an individual in one or more 
        of the classes listed in United States Code, title 8, section 
        1101(a)(15), and an undocumented noncitizen is an individual who 
        resides in the United States without the approval or 
        acquiescence of the Immigration and Naturalization Service. 
           (k) (o) Notwithstanding any other provision of law, a 
        noncitizen who is ineligible for medical assistance due to the 
        deeming of a sponsor's income and resources, is ineligible for 
        general assistance medical care. 
           (l) (p) Effective July 1, 2003, general assistance medical 
        care emergency services end.  
           [EFFECTIVE DATE.] This section is effective September 1, 
        2006. 
           Sec. 53.  Minnesota Statutes 2004, 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 as 
        covered under the medical assistance program; 
           (15) outpatient services provided by a mental health center 
        or clinic that is under contract with the county board and is 
        established under section 245.62; 
           (16) day treatment services for mental illness provided 
        under contract with the county board; 
           (17) prescribed medications for persons who have been 
        diagnosed as mentally ill as necessary to prevent more 
        restrictive institutionalization; 
           (18) psychological services, medical supplies and 
        equipment, and Medicare premiums, coinsurance and deductible 
        payments; 
           (19) medical equipment not specifically listed in this 
        paragraph when the use of the equipment will prevent the need 
        for costlier services that are reimbursable under this 
        subdivision; 
           (20) services performed by a certified pediatric nurse 
        practitioner, a certified family nurse practitioner, a certified 
        adult nurse practitioner, a certified obstetric/gynecological 
        nurse practitioner, a certified neonatal nurse practitioner, or 
        a certified geriatric nurse practitioner in independent 
        practice, if (1) the service is otherwise covered under this 
        chapter as a physician service, (2) the service provided on an 
        inpatient basis is not included as part of the cost for 
        inpatient services included in the operating payment rate, and 
        (3) the service is within the scope of practice of the nurse 
        practitioner's license as a registered nurse, as defined in 
        section 148.171; 
           (21) services of a certified public health nurse or a 
        registered nurse practicing in a public health nursing clinic 
        that is a department of, or that operates under the direct 
        authority of, a unit of government, if the service is within the 
        scope of practice of the public health nurse's license as a 
        registered nurse, as defined in section 148.171; 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 Effective August 1, 2005, sex reassignment 
        surgery and related services are is 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) (2) $25 for nonemergency visits to a hospital-based 
        emergency room; 
           (4) (3) $3 per brand-name drug prescription and $1 per 
        generic drug prescription, subject to a $20 $12 per month 
        maximum for prescription drug co-payments.  No co-payments shall 
        apply to antipsychotic drugs when used for the treatment of 
        mental illness; and 
           (5) (4) 50 percent coinsurance on 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 $12 per month maximum for prescription drug 
        co-payments.  The provider collects the co-payment from the 
        recipient.  Providers may not deny services to recipients who 
        are unable to pay the co-payment, except as provided in 
        paragraph (f). 
           (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. 
           (o) Fee-for-service payments for nonpreventive visits shall 
        be reduced by $3 for services provided on or after January 1, 
        2006.  For purposes of this subdivision, a visit means an 
        episode of service which is required because of a recipient's 
        symptoms, diagnosis, or established illness, and which is 
        delivered in an ambulatory setting by a physician or physician 
        ancillary, chiropractor, podiatrist, advance practice nurse, 
        audiologist, optician, or optometrist. 
           (p) Payments to managed care plans shall not be increased 
        as a result of the removal of the $3 nonpreventive visit 
        co-payment effective January 1, 2006. 
           [EFFECTIVE DATE.] Paragraph (b) is effective August 1, 
        2005, and paragraph (d) is effective January 1, 2006. 
           Sec. 54.  Minnesota Statutes 2004, section 256D.045, is 
        amended to read: 
           256D.045 [SOCIAL SECURITY NUMBER REQUIRED.] 
           To be eligible for general assistance under sections 
        256D.01 to 256D.21, an individual must provide the individual's 
        Social Security number to the county agency or submit proof that 
        an application has been made.  An individual who refuses to 
        provide a Social Security number because of a well-established 
        religious objection as described in Code of Federal Regulations, 
        title 42, section 435.910, may be eligible for general 
        assistance medical care under section 256D.03.  The provisions 
        of this section do not apply to the determination of eligibility 
        for emergency general assistance under section 256D.06, 
        subdivision 2.  This provision applies to eligible children 
        under the age of 18 effective July 1, 1997.  
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 55.  Minnesota Statutes 2004, section 256L.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GROSS INDIVIDUAL OR GROSS FAMILY INCOME.] (a) 
        "Gross individual or gross family income" for nonfarm 
        self-employed means income calculated for the six-month period 
        of eligibility using as the baseline the adjusted gross income 
        the net profit or loss reported on the applicant's federal 
        income tax form for the previous year and adding back in 
        reported depreciation, carryover loss, and net operating loss 
        amounts that apply to the business in which the family is 
        currently engaged using the medical assistance families with 
        children methodology for determining allowable and nonallowable 
        self-employment expenses and countable income.  
           (b) "Gross individual or gross family income" for farm 
        self-employed means income calculated for the six-month period 
        of eligibility using as the baseline the adjusted gross income 
        reported on the applicant's federal income tax form for the 
        previous year and adding back in reported depreciation amounts 
        that apply to the business in which the family is currently 
        engaged.  
           (c) Applicants shall report the most recent financial 
        situation of the family if it has changed from the period of 
        time covered by the federal income tax form.  The report may be 
        in the form of percentage increase or decrease "Gross individual 
        or gross family income" means the total income for all family 
        members, calculated for the six-month period of eligibility. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 56.  Minnesota Statutes 2004, section 256L.01, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INCOME.] (a) "Income" has the meaning given for 
        earned and unearned income for families and children in the 
        medical assistance program, according to the state's aid to 
        families with dependent children plan in effect as of July 16, 
        1996.  The definition does not include medical assistance income 
        methodologies and deeming requirements.  The earned income of 
        full-time and part-time students under age 19 is not counted as 
        income.  Public assistance payments and supplemental security 
        income are not excluded income. 
           (b) For purposes of this subdivision, and unless otherwise 
        specified in this section, the commissioner shall use reasonable 
        methods to calculate gross earned and unearned income including, 
        but not limited to, projecting income based on income received 
        within the past 30 days, the last 90 days, or the last 12 months.
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005. 
           Sec. 57.  Minnesota Statutes 2004, section 256L.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COVERED HEALTH SERVICES.] For individuals 
        under section 256L.04, subdivision 7, with income no greater 
        than 75 percent of the federal poverty guidelines or for 
        families with children under section 256L.04, subdivision 1, all 
        subdivisions of this section apply.  "Covered health services" 
        means the health services reimbursed under chapter 256B, with 
        the exception of inpatient hospital services, special education 
        services, private duty nursing services, adult dental care 
        services other than services covered under section 256B.0625, 
        subdivision 9, paragraph (b), orthodontic services, nonemergency 
        medical transportation services, personal care assistant and 
        case management services, nursing home or intermediate care 
        facilities services, inpatient mental health services, and 
        chemical dependency services.  Outpatient mental health services 
        covered under the MinnesotaCare program are limited to 
        diagnostic assessments, psychological testing, explanation of 
        findings, medication management by a physician, day treatment, 
        partial hospitalization, and individual, family, and group 
        psychotherapy. 
           No public funds shall be used for coverage of abortion 
        under MinnesotaCare except where the life of the female would be 
        endangered or substantial and irreversible impairment of a major 
        bodily function would result if the fetus were carried to term; 
        or where the pregnancy is the result of rape or incest. 
           Covered health services shall be expanded as provided in 
        this section. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 58.  Minnesota Statutes 2004, section 256L.03, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [PREGNANT WOMEN; ELIGIBILITY FOR FULL MEDICAL 
        ASSISTANCE SERVICES.] Beginning January 1, 1999, A pregnant 
        woman who is enrolled in MinnesotaCare when her pregnancy is 
        diagnosed is eligible for coverage of all services provided 
        under the medical assistance program according to chapter 256B 
        retroactive to the date the pregnancy is medically diagnosed of 
        conception.  Co-payments totaling $30 or more, paid after the 
        date the pregnancy is diagnosed of conception, shall be refunded.
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005. 
           Sec. 59.  Minnesota Statutes 2004, section 256L.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CO-PAYMENTS AND COINSURANCE.] (a) Except as 
        provided in paragraphs (b) and (c), the MinnesotaCare benefit 
        plan shall include the following co-payments and coinsurance 
        requirements for all enrollees:  
           (1) ten percent of the paid charges for inpatient hospital 
        services for adult enrollees, subject to an annual inpatient 
        out-of-pocket maximum of $1,000 per individual and $3,000 per 
        family; 
           (2) $3 per prescription for adult enrollees; 
           (3) $25 for eyeglasses for adult enrollees; and 
           (4) $3 per nonpreventive visit.  For purposes of this 
        subdivision, a "visit" means an episode of service which is 
        required because of a recipient's symptoms, diagnosis, or 
        established illness, and which is delivered in an ambulatory 
        setting by a physician or physician ancillary, chiropractor, 
        podiatrist, nurse midwife, advanced practice nurse, audiologist, 
        optician, or optometrist; 
           (5) $6 for nonemergency visits to a hospital-based 
        emergency room; and 
           (6) 50 percent of the fee-for-service rate for adult dental 
        care services other than preventive care services for persons 
        eligible under section 256L.04, subdivisions 1 to 7, with income 
        equal to or less than 175 percent of the federal poverty 
        guidelines. 
           (b) Paragraph (a), clause (1), does not apply to parents 
        and relative caretakers of children under the age of 21 in 
        households with family income equal to or less than 175 percent 
        of the federal poverty guidelines.  Paragraph (a), clause (1), 
        does not apply to parents and relative caretakers of children 
        under the age of 21 in households with family income greater 
        than 175 percent of the federal poverty guidelines for inpatient 
        hospital admissions occurring on or after January 1, 2001.  
           (c) Paragraph (a), clauses (1) to (4), do not apply to 
        pregnant women and children under the age of 21.  
           (d) Adult enrollees with family gross income that exceeds 
        175 percent of the federal poverty guidelines and who are not 
        pregnant shall be financially responsible for the coinsurance 
        amount, if applicable, and amounts which exceed the $10,000 
        inpatient hospital benefit limit. 
           (e) When a MinnesotaCare enrollee becomes a member of a 
        prepaid health plan, or changes from one prepaid health plan to 
        another during a calendar year, any charges submitted towards 
        the $10,000 annual inpatient benefit limit, and any 
        out-of-pocket expenses incurred by the enrollee for inpatient 
        services, that were submitted or incurred prior to enrollment, 
        or prior to the change in health plans, shall be disregarded. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 60.  Minnesota Statutes 2004, section 256L.035, is 
        amended to read: 
           256L.035 [LIMITED BENEFITS COVERAGE FOR CERTAIN SINGLE 
        ADULTS AND HOUSEHOLDS WITHOUT CHILDREN.] 
           (a) "Covered health services" for individuals under section 
        256L.04, subdivision 7, with income above 75 percent, but not 
        exceeding 175 percent, of the federal poverty guideline means: 
           (1) inpatient hospitalization benefits with a ten percent 
        co-payment up to $1,000 and subject to an annual limitation of 
        $10,000; 
           (2) physician services provided during an inpatient stay; 
        and 
           (3) physician services not provided during an inpatient 
        stay,; outpatient hospital services,; freestanding ambulatory 
        surgical center services,; chiropractic services,; lab and 
        diagnostic services,; diabetic supplies and equipment; and 
        prescription drugs,; subject to an aggregate cap of $2,000 per 
        calendar year and the following co-payments: 
           (i) $50 co-pay per emergency room visit; 
           (ii) $3 co-pay per prescription drug; and 
           (iii) $5 co-pay per nonpreventive physician visit. 
        The services covered under this section may be provided by a 
        physician, physician ancillary, chiropractor, psychologist, or 
        licensed independent clinical social worker if the services are 
        within the scope of practice of that health care professional.  
           For purposes of this subdivision section, "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 any health care provider identified in this paragraph. 
           Enrollees are responsible for all co-payments in this 
        subdivision section. 
           (b) The November 2006 MinnesotaCare forecast for the 
        biennium beginning July 1, 2007, shall assume an adjustment in 
        the aggregate cap on the services identified in paragraph (a), 
        clause (3), in $1,000 increments up to a maximum of $10,000, but 
        not less than $2,000, to the extent that the balance in the 
        health care access fund is sufficient in each year of the 
        biennium to pay for this benefit level.  The aggregate cap shall 
        be adjusted according to the forecast. 
           (c) Reimbursement to the providers 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 (d) (c). 
           (d) (c) 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. 
           [EFFECTIVE DATE.] This section is effective January 1, 2006.
           Sec. 61.  Minnesota Statutes 2004, section 256L.04, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [SOCIAL SECURITY NUMBER REQUIRED.] (a) 
        Individuals and families applying for MinnesotaCare coverage 
        must provide a Social Security number. 
           (b) The commissioner shall not deny eligibility to an 
        otherwise eligible applicant who has applied for a Social 
        Security number and is awaiting issuance of that Social Security 
        number. 
           (c) Newborns enrolled under section 256L.05, subdivision 3, 
        are exempt from the requirements of this subdivision. 
           (d) Individuals who refuse to provide a Social Security 
        number because of well-established religious objections are 
        exempt from the requirements of this subdivision.  The term 
        "well-established religious objections" has the meaning given in 
        Code of Federal Regulations, title 42, section 435.910. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 62.  Minnesota Statutes 2004, section 256L.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COOPERATION IN ESTABLISHING THIRD-PARTY 
        LIABILITY, PATERNITY, AND OTHER MEDICAL SUPPORT.] (a) To be 
        eligible for MinnesotaCare, individuals and families must 
        cooperate with the state agency to identify potentially liable 
        third-party payers and assist the state in obtaining third-party 
        payments.  "Cooperation" includes, but is not limited 
        to, complying with the notice requirements in section 256B.056, 
        subdivision 9, identifying any third party who may be liable for 
        care and services provided under MinnesotaCare to the enrollee, 
        providing relevant information to assist the state in pursuing a 
        potentially liable third party, and completing forms necessary 
        to recover third-party payments. 
           (b) A parent, guardian, relative caretaker, or child 
        enrolled in the MinnesotaCare program must cooperate with the 
        Department of Human Services and the local agency in 
        establishing the paternity of an enrolled child and in obtaining 
        medical care support and payments for the child and any other 
        person for whom the person can legally assign rights, in 
        accordance with applicable laws and rules governing the medical 
        assistance program.  A child shall not be ineligible for or 
        disenrolled from the MinnesotaCare program solely because the 
        child's parent, relative caretaker, or guardian fails to 
        cooperate in establishing paternity or obtaining medical support.
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 63.  Minnesota Statutes 2004, section 256L.04, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [APPLICATIONS FOR OTHER BENEFITS.] To be 
        eligible for MinnesotaCare, individuals and families must take 
        all necessary steps to obtain other benefits as described in 
        Code of Federal Regulations, title 42, section 435.608.  
        Applicants and enrollees must apply for other benefits within 30 
        days of notification. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 64.  Minnesota Statutes 2004, section 256L.05, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [MINNESOTACARE ENROLLMENT BY COUNTY 
        AGENCIES.] Beginning September 1, 2006, county agencies shall 
        enroll single adults and households with no children formerly 
        enrolled in general assistance medical care in MinnesotaCare 
        according to section 256D.03, subdivision 3.  County agencies 
        shall perform all duties necessary to administer the 
        MinnesotaCare program ongoing for these enrollees, including the 
        redetermination of MinnesotaCare eligibility at six-month 
        renewal.  
           [EFFECTIVE DATE.] This section is effective September 1, 
        2006. 
           Sec. 65.  Minnesota Statutes 2004, section 256L.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMMISSIONER'S DUTIES.] (a) The commissioner or 
        county agency shall use electronic verification as the primary 
        method of income verification.  If there is a discrepancy 
        between reported income and electronically verified income, an 
        individual may be required to submit additional verification.  
        In addition, the commissioner shall perform random audits to 
        verify reported income and eligibility.  The commissioner may 
        execute data sharing arrangements with the Department of Revenue 
        and any other governmental agency in order to perform income 
        verification related to eligibility and premium payment under 
        the MinnesotaCare program. 
           (b) In determining eligibility for MinnesotaCare, the 
        commissioner shall require applicants and enrollees seeking 
        renewal of eligibility to verify both earned and unearned 
        income.  The commissioner shall also require applicants and 
        enrollees to submit the names of their employers and a contact 
        name with a telephone number for each employer for purposes of 
        verifying whether the applicant or enrollee, and any dependents, 
        are eligible for employer-subsidized coverage.  Data collected 
        is nonpublic data as defined in section 13.02, subdivision 9. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005.  Prior to the implementation of HealthMatch, the 
        commissioner shall implement this section to the fullest extent 
        possible, including the use of manual processing.  Upon 
        implementation of HealthMatch, the commissioner shall implement 
        this section in a manner consistent with the procedures and 
        requirements of HealthMatch.  
           Sec. 66.  Minnesota Statutes 2004, section 256L.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EFFECTIVE DATE OF COVERAGE.] (a) The effective 
        date of coverage is the first day of the month following the 
        month in which eligibility is approved and the first premium 
        payment has been received.  As provided in section 256B.057, 
        coverage for newborns is automatic from the date of birth and 
        must be coordinated with other health coverage.  The effective 
        date of coverage for eligible newly adoptive children added to a 
        family receiving covered health services is the date of entry 
        into the family month of placement.  The effective date of 
        coverage for other new recipients members added to the family 
        receiving covered health services is the first day of the month 
        following the month in which eligibility is approved or at 
        renewal, whichever the family receiving covered health services 
        prefers the change is reported.  All eligibility criteria must 
        be met by the family at the time the new family member is 
        added.  The income of the new family member is included with the 
        family's gross income and the adjusted premium begins in the 
        month the new family member is added.  
           (b) The initial premium must be received by the last 
        working day of the month for coverage to begin the first day of 
        the following month.  
           (c) Benefits are not available until the day following 
        discharge if an enrollee is hospitalized on the first day of 
        coverage.  
           (d) Notwithstanding any other law to the contrary, benefits 
        under sections 256L.01 to 256L.18 are secondary to a plan of 
        insurance or benefit program under which an eligible person may 
        have coverage and the commissioner shall use cost avoidance 
        techniques to ensure coordination of any other health coverage 
        for eligible persons.  The commissioner shall identify eligible 
        persons who may have coverage or benefits under other plans of 
        insurance or who become eligible for medical assistance. 
           (e) The effective date of coverage for single adults and 
        households with no children formerly enrolled in general 
        assistance medical care and enrolled in MinnesotaCare according 
        to section 256D.03, subdivision 3, is the first day of the month 
        following the last day of general assistance medical care 
        coverage. 
           [EFFECTIVE DATE.] Paragraph (a) is effective August 1, 
        2007, or upon HealthMatch implementation, whichever is later, 
        and paragraph (e) is effective September 1, 2006. 
           Sec. 67.  Minnesota Statutes 2004, section 256L.05, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [RENEWAL OF ELIGIBILITY.] (a) Beginning January 
        1, 1999, an enrollee's eligibility must be renewed every 12 
        months.  The 12-month period begins in the month after the month 
        the application is approved.  
           (b) Beginning October 1, 2004, an enrollee's eligibility 
        must be renewed every six months.  The first six-month period of 
        eligibility begins in the month after the month the application 
        is approved received by the commissioner.  The effective date of 
        coverage within the first six-month period of eligibility is as 
        provided in subdivision 3.  Each new period of eligibility must 
        take into account any changes in circumstances that impact 
        eligibility and premium amount.  An enrollee must provide all 
        the information needed to redetermine eligibility by the first 
        day of the month that ends the eligibility period.  The premium 
        for the new period of eligibility must be received as provided 
        in section 256L.06 in order for eligibility to continue. 
           (c) For single adults and households with no children 
        formerly enrolled in general assistance medical care and 
        enrolled in MinnesotaCare according to section 256D.03, 
        subdivision 3, the first six-month period of eligibility begins 
        the month the enrollee submitted the application or renewal for 
        general assistance medical care. 
           [EFFECTIVE DATE.] Paragraph (b) is effective August 1, 
        2007, or upon HealthMatch implementation, whichever is later, 
        and paragraph (c) is effective September 1, 2006. 
           Sec. 68.  Minnesota Statutes 2004, section 256L.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSIONER'S DUTIES AND PAYMENT.] (a) Premiums 
        are dedicated to the commissioner for MinnesotaCare. 
           (b) The commissioner shall develop and implement procedures 
        to:  (1) require enrollees to report changes in income; (2) 
        adjust sliding scale premium payments, based upon changes both 
        increases and decreases in enrollee income, at the time the 
        change in income is reported; and (3) disenroll enrollees from 
        MinnesotaCare for failure to pay required premiums.  Failure to 
        pay includes payment with a dishonored check, a returned 
        automatic bank withdrawal, or a refused credit card or debit 
        card payment.  The commissioner may demand a guaranteed form of 
        payment, including a cashier's check or a money order, as the 
        only means to replace a dishonored, returned, or refused payment.
           (c) Premiums are calculated on a calendar month basis and 
        may be paid on a monthly, quarterly, or semiannual basis, with 
        the first payment due upon notice from the commissioner of the 
        premium amount required.  The commissioner shall inform 
        applicants and enrollees of these premium payment options. 
        Premium payment is required before enrollment is complete and to 
        maintain eligibility in MinnesotaCare.  Premium payments 
        received before noon are credited the same day.  Premium 
        payments received after noon are credited on the next working 
        day.  
           (d) Nonpayment of the premium will result in disenrollment 
        from the plan effective for the calendar month for which the 
        premium was due.  Persons disenrolled for nonpayment or who 
        voluntarily terminate coverage from the program may not reenroll 
        until four calendar months have elapsed.  Persons disenrolled 
        for nonpayment who pay all past due premiums as well as current 
        premiums due, including premiums due for the period of 
        disenrollment, within 20 days of disenrollment, shall be 
        reenrolled retroactively to the first day of disenrollment.  
        Persons disenrolled for nonpayment or who voluntarily terminate 
        coverage from the program may not reenroll for four calendar 
        months unless the person demonstrates good cause for 
        nonpayment.  Good cause does not exist if a person chooses to 
        pay other family expenses instead of the premium.  The 
        commissioner shall define good cause in rule. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005, or upon federal approval, whichever is later.  Prior to 
        the implementation of HealthMatch, the commissioner shall 
        implement this section to the fullest extent possible, including 
        the use of manual processing.  Upon implementation of 
        HealthMatch, the commissioner shall implement this section in a 
        manner consistent with the procedures and requirements of 
        HealthMatch.  
           Sec. 69.  Minnesota Statutes 2004, section 256L.07, 
        subdivision 1, as amended by Laws 2005, chapter 10, article 1, 
        section 56, is amended to read: 
           Subdivision 1.  [GENERAL REQUIREMENTS.] (a) Children 
        enrolled in the original children's health plan as of September 
        30, 1992, children who enrolled in the MinnesotaCare program 
        after September 30, 1992, pursuant to Laws 1992, chapter 549, 
        article 4, section 17, and children who have family gross 
        incomes that are equal to or less than 150 percent of the 
        federal poverty guidelines are eligible without meeting the 
        requirements of subdivision 2 and the four-month requirement in 
        subdivision 3, as long as they maintain continuous coverage in 
        the MinnesotaCare program or medical assistance.  Children who 
        apply for MinnesotaCare on or after the implementation date of 
        the employer-subsidized health coverage program as described in 
        Laws 1998, chapter 407, article 5, section 45, who have family 
        gross incomes that are equal to or less than 150 percent of the 
        federal poverty guidelines, must meet the requirements of 
        subdivision 2 to be eligible for MinnesotaCare. 
           (b) Families enrolled in MinnesotaCare under section 
        256L.04, subdivision 1, whose income increases above 275 percent 
        of the federal poverty guidelines, are no longer eligible for 
        the program and shall be disenrolled by the commissioner.  
        Individuals enrolled in MinnesotaCare under section 256L.04, 
        subdivision 7, whose income increases above 175 percent of the 
        federal poverty guidelines are no longer eligible for the 
        program and shall be disenrolled by the commissioner.  For 
        persons disenrolled under this subdivision, MinnesotaCare 
        coverage terminates the last day of the calendar month following 
        the month in which the commissioner determines that the income 
        of a family or individual exceeds program income limits.  
           (c) Notwithstanding paragraph (b), children may remain 
        enrolled in MinnesotaCare if ten percent of their annual gross 
        individual or gross family income as defined in section 256L.01, 
        subdivision 4, is less than the annual premium for a six-month 
        policy with a $500 deductible available through the Minnesota 
        Comprehensive Health Association.  Children who are no longer 
        eligible for MinnesotaCare under this clause shall be given a 
        12-month notice period from the date that ineligibility is 
        determined before disenrollment.  The premium for children 
        remaining eligible under this clause shall be the maximum 
        premium determined under section 256L.15, subdivision 2, 
        paragraph (b). 
           (d) Notwithstanding paragraphs (b) and (c), parents are not 
        eligible for MinnesotaCare if gross household income exceeds 
        $50,000 $25,000 for the six-month period of eligibility. 
           [EFFECTIVE DATE.] This section is effective August 1, 2007, 
        or upon HealthMatch implementation, whichever is later. 
           Sec. 70.  Minnesota Statutes 2004, section 256L.07, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [MUST NOT HAVE ACCESS TO HEALTH COVERAGE THROUGH 
        A POSTSECONDARY EDUCATION INSTITUTION.] To be eligible, an 
        individual under 21 years of age who is enrolled in a program of 
        study at a postsecondary education institution, including an 
        emancipated minor and an emancipated minor's spouse, must not 
        have access to health coverage through the postsecondary 
        education institution. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005, or upon federal approval, whichever is later.  Prior to 
        implementation of HealthMatch, the commissioner shall implement 
        the section to the fullest extent possible, including the use of 
        manual processing.  Upon implementation of HealthMatch, the 
        commissioner shall implement this section in a manner consistent 
        with the procedures and requirements of HealthMatch. 
           Sec. 71.  Minnesota Statutes 2004, section 256L.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OTHER HEALTH COVERAGE.] (a) Families and 
        individuals enrolled in the MinnesotaCare program must have no 
        health coverage while enrolled or for at least four months prior 
        to application and renewal.  Children enrolled in the original 
        children's health plan and children in families with income 
        equal to or less than 150 percent of the federal poverty 
        guidelines, who have other health insurance, are eligible if the 
        coverage: 
           (1) lacks two or more of the following: 
           (i) basic hospital insurance; 
           (ii) medical-surgical insurance; 
           (iii) prescription drug coverage; 
           (iv) dental coverage; or 
           (v) vision coverage; 
           (2) requires a deductible of $100 or more per person per 
        year; or 
           (3) lacks coverage because the child has exceeded the 
        maximum coverage for a particular diagnosis or the policy 
        excludes a particular diagnosis. 
           The commissioner may change this eligibility criterion for 
        sliding scale premiums in order to remain within the limits of 
        available appropriations.  The requirement of no health coverage 
        does not apply to newborns.  
           (b) Medical assistance, general assistance medical care, 
        and the Civilian Health and Medical Program of the Uniformed 
        Service, CHAMPUS, or other coverage provided under United States 
        Code, title 10, subtitle A, part II, chapter 55, are not 
        considered insurance or health coverage for purposes of the 
        four-month requirement described in this subdivision. 
           (c) For purposes of this subdivision, an applicant or 
        enrollee who is entitled to Medicare Part A or enrolled in 
        Medicare Part B coverage under title XVIII of the Social 
        Security Act, United States Code, title 42, sections 1395c 
        to 1395w-4 1395w-152, is considered to have health coverage.  An 
        applicant or enrollee who is entitled to premium-free Medicare 
        Part A may not refuse to apply for or enroll in Medicare 
        coverage to establish eligibility for MinnesotaCare. 
           (d) Applicants who were recipients of medical assistance or 
        general assistance medical care within one month of application 
        must meet the provisions of this subdivision and subdivision 2. 
           (e) Effective October 1, 2003, applicants who were 
        recipients of medical assistance and had Cost-effective health 
        insurance which that was paid for by medical assistance are 
        exempt from is not considered health coverage for purposes of 
        the four-month requirement under this section, except if the 
        insurance continued after medical assistance no longer 
        considered it cost-effective or after medical assistance closed. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005. 
           Sec. 72.  Minnesota Statutes 2004, section 256L.07, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [EXCEPTION FOR CERTAIN ADULTS.] Single adults and 
        households with no children formerly enrolled in general 
        assistance medical care and enrolled in MinnesotaCare according 
        to section 256D.03, subdivision 3, are eligible without meeting 
        the requirements of this section until six-month renewal. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2006. 
           Sec. 73.  Minnesota Statutes 2004, section 256L.12, is 
        amended by adding a subdivision to read: 
           Subd. 9b.  [RATE SETTING; RATABLE REDUCTION.] In addition 
        to the reduction in subdivision 9a, the total payment made to 
        managed care plans under the MinnesotaCare program shall be 
        reduced for services provided on or after January 1, 2006, to 
        reflect a 6.0 percent reduction in reimbursement for inpatient 
        hospital services. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 74.  Minnesota Statutes 2004, section 256L.15, 
        subdivision 2, as amended by Laws 2005, chapter 10, article 1, 
        section 57, is amended to read: 
           Subd. 2.  [SLIDING FEE SCALE TO DETERMINE PERCENTAGE OF 
        MONTHLY GROSS INDIVIDUAL OR FAMILY INCOME.] (a) The commissioner 
        shall establish a sliding fee scale to determine the percentage 
        of monthly gross individual or family income that households at 
        different income levels must pay to obtain coverage through the 
        MinnesotaCare program.  The sliding fee scale must be based on 
        the enrollee's monthly gross individual or family income.  The 
        sliding fee scale must contain separate tables based on 
        enrollment of one, two, or three or more persons.  The sliding 
        fee scale begins with a premium of 1.5 percent of monthly gross 
        individual or family incom