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1998 Minnesota Session Laws

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                            CHAPTER 407-S.F.No. 3346 
                  An act relating to human services; appropriating 
                  money; changing provisions for long-term care, health 
                  care programs, and provisions including MA and GAMC, 
                  MinnesotaCare, welfare reform, work first, compulsive 
                  gambling, child welfare modifications and child 
                  support, and regional treatment centers; providing 
                  administrative penalties; providing for the recording 
                  and reporting of abortion data; amending Minnesota 
                  Statutes 1996, sections 62A.65, subdivision 5; 
                  62D.042, subdivision 2; 62E.16; 62J.321, by adding a 
                  subdivision; 62Q.095, subdivision 3; 144.226, 
                  subdivision 3; 144.701, subdivisions 1, 2, and 4; 
                  144.702, subdivisions 1, 2, and 8; 144.9501, 
                  subdivisions 1, 17, 18, 20, 23, 30, 32, and by adding 
                  subdivisions; 144.9502, subdivisions 3, 4, and 9; 
                  144.9503, subdivisions 4, 6, and 7; 144.9504, 
                  subdivisions 1, 3, 4, 5, 6, 7, 8, 9, and 10; 144.9505, 
                  subdivisions 1, 4, and 5; 144.9506, subdivision 2; 
                  144.9507, subdivisions 2, 3, and 4; 144.9508, 
                  subdivisions 1, 3, 4, and by adding a subdivision; 
                  144.9509, subdivision 2; 144.99, subdivision 1; 
                  144A.04, subdivision 5; 144A.09, subdivision 1; 
                  144A.44, subdivision 2; 145.11, by adding a 
                  subdivision; 145A.15, subdivision 2; 157.15, 
                  subdivisions 9, 12, 12a, 13, and 14; 214.03; 245.462, 
                  subdivisions 4 and 8; 245.4871, subdivision 4; 
                  245A.03, by adding subdivisions; 245A.035, subdivision 
                  4; 245A.14, subdivision 4; 254A.17, subdivision 1, and 
                  by adding a subdivision; 256.01, subdivision 12, and 
                  by adding subdivisions; 256.014, subdivision 1; 
                  256.969, subdivisions 16 and 17; 256B.03, subdivision 
                  3; 256B.055, subdivision 7, and by adding a 
                  subdivision; 256B.057, subdivision 3a, and by adding 
                  subdivisions; 256B.0625, subdivisions 7, 17, 19a, 20, 
                  34, 38, and by adding subdivisions; 256B.0627, 
                  subdivision 4; 256B.0911, subdivision 4; 256B.0916; 
                  256B.41, subdivision 1; 256B.431, subdivisions 2b, 2i, 
                  4, 11, 22, and by adding subdivisions; 256B.501, 
                  subdivisions 2 and 12; 256B.69, subdivision 22, and by 
                  adding subdivisions; 256D.03, subdivision 4, and by 
                  adding a subdivision; 256D.051, by adding a 
                  subdivision; 256D.46, subdivision 2; 256I.04, 
                  subdivisions 1, 3, and by adding a subdivision; 
                  256I.05, subdivision 2; 257.42; 257.43; 259.24, 
                  subdivision 1; 259.37, subdivision 2; 259.67, 
                  subdivision 1; 260.011, subdivision 2; 260.141, by 
                  adding a subdivision; 260.172, subdivision 1; 260.221, 
                  as amended; 268.88; 268.92, subdivision 4; 609.115, 
                  subdivision 9; and 626.556, by adding a subdivision; 
                  Minnesota Statutes 1997 Supplement, sections 13.99, by 
                  adding a subdivision; 60A.15, subdivision 1; 62D.11, 
                  subdivision 1; 62J.69, subdivisions 1, 2, and by 
                  adding subdivisions; 62J.71, subdivisions 1, 3, and 4; 
                  62J.72, subdivision 1; 62J.75; 62Q.105, subdivision 1; 
                  62Q.30; 103I.208, subdivision 2; 119B.01, subdivision 
                  16; 119B.02; 123.70, subdivision 10, as amended; 
                  144.1494, subdivision 1; 144.218, subdivision 2; 
                  144.226, subdivision 4; 144.9504, subdivision 2; 
                  144.9506, subdivision 1; 144A.071, subdivision 4a; 
                  144A.4605, subdivision 4; 157.16, subdivision 3; 
                  171.29, subdivision 2; 214.32, subdivision 1; 245A.03, 
                  subdivision 2; 245A.04, subdivisions 3b and 3d; 
                  245B.06, subdivision 2; 256.01, subdivision 2; 
                  256.031, subdivision 6; 256.741, by adding a 
                  subdivision; 256.82, subdivision 2; 256.9657, 
                  subdivision 3; 256.9685, subdivision 1; 256.9864; 
                  256B.04, subdivision 18; 256B.056, subdivisions 1a and 
                  4; 256B.06, subdivision 4; 256B.062; 256B.0625, 
                  subdivision 31a; 256B.0627, subdivisions 5 and 8; 
                  256B.0635, by adding a subdivision; 256B.0645; 
                  256B.0911, subdivisions 2 and 7; 256B.0913, 
                  subdivision 14; 256B.0915, subdivisions 1d and 3; 
                  256B.0951, by adding a subdivision; 256B.431, 
                  subdivisions 3f and 26; 256B.433, subdivision 3a; 
                  256B.434, subdivision 10; 256B.69, subdivisions 2 and 
                  3a; 256B.692, subdivisions 2 and 5; 256B.77, 
                  subdivisions 3, 7a, 10, and 12; 256D.03, subdivision 
                  3; 256D.05, subdivision 8; 256F.05, subdivision 8; 
                  256J.02, subdivision 4; 256J.03; 256J.08, subdivisions 
                  11, 26, 28, 40, 60, 68, 73, 83, and by adding 
                  subdivisions; 256J.09, subdivisions 6 and 9; 256J.11, 
                  subdivision 2, as amended; 256J.12; 256J.14; 256J.15, 
                  subdivision 2; 256J.20, subdivisions 2 and 3; 256J.21; 
                  256J.24, subdivisions 1, 2, 3, 4, 7, and by adding 
                  subdivisions; 256J.26, subdivisions 1, 2, 3, and 4; 
                  256J.28, subdivisions 1, 2, and by adding a 
                  subdivision; 256J.30, subdivisions 10 and 11; 256J.31, 
                  subdivisions 5, 10, and by adding a subdivision; 
                  256J.32, subdivisions 4, 6, and by adding a 
                  subdivision; 256J.33, subdivisions 1 and 4; 256J.35; 
                  256J.36; 256J.37, subdivisions 1, 2, 9, and by adding 
                  subdivisions; 256J.38, subdivision 1; 256J.39, 
                  subdivision 2; 256J.395; 256J.42; 256J.43; 256J.45, 
                  subdivisions 1, 2, and by adding a subdivision; 
                  256J.46, subdivisions 1, 2, and 2a; 256J.47, 
                  subdivision 4; 256J.48, subdivisions 2 and 3; 256J.49, 
                  subdivision 4; 256J.50, subdivision 5, and by adding 
                  subdivisions; 256J.515; 256J.52, subdivision 4, and by 
                  adding subdivisions; 256J.54, subdivisions 2, 3, 4, 
                  and 5; 256J.55, subdivision 5; 256J.56; 256J.57, 
                  subdivision 1; 256J.645, subdivision 3; 256J.74, 
                  subdivision 2, and by adding a subdivision; 256K.03, 
                  subdivision 5; 256L.01; 256L.02, subdivision 3, and by 
                  adding a subdivision; 256L.03, subdivisions 1, 3, 4, 
                  5, and by adding subdivisions; 256L.04, subdivisions 
                  1, 2, 7, 8, 9, 10, and by adding subdivisions; 
                  256L.05, subdivisions 2, 3, 4, and by adding 
                  subdivisions; 256L.06, subdivision 3; 256L.07; 
                  256L.09, subdivisions 2, 4, and 6; 256L.11, 
                  subdivision 6; 256L.12, subdivision 5; 256L.15; 
                  256L.17, by adding a subdivision; 257.071, subdivision 
                  1d; 257.85, subdivision 5; 259.22, subdivision 4; 
                  259.47, subdivision 3; 259.58; 259.60, subdivision 2; 
                  260.012; 260.015, subdivisions 2a and 29; 260.161, 
                  subdivision 2; 260.191, subdivisions 1, 1a, 3a, and 
                  3b; 260.241, subdivision 3; and 270A.03, subdivision 
                  5; Laws 1994, chapter 633, article 7, section 3; Laws 
                  1997, chapter 195, section 5; chapter 203, article 4, 
                  section 64; article 9, section 21; chapter 207, 
                  section 7; chapter 225, article 2, section 64; and 
                  chapter 248, section 46, as amended; proposing coding 
                  for new law in Minnesota Statutes, chapters 62J; 62Q; 
                  144; 145; 245; 256; 256B; 256D; and 256J; repealing 
                  Minnesota Statutes 1996, sections 62J.685; 144.0721, 
                  subdivision 3a; 144.491; 144.9501, subdivisions 12, 
                  14, and 16; 144.9503, subdivisions 5, 8, and 9; 
                  157.15, subdivision 15; 256.031, subdivisions 1, 2, 3, 
                  and 4; 256.032; 256.033, subdivisions 2, 3, 4, 5, and 
                  6; 256.034; 256.035; 256.036; 256.0361; 256.047; 
                  256.0475; 256.048; and 256.049; Minnesota Statutes 
                  1997 Supplement, sections 62D.042, subdivision 3; 
                  144.0721, subdivision 3; 256.031, subdivisions 5 and 
                  6; 256.033, subdivisions 1 and 1a; 256B.057, 
                  subdivision 1a; 256B.062; 256B.0913, subdivision 15; 
                  256J.25; 256J.28, subdivision 4; 256J.32, subdivision 
                  5; 256J.34, subdivision 5; 256L.04, subdivisions 3, 4, 
                  5, and 6; 256L.06, subdivisions 1 and 2; 256L.08; 
                  256L.09, subdivision 3; 256L.13; and 256L.14; Laws 
                  1997, chapter 85, article 1, sections 61 and 71; and 
                  article 3, section 55. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                                 APPROPRIATIONS 
        Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
           The sums shown in the columns marked "APPROPRIATIONS" are 
        appropriated from the general fund, or any other fund named, to 
        the agencies and for the purposes specified in the following 
        sections of this article, to be available for the fiscal years 
        indicated for each purpose.  The figures "1998" and "1999" where 
        used in this article, mean that the appropriation or 
        appropriations listed under them are available for the fiscal 
        year ending June 30, 1998, or June 30, 1999, respectively.  
        Where a dollar amount appears in parentheses, it means a 
        reduction of an appropriation.  
                                SUMMARY BY FUND 
        APPROPRIATIONS                                      BIENNIAL
                                  1998          1999           TOTAL
        General            $ (139,959,000)$ (161,811,000)$ (301,770,000)
        State Government
        Special Revenue           113,000        231,000        344,000
        Health Care Access 
        Fund                   (3,130,000)   (14,203,000)   (17,333,000)
        TOTAL              $ (142,976,000)$ (175,783,000)$ (318,759,000)
                                                   APPROPRIATIONS 
                                               Available for the Year 
                                                   Ending June 30 
                                                  1998         1999 
        Sec. 2.  COMMISSIONER OF 
        HUMAN SERVICES 
        Subdivision 1.  Total 
        Appropriation                     $ (143,089,000)$ (196,131,000)
                      Summary by Fund
        General            (139,959,000) (181,669,000)
        Health Care Access   (3,130,000)  (14,462,000)
        This appropriation is taken from the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 2. 
        The amounts that are added to or 
        reduced from the appropriation for each 
        program are specified in the following 
        subdivisions. 
        Subd. 2.  Children's Grants
                -0-         1,618,000 
        [CRISIS NURSERY PROGRAMS.] Of this 
        appropriation, $200,000 in fiscal year 
        1999 is from the general fund to the 
        commissioner to contract for technical 
        assistance with counties and private 
        nonprofit agencies that are interested 
        in developing a crisis nursery 
        program.  The technical assistance must 
        be designed to assist interested 
        counties in building capacity to 
        develop and maintain a crisis nursery 
        program in the county.  The grant 
        amounts must not exceed $20,000.  To be 
        eligible to receive a grant under this 
        program, the county must not have an 
        existing crisis nursery program and 
        must not be a metropolitan county, as 
        that term is defined in Minnesota 
        Statutes, section 473.121.  Grants must 
        be distributed by award letters to 
        agencies demonstrating a need for 
        crisis nursery services and documenting 
        community support for these efforts.  
        This appropriation shall not become 
        part of base level funding for the 
        2000-2001 biennium. 
        [CHILDREN'S MENTAL HEALTH SERVICES.] 
        (a) Of this appropriation, $300,000 in 
        fiscal year 1999 is from the general 
        fund for the commissioner to award 
        grants to counties that have a 
        relatively low net tax capacity to 
        provide children's mental health 
        services to children and families 
        residing outside of a metropolitan 
        statistical area, as that term is 
        defined by the United States Census 
        Bureau.  Funds shall be used to provide 
        services according to an individual 
        family community support plan as 
        described in Minnesota Statutes, 
        section 245.4881, subdivision 4.  The 
        plan must be developed using a process 
        that enhances consumer empowerment.  
        Counties with an approved children's 
        mental health collaborative may 
        integrate funds appropriated for fiscal 
        years 1998 and 1999 with existing funds 
        to meet the needs identified in the 
        child's individual family community 
        support plan. 
        (b) In awarding grants to counties 
        under this provision, the commissioner 
        shall follow the process established in 
        Minnesota Statutes, section 245.4886, 
        subdivision 2.  The commissioner shall 
        give priority for funding to counties 
        that continued to spend for mental 
        health services specified in Minnesota 
        Statutes, sections 245.461 to 245.486 
        and 245.487 to 245.4888, according to 
        generally accepted accounting 
        principles, in an amount equal to the 
        total expenditures shown in the 
        county's approved 1987 CSSA plan for 
        services to persons with mental illness 
        plus the comparable figure for 
        facilities licensed under Minnesota 
        Rules, chapter 9545, for target 
        populations other than mental illness 
        in the county's approved 1989 CSSA 
        plan.  The commissioner shall ensure 
        that grant funds are not used to 
        replace existing funds. 
        [PRIMARY SUPPORT TO IMPLEMENT THE 
        INDIAN FAMILY PRESERVATION ACT.] For 
        fiscal year 1998, $100,000 of federal 
        funds are transferred from the state's 
        federal TANF block grant and added to 
        the state's allocation of federal Title 
        XX block grant funds.  Notwithstanding 
        the provisions of Minnesota Statutes 
        1997 Supplement, section 256E.07, the 
        commissioner shall use $100,000 of the 
        state's Title XX block grant funds for 
        a grant under Minnesota Statutes, 
        section 257.3571, subdivision 1, to an 
        Indian organization licensed as an 
        adoption agency.  The grant must be 
        used to provide primary support for 
        implementation of the Minnesota Indian 
        Family Preservation Act and compliance 
        with the Indian Child Welfare Act.  
        This appropriation must be used 
        according to the requirements of United 
        States Code, title 42, section 
        604(d)(3)(B).  This appropriation is 
        available until June 30, 1999. 
        [ADOPTION ASSISTANCE CARRYFORWARD.] Of 
        the appropriation in Laws 1997, chapter 
        203, section 2, subdivision 3, for 
        children's grants for fiscal year 1998, 
        $600,000 of the amount appropriated for 
        the adoption assistance program is 
        available for the same purpose in 
        fiscal year 1999.  The amount carried 
        forward shall become part of the base 
        for the adoption assistance program in 
        the 2000-2001 biennial budget. 
        [FAMILY PRESERVATION PROGRAM FUNDING.] 
        $10,200,000 is transferred in fiscal 
        year 1999 from the state's federal TANF 
        block grant to the state's federal 
        Title XX block grant.  Notwithstanding 
        the provisions of Minnesota Statutes 
        1997 Supplement, section 256E.07, in 
        fiscal year 1999 the commissioner shall 
        transfer $10,000,000 of the state's 
        Title XX block grant funds to the 
        family preservation program under 
        Minnesota Statutes, chapter 256F.  The 
        commissioner shall transfer $200,000 to 
        the commissioner of health for the 
        program under Minnesota Statutes, 
        section 145A.15, that funds home 
        visiting projects; these transferred 
        funds are available until expended.  
        The commissioners shall ensure that 
        money allocated to counties under this 
        provision must be used in accordance 
        with the requirements of United States 
        Code, title 42, section 604(d)(3)(B).  
        These are one-time appropriations that 
        shall not be added to the base for 
        these programs for the 2000-2001 
        biennial budget. 
        Subd. 3.  Basic Health Care Grants
           (97,529,000)  (146,802,000)
                      Summary by Fund
        General             (94,591,000) (128,833,000)
        Health Care Access   (2,938,000)  (17,969,000)
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Minnesota Care Grants
        Health Care Access Fund
            (2,938,000)   (17,969,000)
        [SUBSIDIZED FAMILY HEALTH COVERAGE.] Of 
        this appropriation, $500,000 from the 
        health care access fund in fiscal year 
        1999 is to implement the 
        employer-subsidized health coverage 
        program described in article 5, section 
        45.  
        (b) MA Basic Health Care Grants-
        Families and Children
        General (32,047,000)  (65,249,000)
        [FETAL ALCOHOL SYNDROME MEDICAL 
        ASSISTANCE FEDERAL MATCH.] The 
        commissioner shall claim all available 
        federal match under Title XIX for the 
        fetal alcohol syndrome/fetal alcohol 
        effect initiatives.  Grants and 
        projects shall be developed which focus 
        treatment on community-based options 
        which consider the availability of 
        federal match. 
        (c) MA Basic Health Care Grants- 
        Elderly and  Disabled
        General (25,643,000)  (40,952,000)
        (d) General Assistance Medical Care
        General (36,901,000)  (22,632,000)
        [PRESCRIPTION DRUG BENEFIT.] (a) If, by 
        September 15, 1998, federal approval is 
        obtained to provide a prescription drug 
        benefit for qualified Medicare 
        beneficiaries at no less than 100 
        percent of the federal poverty 
        guidelines and service-limited Medicare 
        beneficiaries under Minnesota Statutes, 
        section 256B.057, subdivision 3a, at no 
        less than 120 percent of federal 
        poverty guidelines, the commissioner of 
        human services shall not implement the 
        senior citizen drug program under 
        Minnesota Statutes, section 256.955, 
        but shall implement a drug benefit in 
        accordance with the approved waiver.  
        Upon approval of this waiver, the total 
        appropriation for the senior citizen 
        drug program under Laws 1997, chapter 
        225, article 7, section 2, shall be 
        transferred to the medical assistance 
        account to fund the federally approved 
        coverage for eligible persons for 
        fiscal year 1999. 
        (b) The commissioner may seek approval 
        for a higher copayment for eligible 
        persons above 100 percent of the 
        federal poverty guidelines. 
        (c) The commissioner shall report by 
        October 15, 1998, to the chairs of the 
        health and human services policy and 
        fiscal committees of the house and 
        senate whether the waiver referred to 
        in paragraph (a) has been approved and 
        will be implemented or whether the 
        state senior citizen drug program will 
        be implemented. 
        (d) If the commissioner does not 
        receive federal waiver approval at or 
        above the level of eligibility defined 
        in paragraph (a), the commissioner 
        shall implement the program under 
        Minnesota Statutes, section 256.955. 
        [HEALTH CARE ACCESS FUND TRANSFERS TO 
        THE GENERAL FUND.] Notwithstanding Laws 
        1997, chapter 203, article 1, section 
        2, subdivision 5, the commissioner 
        shall transfer funds from the health 
        care access fund to the general fund to 
        offset the projected savings to general 
        assistance medical care (GAMC) that 
        would result from the transition of 
        GAMC parents and adults without 
        children to MinnesotaCare.  For fiscal 
        year 1998, the amount transferred from 
        the health care access fund to the 
        general fund shall be $13,700,000.  The 
        amount of transfer for fiscal year 1999 
        shall be $2,659,000. 
        Subd. 4.  Basic Health Care Management
              (192,000)     2,448,000 
                      Summary by Fund
        General                 -0-            25,000
        Health Care Access     (192,000)    2,423,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Health Care Policy Administration
        General                 -0-            25,000
        Health Care Access     (192,000)      354,000
        [DELAY IN TRANSFERRING GAMC CLIENTS.] 
        Due to delaying the transfer of GAMC 
        clients to MinnesotaCare until January 
        1, 2000, $192,000 in fiscal year 1998 
        health care access fund administrative 
        funds, appropriated in Laws 1997, 
        chapter 225, article 7, section 2, 
        subdivision 1, are canceled. 
        [HEALTH CARE MANUAL PRODUCTION COSTS.] 
        For the biennium ending June 30, 1999, 
        the commissioner may charge a fee for 
        the health care manual.  The difference 
        between the cost of producing and 
        distributing the department of human 
        services health care manual, and the 
        fees paid by individuals and private 
        entities on January 1, 1998, is 
        appropriated to the commissioner to 
        defray manual production and 
        distribution costs.  The commissioner 
        must provide the health care manual to 
        government agencies and nonprofit 
        agencies serving the legal and social 
        service needs of clients at no cost to 
        those agencies. 
        [TRANSFER.] For fiscal years 2000 and 
        2001, the commissioner of finance shall 
        transfer from the health care access 
        fund to the general fund an amount to 
        cover the expenditures associated with 
        the services provided to pregnant women 
        and children under the age of two 
        enrolled in the MinnesotaCare program.  
        Notwithstanding section 7, this 
        provision expires on July 1, 2001.  
        [FEDERAL CONTINGENCY RESERVE LIMIT.] 
        Notwithstanding Minnesota Statutes, 
        section 16A.76, subdivision 2, the 
        federal contingency reserve limit shall 
        be reduced for fiscal years 1999, 2000, 
        and 2001 by the cumulative amount of 
        the expenditures associated with 
        services provided to pregnant women and 
        children enrolled in the MinnesotaCare 
        program in these fiscal years.  
        Notwithstanding section 7, this 
        provision expires on July 1, 2001. 
        [MINNESOTACARE OUTREACH FEDERAL 
        MATCHING FUNDS.] Any federal matching 
        funds received as a result of the 
        MinnesotaCare outreach activities 
        authorized by Laws 1997, chapter 225, 
        article 7, section 2, subdivision 1, 
        shall be deposited in the health care 
        access fund and dedicated to the 
        commissioner of human services to be 
        used for those outreach purposes. 
        (b) Health Care Operations
        Health Care Access      -0-         2,069,000
        [MINNESOTACARE OUTREACH.] Unexpended 
        money in fiscal year 1998 for 
        MinnesotaCare outreach activities 
        appropriated in Laws 1997, chapter 225, 
        article 7, section 2, subdivision 1, 
        does not cancel, but is available for 
        those purposes in fiscal year 1999. 
        Subd. 5.  State-Operated Services
                -0-          (254,000) 
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) RTC Facilities
                -0-           700,000
        [LEAVE LIABILITIES.] The accrued leave 
        liabilities of state employees 
        transferred to state-operated community 
        services programs may be paid from the 
        appropriation for state-operated 
        services in Laws 1997, chapter 203, 
        article 1, section 2, subdivision 7, 
        paragraph (a).  Funds set aside for 
        this purpose shall not exceed the 
        amount of the actual leave liability 
        calculated as of June 30, 1999, and 
        shall be available until expended.  
        This provision is effective the day 
        following final enactment. 
        [GRAVE MARKERS.] Of the $195,000 
        retained by the commissioner from the 
        $200,000 appropriation in Laws 1997, 
        chapter 203, article 1, section 2, 
        subdivision 7, paragraph (a), for grave 
        markers at regional treatment centers, 
        $29,250 is for community organizing, 
        coordination, fundraising, and 
        administration. 
        [RTC BUILDING AND SPACE ANALYSIS.] Of 
        this appropriation, $50,000 from the 
        general fund in fiscal year 1999 is for 
        the commissioner to conduct an analysis 
        of surplus land and buildings on the 
        regional treatment center campuses and 
        to develop recommendations for future 
        utilization of this property.  The 
        commissioner shall report to the 
        legislature by January 15, 1999, with 
        recommendations for an orderly process 
        to sell, lease, demolish, transfer, or 
        otherwise dispose of unneeded buildings 
        and land. 
        (b) State-Operated Community 
        Services - DD
               -0-           (954,000)
        Subd. 6.  Continuing Care and 
        Community Support Grants
           (36,806,000)    (9,289,000)
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Community Services Block Grants
               130,000        846,000 
        [WILKIN COUNTY FLOOD COSTS.] Of this 
        appropriation, $130,000 for fiscal year 
        1998 is to reimburse Wilkin county for 
        flood-related human service and public 
        health costs which cannot be reimbursed 
        through any other source. 
        (b) Aging Adult Service Grants
               -0-            250,000 
        [METROPOLITAN AREA AGENCY ON AGING.] Of 
        this appropriation, $100,000 in fiscal 
        year 1999 from the general fund is for 
        the commissioner for the metropolitan 
        area agency on aging to provide 
        technical support and planning services 
        to enable older adults to remain living 
        in the community.  This appropriation 
        shall not cancel but is available until 
        expended.* (The preceding text 
        beginning "[METROPOLITAN AREA AGENCY ON 
        AGING.]" was vetoed by the governor.) 
        [HOME SHARING.] Of this appropriation, 
        $150,000 in fiscal year 1999 is from 
        the general fund to the commissioner 
        for the home-sharing program under 
        Minnesota Statutes, section 256.973, 
        which links elderly, disabled, and 
        families together to share a home. 
        (c) Deaf and Hard-of-Hearing 
        Services Grants
               -0-            234,000 
        [SERVICES FOR DEAF-BLIND PERSONS.] Of 
        this appropriation, $150,000 in fiscal 
        year 1999 is for the following: 
        (1) $100,000 for a grant to Deaf Blind 
        Services Minnesota, Inc., in order to 
        provide services to deaf-blind children 
        and their families.  The services 
        include providing intervenors to assist 
        deaf-blind children in participating in 
        their community and providing family 
        education specialists to teach siblings 
        and parents skills to support the 
        deaf-blind child in the family. 
        (2) $50,000 is for a grant to Deaf 
        Blind Services Minnesota, Inc., and 
        Duluth Lighthouse for the Blind, Inc., 
        in order to provide assistance to 
        deaf-blind persons who are working 
        toward establishing and maintaining 
        independence. 
        (d) Mental Health Grants
               100,000      1,803,000 
        [DD CRISIS INTERVENTION PROJECT.] Of 
        this appropriation, $125,000 in fiscal 
        year 1999 is from the general fund to 
        the commissioner for start-up operating 
        and training costs for the action, 
        support, and prevention project of 
        southeastern Minnesota.  This 
        appropriation is to provide crisis 
        intervention through community-based 
        services in the private sector to 
        persons with developmental disabilities 
        under Laws 1995, chapter 207, article 
        3, section 22.  This appropriation 
        shall not become part of base level 
        funding for the 2000-2001 biennium. 
        [FLOOD COSTS.] Of this appropriation, 
        $100,000 for fiscal year 1998 and 
        $700,000 for fiscal year 1999 is to pay 
        for flood-related mental health 
        services and to reimburse mental health 
        centers for the cost of disruptions in 
        the mental health centers' other 
        services that were caused by diversion 
        of staff to flood efforts.  Funding is 
        limited to costs for services which 
        cannot be reimbursed through any other 
        source in counties officially declared 
        as disaster areas. 
        [COMPULSIVE GAMBLING CARRYFORWARD.] 
        Unexpended funds appropriated to the 
        commissioner for compulsive gambling 
        programs for fiscal year 1998 do not 
        cancel but are available for these 
        purposes for fiscal year 1999. 
        (e) Developmental Disabilities
        Support Grants
               -0-            162,000 
        (f) Medical Assistance Long-Term 
        Care Waivers and Home Care
            (3,936,000)    (2,435,000) 
        [JULY 1, 1998, PROVIDER RATE INCREASE.] 
        (1) Effective for services rendered on 
        or after July 1, 1998, the commissioner 
        shall increase reimbursement or 
        allocation rates by three percent, and 
        county boards shall adjust provider 
        contracts as needed, for home and 
        community-based waiver services for 
        persons with mental retardation or 
        related conditions under Minnesota 
        Statutes, section 256B.501; home and 
        community-based waiver services for the 
        elderly under Minnesota Statutes, 
        section 256B.0915; waivered services 
        under community alternatives for 
        disabled individuals under Minnesota 
        Statutes, section 256B.49; community 
        alternative care waivered services 
        under Minnesota Statutes, section 
        256B.49; traumatic brain injury 
        waivered services under Minnesota 
        Statutes, section 256B.49; nursing 
        services and home health services under 
        Minnesota Statutes, section 256B.0625, 
        subdivision 6a; personal care services 
        and nursing supervision of personal 
        care services under Minnesota Statutes, 
        section 256B.0625, subdivision 19a; 
        private duty nursing services under 
        Minnesota Statutes, section 256B.0625, 
        subdivision 7; day training and 
        habilitation services for adults with 
        mental retardation or related 
        conditions under Minnesota Statutes, 
        sections 252.40 to 252.46; physical 
        therapy services under Minnesota 
        Statutes, sections 256B.0625, 
        subdivision 8, and 256D.03, subdivision 
        4; occupational therapy services under 
        Minnesota Statutes, sections 256B.0625, 
        subdivision 8a, and 256D.03, 
        subdivision 4; speech-language therapy 
        services under Minnesota Statutes, 
        section 256D.03, subdivision 4, and 
        Minnesota Rules, part 9505.0390; 
        respiratory therapy services under 
        Minnesota Statutes, section 256D.03, 
        subdivision 4, and Minnesota Rules, 
        part 9505.0295; dental services under 
        Minnesota Statutes, sections 256B.0625, 
        subdivision 9, and 256D.03, subdivision 
        4; alternative care services under 
        Minnesota Statutes, section 256B.0913; 
        adult residential program grants under 
        Minnesota Rules, parts 9535.2000 to 
        9535.3000; adult and family community 
        support grants under Minnesota Rules, 
        parts 9535.1700 to 9535.1760; 
        semi-independent living services under 
        Minnesota Statutes, section 252.275, 
        including SILS funding under county 
        social services grants formerly funded 
        under Minnesota Statutes, chapter 256I; 
        day treatment under Minnesota Rules, 
        part 9505.0323; the skills training 
        component of (a) family community 
        support services under Minnesota 
        Statutes, section 256B.0625, 
        subdivisions 5 and 35, (b) therapeutic 
        support of foster care under Minnesota 
        Statutes, section 256B.0625, 
        subdivisions 5 and 36, and (c) 
        home-based treatment under Minnesota 
        Rules, part 9505.0324; and community 
        support services for deaf and 
        hard-of-hearing adults with mental 
        illness who use or wish to use sign 
        language as their primary means of 
        communication. 
        (2) Effective January 1, 1999, the 
        commissioner shall increase capitation 
        rates in the prepaid medical assistance 
        program, prepaid general assistance 
        medical care program, and prepaid 
        MinnesotaCare program as appropriate to 
        reflect the rate increases in paragraph 
        (l). 
        (3) It is the intention of the 
        legislature that the compensation 
        packages of staff within each service 
        be increased by three percent. 
        (4) Section 7, sunset of uncodified 
        language, does not apply to this 
        provision. 
        (g) Medical Assistance Long-Term
        Care Facilities
           (24,318,000)   (16,911,000)                 
        [ICFs/MR AND NURSING FACILITY 
        FLOOD-RELATED REPORTING.] For the 
        reporting year ending December 31, 
        1997, for ICFs/MR that temporarily 
        admitted victims of the flood of 1997, 
        the resident days related to the 
        temporary placement of persons not 
        formally admitted who continued to be 
        billed under the evacuated facility's 
        provider number shall not be counted in 
        the cost report submitted to calculate 
        October 1, 1998, rates, and the 
        additional expenditures shall be 
        considered nonallowable. 
        For the reporting year ending September 
        30, 1997, for nursing facilities that 
        temporarily admitted victims of the 
        flood of 1997, the resident days 
        related to the temporary placement of 
        persons not formally admitted who 
        continued to be billed under the 
        evacuated facility's provider number 
        shall not be counted in the cost report 
        submitted to calculate July 1, 1998, 
        rates, and the additional expenditures 
        shall be considered nonallowable. 
        [ICF/MR DISALLOWANCES.] Of this 
        appropriation, $65,000 in fiscal year 
        1999 is from the general fund to the 
        commissioner for the purpose of 
        reimbursing a 12-bed ICF/MR in Stearns 
        county and a 12-bed ICF/MR in Sherburne 
        county for disallowances resulting from 
        field audit findings.  The commissioner 
        shall exempt these facilities from the 
        provisions of Minnesota Statutes, 
        section 256B.501, subdivision 5b, 
        paragraph (d), clause (6), for the rate 
        years beginning October 1, 1997, and 
        October 1, 1998.  Section 10, sunset of 
        uncodified language, does not apply to 
        this provision. 
        [NURSING HOME MORATORIUM EXCEPTIONS.] 
        Base level funding for medical 
        assistance long-term care facilities is 
        increased by $255,000 in fiscal year 
        2000 and by $278,000 in fiscal year 
        2001 for the additional medical 
        assistance costs of the nursing home 
        moratorium exceptions under Minnesota 
        Statutes 1997 Supplement, section 
        144A.071, subdivision 4a, paragraphs 
        (w) and (x).  Notwithstanding the 
        provisions of section 7, sunset of 
        uncodified language, this provision 
        shall not expire. 
        (h) Alternative Care Grants  
               -0-         22,663,000                
        (i) Group Residential Housing
            (8,782,000)    (8,408,000)                
        [SERVICES TO DEAF PERSONS WITH MENTAL 
        ILLNESS.] Of this appropriation, 
        $65,000 in fiscal year 1999 is from the 
        general fund to the commissioner for a 
        grant to a nonprofit agency that 
        currently serves deaf and 
        hard-of-hearing adults with mental 
        illness through residential programs 
        and supported housing outreach 
        activities.  The grant must be used to 
        continue or maintain 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.  This 
        appropriation is in addition to the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 2, subdivision 
        8, paragraph (d), for a grant to this 
        nonprofit agency.  This appropriation 
        shall not become part of base level 
        funding for the 2000-2001 biennium. 
        (j) Chemical Dependency
        Entitlement Grants
               -0-         (7,893,000)                
        [CHEMICAL DEPENDENCY RESERVE ACCOUNT.] 
        For fiscal year 1999, $3,000,000 is 
        canceled from the chemical dependency 
        reserve account within the consolidated 
        chemical dependency treatment fund to 
        the general fund. 
        (k) Chemical Dependency                                        
        Nonentitlement Grants 
               -0-            400,000                                   
        [MATCHING GRANT FOR YOUTH ALCOHOL 
        TREATMENT.] Of this appropriation, 
        $400,000 in fiscal year 1999 is from 
        the general fund for the commissioner 
        to provide a grant to the board of 
        directors of the Minnesota Indian 
        Primary Residential Treatment Center, 
        Inc., to build a youth alcohol 
        treatment wing at the Mash-Ka-Wisen 
        Treatment Center.  This appropriation 
        is available only if matched by a 
        $1,500,000 federal grant and a $100,000 
        grant from state Indian bands. 
        [MATCHING GRANT FOR PROJECT TURNABOUT.] 
        If money is appropriated in fiscal year 
        1999 to the commissioner from the 
        lottery prize fund, the money shall be 
        used to provide a grant for capital 
        improvements to Project Turnabout in 
        Granite Falls.  A local match is 
        required before the commissioner may 
        release this appropriation to the 
        facility.  The facility shall receive 
        state funds equal to the amount of 
        local matching funds provided, up to 
        the limit of this appropriation. 
        Subd. 7.  Continuing Care and
        Community Support Management
               -0-             25,000                
        [REGION 10 COMMISSION CARRYOVER 
        AUTHORITY.] Any unspent portion of the 
        appropriation to the commissioner in 
        Laws 1997, chapter 203, article 1, 
        section 2, subdivision 9, for the 
        region 10 quality assurance commission 
        for fiscal year 1998 shall not cancel 
        but shall be available for the 
        commission for fiscal year 1999. 
        [STUDY OF DAY TRAINING CAPITAL NEEDS.] 
        (a) Of this appropriation, $25,000 in 
        fiscal year 1999 is from the general 
        fund to the commissioner to conduct a 
        study to: 
        (1) determine the extent to which day 
        training and habilitation programs have 
        unmet capital improvement needs; 
        (2) ascertain the degree to which these 
        unmet capital needs impact consumers of 
        day training and habilitation programs; 
        (3) determine the state's role and 
        responsibility in meeting the capital 
        improvement needs of day training and 
        habilitation programs; and 
        (4) examine the relationship among the 
        state, counties, and community 
        resources in meeting the capital 
        improvement needs of day training and 
        habilitation programs. 
        (b) The commissioner shall report to 
        the legislature by January 15, 1999, 
        the results of the study along with 
        recommendations for involving the 
        state, counties, and community 
        resources in collaborative initiatives 
        to assist in meeting the capital 
        improvement needs of day training and 
        habilitation programs. 
        (c) This appropriation shall not become 
        part of base level funding for the 
        2000-2001 biennium.* (The preceding 
        text beginning "[STUDY OF DAY TRAINING 
        CAPITAL NEEDS.]" was vetoed by the 
        governor.) 
        Subd. 8.  Economic Support Grants
            (8,562,000)   (44,961,000)                
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Assistance to Families Grants
             1,173,000    (32,282,000)                
        [FEDERAL TANF FUNDS.] Notwithstanding 
        any contrary provisions of Laws 1997, 
        chapter 203, article 1, section 2, 
        subdivision 12, federal TANF block 
        grant funds are appropriated to the 
        commissioner in amounts up to 
        $230,200,000 in fiscal year 1998 and 
        $285,990,000 in fiscal year 1999. 
        Additional federal TANF funds may be 
        expended but only to the extent that an 
        equal amount of state funds have been 
        transferred to the TANF reserve under 
        Minnesota Statutes, section 256J.03.  
        [TRANSFER OF STATE MONEY FROM TANF 
        RESERVE.] For fiscal year 1999, 
        $5,416,000 is appropriated from the 
        state money in the TANF reserve to the 
        commissioner for the purposes of 
        funding the Minnesota food assistance 
        program under Minnesota Statutes, 
        section 256D.053, and the eligibility 
        of legal noncitizens who were not 
        Minnesota residents on March 1, 1997, 
        for the general assistance program 
        under the amendments to Minnesota 
        Statutes, section 256D.05, subdivision 
        8, in article 6. 
        [TRANSFER OF FEDERAL TANF FUNDS TO 
        CHILD CARE DEVELOPMENT FUND.] $791,000 
        is transferred in fiscal year 1999 from 
        the state's federal TANF block grant to 
        the state's child care development 
        fund, and is appropriated to the 
        commissioner of children, families, and 
        learning for the purposes of Minnesota 
        Statutes, section 119B.05. 
        [TRANSFER FROM STATE TANF RESERVE.] 
        Notwithstanding the provisions of 
        Minnesota Statutes, section 256J.03, 
        $7,799,000 is transferred from the 
        state TANF reserve account to the 
        general fund in fiscal year 2000.  
        Notwithstanding section 7, this 
        provision expires on July 1, 2000. 
        (b) Work Grants
                -0-        (1,000,000)
        [FOOD STAMP EMPLOYMENT AND TRAINING 
        APPROPRIATION REDUCTION.] The 
        appropriation in Laws 1997, chapter 
        203, article 1, section 2, subdivision 
        10, paragraph (b), for fiscal year 1999 
        for work grants is reduced by 
        $1,000,000.  This reduction shall be 
        taken from the fiscal year 1999 
        appropriation for the food stamp 
        employment and training program. 
        (c) Child Support Enforcement
                -0-        (1,100,000)
        [CHILD SUPPORT CARRYOVER AUTHORITY.] 
        Any unspent portion of the 
        appropriation to the commissioner in 
        Laws 1997, chapter 203, article 1, 
        section 2, subdivision 10, for child 
        support enforcement activities for 
        fiscal year 1998 shall not cancel but 
        shall be available to the commissioner 
        for fiscal year 1999.  The 
        appropriation in Laws 1997, chapter 
        203, article 1, section 2, subdivision 
        10, for child support enforcement 
        activities for fiscal year 1999 is 
        reduced by $1,100,000.  This reduction 
        shall not reduce base level funding for 
        these activities for the 2000-2001 
        biennium. 
        (d) General Assistance
             (6,933,000)   (6,321,000)
        (e) Minnesota Supplemental Aid
             (2,802,000)   (4,258,000)
        Subd. 9.  Economic Support  
        Management
        Health Care Access      -0-         1,084,000
        [ASSESSMENT OF AFFORDABLE HOUSING 
        SUPPLY.] The commissioner of human 
        services shall assess the statewide 
        supply of affordable housing for all 
        MFIP-S and GA recipients, and report to 
        the legislature by January 15, 1999, on 
        the results of this assessment. 
        Sec. 3.  COMMISSIONER OF HEALTH 
        Subdivision 1.  Total 
        Appropriation                            -0-         20,147,000
                      Summary by Fund
        General                 -0-        19,780,000
        State Government
        Special Revenue         -0-           108,000
        Health Care Access      -0-           259,000
        This appropriation is added to the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 3. 
        The amounts that may be spent from this 
        appropriation for each program are 
        specified in the following subdivisions.
        Subd. 2.  Health Systems
        and Special Populations                  -0-         15,459,000
                      Summary by Fund
        General                 -0-        15,200,000
        Health Care Access      -0-           259,000
        [FETAL ALCOHOL SYNDROME.] (a) Of this 
        appropriation, $5,000,000 in fiscal 
        year 1999 is from the general fund to 
        the commissioner for the fetal alcohol 
        syndrome/fetal alcohol effect (FAS/FAE) 
        initiatives specified in paragraphs (b) 
        to (k). 
        (b) Of the amount in paragraph (a), 
        $200,000 is transferred to the 
        commissioner of children, families, and 
        learning for school-based pilot 
        programs to identify and implement 
        effective educational strategies for 
        individuals with FAS/FAE. 
        (c) Of the amount in paragraph (a), 
        $800,000 is for the public awareness 
        campaign under Minnesota Statutes, 
        section 145.9266, subdivision 1. 
        (d) Of the amount in paragraph (a), 
        $400,000 is to develop a statewide 
        network of regional FAS diagnostic 
        clinics under Minnesota Statutes, 
        section 145.9266, subdivision 2. 
        (e) Of the amount in paragraph (a), 
        $150,000 is for professional training 
        about FAS under Minnesota Statutes, 
        section 145.9266, subdivision 3. 
        (f) Of the amount in paragraph (a), 
        $350,000 is for the fetal alcohol 
        coordinating board under Minnesota 
        Statutes, section 145.9266, subdivision 
        6. 
        (g) Of the amount in paragraph (a), 
        $800,000 is transferred to the 
        commissioner of human services to 
        expand the maternal and child health 
        social service programs under Minnesota 
        Statutes, section 254A.17, subdivision 
        1.  Of this amount, $184,000 shall be 
        used by the commissioner of human 
        services to eliminate the asset 
        standards for medical assistance 
        eligibility for pregnant women. 
        (h) Of the amount in paragraph (a), 
        $200,000 is for the commissioner to 
        study the extent of fetal alcohol 
        syndrome in the state. 
        (i) Of the amount in paragraph (a), 
        $400,000 is transferred to the 
        commissioner of human services for the 
        intervention and advocacy program under 
        Minnesota Statutes, section 254A.17, 
        subdivision 1b. 
        (j) Of the amount in paragraph (a), 
        $850,000 is for the FAS community grant 
        program under Minnesota Statutes, 
        section 145.9266, subdivision 4. 
        (k) Of the amount in paragraph (a), 
        $850,000 is transferred to the 
        commissioner of human services to 
        expand treatment services and halfway 
        houses for pregnant women and women 
        with children who abuse alcohol during 
        pregnancy. 
        [RURAL PHYSICIAN LOAN FORGIVENESS 
        BUDGET REQUEST.] The budget request for 
        the rural physician loan forgiveness 
        program in the 2000-2001 biennial 
        budget shall detail the amount of funds 
        carried forward and obligations 
        canceled. 
        [CONSUMER ADVISORY BOARD.] Of the 
        general fund appropriation for fiscal 
        year 1999, $50,000 is to the 
        commissioner to reimburse members of 
        the consumer advisory board for travel, 
        food, and lodging expenses incurred by 
        board members in the course of 
        conducting board duties. 
        [MEDICAL EDUCATION AND RESEARCH TRUST 
        FUND.] Of the general fund 
        appropriation, $10,000,000 in fiscal 
        year 1999 is to the commissioner for 
        the medical education and research 
        trust fund.  Of this amount, $5,000,000 
        shall become part of base level funding 
        for the biennium beginning July 1, 1999.
        [MERC FEDERAL FINANCIAL PARTICIPATION.] 
        (1) The commissioner of human services 
        shall seek to maximize federal 
        financial participation for payments 
        for medical education and research 
        costs. 
        (2) If the commissioner of human 
        services determines that federal 
        financial participation is available 
        for the fiscal year 1999 appropriation 
        for the medical education and research 
        trust fund under this subdivision, the 
        commissioner of health shall transfer 
        to the commissioner of human services 
        the amount of state funds necessary to 
        maximize the federal funds. 
        (3) The transferred amount, plus the 
        federal financial participation amount, 
        shall be distributed to medical 
        assistance providers according to the 
        distribution methodology of the medical 
        education research trust fund 
        established under Minnesota Statutes, 
        section 62J.69. 
        [DIABETES PREVENTION.] Of this 
        appropriation, $50,000 in fiscal year 
        1999 from the general fund is to the 
        commissioner for statewide activities 
        related to general diabetes prevention, 
        the development and dissemination of 
        prevention materials to health care 
        providers, and for other statewide 
        activities related to diabetes 
        prevention and control for targeted 
        populations who are at high risk for 
        developing diabetes or health 
        complications from diabetes. 
        Subd. 3.  Health Protection             -0-          4,688,000
                      Summary by Fund
        General                 -0-         4,580,000
        State Government 
        Special Revenue         -0-           108,000
        [FOOD, BEVERAGE, AND LODGING PROGRAM 
        STAFF RESTORATION.] Of the 
        appropriation from the state government 
        special revenue fund, $101,000 in 
        fiscal year 1999 is for the 
        commissioner to restore staffing for 
        the food, beverage, and lodging program.
        [OCCUPATIONAL RESPIRATORY DISEASE 
        INFORMATION SYSTEM.] Of the general 
        fund appropriation, $250,000 in fiscal 
        year 1999 is to design an occupational 
        respiratory disease information 
        system.  This appropriation is 
        available until expended.  This 
        appropriation is added to the base for 
        the 2000-2001 biennial budget. 
        [LEAD-SAFE PROPERTY CERTIFICATION 
        PROGRAM.] Of this appropriation, 
        $75,000 in fiscal year 1999 is from the 
        general fund to the commissioner for 
        the purposes of the lead-safe property 
        certification program under Minnesota 
        Statutes, section 144.9511. 
        [INFECTION CONTROL.] Of the general 
        fund appropriation, $200,000 in fiscal 
        year 1999 is for infection control 
        activities, including training and 
        technical assistance of health care 
        personnel to prevent and control 
        disease outbreaks, and for hospital and 
        public health laboratory testing and 
        other activities to monitor trends in 
        drug-resistant infections.  
        [CANCER SCREENING.] Of the general fund 
        appropriation, $1,255,000 in fiscal 
        year 1999 is for increased cancer 
        screening and diagnostic services for 
        women, particularly underserved women, 
        and to improve cancer screening rates 
        for the general population.  Of this 
        amount, at least $855,000 is for grants 
        to support local boards of health in 
        providing outreach and coordination and 
        to reimburse health care providers for 
        screening and diagnostic tests, and up 
        to $400,000 is for technical 
        assistance, consultation, and outreach. 
        [SEXUALLY TRANSMITTED DISEASE.] (a) of 
        this appropriation, $300,000 in fiscal 
        year 1999 is from the general fund to 
        the commissioner to do the following, 
        in consultation with the HIV/STD 
        prevention task force and the 
        commissioner of children, families, and 
        learning: 
        (1) $100,000 to conduct a statewide 
        assessment of need and capacity to 
        prevent and treat sexually transmitted 
        diseases and prepare a comprehensive 
        plan for how to prevent and treat 
        sexually transmitted diseases, 
        including strategies for reducing 
        infection and for increasing access to 
        treatment; 
        (2) $150,000 to conduct research on the 
        prevalence of sexually transmitted 
        diseases among populations at highest 
        risk for infection.  The research may 
        be done in collaboration with the 
        University of Minnesota and nonprofit 
        community health clinics; and 
        (3) $50,000 to conduct laboratory 
        screenings for sexually transmitted 
        diseases at no charge to patients 
        participating in epidemiological 
        research activities specified in clause 
        (2). 
        (b) This appropriation shall not become 
        part of the base for the 2000-2001 
        biennium. 
        Sec. 4.  HEALTH-RELATED BOARDS 
        Subdivision 1.  Total       
        Appropriation                            113,000        123,000 
        This appropriation is added to the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 5. 
        The appropriations in this section are 
        from the state government special 
        revenue fund. 
        [NO SPENDING IN EXCESS OF REVENUES.] 
        The commissioner of finance shall not 
        permit the allotment, encumbrance, or 
        expenditure of money appropriated in 
        this section in excess of the 
        anticipated biennial revenues or 
        accumulated surplus revenues from fees 
        collected by the boards.  Neither this 
        provision nor Minnesota Statutes, 
        section 214.06, applies to transfers 
        from the general contingent account. 
        Subd. 2.  Board of Medical  
        Practice                                  80,000         90,000
        This appropriation is added to the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 5, subdivision 
        6, and is for the health professional 
        services activity. 
        Subd. 3.  Board of Veterinary 
        Medicine                                  33,000         33,000
        This appropriation is added to the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 5, subdivision 
        14, and is for national examination 
        costs. 
        Sec. 5.  EMERGENCY MEDICAL 
        SERVICES BOARD       
        General                                  -0-             78,000 
        This appropriation is added to the 
        appropriation in Laws 1997, chapter 
        203, article 1, section 6. 
        [EMERGENCY MEDICAL SERVICES 
        COMMUNICATIONS NEEDS ASSESSMENT.] (a) 
        Of this appropriation, $78,000 in 
        fiscal year 1999 is from the general 
        fund to the board to conduct an 
        emergency medical services needs 
        assessment for areas outside the 
        seven-county metropolitan area.  The 
        assessment shall determine the current 
        status of and need for emergency 
        medical services communications 
        equipment.  All regional emergency 
        medical services programs designated by 
        the board under Minnesota Statutes 1997 
        Supplement, section 144E.50, shall 
        cooperate in the preparation of the 
        assessment. 
        (b) The appropriation for this project 
        shall be distributed through the 
        emergency medical services system fund 
        under Minnesota Statutes, section 
        144E.50, through a request-for-proposal 
        process.  The board must select a 
        regional EMS program that receives at 
        least 20 percent of its funding from 
        nonstate sources to conduct the 
        assessment.  The request for proposals 
        must be issued by August 1, 1998. 
        (c) A final report with recommendations 
        shall be presented to the board and the 
        legislature by July 1, 1999. 
        (d) This appropriation shall not become 
        part of base level funding for the 
        2000-2001 biennium. 
        Sec. 6.  [CARRYOVER LIMITATION.] None 
        of the appropriations in this act which 
        are allowed to be carried forward from 
        fiscal year 1998 to fiscal year 1999 
        shall become part of the base level 
        funding for the 2000-2001 biennial 
        budget, unless specifically directed by 
        the legislature. 
        Sec. 7.  [SUNSET OF UNCODIFIED 
        LANGUAGE.] All uncodified language 
        contained in this article expires on 
        June 30, 1999, unless a different 
        expiration date is explicit. 
           Sec. 8.  [EFFECTIVE DATE.] 
           The appropriations and reductions for fiscal year 1998 in 
        this article are effective the day following final enactment. 
                                   ARTICLE 2  
                   HEALTH DEPARTMENT AND HEALTH PROFESSIONALS 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        13.99, is amended by adding a subdivision to read: 
           Subd. 19m.  [DATA HELD BY OFFICE OF HEALTH CARE CONSUMER 
        ASSISTANCE, ADVOCACY, AND INFORMATION.] Consumer complaint data 
        collected or maintained by the office of health care consumer 
        assistance, advocacy, and information under sections 62J.77 and 
        62J.80 are classified under section 62J.79, subdivision 4. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        62D.11, subdivision 1, is amended to read: 
           Subdivision 1.  [ENROLLEE COMPLAINT SYSTEM.] Every health 
        maintenance organization shall establish and maintain a 
        complaint system, as required under section 62Q.105 to provide 
        reasonable procedures for the resolution of written complaints 
        initiated by or on behalf of enrollees concerning the provision 
        of health care services.  "Provision of health services" 
        includes, but is not limited to, questions of the scope of 
        coverage, quality of care, and administrative operations.  The 
        health maintenance organization must inform enrollees that they 
        may choose to use alternative dispute resolution arbitration to 
        appeal a health maintenance organization's internal appeal 
        decision.  The health maintenance organization must also inform 
        enrollees that they have the right to use arbitration to appeal 
        a health maintenance organization's internal appeal decision not 
        to certify an admission, procedure, service, or extension of 
        stay under section 62M.06.  If an enrollee chooses to use an 
        alternative dispute resolution process arbitration, the health 
        maintenance organization must participate. 
           Sec. 3.  Minnesota Statutes 1996, section 62J.321, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [PRESCRIPTION DRUG PRICE DISCLOSURE 
        DATA.] Notwithstanding subdivisions 1 and 5, data collected 
        under section 62J.381 shall be classified as public data. 
           Sec. 4.  [62J.381] [PRESCRIPTION DRUG PRICE DISCLOSURE.] 
           By April 1, 1999, and annually thereafter, hospitals 
        licensed under chapter 144 and group purchasers required to file 
        a full report under section 62J.38 and the rules promulgated 
        thereunder, must submit to the commissioner of health the total 
        amount of: 
           (1) aggregate purchases of or payments for prescription 
        drugs; and 
           (2) aggregate cash rebates, discounts, other payments 
        received, and any fees associated with education, data 
        collection, research, training, or market share movement, which 
        are received during the previous calendar year from a 
        manufacturer as defined under section 151.44, paragraph (c), or 
        wholesale drug distributor as defined under section 151.44, 
        paragraph (d). 
        The data collected under this section shall be distributed 
        through the information clearinghouse under section 62J.2930.  
        The identification of individual manufacturers or wholesalers or 
        specific drugs shall not be required under this section.  
           Sec. 5.  Minnesota Statutes 1997 Supplement, section 
        62J.69, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following definitions apply: 
           (a) "Medical education" means the accredited clinical 
        training of physicians (medical students and residents), doctor 
        of pharmacy practitioners, doctors of chiropractic, dentists, 
        advanced practice nurses (clinical nurse specialist, certified 
        registered nurse anesthetists, nurse practitioners, and 
        certified nurse midwives), and physician assistants. 
           (b) "Clinical training" means accredited training for the 
        health care practitioners listed in paragraph (a) that is funded 
        and was historically funded in part by inpatient patient care 
        revenues and that occurs in both either an inpatient and or 
        ambulatory patient care settings training site. 
           (c) "Trainee" means students involved in an accredited 
        clinical training program for medical education as defined in 
        paragraph (a). 
           (d) "Eligible trainee" means a student involved in an 
        accredited training program for medical education as defined in 
        paragraph (a), which meets the definition of clinical training 
        in paragraph (b), who is in a training site that is located in 
        Minnesota and which has a medical assistance provider number. 
           (e) "Health care research" means approved clinical, 
        outcomes, and health services investigations that are funded by 
        patient out-of-pocket expenses or a third-party payer. 
           (e) (f) "Commissioner" means the commissioner of health. 
           (f) (g) "Teaching institutions" means any hospital, medical 
        center, clinic, or other organization that currently sponsors or 
        conducts accredited medical education programs or clinical 
        research in Minnesota. 
           (h) "Accredited training" means training provided by a 
        program that is accredited through an organization recognized by 
        the department of education or the health care financing 
        administration as the official accrediting body for that program.
           (i) "Sponsoring institution" means a hospital, school, or 
        consortium located in Minnesota that sponsors and maintains 
        primary organizational and financial responsibility for an 
        accredited medical education program in Minnesota and which is 
        accountable to the accrediting body. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        62J.69, subdivision 2, is amended to read: 
           Subd. 2.  [ALLOCATION AND FUNDING FOR MEDICAL EDUCATION AND 
        RESEARCH.] (a) The commissioner may establish a trust fund for 
        the purposes of funding medical education and research 
        activities in the state of Minnesota. 
           (b) By January 1, 1997, the commissioner may appoint an 
        advisory committee to provide advice and oversight on the 
        distribution of funds from the medical education and research 
        trust fund.  If a committee is appointed, the commissioner 
        shall:  (1) consider the interest of all stakeholders when 
        selecting committee members; (2) select members that represent 
        both urban and rural interest; and (3) select members that 
        include ambulatory care as well as inpatient perspectives.  The 
        commissioner shall appoint to the advisory committee 
        representatives of the following groups:  medical researchers, 
        public and private academic medical centers, managed care 
        organizations, Blue Cross and Blue Shield of Minnesota, 
        commercial carriers, Minnesota Medical Association, Minnesota 
        Nurses Association, medical product manufacturers, employers, 
        and other relevant stakeholders, including consumers.  The 
        advisory committee is governed by section 15.059, for membership 
        terms and removal of members and will sunset on June 30, 1999. 
           (c) Eligible applicants for funds are accredited medical 
        education teaching institutions, consortia, and programs 
        operating in Minnesota.  Applications must be submitted by the 
        sponsoring institution on behalf of the teaching program, and 
        must be received by September 30 of each year for distribution 
        in January of the following year.  An application for funds must 
        include the following: 
           (1) the official name and address of the sponsoring 
        institution and the official name and address of the facility or 
        program programs on whose behalf the institution is applying for 
        funding; 
           (2) the name, title, and business address of those persons 
        responsible for administering the funds; 
           (3) the total number, type, and specialty orientation of 
        eligible Minnesota-based trainees in for each accredited medical 
        education program for which funds are being sought the type and 
        specialty orientation of trainees in the program, the name, 
        address, and medical assistance provider number of each training 
        site used in the program, the total number of trainees at each 
        site, and the total number of eligible trainees at each training 
        site; 
           (4) audited clinical training costs per trainee for each 
        medical education program where available or estimates of 
        clinical training costs based on audited financial data; 
           (5) a description of current sources of funding for medical 
        education costs including a description and dollar amount of all 
        state and federal financial support, including Medicare direct 
        and indirect payments; 
           (6) other revenue received for the purposes of clinical 
        training; and 
           (7) a statement identifying unfunded costs; and 
           (8) other supporting information the commissioner, with 
        advice from the advisory committee, determines is necessary for 
        the equitable distribution of funds. 
           (d) The commissioner shall distribute medical education 
        funds to all qualifying applicants based on the following basic 
        criteria:  (1) total medical education funds available; (2) 
        total eligible trainees in each eligible education program; and 
        (3) the statewide average cost per trainee, by type of trainee, 
        in each medical education program.  Funds distributed shall not 
        be used to displace current funding appropriations from federal 
        or state sources.  Funds shall be distributed to the sponsoring 
        institutions indicating the amount to be paid to each of the 
        sponsor's medical education programs based on the criteria in 
        this paragraph.  Sponsoring institutions which receive funds 
        from the trust fund must distribute approved funds to the 
        medical education program according to the commissioner's 
        approval letter.  Further, programs must distribute funds among 
        the sites of training based on the percentage of total program 
        training performed at each site. as specified in the 
        commissioner's approval letter.  Any funds not distributed as 
        directed by the commissioner's approval letter shall be returned 
        to the medical education and research trust fund within 30 days 
        of a notice from the commissioner.  The commissioner shall 
        distribute returned funds to the appropriate entities in 
        accordance with the commissioner's approval letter. 
           (e) Medical education programs receiving funds from the 
        trust fund must submit annual cost and program reports a medical 
        education and research grant verification report (GVR) through 
        the sponsoring institution based on criteria established by the 
        commissioner.  If the sponsoring institution fails to submit the 
        GVR by the stated deadline, or to request and meet the deadline 
        for an extension, the sponsoring institution is required to 
        return the full amount of the medical education and research 
        trust fund grant to the medical education and research trust 
        fund within 30 days of a notice from the commissioner.  The 
        commissioner shall distribute returned funds to the appropriate 
        entities in accordance with the commissioner's approval letter.  
        The reports must include:  
           (1) the total number of eligible trainees in the program; 
           (2) the programs and residencies funded, the amounts of 
        trust fund payments to each program, and within each program, 
        the percentage dollar amount distributed to each training site; 
        and 
           (3) the average cost per trainee and a detailed breakdown 
        of the components of those costs; 
           (4) other state or federal appropriations received for the 
        purposes of clinical training; 
           (5) other revenue received for the purposes of clinical 
        training; and 
           (6) other information the commissioner, with advice from 
        the advisory committee, deems appropriate to evaluate the 
        effectiveness of the use of funds for clinical training.  
           The commissioner, with advice from the advisory committee, 
        will provide an annual summary report to the legislature on 
        program implementation due February 15 of each year. 
           (f) The commissioner is authorized to distribute funds made 
        available through: 
           (1) voluntary contributions by employers or other entities; 
           (2) allocations for the department of human services to 
        support medical education and research; and 
           (3) other sources as identified and deemed appropriate by 
        the legislature for inclusion in the trust fund. 
           (g) The advisory committee shall continue to study and make 
        recommendations on:  
           (1) the funding of medical research consistent with work 
        currently mandated by the legislature and under way at the 
        department of health; and 
           (2) the costs and benefits associated with medical 
        education and research. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        62J.69, is amended by adding a subdivision to read: 
           Subd. 4.  [TRANSFERS FROM THE COMMISSIONER OF HUMAN 
        SERVICES.] (a) The amount transferred according to section 
        256B.69, subdivision 5c, shall be distributed to qualifying 
        applicants based on a distribution formula that reflects a 
        summation of two factors: 
           (1) an education factor, which is determined by the total 
        number of eligible trainees and the total statewide average 
        costs per trainee, by type of trainee, in each program; and 
           (2) a public program volume factor, which is determined by 
        the total volume of public program revenue received by each 
        training site as a percentage of all public program revenue 
        received by all training sites in the trust fund pool.  
           In this formula, the education factor shall be weighted at 
        50 percent and the public program volume factor shall be 
        weighted at 50 percent. 
           (b) Public program revenue for the formula in paragraph (a) 
        shall include revenue from medical assistance, prepaid medical 
        assistance, general assistance medical care, and prepaid general 
        assistance medical care. 
           (c) Training sites that receive no public program revenue 
        shall be ineligible for payments from the prepaid medical 
        assistance program transfer pool. 
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        62J.69, is amended by adding a subdivision to read: 
           Subd. 5.  [REVIEW OF ELIGIBLE PROVIDERS.] (a) Provider 
        groups added after January 1, 1998, to the list of providers 
        eligible for the trust fund shall not receive funding from the 
        trust fund without prior evaluation by the commissioner and the 
        medical education and research costs advisory committee.  The 
        evaluation shall consider the degree to which the training of 
        the provider group: 
           (1) takes place in patient care settings, which are 
        consistent with the purposes of this section; 
           (2) is funded with patient care revenues; 
           (3) takes place in patient care settings, which face 
        increased financial pressure as a result of competition with 
        nonteaching patient care entities; and 
           (4) emphasizes primary care or specialties, which are in 
        undersupply in Minnesota. 
           Results of this evaluation shall be reported to the 
        legislative commission on health care access.  The legislative 
        commission on health care access must approve funding for the 
        provider group prior to their receiving any funding from the 
        trust fund.  In the event that a reviewed provider group is not 
        approved by the legislative commission on health care access, 
        trainees in that provider group shall be considered ineligible 
        trainees for the trust fund distribution. 
           (b) The commissioner and the medical education and research 
        costs advisory committee may also review provider groups, which 
        were added to the eligible list of provider groups prior to 
        January 1, 1998, to assure that the trust fund money continues 
        to be distributed consistent with the purpose of this section.  
        The results of any such reviews must be reported to the 
        legislative commission on health care access.  Trainees in 
        provider groups, which were added prior to January 1, 1998, and 
        which are reviewed by the commissioner and the medical education 
        and research costs advisory committee, shall be considered 
        eligible trainees for purposes of the trust fund distribution 
        unless and until the legislative commission on health care 
        access disapproves their eligibility, in which case they shall 
        be considered ineligible trainees. 
           Sec. 9.  [62J.701] [GOVERNMENTAL PROGRAMS.] 
           Beginning January 1, 1999, the provisions in paragraphs (a) 
        to (d) apply. 
           (a) For purposes of sections 62J.695 to 62J.80, the 
        requirements and other provisions that apply to health plan 
        companies also apply to governmental programs. 
           (b) For purposes of this section, "governmental programs" 
        means the medical assistance program, the MinnesotaCare program, 
        the general assistance medical care program, the state employee 
        group insurance program, the public employees insurance program 
        under section 43A.316, and coverage provided by political 
        subdivisions under section 471.617. 
           (c) Notwithstanding paragraph (a), section 62J.72 does not 
        apply to the fee-for-service programs under medical assistance, 
        MinnesotaCare, and general assistance medical care. 
           (d) If a state commissioner or local unit of government 
        contracts with a health plan company or a third party 
        administrator, the contract may assign any obligations under 
        paragraph (a) to the health plan company or third party 
        administrator.  Nothing in this paragraph shall be construed to 
        remove or diminish any enforcement responsibilities of the 
        commissioners of health or commerce provided in sections 62J.695 
        to 62J.80. 
           Sec. 10.  Minnesota Statutes 1997 Supplement, section 
        62J.71, subdivision 1, is amended to read: 
           Subdivision 1.  [PROHIBITED AGREEMENTS AND DIRECTIVES.] The 
        following types of agreements and directives are contrary to 
        state public policy, are prohibited under this section, and are 
        null and void: 
           (1) any agreement or directive that prohibits a health care 
        provider from communicating with an enrollee with respect to the 
        enrollee's health status, health care, or treatment options, if 
        the health care provider is acting in good faith and within the 
        provider's scope of practice as defined by law; 
           (2) any agreement or directive that prohibits a health care 
        provider from making a recommendation regarding the suitability 
        or desirability of a health plan company, health insurer, or 
        health coverage plan for an enrollee, unless the provider has a 
        financial conflict of interest in the enrollee's choice of 
        health plan company, health insurer, or health coverage plan; 
           (3) any agreement or directive that prohibits a provider 
        from providing testimony, supporting or opposing legislation, or 
        making any other contact with state or federal legislators or 
        legislative staff or with state and federal executive branch 
        officers or staff; 
           (4) any agreement or directive that prohibits a health care 
        provider from disclosing accurate information about whether 
        services or treatment will be paid for by a patient's health 
        plan company or health insurer or health coverage plan; and 
           (5) any agreement or directive that prohibits a health care 
        provider from informing an enrollee about the nature of the 
        reimbursement methodology used by an enrollee's health plan 
        company, health insurer, or health coverage plan to pay the 
        provider. 
           Sec. 11.  Minnesota Statutes 1997 Supplement, section 
        62J.71, subdivision 3, is amended to read: 
           Subd. 3.  [RETALIATION PROHIBITED.] No person, health plan 
        company, or other organization may take retaliatory action 
        against a health care provider solely on the grounds that the 
        provider: 
           (1) refused to enter into an agreement or provide services 
        or information in a manner that is prohibited under this section 
        or took any of the actions listed in subdivision 1; 
           (2) disclosed accurate information about whether a health 
        care service or treatment is covered by an enrollee's health 
        plan company, health insurer, or health coverage plan; or 
           (3) discussed diagnostic, treatment, or referral options 
        that are not covered or are limited by the enrollee's health 
        plan company, health insurer, or health coverage plan; 
           (4) criticized coverage of the enrollee's health plan 
        company, health insurer, or health coverage plan; or 
           (5) expressed personal disagreement with a decision made by 
        a person, organization, or health care provider regarding 
        treatment or coverage provided to a patient of the provider, or 
        assisted or advocated for the patient in seeking reconsideration 
        of such a decision, provided the health care provider makes it 
        clear that the provider is acting in a personal capacity and not 
        as a representative of or on behalf of the entity that made the 
        decision. 
           Sec. 12.  Minnesota Statutes 1997 Supplement, section 
        62J.71, subdivision 4, is amended to read: 
           Subd. 4.  [EXCLUSION.] (a) Nothing in this section 
        prohibits a health plan an entity that is subject to this 
        section from taking action against a provider if the health plan 
        entity has evidence that the provider's actions are illegal, 
        constitute medical malpractice, or are contrary to accepted 
        medical practices. 
           (b) Nothing in this section prohibits a contract provision 
        or directive that requires any contracting party to keep 
        confidential or to not use or disclose the specific amounts paid 
        to a provider, provider fee schedules, provider salaries, and 
        other proprietary information of a specific health plan or 
        health plan company entity that is subject to this section.  
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        62J.72, subdivision 1, is amended to read: 
           Subdivision 1.  [WRITTEN DISCLOSURE.] (a) A health plan 
        company, as defined under section 62J.70, subdivision 3, a 
        health care network cooperative as defined under section 62R.04, 
        subdivision 3, and a health care provider as defined under 
        section 62J.70, subdivision 2, shall, during open enrollment, 
        upon enrollment, and annually thereafter, provide enrollees with 
        a description of the general nature of the reimbursement 
        methodologies used by the health plan company, health insurer, 
        or health coverage plan to pay providers.  The description must 
        explain clearly any aspect of the reimbursement methodology that 
        creates a financial incentive for the health care provider to 
        limit or restrict the health care provided to enrollees.  An 
        entity required to disclose shall also disclose if no 
        reimbursement methodology is used that creates a financial 
        incentive for the health care provider to limit or restrict the 
        health care provided to enrollees.  This description may be 
        incorporated into the member handbook, subscriber contract, 
        certificate of coverage, or other written enrollee 
        communication.  The general reimbursement methodology shall be 
        made available to employers at the time of open enrollment.  
           (b) Health plan companies, health care network 
        cooperatives, and providers must, upon request, provide an 
        enrollee with specific information regarding the reimbursement 
        methodology, including, but not limited to, the following 
        information:  
           (1) a concise written description of the provider payment 
        plan, including any incentive plan applicable to the enrollee; 
           (2) a written description of any incentive to the provider 
        relating to the provision of health care services to enrollees, 
        including any compensation arrangement that is dependent on the 
        amount of health coverage or health care services provided to 
        the enrollee, or the number of referrals to or utilization of 
        specialists; and 
           (3) a written description of any incentive plan that 
        involves the transfer of financial risk to the health care 
        provider. 
           (c) The disclosure statement describing the general nature 
        of the reimbursement methodologies must comply with the 
        Readability of Insurance Policies Act in chapter 72C.  
        Notwithstanding any other law to the contrary, the disclosure 
        statement may voluntarily be filed with the commissioner for 
        approval and must be filed with and approved by the commissioner 
        prior to its use. 
           (d) A disclosure statement that has voluntarily been filed 
        with the commissioner for approval under chapter 72C or 
        voluntarily filed with the commissioner for approval for 
        purposes other than pursuant to chapter 72C paragraph (c) is 
        deemed approved 30 days after the date of filing, unless 
        approved or disapproved by the commissioner on or before the end 
        of that 30-day period. 
           (e) The disclosure statement describing the general nature 
        of the reimbursement methodologies must be provided upon request 
        in English, Spanish, Vietnamese, and Hmong.  In addition, 
        reasonable efforts must be made to provide information contained 
        in the disclosure statement to other non-English-speaking 
        enrollees. 
           (f) Health plan companies and providers may enter into 
        agreements to determine how to respond to enrollee requests 
        received by either the provider or the health plan company.  
        This subdivision does not require disclosure of specific amounts 
        paid to a provider, provider fee schedules, provider salaries, 
        or other proprietary information of a specific health plan 
        company or health insurer or health coverage plan or provider. 
           Sec. 14.  Minnesota Statutes 1997 Supplement, section 
        62J.75, is amended to read: 
           62J.75 [CONSUMER ADVISORY BOARD.] 
           (a) The consumer advisory board consists of 18 members 
        appointed in accordance with paragraph (b).  All members must be 
        public, consumer members who: 
           (1) do not have and never had a material interest in either 
        the provision of health care services or in an activity directly 
        related to the provision of health care services, such as health 
        insurance sales or health plan administration; 
           (2) are not registered lobbyists; and 
           (3) are not currently responsible for or directly involved 
        in the purchasing of health insurance for a business or 
        organization. 
           (b) The governor, the speaker of the house of 
        representatives, and the subcommittee on committees of the 
        committee on rules and administration of the senate shall each 
        appoint two six members.  The Indian affairs council, the 
        council on affairs of Chicano/Latino people, the council on 
        Black Minnesotans, the council on Asian-Pacific Minnesotans, 
        mid-Minnesota legal assistance, and the Minnesota chamber of 
        commerce shall each appoint one member.  The member appointed by 
        the Minnesota chamber of commerce must represent small business 
        interests.  The health care campaign of Minnesota, Minnesotans 
        for affordable health care, and consortium for citizens with 
        disabilities shall each appoint two members.  Members serve 
        without compensation or reimbursement for expenses.  Members may 
        be compensated in accordance with section 15.059, subdivision 3, 
        except that members shall not receive per diem compensation or 
        reimbursements for child care expenses. 
           (c) The board shall advise the commissioners of health and 
        commerce on the following: 
           (1) the needs of health care consumers and how to better 
        serve and educate the consumers on health care concerns and 
        recommend solutions to identified problems; and 
           (2) consumer protection issues in the self-insured market, 
        including, but not limited to, public education needs. 
           The board also may make recommendations to the legislature 
        on these issues. 
           (d) The board and this section expire June 30, 2001. 
           Sec. 15.  [62J.77] [DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] For purposes of sections 
        62J.77 to 62J.80, the terms defined in this section have the 
        meanings given them. 
           Subd. 2.  [ENROLLEE.] "Enrollee" means a natural person 
        covered by a health plan company, health insurance, or health 
        coverage plan and includes an insured, policyholder, subscriber, 
        contract holder, member, covered person, or certificate holder. 
           Subd. 3.  [PATIENT.] "Patient" means a former, current, or 
        prospective patient of a health care provider.  
           Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of health. 
           Sec. 16.  [62J.78] [ESTABLISHMENT; ORGANIZATION.] 
           Subdivision 1.  [GENERAL.] The commissioner shall establish 
        within the department of health the office of health care 
        consumer assistance, advocacy, and information to provide 
        assistance, advocacy, and information to all health care 
        consumers within the state.  The office shall have no regulatory 
        power or authority, shall be separated from all regulatory 
        functions within the department of health, and shall not provide 
        legal representation in a court of law. 
           Subd. 2.  [EXECUTIVE DIRECTOR.] An executive director shall 
        be appointed by the commissioner, in consultation with the 
        consumer advisory board, and shall report directly to the 
        commissioner.  The executive director must be selected without 
        regard to political affiliation and must be a person who has 
        knowledge and experience concerning the needs and rights of 
        health care consumers and must be qualified to analyze questions 
        of law, administrative functions, and public policy.  No person 
        may serve as executive director while holding another public 
        office.  The director shall serve in the unclassified service.  
           Subd. 3.  [STAFF.] The executive director shall appoint at 
        least nine consumer advocates to discharge the responsibilities 
        and duties of the office. 
           Subd. 4.  [TRAINING.] The executive director shall ensure 
        that the consumer advocates are adequately trained. 
           Subd. 5.  [STATEWIDE ADVOCACY.] The executive director 
        shall assign a consumer advocate to represent each regional 
        coordinating board's geographic area. 
           Subd. 6.  [FINANCIAL INTEREST.] The executive director and 
        staff must not have any direct personal financial interest in 
        the health care system, except as an individual consumer of 
        health care services. 
           Subd. 7.  [ADMINISTRATION.] To the extent practical, the 
        office of health care consumer assistance, advocacy, and 
        information and all ombudsman offices with health care 
        responsibilities shall have their telephone systems linked in 
        order to facilitate immediate referrals. 
           Sec. 17.  [62J.79] [DUTIES AND POWERS OF THE OFFICE OF 
        HEALTH CARE CONSUMER ASSISTANCE, ADVOCACY, AND INFORMATION.] 
           Subdivision 1.  [DUTIES.] (a) The office of health care 
        consumer assistance, advocacy, and information shall provide 
        information and assistance to all health care consumers by: 
           (1) assisting patients and enrollees in understanding and 
        asserting their contractual and legal rights, including the 
        rights under an alternative dispute resolution process.  This 
        assistance may include advocacy for enrollees in administrative 
        proceedings or other formal or informal dispute resolution 
        processes; 
           (2) assisting enrollees in obtaining health care referrals 
        under their health plan company, health insurance, or health 
        coverage plan; 
           (3) assisting patients and enrollees in accessing the 
        services of governmental agencies, regulatory boards, and other 
        state consumer assistance programs, ombudsman, or advocacy 
        services whenever appropriate so that the patient or enrollee 
        can take full advantage of existing mechanisms for resolving 
        complaints; 
           (4) referring patients and enrollees to governmental 
        agencies and regulatory boards for the investigation of health 
        care complaints and for enforcement action; 
           (5) educating and training enrollees about their health 
        plan company, health insurance, or health coverage plan in order 
        to enable them to assert their rights and to understand their 
        responsibilities; 
           (6) assisting enrollees in receiving a timely resolution of 
        their complaints; 
           (7) monitoring health care complaints addressed by the 
        office to identify specific complaint patterns or areas of 
        potential improvement; 
           (8) recommending to health plan companies ways to identify 
        and remove any barriers that might delay or impede the health 
        plan company's effort to resolve consumer complaints; and 
           (9) in performing the duties specified in clauses (1) to 
        (8), taking into consideration the special situations of 
        patients and enrollees who have unique culturally defined needs. 
           (b) The executive director shall prioritize the duties 
        listed in this subdivision within the appropriations allocated.  
           Subd. 2.  [COMMUNICATION.] (a) The executive director shall 
        meet at least six times per year with the consumer advisory 
        board.  The executive director shall share all public 
        information obtained by the office of health care consumer 
        assistance, advocacy, and information with the consumer advisory 
        board in order to assist the consumer advisory board in its role 
        of advising the commissioners of health and commerce and the 
        legislature in accordance with section 62J.75.  
           (b) The executive director shall have the authority to make 
        recommendations to the legislature on any issue related to the 
        needs and interests of health care consumers. 
           Subd. 3.  [REPORTS.] Beginning July 1, 1999, the executive 
        director, on at least a quarterly basis, shall provide data from 
        the health care complaints addressed by the office to the 
        commissioners of health and commerce, the consumer advisory 
        board, the Minnesota council of health plans, and the Insurance 
        Federation of Minnesota.  Beginning January 15, 2000, the 
        executive director must make an annual written report to the 
        legislature regarding activities of the office, including 
        recommendations on improving health care consumer assistance and 
        complaint resolution processes.  
           Subd. 4.  [DATA PRIVACY.] (a) Consumer complaint data, 
        including medical records and other documentation, provided by a 
        patient or enrollee to the office of health care consumer 
        assistance, advocacy, and information shall be classified as 
        private data on individuals under section 13.02, subdivision 12. 
           (b) Except as provided in paragraph (a), all data collected 
        or maintained by the office in the course of assisting a patient 
        or enrollee in resolving a complaint, including data collected 
        or maintained for the purpose of assistance during a formal or 
        informal dispute resolution process, shall be classified as 
        investigative data under section 13.39 except that inactive 
        investigative data shall be classified as private data on 
        individuals under section 13.02, subdivision 12. 
           Sec. 18.  [62J.80] [RETALIATION.] 
           A health plan company or health care provider shall not 
        retaliate or take adverse action against an enrollee or patient 
        who, in good faith, makes a complaint against a health plan 
        company or health care provider.  If retaliation is suspected, 
        the executive director may report it to the appropriate 
        regulatory authority.  
           Sec. 19.  Minnesota Statutes 1996, section 62Q.095, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MANDATORY OFFERING TO ENROLLEES.] (a) Each 
        health plan company shall offer to enrollees the option of 
        receiving covered services through the expanded network of 
        allied independent health providers established under 
        subdivisions 1 and 2.  This expanded network option may be 
        offered as a separate health plan.  The network may establish 
        separate premium rates and cost-sharing requirements for this 
        expanded network plan, as long as these premium rates and 
        cost-sharing requirements are actuarially justified and approved 
        by the commissioner.  This subdivision does not apply to 
        Medicare, medical assistance, general assistance medical care, 
        and MinnesotaCare.  This subdivision is effective January 1, 
        1995, and applies to health plans issued or renewed, or offers 
        of health plans to be issued or renewed, on or after January 1, 
        1995, except that this subdivision is effective January 1, 1996, 
        for collective bargaining agreements of the department of 
        employee relations and the University of Minnesota. 
           (b) Information on this expanded provider network option 
        must be provided by each health plan company during open 
        enrollment and upon enrollment.  
           Sec. 20.  Minnesota Statutes 1997 Supplement, section 
        62Q.105, subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] Each health plan company 
        shall establish and make available to enrollees, by July 1, 1998 
        1999, an informal complaint resolution process that meets the 
        requirements of this section.  A health plan company must make 
        reasonable efforts to resolve enrollee complaints, and must 
        inform complainants in writing of the company's decision within 
        30 days of receiving the complaint.  The complaint resolution 
        process must treat the complaint and information related to it 
        as required under sections 72A.49 to 72A.505.  
           Sec. 21.  [62Q.107] [PROHIBITED PROVISION; EFFECT OF DENIAL 
        OF CLAIM.] 
           Beginning January 1, 1999, no health plan, including the 
        coverages described in section 62A.011, subdivision 3, clauses 
        (7) and (10), may specify a standard of review upon which a 
        court may review denial of a claim or of any other decision made 
        by a health plan company with respect to an enrollee.  This 
        section prohibits limiting court review to a determination of 
        whether the health plan company's decision is arbitrary and 
        capricious, an abuse of discretion, or any other standard less 
        favorable to the enrollee than a preponderance of the evidence.  
           Sec. 22.  Minnesota Statutes 1997 Supplement, section 
        62Q.30, is amended to read: 
           62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION 
        PROCESS.] 
           The commissioner shall establish an expedited fact finding 
        and dispute resolution process to assist enrollees of health 
        plan companies with contested treatment, coverage, and service 
        issues to be in effect July 1, 1998 1999.  If the disputed issue 
        relates to whether a service is appropriate and necessary, the 
        commissioner shall issue an order only after consulting with 
        appropriate experts knowledgeable, trained, and practicing in 
        the area in dispute, reviewing pertinent literature, and 
        considering the availability of satisfactory alternatives.  The 
        commissioner shall take steps including but not limited to 
        fining, suspending, or revoking the license of a health plan 
        company that is the subject of repeated orders by the 
        commissioner that suggests a pattern of inappropriate 
        underutilization.  
           Sec. 23.  Minnesota Statutes 1997 Supplement, section 
        103I.208, subdivision 2, is amended to read: 
           Subd. 2.  [PERMIT FEE.] The permit fee to be paid by a 
        property owner is:  
           (1) for a well that is not in use under a maintenance 
        permit, $100 annually; 
           (2) for construction of a monitoring well, $120, which 
        includes the state core function fee; 
           (3) for a monitoring well that is unsealed under a 
        maintenance permit, $100 annually; 
           (4) for monitoring wells used as a leak detection device at 
        a single motor fuel retail outlet or, a single petroleum bulk 
        storage site excluding tank farms, or a single agricultural 
        chemical facility site, the construction permit fee is $120, 
        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 
        $100 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 wells, $120, which includes the 
        state core function fee; 
           (6) for a vertical heat exchanger, $120; 
           (7) for a dewatering well that is unsealed under a 
        maintenance permit, $100 annually for each well, except a 
        dewatering project comprising more than five wells shall be 
        issued a single permit for $500 annually for wells recorded on 
        the permit; and 
           (8) for excavating holes for the purpose of installing 
        elevator shafts, $120 for each hole. 
           Sec. 24.  Minnesota Statutes 1997 Supplement, section 
        123.70, subdivision 10, as amended by Laws 1998, chapter 305, 
        section 4, is amended to read: 
           Subd. 10.  A statement required to be submitted under 
        subdivisions 1, 2, and 4 to document evidence of immunization 
        shall include month, day, and year for immunizations 
        administered after January 1, 1990.  
           (a) For persons enrolled in grades 7 and 12 during the 
        1996-1997 school term, the statement must indicate that the 
        person has received a dose of tetanus and diphtheria toxoid no 
        earlier than 11 years of age. 
           (b) Except as specified in paragraph (e), for persons 
        enrolled in grades 7, 8, and 12 during the 1997-1998 school 
        term, the statement must indicate that the person has received a 
        dose of tetanus and diphtheria toxoid no earlier than 11 years 
        of age.  
           (c) Except as specified in paragraph (e), for persons 
        enrolled in grades 7 through 12 during the 1998-1999 school term 
        and for each year thereafter, the statement must indicate that 
        the person has received a dose of tetanus and diphtheria toxoid 
        no earlier than 11 years of age.  
           (d) For persons enrolled in grades 7 through 12 during the 
        1996-1997 school year and for each year thereafter, the 
        statement must indicate that the person has received at least 
        two doses of vaccine against measles, mumps, and rubella, given 
        alone or separately and given not less than one month apart. 
           (e) A person who has received at least three doses of 
        tetanus and diphtheria toxoids, with the most recent dose given 
        after age six and before age 11, is not required to have 
        additional immunization against diphtheria and tetanus until ten 
        years have elapsed from the person's most recent dose of tetanus 
        and diphtheria toxoid. 
           (f) The requirement for hepatitis B vaccination shall apply 
        to persons enrolling in kindergarten beginning with the 
        2000-2001 school term. 
           (g) The requirement for hepatitis B vaccination shall apply 
        to persons enrolling in kindergarten through grade 7 beginning 
        with the 2007-2008 2001-2002 school term. 
           Sec. 25.  Minnesota Statutes 1997 Supplement, section 
        144.1494, subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION OF ACCOUNT.] A rural physician 
        education account is established in the health care access 
        fund.  The commissioner shall use money from the account to 
        establish a loan forgiveness program for medical residents 
        agreeing to practice in designated rural areas, as defined by 
        the commissioner.  Appropriations made to this account do not 
        cancel and are available until expended, except that at the end 
        of each biennium the commissioner shall cancel to the health 
        care access fund any remaining unobligated balance in this 
        account. 
           Sec. 26.  [144.6905] [OCCUPATIONAL RESPIRATORY DISEASE 
        INFORMATION SYSTEM ADVISORY GROUP.] 
           Subdivision 1.  [ADVISORY GROUP.] The commissioner of 
        health shall convene an occupational respiratory disease 
        advisory group and shall consult with the group on the 
        development, implementation, and ongoing operation of an 
        occupational respiratory disease information system.  Membership 
        in the group shall include representatives of academia, 
        government, industry, labor, medicine, and consumers from areas 
        of the state targeted by the information system.  From members 
        of the advisory group, the commissioner shall form a technical 
        and medical committee to create information system protocols and 
        a legal and policy committee to address data privacy issues.  
        The advisory group is governed by section 15.059, except that 
        members shall not receive per diem compensation. 
           Subd. 2.  [DATA PROVISIONS.] No individually identifying 
        data shall be collected or entered into the occupational 
        respiratory disease information system without further action of 
        the legislature. 
           Sec. 27.  Minnesota Statutes 1996, section 144.701, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CONSUMER INFORMATION.] The commissioner of 
        health shall ensure that the total costs, total 
        revenues, overall utilization, and total services of each 
        hospital and each outpatient surgical center are reported to the 
        public in a form understandable to consumers.  
           Sec. 28.  Minnesota Statutes 1996, section 144.701, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DATA FOR POLICY MAKING.] The commissioner of 
        health shall compile relevant financial and accounting, 
        utilization, and services data concerning hospitals and 
        outpatient surgical centers in order to have statistical 
        information available for legislative policy making. 
           Sec. 29.  Minnesota Statutes 1996, section 144.701, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FILING FEES.] Each report which is required to 
        be submitted to the commissioner of health under sections 
        144.695 to 144.703 and which is not submitted to a voluntary, 
        nonprofit reporting organization in accordance with section 
        144.702 shall be accompanied by a filing fee in an amount 
        prescribed by rule of the commissioner of health.  Fees received 
        pursuant to this subdivision shall be deposited in the general 
        fund of the state treasury.  Upon the withdrawal of approval of 
        a reporting organization, or the decision of the commissioner to 
        not renew a reporting organization, fees collected under section 
        144.702 shall be submitted to the commissioner and deposited in 
        the general fund.  Fees received under this subdivision shall be 
        deposited in a revolving fund and are appropriated to the 
        commissioner of health for the purposes of sections 144.695 to 
        144.703.  The commissioner shall report the termination or 
        nonrenewal of the voluntary reporting organization to the chair 
        of the health and human services subdivision of the 
        appropriations committee of the house of representatives, to the 
        chair of the health and human services division of the finance 
        committee of the senate, and the commissioner of finance. 
           Sec. 30.  Minnesota Statutes 1996, section 144.702, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REPORTING THROUGH A REPORTING 
        ORGANIZATION.] A hospital or outpatient surgical center may 
        agree to submit its financial, utilization, and services reports 
        to a voluntary, nonprofit reporting organization whose reporting 
        procedures have been approved by the commissioner of health in 
        accordance with this section.  Each report submitted to the 
        voluntary, nonprofit reporting organization under this section 
        shall be accompanied by a filing fee. 
           Sec. 31.  Minnesota Statutes 1996, section 144.702, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL OF ORGANIZATION'S REPORTING 
        PROCEDURES.] The commissioner of health may approve voluntary 
        reporting procedures consistent with written operating 
        requirements for the voluntary, nonprofit reporting organization 
        which shall be established annually by the commissioner.  These 
        written operating requirements shall specify reports, analyses, 
        and other deliverables to be produced by the voluntary, 
        nonprofit reporting organization, and the dates on which those 
        deliverables must be submitted to the commissioner.  These 
        written operating requirements shall specify deliverable dates 
        sufficient to enable the commissioner of health to process and 
        report health care cost information system data to the 
        commissioner of human services by August 15 of each year.  The 
        commissioner of health shall, by rule, prescribe standards for 
        submission of data by hospitals and outpatient surgical centers 
        to the voluntary, nonprofit reporting organization or to the 
        commissioner.  These standards shall provide for: 
           (a) the filing of appropriate financial, utilization, and 
        services information with the reporting organization; 
           (b) adequate analysis and verification of that financial, 
        utilization, and services information; and 
           (c) timely publication of the costs, revenues, and rates of 
        individual hospitals and outpatient surgical centers prior to 
        the effective date of any proposed rate increase.  The 
        commissioner of health shall annually review the procedures 
        approved pursuant to this subdivision. 
           Sec. 32.  Minnesota Statutes 1996, section 144.702, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TERMINATION OR NONRENEWAL OF REPORTING 
        ORGANIZATION.] The commissioner may withdraw approval of any 
        voluntary, nonprofit reporting organization for failure on the 
        part of the voluntary, nonprofit reporting organization to 
        comply with the written operating requirements under subdivision 
        2.  Upon the effective date of the withdrawal, all funds 
        collected by the voluntary, nonprofit reporting organization 
        under section 144.701, subdivision 4 1, but not expended shall 
        be deposited in the general fund a revolving fund and are 
        appropriated to the commissioner of health for the purposes of 
        sections 144.695 to 144.703. 
           The commissioner may choose not to renew approval of a 
        voluntary, nonprofit reporting organization if the organization 
        has failed to perform its obligations satisfactorily under the 
        written operating requirements under subdivision 2. 
           Sec. 33.  [144.7022] [ADMINISTRATIVE PENALTY ORDERS FOR 
        REPORTING ORGANIZATIONS.] 
           Subdivision 1.  [AUTHORIZATION.] The commissioner may issue 
        an order to the voluntary, nonprofit reporting organization 
        requiring violations to be corrected and administratively assess 
        monetary penalties for violations of sections 144.695 to 144.703 
        or rules, written operating requirements, orders, stipulation 
        agreements, settlements, or compliance agreements adopted, 
        enforced, or issued by the commissioner. 
           Subd. 2.  [CONTENTS OF ORDER.] An order assessing an 
        administrative penalty under this section must include: 
           (1) a concise statement of the facts alleged to constitute 
        a violation; 
           (2) a reference to the section of law, rule, written 
        operating requirement, order, stipulation agreement, settlement, 
        or compliance agreement that has been violated; 
           (3) a statement of the amount of the administrative penalty 
        to be imposed and the factors upon which the penalty is based; 
           (4) a statement of the corrective actions necessary to 
        correct the violation; and 
           (5) a statement of the right to request a hearing according 
        to sections 14.57 to 14.62. 
           Subd. 3.  [CONCURRENT CORRECTIVE ORDER.] The commissioner 
        may issue an order assessing an administrative penalty and 
        requiring the violations cited in the order be corrected within 
        30 calendar days from the date the order is received.  Before 
        the 31st day after the order was received, the voluntary, 
        nonprofit reporting organization that is subject to the order 
        shall provide the commissioner with information demonstrating 
        that the violation has been corrected or that a corrective plan 
        acceptable to the commissioner has been developed.  The 
        commissioner shall determine whether the violation has been 
        corrected and notify the voluntary, nonprofit reporting 
        organization of the commissioner's determination. 
           Subd. 4.  [PENALTY.] If the commissioner determines that 
        the violation has been corrected or an acceptable corrective 
        plan has been developed, the penalty may be forgiven, except 
        where there are repeated or serious violations, the commissioner 
        may issue an order with a penalty that will not be forgiven 
        after corrective action is taken.  Unless there is a request for 
        review of the order under subdivision 6 before the penalty is 
        due, the penalty is due and payable: 
           (1) on the 31st calendar day after the order was received, 
        if the voluntary, nonprofit reporting organization fails to 
        provide information to the commissioner showing that the 
        violation has been corrected or that appropriate steps have been 
        taken toward correcting the violation; 
           (2) on the 20th day after the voluntary, nonprofit 
        reporting organization receives the commissioner's determination 
        that the information provided is not sufficient to show that 
        either the violation has been corrected or that appropriate 
        steps have been taken toward correcting the violation; or 
           (3) on the 31st day after the order was received where the 
        penalty is for repeated or serious violations and according to 
        the order issued, the penalty will not be forgiven after 
        corrective action is taken. 
           All penalties due under this section are payable to the 
        treasurer, state of Minnesota, and shall be deposited in the 
        general fund. 
           Subd. 5.  [AMOUNT OF PENALTY; CONSIDERATIONS.] (a) The 
        maximum amount of an administrative penalty order is $5,000 for 
        each specific violation identified in an inspection, 
        investigation, or compliance review, up to an annual maximum 
        total for all violations of ten percent of the fees collected by 
        the voluntary, nonprofit reporting organization under section 
        144.702, subdivision 1.  The annual maximum is based on a 
        reporting year. 
           (b) In determining the amount of the administrative 
        penalty, the commissioner shall consider the following: 
           (1) the willfulness of the violation; 
           (2) the gravity of the violation; 
           (3) the history of past violations; 
           (4) the number of violations; 
           (5) the economic benefit gained by the person allowing or 
        committing the violation; and 
           (6) other factors as justice may require, if the 
        commissioner specifically identifies the additional factors in 
        the commissioner's order. 
           (c) In determining the amount of a penalty for a violation 
        subsequent to an initial violation under paragraph (a), the 
        commissioner shall also consider: 
           (1) the similarity of the most recent previous violation 
        and the violation to be penalized; 
           (2) the time elapsed since the last violation; and 
           (3) the response of the voluntary, nonprofit reporting 
        organization to the most recent previous violation. 
           Subd. 6.  [REQUEST FOR HEARING; HEARING; AND FINAL 
        ORDER.] A request for hearing must be in writing, delivered to 
        the commissioner by certified mail within 20 calendar days after 
        the receipt of the order, and specifically state the reasons for 
        seeking review of the order.  The commissioner must initiate a 
        hearing within 30 calendar days from the date of receipt of the 
        written request for hearing.  The hearing shall be conducted 
        pursuant to the contested case procedures in sections 14.57 to 
        14.62.  No earlier than ten calendar days after and within 30 
        calendar days of receipt of the presiding administrative law 
        judge's report, the commissioner shall, based on all relevant 
        facts, issue a final order modifying, vacating, or making the 
        original order permanent.  If, within 20 calendar days of 
        receipt of the original order, the voluntary, nonprofit 
        reporting organization fails to request a hearing in writing, 
        the order becomes the final order of the commissioner. 
           Subd. 7.  [REVIEW OF FINAL ORDER AND PAYMENT OF 
        PENALTY.] Once the commissioner issues a final order, any 
        penalty due under that order shall be paid within 30 calendar 
        days after the date of the final order, unless review of the 
        final order is requested.  The final order of the commissioner 
        may be appealed in the manner prescribed in sections 14.63 to 
        14.69.  If the final order is reviewed and upheld, the penalty 
        shall be paid 30 calendar days after the date of the decision of 
        the reviewing court.  Failure to request an administrative 
        hearing pursuant to subdivision 6 shall constitute a waiver of 
        the right to further agency or judicial review of the final 
        order. 
           Subd. 8.  [REINSPECTIONS AND EFFECT OF NONCOMPLIANCE.] If, 
        upon reinspection, or in the determination of the commissioner, 
        it is found that any deficiency specified in the order has not 
        been corrected or an acceptable corrective plan has not been 
        developed, the voluntary, nonprofit reporting organization is in 
        noncompliance.  The commissioner shall issue a notice of 
        noncompliance and may impose any additional remedy available 
        under this chapter. 
           Subd. 9.  [ENFORCEMENT.] The attorney general may proceed 
        on behalf of the commissioner to enforce penalties that are due 
        and payable under this section in any manner provided by law for 
        the collection of debts. 
           Subd. 10.  [TERMINATION OR NONRENEWAL OF REPORTING 
        ORGANIZATION.] The commissioner may withdraw or not renew 
        approval of any voluntary, nonprofit reporting organization for 
        failure on the part of the voluntary, nonprofit reporting 
        organization to pay penalties owed under this section. 
           Subd. 11.  [CUMULATIVE REMEDY.] The authority of the 
        commissioner to issue an administrative penalty order is in 
        addition to other lawfully available remedies. 
           Subd. 12.  [MEDIATION.] In addition to review under 
        subdivision 6, the commissioner is authorized to enter into 
        mediation concerning an order issued under this section if the 
        commissioner and the voluntary, nonprofit reporting organization 
        agree to mediation. 
           Sec. 34.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CITATION.] Sections 144.9501 to 144.9509 
        may be cited as the "childhood Lead Poisoning Prevention Act." 
           Sec. 35.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [ASSESSING AGENCY.] "Assessing agency" means the 
        commissioner or a board of health with authority and 
        responsibility to conduct lead risk assessments in response to 
        reports of children or pregnant women with elevated blood lead 
        levels. 
           Sec. 36.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 6b.  [CLEARANCE INSPECTION.] "Clearance inspection" 
        means a visual identification of deteriorated paint and bare 
        soil and a resampling and analysis of interior dust lead 
        concentrations in a residence to ensure that the lead standards 
        established in rules adopted under section 144.9508 are not 
        exceeded. 
           Sec. 37.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 17, is amended to read: 
           Subd. 17.  [LEAD HAZARD REDUCTION.] "Lead hazard reduction" 
        means action undertaken in response to a lead order to make a 
        residence, child care facility, school, or playground lead-safe 
        by complying with the lead standards and methods adopted under 
        section 144.9508, by: 
           (1) a property owner or lead contractor complying persons 
        hired by the property owner to comply with a lead order issued 
        under section 144.9504; or 
           (2) a swab team service provided in response to a lead 
        order issued under section 144.9504; or 
           (3) a renter residing at a rental property or one or more 
        volunteers to comply with a lead order issued under section 
        144.9504.  
           Sec. 38.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 17a.  [LEAD HAZARD SCREEN.] "Lead hazard screen" 
        means visual identification of the existence and location of any 
        deteriorated paint, collection and analysis of dust samples, and 
        visual identification of the existence and location of bare soil.
           Sec. 39.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 18, is amended to read: 
           Subd. 18.  [LEAD INSPECTION.] "Lead inspection" means a 
        qualitative or quantitative analytical inspection of a residence 
        for deteriorated paint or bare soil and the collection of 
        samples of deteriorated paint, bare soil, dust, or drinking 
        water for analysis to determine if the lead concentrations in 
        the samples exceed standards adopted under section 144.9508. 
        Lead inspection includes the clearance inspection after the 
        completion of a lead order measurement of the lead content of 
        paint and a visual identification of the existence and location 
        of bare soil.  
           Sec. 40.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 20, is amended to read: 
           Subd. 20.  [LEAD ORDER.] "Lead order" means a legal 
        instrument to compel a property owner to engage in lead hazard 
        reduction according to the specifications given by the 
        inspecting assessing agency.  
           Sec. 41.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 20a.  [LEAD PROJECT DESIGNER.] "Lead project designer"
        means an individual who is responsible for planning the 
        site-specific performance of lead abatement or lead hazard 
        reduction and who has been licensed by the commissioner under 
        section 144.9505. 
           Sec. 42.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 20b.  [LEAD RISK ASSESSMENT.] "Lead risk assessment" 
        means a quantitative measurement of the lead content of paint, 
        interior dust, and bare soil to determine compliance with the 
        standards established under section 144.9508. 
           Sec. 43.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 20c.  [LEAD RISK ASSESSOR.] "Lead risk assessor" 
        means an individual who performs lead risk assessments or lead 
        inspections and who has been licensed by the commissioner under 
        section 144.9506. 
           Sec. 44.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 22a.  [LEAD SUPERVISOR.] "Lead supervisor" means an 
        individual who is responsible for the on-site performance of 
        lead abatement or lead hazard reduction and who has been 
        licensed by the commissioner under section 144.9505. 
           Sec. 45.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 23, is amended to read: 
           Subd. 23.  [LEAD WORKER.] "Lead worker" means any person 
        who is certified an individual who performs lead abatement or 
        lead hazard reduction and who has been licensed by the 
        commissioner under section 144.9505.  
           Sec. 46.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 25a.  [PLAY AREA.] "Play area" means any established 
        area where children play, or on residential property, any 
        established area where children play or bare soil is accessible 
        to children. 
           Sec. 47.  Minnesota Statutes 1996, section 144.9501, is 
        amended by adding a subdivision to read: 
           Subd. 28a.  [STANDARD.] "Standard" means a quantitative 
        assessment of lead in any environmental media or consumer 
        product, or a work practice or method that reduces the 
        likelihood of lead exposure. 
           Sec. 48.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 30, is amended to read: 
           Subd. 30.  [SWAB TEAM WORKER.] "Swab team worker" means a 
        person who is certified an individual who performs swab team 
        services and who has been licensed by the commissioner as a lead 
        worker under section 144.9505.  
           Sec. 49.  Minnesota Statutes 1996, section 144.9501, 
        subdivision 32, is amended to read: 
           Subd. 32.  [VOLUNTARY LEAD HAZARD REDUCTION.] "Voluntary 
        lead hazard reduction" means action undertaken by a property 
        owner with the intention to engage in lead hazard reduction or 
        abatement lead hazard reduction activities defined in 
        subdivision 17, but not undertaken in response to the issuance 
        of a lead order.  
           Sec. 50.  Minnesota Statutes 1996, section 144.9502, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REPORTS OF BLOOD LEAD ANALYSIS REQUIRED.] (a) 
        Every hospital, medical clinic, medical laboratory, or other 
        facility, or individual performing blood lead analysis shall 
        report the results after the analysis of each specimen analyzed, 
        for both capillary and venous specimens, and epidemiologic 
        information required in this section to the commissioner of 
        health, within the time frames set forth in clauses (1) and (2): 
           (1) within two working days by telephone, fax, or 
        electronic transmission, with written or electronic confirmation 
        within one month, for a venous blood lead level equal to or 
        greater than 15 micrograms of lead per deciliter of whole blood; 
        or 
           (2) within one month in writing or by electronic 
        transmission, for a any capillary result or for a venous blood 
        lead level less than 15 micrograms of lead per deciliter of 
        whole blood.  
           (b) If a blood lead analysis is performed outside of 
        Minnesota and the facility performing the analysis does not 
        report the blood lead analysis results and epidemiological 
        information required in this section to the commissioner, the 
        provider who collected the blood specimen must satisfy the 
        reporting requirements of this section.  For purposes of this 
        section, "provider" has the meaning given in section 62D.02, 
        subdivision 9. 
           (c) The commissioner shall coordinate with hospitals, 
        medical clinics, medical laboratories, and other facilities 
        performing blood lead analysis to develop a universal reporting 
        form and mechanism. 
           The reporting requirements of this subdivision shall expire 
        on December 31, 1997.  Beginning January 1, 1998, every 
        hospital, medical clinic, medical laboratory, or other facility 
        performing blood lead analysis shall report the results within 
        two working days by telephone, fax, or electronic transmission, 
        with written or electronic confirmation within one month, for 
        capillary or venous blood lead level equal to the level for 
        which reporting is recommended by the Center for Disease Control.
           Sec. 51.  Minnesota Statutes 1996, section 144.9502, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BLOOD LEAD ANALYSES AND EPIDEMIOLOGIC 
        INFORMATION.] The blood lead analysis reports required in this 
        section must specify:  
           (1) whether the specimen was collected as a capillary or 
        venous sample; 
           (2) the date the sample was collected; 
           (3) the results of the blood lead analysis; 
           (4) the date the sample was analyzed; 
           (5) the method of analysis used; 
           (6) the full name, address, and phone number of the 
        laboratory performing the analysis; 
           (7) the full name, address, and phone number of the 
        physician or facility requesting the analysis; 
           (8) the full name, address, and phone number of the person 
        with the elevated blood lead level, and the person's birthdate, 
        gender, and race.  
           Sec. 52.  Minnesota Statutes 1996, section 144.9502, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CLASSIFICATION OF DATA.] Notwithstanding any law 
        to the contrary, including section 13.05, subdivision 9, data 
        collected by the commissioner of health about persons with 
        elevated blood lead levels, including analytic results from 
        samples of paint, soil, dust, and drinking water taken from the 
        individual's home and immediate property, shall be private and 
        may only be used by the commissioner of health, the commissioner 
        of labor and industry, authorized agents of Indian tribes, and 
        authorized employees of local boards of health for the purposes 
        set forth in this section.  
           Sec. 53.  Minnesota Statutes 1996, section 144.9503, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SWAB TEAM SERVICES.] Primary prevention must 
        include the use of swab team services in census tracts 
        identified at high risk for toxic lead exposure as identified by 
        the commissioner under this section.  The swab team services may 
        be provided based on visual inspections lead hazard screens 
        whenever possible and must at least include lead 
        hazard management reduction for deteriorated interior lead-based 
        paint, bare soil, and dust.  
           Sec. 54.  Minnesota Statutes 1996, section 144.9503, 
        subdivision 6, is amended to read: 
           Subd. 6.  [VOLUNTARY LEAD ABATEMENT OR LEAD HAZARD 
        REDUCTION.] The commissioner shall monitor the lead abatement or 
        lead hazard reduction methods adopted under section 144.9508 in 
        cases of voluntary lead abatement or lead hazard reduction.  All 
        contractors persons hired to do voluntary lead abatement or lead 
        hazard reduction must be licensed lead contractors by the 
        commissioner under section 144.9505 or 144.9506.  Renters and 
        volunteers performing lead abatement or lead hazard reduction 
        must be trained and licensed as lead supervisors or lead 
        workers.  If a property owner does not use a lead contractor 
        hire a person for voluntary lead abatement or lead hazard 
        reduction, the property owner shall provide the commissioner 
        with a work plan for lead abatement or lead hazard reduction at 
        least ten working days before beginning the lead abatement or 
        lead hazard reduction.  The work plan must include the details 
        required in section 144.9505, and notice as to when 
        lead abatement or lead hazard reduction activities will begin.  
        Within the limits of appropriations, the commissioner shall 
        review work plans and shall approve or disapprove them as to 
        compliance with the requirements in section 144.9505.  No 
        penalty shall be assessed against a property owner for 
        discontinuing voluntary lead hazard reduction before completion 
        of the work plan, provided that the property owner discontinues 
        the plan lead hazard reduction in a manner that leaves the 
        property in a condition no more hazardous than its condition 
        before the work plan implementation. 
           Sec. 55.  Minnesota Statutes 1996, section 144.9503, 
        subdivision 7, is amended to read: 
           Subd. 7.  [LEAD-SAFE INFORMATIONAL DIRECTIVES.] (a) By July 
        1, 1995, and amended and updated as necessary, the commissioner 
        shall develop in cooperation with the commissioner of 
        administration provisions and procedures to define 
        lead-safe informational directives for residential remodeling, 
        renovation, installation, and rehabilitation activities that are 
        not lead hazard reduction, but may disrupt lead-based paint 
        surfaces.  
           (b) The provisions and procedures shall define lead-safe 
        directives for nonlead hazard reduction activities including 
        preparation, cleanup, and disposal procedures.  The directives 
        shall be based on the different levels and types of work 
        involved and the potential for lead hazards.  The directives 
        shall address activities including painting; remodeling; 
        weatherization; installation of cable, wire, plumbing, and gas; 
        and replacement of doors and windows.  The commissioners of 
        health and administration shall consult with representatives of 
        builders, weatherization providers, nonprofit rehabilitation 
        organizations, each of the affected trades, and housing and 
        redevelopment authorities in developing the directives and 
        procedures.  This group shall also make recommendations for 
        consumer and contractor education and training.  The 
        commissioner of health shall report to the legislature by 
        February 15, 1996, regarding development of the provisions 
        required under this subdivision paragraph.  
           (c) By January 1, 1999, the commissioner, in cooperation 
        with interested and informed persons and using the meeting 
        structure and format developed in paragraph (b), shall develop 
        lead-safe informational directives on the following topics: 
           (1) maintaining floors, walls, and ceilings; 
           (2) maintaining and repairing porches; 
           (3) conducting a risk evaluation for lead; and 
           (4) prohibited practices when working with lead. 
        The commissioner shall report to the legislature by January 1, 
        1999, regarding development of the provisions required under 
        this paragraph. 
           Sec. 56.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [JURISDICTION.] (a) A board of health 
        serving cities of the first class must conduct lead inspections 
        risk assessments for purposes of secondary prevention, according 
        to the provisions of this section.  A board of health not 
        serving cities of the first class must conduct lead inspections 
        risk assessments for the purposes of secondary prevention, 
        unless they certify certified in writing to the commissioner by 
        January 1, 1996, that they desire desired to relinquish these 
        duties back to the commissioner.  At the discretion of the 
        commissioner, a board of health may relinquish the authority and 
        duty to perform lead risk assessments for secondary prevention 
        by so certifying in writing to the commissioner by December 31, 
        1999.  At the discretion of the commissioner, a board of health 
        may, upon written request to the commissioner, resume these 
        duties. 
           (b) Inspections Lead risk assessments must be conducted by 
        a board of health serving a city of the first class.  The 
        commissioner must conduct lead inspections risk assessments in 
        any area not including cities of the first class where a board 
        of health has relinquished to the commissioner the 
        responsibility for lead inspections risk assessments.  The 
        commissioner shall coordinate with the board of health to ensure 
        that the requirements of this section are met.  
           (c) The commissioner may assist boards of health by 
        providing technical expertise, equipment, and personnel to 
        boards of health.  The commissioner may provide laboratory or 
        field lead-testing equipment to a board of health or may 
        reimburse a board of health for direct costs associated with 
        lead inspections risk assessments. 
           (d) The commissioner shall enforce the rules under section 
        144.9508 in cases of voluntary lead hazard reduction. 
           Sec. 57.  Minnesota Statutes 1997 Supplement, section 
        144.9504, subdivision 2, is amended to read: 
           Subd. 2.  [LEAD INSPECTION RISK ASSESSMENT.] (a) 
        An inspecting assessing agency shall conduct a lead inspection 
        risk assessment of a residence according to the venous blood 
        lead level and time frame set forth in clauses (1) to (5) 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 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 micrograms of lead per 
        deciliter of whole blood; 
           (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 state and federal 
        appropriations, an inspecting assessing agency may also conduct 
        a lead inspection risk assessment for children with any elevated 
        blood lead level.  
           (c) In a building with two or more dwelling units, an 
        inspecting assessing agency shall inspect the individual unit in 
        which the conditions of this section are met and shall also 
        inspect all common areas.  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 inspecting 
        assessing agency shall also inspect the other sites.  
        The inspecting assessing agency shall have one additional day 
        added to the time frame set forth in this subdivision to 
        complete the lead inspection risk assessment for each additional 
        site.  
           (d) Within the limits of appropriations, the inspecting 
        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 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 a 
        copy of the lead inspection risk assessment guide.  The 
        inspecting assessing agency shall provide the notice required by 
        this subdivision without identifying the child or pregnant 
        female with the elevated blood lead level.  The inspecting 
        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 inspecting assessing agency shall conduct the lead 
        inspection risk assessment according to rules adopted by the 
        commissioner under section 144.9508.  An inspecting assessing 
        agency shall have lead inspections risk assessments performed by 
        lead inspectors risk assessors licensed by the commissioner 
        according to rules adopted under section 144.9508.  If a 
        property owner refuses to allow an inspection a lead risk 
        assessment, the inspecting assessing agency shall begin legal 
        proceedings to gain entry to the property and the time frame for 
        conducting a lead inspection risk assessment set forth in this 
        subdivision no longer applies.  An inspector A lead risk 
        assessor or inspecting 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, and drinking 
        water 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 a probable source of lead exposure is not identified by 
        measurement of lead in paint, bare soil, or dust.  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) A lead inspector risk assessor shall notify the 
        commissioner and the board of health of all violations of lead 
        standards under section 144.9508, that are identified in a 
        lead inspection risk assessment conducted under this section.  
           (g) Each inspecting 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 inspecting assessing agency.  Inspecting Assessing agencies 
        must consider appeals that propose lower cost methods that make 
        the residence lead safe. 
           (h) Sections 144.9501 to 144.9509 neither authorize nor 
        prohibit an inspecting assessing agency from charging a property 
        owner for the cost of a lead inspection risk assessment. 
           Sec. 58.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LEAD EDUCATION STRATEGY.] At the time of a 
        lead inspection risk assessment or following a lead order, the 
        inspecting assessing agency shall ensure that a family will 
        receive a visit at their residence by a swab team worker or 
        public health professional, such as a nurse, sanitarian, public 
        health educator, or other public health professional.  The swab 
        team worker or public health professional shall inform the 
        property owner, landlord, and the tenant of the health-related 
        aspects of lead exposure; nutrition; safety measures to minimize 
        exposure; methods to be followed before, during, and after the 
        lead hazard reduction process; and community, legal, and housing 
        resources.  If a family moves to a temporary residence during 
        the lead hazard reduction process, lead education services 
        should be provided at the temporary residence whenever feasible. 
           Sec. 59.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LEAD INSPECTION RISK ASSESSMENT GUIDES.] (a) The 
        commissioner of health shall develop or purchase lead inspection 
        risk assessment guides that enable parents and other caregivers 
        to assess the possible lead sources present and that suggest 
        lead hazard reduction actions.  The guide must provide 
        information on lead hazard reduction and disposal methods, 
        sources of equipment, and telephone numbers for additional 
        information to enable the persons to either select a lead 
        contractor persons licensed by the commissioner under section 
        144.9505 or 144.9506 to perform lead hazard reduction or perform 
        the lead hazard reduction themselves.  The guides must explain:  
           (1) the requirements of this section and rules adopted 
        under section 144.9508; 
           (2) information on the administrative appeal procedures 
        required under this section; 
           (3) summary information on lead-safe directives; 
           (4) be understandable at an eighth grade reading level; and 
           (5) be translated for use by non-English-speaking persons.  
           (b) An inspecting assessing agency shall provide the lead 
        inspection risk assessment guides at no cost to:  
           (1) parents and other caregivers of children who are 
        identified as having blood lead levels of at least ten 
        micrograms of lead per deciliter of whole blood; 
           (2) all property owners who are issued housing code or lead 
        orders requiring lead hazard reduction of lead sources and all 
        occupants of those properties; and 
           (3) occupants of residences adjacent to the inspected 
        property.  
           (c) An inspecting assessing agency shall provide the lead 
        inspection risk assessment guides on request to owners or 
        occupants of residential property, builders, contractors, 
        inspectors, and the public within the jurisdiction of 
        the inspecting assessing agency.  
           Sec. 60.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LEAD ORDERS.] An inspecting assessing agency, 
        after conducting a lead inspection risk assessment, shall order 
        a property owner to perform lead hazard reduction on all lead 
        sources that exceed a standard adopted according to section 
        144.9508.  If lead inspections risk assessments and lead orders 
        are conducted at times when weather or soil conditions do not 
        permit the lead inspection risk assessment or lead hazard 
        reduction, external surfaces and soil lead shall be inspected, 
        and lead orders complied with, if necessary, at the first 
        opportunity that weather and soil conditions allow.  If the 
        paint standard under section 144.9508 is violated, but the paint 
        is intact, the inspecting assessing agency shall not order the 
        paint to be removed unless the intact paint is a known source of 
        actual lead exposure to a specific person.  Before the 
        inspecting assessing agency may order the intact paint to be 
        removed, a reasonable effort must be made to protect the child 
        and preserve the intact paint by the use of guards or other 
        protective devices and methods.  Whenever windows and doors or 
        other components covered with deteriorated lead-based paint have 
        sound substrate or are not rotting, those components should be 
        repaired, sent out for stripping or be planed down to remove 
        deteriorated lead-based paint or covered with protective guards 
        instead of being replaced, provided that such an activity is the 
        least cost method.  However, a property owner who has been 
        ordered to perform lead hazard reduction may choose any method 
        to address deteriorated lead-based paint on windows, doors, or 
        other components, provided that the method is approved in rules 
        adopted under section 144.9508 and that it is appropriate to the 
        specific property.  Lead orders must require that any source of 
        damage, such as leaking roofs, plumbing, and windows, be 
        repaired or replaced, as needed, to prevent damage to 
        lead-containing interior surfaces.  The inspecting assessing 
        agency is not required to pay for lead hazard reduction.  Lead 
        orders must be issued within 30 days of receiving the blood lead 
        level analysis.  The inspecting assessing agency shall enforce 
        the lead orders issued to a property owner under this section.  
        A copy of the lead order must be forwarded to the commissioner.  
           Sec. 61.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SWAB TEAM SERVICES.] After a lead inspection 
        risk assessment or after issuing lead orders, the inspecting 
        assessing agency, within the limits of appropriations and 
        availability, shall offer the property owner the services of a 
        swab team free of charge and, if accepted, shall send a swab 
        team within ten working days to the residence to perform swab 
        team services as defined in section 144.9501.  If the inspecting 
        assessing agency provides swab team services after a 
        lead inspection risk assessment, but before the issuance of a 
        lead order, swab team services do not need to be repeated after 
        the issuance of the lead order if the swab team services 
        fulfilled the lead order.  Swab team services are not considered 
        completed until the clearance inspection required under this 
        section shows that the property is lead safe. 
           Sec. 62.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 7, is amended to read: 
           Subd. 7.  [RELOCATION OF RESIDENTS.] (a) Within the limits 
        of appropriations, the inspecting assessing agency shall ensure 
        that residents are relocated from rooms or dwellings during a 
        lead hazard reduction process that generates leaded dust, such 
        as removal or disruption of lead-based paint or plaster that 
        contains lead.  Residents shall not remain in rooms or dwellings 
        where the lead hazard reduction process is occurring.  An 
        inspecting assessing agency is not required to pay for 
        relocation unless state or federal funding is available for this 
        purpose.  The inspecting assessing agency shall make an effort 
        to assist the resident in locating resources that will provide 
        assistance with relocation costs.  Residents shall be allowed to 
        return to the residence or dwelling after completion of the lead 
        hazard reduction process.  An inspecting assessing agency shall 
        use grant funds under section 144.9507 if available, in 
        cooperation with local housing agencies, to pay for moving costs 
        and rent for a temporary residence for any low-income resident 
        temporarily relocated during lead hazard reduction.  For 
        purposes of this section, "low-income resident" means any 
        resident whose gross household income is at or below 185 percent 
        of federal poverty level.  
           (b) A resident of rental property who is notified by an 
        inspecting assessing agency to vacate the premises during lead 
        hazard reduction, notwithstanding any rental agreement or lease 
        provisions:  
           (1) shall not be required to pay rent due the landlord for 
        the period of time the tenant vacates the premises due to lead 
        hazard reduction; 
           (2) may elect to immediately terminate the tenancy 
        effective on the date the tenant vacates the premises due to 
        lead hazard reduction; and 
           (3) shall not, if the tenancy is terminated, be liable for 
        any further rent or other charges due under the terms of the 
        tenancy. 
           (c) A landlord of rental property whose tenants vacate the 
        premises during lead hazard reduction shall:  
           (1) allow a tenant to return to the dwelling unit after 
        lead hazard reduction and clearance inspection, required under 
        this section, is completed, unless the tenant has elected to 
        terminate the tenancy as provided for in paragraph (b); and 
           (2) return any security deposit due under section 504.20 
        within five days of the date the tenant vacates the unit, to any 
        tenant who terminates tenancy as provided for in paragraph (b).  
           Sec. 63.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PROPERTY OWNER RESPONSIBILITY.] Property owners 
        shall comply with lead orders issued under this section within 
        60 days or be subject to enforcement actions as provided under 
        section 144.9509.  For orders or portions of orders concerning 
        external lead hazards, property owners shall comply within 60 
        days, or as soon thereafter as weather permits.  If the property 
        owner does not use a lead contractor hire a person licensed by 
        the commissioner under section 144.9505 for compliance with the 
        lead orders, the property owner shall submit a work plan to 
        the inspecting assessing agency within 30 days after receiving 
        the orders.  The work plan must include the details required in 
        section 144.9505 as to how the property owner intends to comply 
        with the lead orders and notice as to when lead hazard reduction 
        activities will begin.  Within the limits of appropriations, the 
        commissioner shall review plans and shall approve or disapprove 
        them as to compliance with the requirements in section 144.9505, 
        subdivision 5.  Renters and volunteers performing lead abatement 
        or lead hazard reduction must be trained and licensed as lead 
        supervisors or lead workers under section 144.9505. 
           Sec. 64.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CLEARANCE INSPECTION.] After completion of swab 
        team services and compliance with the lead orders by the 
        property owner, including any repairs ordered by a local housing 
        or building inspector, the inspecting assessing agency shall 
        conduct a clearance inspection by visually inspecting the 
        residence for visual identification of deteriorated paint and 
        bare soil and retest the dust lead concentration in the 
        residence to assure that violations of the lead standards under 
        section 144.9508 no longer exist.  The inspecting assessing 
        agency is not required to test a dwelling unit after lead hazard 
        reduction that was not ordered by the inspecting assessing 
        agency.  
           Sec. 65.  Minnesota Statutes 1996, section 144.9504, 
        subdivision 10, is amended to read: 
           Subd. 10.  [CASE CLOSURE.] A lead inspection risk 
        assessment is completed and the responsibility of the inspecting 
        assessing agency ends when all of the following conditions are 
        met:  
           (1) lead orders are written on all known sources of 
        violations of lead standards under section 144.9508; 
           (2) compliance with all lead orders has been completed; and 
           (3) clearance inspections demonstrate that no deteriorated 
        lead paint, bare soil, or lead dust levels exist that exceed the 
        standards adopted under section 144.9508.  
           Sec. 66.  Minnesota Statutes 1996, section 144.9505, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSING AND CERTIFICATION.] (a) Lead 
        contractors A person shall, before performing abatement or lead 
        hazard reduction or providing planning services for lead 
        abatement or lead hazard reduction, obtain a license from the 
        commissioner as a lead supervisor, lead worker, or lead project 
        designer.  Workers for lead contractors shall obtain 
        certification from the commissioner.  The commissioner shall 
        specify training and testing requirements for licensure and 
        certification as required in section 144.9508 and shall charge a 
        fee for the cost of issuing a license or certificate and for 
        training provided by the commissioner.  Fees collected under 
        this section shall be set in amounts to be determined by the 
        commissioner to cover but not exceed the costs of adopting rules 
        under section 144.9508, the costs of licensure, certification, 
        and training, and the costs of enforcing licenses and 
        certificates under this section.  License fees shall be 
        nonrefundable and must be submitted with each application in the 
        amount of $50 for each lead supervisor, lead worker, or lead 
        inspector and $100 for each lead project designer, lead risk 
        assessor, or certified firm.  All fees received shall be paid 
        into the state treasury and credited to the lead abatement 
        licensing and certification account and are appropriated to the 
        commissioner to cover costs incurred under this section and 
        section 144.9508. 
           (b) Contractors Persons shall not advertise or otherwise 
        present themselves as lead contractors supervisors, lead 
        workers, or lead project designers unless they have lead 
        contractor licenses issued by the department of health 
        commissioner under section 144.9505. 
           Sec. 67.  Minnesota Statutes 1996, section 144.9505, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NOTICE OF LEAD ABATEMENT OR LEAD HAZARD 
        REDUCTION WORK.] (a) At least five working days before starting 
        work at each lead abatement or lead hazard reduction worksite, 
        the person performing the lead abatement or lead hazard 
        reduction work shall give written notice and an approved work 
        plan as required in this section to the commissioner and the 
        appropriate board of health.  Within the limits of 
        appropriations, the commissioner shall review plans and shall 
        approve or disapprove them as to compliance with the 
        requirements in subdivision 5. 
           (b) This provision does not apply to swab team workers 
        performing work under an order of an inspecting assessing agency.
           Sec. 68.  Minnesota Statutes 1996, section 144.9505, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ABATEMENT OR LEAD HAZARD REDUCTION WORK PLANS.] 
        (a) A lead contractor person who performs lead abatement or lead 
        hazard reduction shall present a lead abatement or lead hazard 
        reduction work plan to the property owner with each bid or 
        estimate for lead abatement or lead hazard reduction work.  
        The work plan does not replace or supersede more stringent 
        contractual agreements.  A written lead abatement or lead hazard 
        reduction work plan must be prepared which describes the 
        equipment and procedures to be used throughout the lead 
        abatement or lead hazard reduction work project.  At a minimum, 
        the work plan must describe: 
           (1) the building area and building components to be worked 
        on; 
           (2) the amount of lead-containing material to be removed, 
        encapsulated, or enclosed; 
           (3) the schedule to be followed for each work stage; 
           (4) the workers' personal protection equipment and 
        clothing; 
           (5) the dust suppression and debris containment methods; 
           (6) the lead abatement or lead hazard reduction methods to 
        be used on each building component; 
           (7) cleaning methods; 
           (8) temporary, on-site waste storage, if any; and 
           (9) the methods for transporting waste material and its 
        destination. 
           (b) A lead contractor The work plan shall itemize the costs 
        for each item listed in paragraph (a) and for any other expenses 
        associated with the lead abatement or lead hazard reduction work 
        and shall present these costs be presented to the property owner 
        with any bid or estimate for lead abatement or lead hazard 
        reduction work. 
           (c) A lead contractor The person performing the lead 
        abatement or lead hazard reduction shall keep a copy of the work 
        plan readily available at the worksite for the duration of the 
        project and present it to the inspecting assessing agency on 
        demand. 
           (d) A lead contractor The person performing the lead 
        abatement or lead hazard reduction shall keep a copy of the work 
        plan on record for one year after completion of the project and 
        shall present it to the inspecting assessing agency on demand. 
           (e) This provision does not apply to swab team workers 
        performing work under an order of an inspecting assessing agency 
        or providing services at no cost to a property owner with 
        funding under a state or federal grant. 
           Sec. 69.  Minnesota Statutes 1997 Supplement, section 
        144.9506, subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSE REQUIRED.] (a) A lead 
        inspector person shall obtain a license as a lead inspector or a 
        lead risk assessor before performing lead inspections, lead 
        hazard screens, or lead risk assessments and shall renew 
        it annually as required in rules adopted under section 144.9508. 
        The commissioner shall charge a fee and require annual refresher 
        training, as specified in this section.  A lead inspector or 
        lead risk assessor shall have the lead inspector's license or 
        lead risk assessor's license readily available at all times 
        at an a lead inspection site or lead risk assessment site and 
        make it available, on request, for inspection examination by the 
        inspecting assessing agency with jurisdiction over the site.  A 
        license shall not be transferred.  License fees shall be 
        nonrefundable and must be submitted with each application in the 
        amount of $50 for each lead inspector and $100 for each lead 
        risk assessor. 
           (b) Individuals shall not advertise or otherwise present 
        themselves as lead inspectors or lead risk assessors unless 
        licensed by the commissioner. 
           (c) An individual may use sodium rhodizonate to test paint 
        for the presence of lead without obtaining a lead inspector or 
        lead risk assessor license, but must not represent the test as a 
        lead inspection or lead risk assessment. 
           Sec. 70.  Minnesota Statutes 1996, section 144.9506, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSE APPLICATION.] An application for a 
        license or license renewal shall be on a form provided by the 
        commissioner and shall include: 
           (1) a $50 nonrefundable fee, in a form approved by the 
        commissioner; and 
           (2) evidence that the applicant has successfully completed 
        a lead inspector training course approved under this section or 
        from another state with which the commissioner has established 
        reciprocity.  The fee required in this section is waived for 
        federal, state, or local government employees within Minnesota. 
           Sec. 71.  Minnesota Statutes 1996, section 144.9507, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LEAD INSPECTION RISK ASSESSMENT CONTRACTS.] The 
        commissioner shall, within available federal or state 
        appropriations, contract with boards of health to conduct 
        lead inspections risk assessments to determine sources of lead 
        contamination and to issue and enforce lead orders according to 
        section 144.9504.  
           Sec. 72.  Minnesota Statutes 1996, section 144.9507, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TEMPORARY LEAD-SAFE HOUSING CONTRACTS.] The 
        commissioner shall, within the limits of available 
        appropriations, contract with boards of health for temporary 
        housing, to be used in meeting relocation requirements in 
        section 144.9504, and award grants to boards of health for the 
        purposes of paying housing and relocation costs under section 
        144.9504.  The commissioner may use up to 15 percent of the 
        available appropriations to provide temporary lead-safe housing 
        in areas of the state in which the commissioner has the duty 
        under section 144.9504 to perform secondary prevention. 
           Sec. 73.  Minnesota Statutes 1996, section 144.9507, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LEAD CLEANUP EQUIPMENT AND MATERIAL GRANTS TO 
        NONPROFIT ORGANIZATIONS.] (a) The commissioner shall, within the 
        limits of available state or federal appropriations, provide 
        funds for lead cleanup equipment and materials under a grant 
        program to nonprofit community-based organizations in areas at 
        high risk for toxic lead exposure, as provided for in section 
        144.9503.  
           (b) Nonprofit community-based organizations in areas at 
        high risk for toxic lead exposure may apply for grants from the 
        commissioner to purchase lead cleanup equipment and materials 
        and to pay for training for staff and volunteers for lead 
        licensure under sections 144.9505 and 144.9506. 
           (c) For purposes of this section, lead cleanup equipment 
        and materials means high efficiency particle accumulator (HEPA) 
        and wet vacuum cleaners, wash water filters, mops, buckets, 
        hoses, sponges, protective clothing, drop cloths, wet scraping 
        equipment, secure containers, dust and particle containment 
        material, and other cleanup and containment materials to remove 
        loose paint and plaster, patch plaster, control household dust, 
        wax floors, clean carpets and sidewalks, and cover bare soil. 
           (d) The grantee's staff and volunteers may make lead 
        cleanup equipment and materials available to residents and 
        property owners and instruct them on the proper use of the 
        equipment.  Lead cleanup equipment and materials must be made 
        available to low-income households, as defined by federal 
        guidelines, on a priority basis at no fee.  Other households may 
        be charged on a sliding fee scale. 
           (e) The grantee shall not charge a fee for services 
        performed using the equipment or materials. 
           (f) Any funds appropriated for purposes of this subdivision 
        that are not awarded, due to a lack of acceptable proposals for 
        the full amount appropriated, may be used for any purpose 
        authorized in this section.  
           Sec. 74.  Minnesota Statutes 1996, section 144.9508, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SAMPLING AND ANALYSIS.] The commissioner 
        shall adopt, by rule, visual inspection and sampling and 
        analysis methods for:  
           (1) lead inspections under section 144.9504, lead hazard 
        screens, lead risk assessments, and clearance inspections; 
           (2) environmental surveys of lead in paint, soil, dust, and 
        drinking water to determine census tracts that are areas at high 
        risk for toxic lead exposure; 
           (3) soil sampling for soil used as replacement soil; and 
           (4) drinking water sampling, which shall be done in 
        accordance with lab certification requirements and analytical 
        techniques specified by Code of Federal Regulations, title 40, 
        section 141.89; and 
           (5) sampling to determine whether at least 25 percent of 
        the soil samples collected from a census tract within a standard 
        metropolitan statistical area contain lead in concentrations 
        that exceed 100 parts per million.  
           Sec. 75.  Minnesota Statutes 1996, section 144.9508, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [LEAD STANDARDS FOR EXTERIOR SURFACES AND STREET 
        DUST.] The commissioner may, by rule, establish lead standards 
        for exterior horizontal surfaces, concrete or other impervious 
        surfaces, and street dust on residential property to protect the 
        public health and the environment. 
           Sec. 76.  Minnesota Statutes 1996, section 144.9508, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LEAD CONTRACTORS AND WORKERS LICENSURE AND 
        CERTIFICATION.] The commissioner shall adopt rules to license 
        lead contractors and to certify supervisors, lead workers of 
        lead contractors who perform lead abatement or lead hazard 
        reduction, lead project designers, lead inspectors, and lead 
        risk assessors.  The commissioner shall also adopt rules 
        requiring certification of firms that perform lead abatement, 
        lead hazard reduction, lead hazard screens, or lead risk 
        assessments.  The commissioner shall require periodic renewal of 
        licenses and certificates and shall establish the renewal 
        periods. 
           Sec. 77.  Minnesota Statutes 1996, section 144.9508, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LEAD TRAINING COURSE.] The commissioner shall 
        establish by rule a permit fee to be paid by a training course 
        provider on application for a training course permit or renewal 
        period for each lead-related training course required for 
        certification or licensure.  The commissioner shall establish 
        criteria in rules for the content and presentation of training 
        courses intended to qualify trainees for licensure under 
        subdivision 3.  Training course permit fees shall be 
        nonrefundable and must be submitted with each application in the 
        amount of $500 for an initial training course, $250 for renewal 
        of a permit for an initial training course, $250 for a refresher 
        training course, and $125 for renewal of a permit of a refresher 
        training course. 
           Sec. 78.  Minnesota Statutes 1996, section 144.9509, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISCRIMINATION.] A person who discriminates 
        against or otherwise sanctions an employee who complains to or 
        cooperates with the inspecting assessing agency in administering 
        sections 144.9501 to 144.9509 is guilty of a petty misdemeanor.  
           Sec. 79.  [144.9511] [LEAD-SAFE PROPERTY CERTIFICATION.] 
           Subdivision 1.  [LEAD-SAFE PROPERTY CERTIFICATION PROGRAM 
        ESTABLISHED.] (a) The commissioner shall establish, within the 
        limits of available appropriations, recommended protocols for a 
        voluntary lead-safe property certification program for 
        residential properties.  This program shall involve an initial 
        property certification process, a property condition report, and 
        a lead-safe property certification booklet. 
           (b) The commissioner shall establish recommended protocols 
        for an initial property certification process composed of the 
        following: 
           (1) a lead hazard screen, which shall include a visual 
        evaluation of a residential property for both deteriorated paint 
        and bare soil; and 
           (2) a quantitative measure of lead in dust within the 
        structure and in common areas as determined by rule adopted 
        under authority of section 144.9508. 
           (c) The commissioner shall establish forms, checklists, and 
        protocols for conducting a property condition report.  A 
        property condition report is an evaluation of property 
        components, without regard to aesthetic considerations, to 
        determine whether any of the following conditions are likely to 
        occur within one year of the report: 
           (1) that paint will become chipped, flaked, or cracked; 
           (2) that structural defects in the roof, windows, or 
        plumbing will fail and cause paint to deteriorate; 
           (3) that window wells or window troughs will not be 
        cleanable and washable; 
           (4) that windows will generate dust due to friction; 
           (5) that cabinet, room, and threshold doors will rub 
        against casings or have repeated contact with painted surfaces; 
           (6) that floors will not be smooth and cleanable and 
        carpeted floors will not be cleanable; 
           (7) that soil will not remain covered; 
           (8) that bare soil in vegetable and flower gardens will not 
        (i) be inaccessible to children or (ii) be tested to determine 
        if it is below the soil standard under section 144.9508; 
           (9) that parking areas will not remain covered by an 
        impervious surface or gravel; 
           (10) that covered soil will erode, particularly in play 
        areas; and 
           (11) that gutters and down spouts will not function 
        correctly. 
           (d) The commissioner shall develop a lead-safe property 
        certification booklet that contains the following: 
           (1) information on how property owners and their 
        maintenance personnel can perform essential maintenance 
        practices to correct any of the property component conditions 
        listed in paragraph (c) that may occur; 
           (2) the lead-safe work practices fact sheets created under 
        section 144.9503, subdivision 7; 
           (3) forms, checklists, and copies of recommended lead-safe 
        property certification certificates; and 
           (4) an educational sheet for landlords to give to tenants 
        on the importance of having tenants inform property owners or 
        designated maintenance staff of one or more of the conditions 
        listed in paragraph (c). 
           Subd. 2.  [CONDITIONS FOR CERTIFICATION.] A property shall 
        be certified as lead safe only if the following conditions are 
        met: 
           (1) the property passes the initial certification process 
        in subdivision 1; 
           (2) the property owner agrees in writing to perform 
        essential maintenance practices; 
           (3) the property owner agrees in writing to use lead-safe 
        work practices, as provided for under section 144.9503, 
        subdivision 7; 
           (4) the property owner performs essential maintenance as 
        the need arises or uses maintenance personnel who have completed 
        a U.S. Environmental Protection Agency- or Minnesota department 
        of health-approved maintenance training program or course to 
        perform essential maintenance; 
           (5) the lead-safe property certification booklet is 
        distributed to the property owner, maintenance personnel, and 
        tenants at the completion of the initial certification process; 
        and 
           (6) a copy of the lead-safe property certificate is filed 
        with the commissioner along with a $5 filing fee. 
           Subd. 3.  [LEAD STANDARDS.] Lead standards used in this 
        section shall be those approved by the commissioner under 
        section 144.9508. 
           Subd. 4.  [LEAD RISK ASSESSORS.] Lead-safe property 
        certifications shall only be performed by lead risk assessors 
        licensed by the commissioner under section 144.9506. 
           Subd. 5.  [EXPIRATION.] Lead-safe property certificates are 
        valid for one year. 
           Subd. 6.  [LIST OF CERTIFIED PROPERTIES.] Within the limits 
        of available appropriations, the commissioner shall maintain a 
        list of all properties certified as lead-safe under this section 
        and make it freely available to the public. 
           Subd. 7.  [RE-APPLICATION.] Properties failing the initial 
        property certification may re-apply for a lead-safe property 
        certification by having a new initial certification process 
        performed and by correcting any condition listed by the licensed 
        lead risk assessor in the property condition report.  Properties 
        that fail the initial property certification process must have 
        the condition corrected by the property owner, by trained 
        maintenance staff, or by a contractor with personnel licensed 
        for lead hazard reduction or lead abatement work by the 
        commissioner under section 144.9505, in order to have the 
        property certified. 
           Sec. 80.  Minnesota Statutes 1996, section 144.99, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REMEDIES AVAILABLE.] The provisions of 
        chapters 103I and 157 and sections 115.71 to 115.77; 144.12, 
        subdivision 1, paragraphs (1), (2), (5), (6), (10), (12), (13), 
        (14), and (15); 144.121; 144.1222; 144.35; 144.381 to 144.385; 
        144.411 to 144.417; 144.491; 144.495; 144.71 to 144.74; 144.9501 
        to 144.9509; 144.992; 326.37 to 326.45; 326.57 to 326.785; 
        327.10 to 327.131; and 327.14 to 327.28 and all rules, orders, 
        stipulation agreements, settlements, compliance agreements, 
        licenses, registrations, certificates, and permits adopted or 
        issued by the department or under any other law now in force or 
        later enacted for the preservation of public health may, in 
        addition to provisions in other statutes, be enforced under this 
        section. 
           Sec. 81.  Minnesota Statutes 1996, section 144A.44, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INTERPRETATION AND ENFORCEMENT OF RIGHTS.] These 
        rights are established for the benefit of persons who receive 
        home care services.  "Home care services" means home care 
        services as defined in section 144A.43, subdivision 3.  A home 
        care provider may not require a person to surrender these rights 
        as a condition of receiving services.  A guardian or conservator 
        or, when there is no guardian or conservator, a designated 
        person, may seek to enforce these rights.  This statement of 
        rights does not replace or diminish other rights and liberties 
        that may exist relative to persons receiving home care services, 
        persons providing home care services, or providers licensed 
        under Laws 1987, chapter 378.  A copy of these rights must be 
        provided to an individual at the time home care services are 
        initiated.  The copy shall also contain the address and phone 
        number of the office of health facility complaints and the 
        office of the ombudsman for older Minnesotans and a brief 
        statement describing how to file a complaint with that office 
        these offices.  Information about how to contact the office of 
        the ombudsman for older Minnesotans shall be included in notices 
        of change in client fees and in notices where home care 
        providers initiate transfer or discontinuation of services. 
           Sec. 82.  Minnesota Statutes 1997 Supplement, section 
        144A.4605, subdivision 4, is amended to read: 
           Subd. 4.  [LICENSE REQUIRED.] (a) A housing with services 
        establishment registered under chapter 144D that is required to 
        obtain a home care license must obtain an assisted living home 
        care license according to this section or a class A or class E 
        license according to rule.  A housing with services 
        establishment that obtains a class E license under this 
        subdivision remains subject to the payment limitations in 
        sections 256B.0913, subdivision 5, paragraph (h), and 256B.0915, 
        subdivision 3, paragraph (g). 
           (b) A board and lodging establishment registered for 
        special services as of December 31, 1996, and also registered as 
        a housing with services establishment under chapter 144D, must 
        deliver home care services according to sections 144A.43 to 
        144A.49, and may apply for a waiver from requirements under 
        Minnesota Rules, parts 4668.0002 to 4668.0240, to operate a 
        licensed agency under the standards of section 157.17.  Such 
        waivers as may be granted by the department will expire upon 
        promulgation of home care rules implementing section 144A.4605. 
           (c) An adult foster care provider licensed by the 
        department of human services and registered under chapter 144D 
        may continue to provide health-related services under its foster 
        care license until the promulgation of home care rules 
        implementing this section. 
           Sec. 83.  [145.905] [LOCATION FOR BREAST-FEEDING.] 
           A mother may breast-feed in any location, public or 
        private, where the mother and child are otherwise authorized to 
        be, irrespective of whether the nipple of the mother's breast is 
        uncovered during or incidental to the breast-feeding. 
           Sec. 84.  [145.9261] [ABSTINENCE EDUCATION GRANT PROGRAM.] 
           The commissioner of health shall expend federal funds for 
        abstinence education programs provided under United States Code, 
        title 42, section 710, and state matching funds for abstinence 
        education programs only to an abstinence education program that 
        complies with the state plan that has been submitted to and 
        approved by the federal Department of Health and Human Services. 
           Sec. 85.  [145.9266] [FETAL ALCOHOL SYNDROME.] 
           Subdivision 1.  [PUBLIC AWARENESS.] The commissioner of 
        health shall design and implement an ongoing statewide campaign 
        to raise public awareness about fetal alcohol syndrome and other 
        effects of prenatal alcohol exposure.  The campaign shall 
        include messages directed to the general population as well as 
        culturally specific and community-based messages.  A toll-free 
        resource and referral telephone line shall be included in the 
        messages.  The commissioner of health shall conduct an 
        evaluation to determine the effectiveness of the campaign. 
           Subd. 2.  [STATEWIDE NETWORK OF FAS DIAGNOSTIC CLINICS.] A 
        statewide network of regional fetal alcohol syndrome diagnostic 
        clinics shall be developed between the department of health and 
        the University of Minnesota.  This collaboration shall be based 
        on a statewide needs assessment and shall include involvement 
        from consumers, providers, and payors.  By the end of calendar 
        year 1998, a plan shall be developed for the clinic network, and 
        shall include a comprehensive evaluation component.  Sites shall 
        be established in calendar year 1999.  The commissioner shall 
        not access or collect individually identifiable data for the 
        statewide network of regional fetal alcohol syndrome diagnostic 
        clinics.  Data collected at the clinics shall be maintained 
        according to applicable data privacy laws, including section 
        144.335. 
           Subd. 3.  [PROFESSIONAL TRAINING ABOUT FAS.] (a) The 
        commissioner of health, in collaboration with the board of 
        medical practice, the board of nursing, and other professional 
        boards and state agencies, shall develop curricula and materials 
        about fetal alcohol syndrome for professional training of health 
        care providers, social service providers, educators, and 
        judicial and corrections systems professionals.  The training 
        and curricula shall increase knowledge and develop practical 
        skills of professionals to help them address the needs of 
        at-risk pregnant women and the needs of individuals affected by 
        fetal alcohol syndrome or fetal alcohol effects and their 
        families. 
           (b) Training for health care providers shall focus on skill 
        building for screening, counseling, referral, and follow-up for 
        women using or at risk of using alcohol while pregnant.  
        Training for health care professionals shall include methods for 
        diagnosis and evaluation of fetal alcohol syndrome and fetal 
        alcohol effects.  Training for education, judicial, and 
        corrections professionals shall involve effective education 
        strategies, methods to identify the behaviors and learning 
        styles of children with alcohol-related birth defects, and 
        methods to identify available referral and community resources. 
           (c) Training for social service providers shall focus on 
        resources for assessing, referring, and treating at-risk 
        pregnant women, changes in the mandatory reporting and 
        commitment laws, and resources for affected children and their 
        families.  
           Subd. 4.  [FAS COMMUNITY GRANT PROGRAM.] The commissioner 
        of health shall administer a grant program to provide money to 
        community organizations and coalitions to collaborate on fetal 
        alcohol syndrome prevention and intervention strategies and 
        activities.  The commissioner shall disburse grant money through 
        a request for proposal process or sole-source distribution where 
        appropriate, and shall include at least one grant award for 
        transitional skills and services for individuals with fetal 
        alcohol syndrome or fetal alcohol effects. 
           Subd. 5.  [SCHOOL PILOT PROGRAMS.] (a) The commissioner of 
        children, families, and learning shall award up to four grants 
        to schools for pilot programs to identify and implement 
        effective educational strategies for individuals with fetal 
        alcohol syndrome and other alcohol-related birth defects.  
           (b) One grant shall be awarded in each of the following age 
        categories:  
           (1) birth to three years; 
           (2) three to five years; 
           (3) six to 12 years; and 
           (4) 13 to 18 years.  
           (c) Grant proposals must include an evaluation plan, 
        demonstrate evidence of a collaborative or multisystem approach, 
        provide parent education and support, and show evidence of a 
        child- and family-focused approach consistent with 
        research-based educational practices and other guidelines 
        developed by the department of children, families, and learning. 
           (d) Children participating in the pilot program sites may 
        be identified through child find activities or a diagnostic 
        clinic.  No identification activity may be undertaken without 
        the consent of a child's parent or guardian. 
           Subd. 6.  [FETAL ALCOHOL COORDINATING BOARD; DUTIES.] (a) 
        The fetal alcohol coordinating board consists of: 
           (1) the commissioners of health, human services, 
        corrections, public safety, economic security, and children, 
        families, and learning; 
           (2) the director of the office of strategic and long-range 
        planning; 
           (3) the chair of the maternal and child health advisory 
        task force established by section 145.881, or the chair's 
        designee; 
           (4) a representative of the University of Minnesota 
        academic health center, appointed by the provost; 
           (5) five members from the general public appointed by the 
        governor, one of whom must be a family member of an individual 
        with fetal alcohol syndrome or fetal alcohol effect; and 
           (6) one member from the judiciary appointed by the chief 
        justice of the supreme court. 
        Terms, compensation, removal, and filling of vacancies of 
        appointed members are governed by section 15.0575.  The board 
        shall elect a chair from its membership to serve a one-year 
        term.  The commissioner of health shall provide staff and 
        consultant support for the board.  Support must be provided 
        based on an annual budget and work plan developed by the board.  
        The board shall contract with the department of health for 
        necessary administrative services.  Administrative services 
        include personnel, budget, payroll, and contract 
        administration.  The board shall adopt an annual budget and work 
        program. 
           (b) Board duties include:  
           (1) reviewing programs of state agencies that involve fetal 
        alcohol syndrome and coordinating those that are 
        interdepartmental in nature; 
           (2) providing an integrated and comprehensive approach to 
        fetal alcohol syndrome prevention and intervention strategies 
        both at a local and statewide level; 
           (3) approving on an annual basis the statewide public 
        awareness campaign as designed and implemented by the 
        commissioner of health under subdivision 1; 
           (4) reviewing fetal alcohol syndrome community grants 
        administered by the commissioner of health under subdivision 4; 
        and 
           (5) submitting a report to the governor on January 15 of 
        each odd-numbered year summarizing board operations, activities, 
        findings, and recommendations, and fetal alcohol syndrome 
        activities throughout the state. 
           (c) The board expires on January 1, 2001. 
           Subd. 7.  [FEDERAL FUNDS; CONTRACTS; DONATIONS.] The fetal 
        alcohol coordinating board may apply for, receive, and disburse 
        federal funds made available to the state by federal law or 
        rules adopted for any purpose related to the powers and duties 
        of the board.  The board shall comply with any requirements of 
        federal law, rules, and regulations in order to apply for, 
        receive, and disburse funds.  The board may contract with or 
        provide grants to public and private nonprofit entities.  The 
        board may accept donations or grants from any public or private 
        entity.  Money received by the board must be deposited in a 
        separate account in the state treasury and invested by the state 
        board of investment.  The amount deposited, including investment 
        earnings, is appropriated to the board to carry out its duties.  
        Money deposited in the state treasury shall not cancel.  
           Sec. 86.  Minnesota Statutes 1996, section 145A.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GRANT RECIPIENTS.] (a) The commissioner is 
        authorized to award grants to programs that meet the 
        requirements of subdivision 3 and include a strong child abuse 
        and neglect prevention focus for families in need of services.  
        Priority will be given to families considered to be in need of 
        additional services.  These families include, but are not 
        limited to, families with: 
           (1) adolescent parents; 
           (2) a history of alcohol and other drug abuse; 
           (3) a history of child abuse, domestic abuse, or other 
        types of violence in the family of origin; 
           (4) a history of domestic abuse, rape, or other forms of 
        victimization; 
           (5) reduced cognitive functioning; 
           (6) a lack of knowledge of child growth and development 
        stages; 
           (7) low resiliency to adversities and environmental 
        stresses; or 
           (8) lack of sufficient financial resources to meet their 
        needs. 
           (b) Grants made under this section shall be used to fund 
        existing and new home visiting programs.  In awarding grants 
        under this section, the commissioner shall give priority to new 
        home visiting programs with local matching funds. 
           Sec. 87.  Minnesota Statutes 1996, section 157.15, 
        subdivision 9, is amended to read: 
           Subd. 9.  [MOBILE FOOD UNIT.] "Mobile food unit" means a 
        food and beverage service establishment that is a vehicle 
        mounted unit, either motorized or trailered, operating no more 
        than 14 21 days annually at any one place or is operated in 
        conjunction with a permanent business licensed under this 
        chapter or chapter 28A at the site of the permanent business by 
        the same individual or company, and readily movable, without 
        disassembling, for transport to another location. 
           Sec. 88.  Minnesota Statutes 1996, section 157.15, 
        subdivision 12, is amended to read: 
           Subd. 12.  [RESTAURANT.] "Restaurant" means a food and 
        beverage service establishment, whether the establishment serves 
        alcoholic or nonalcoholic beverages, which operates from a 
        location for more than 14 21 days annually.  Restaurant does not 
        include a food cart or a mobile food unit. 
           Sec. 89.  Minnesota Statutes 1996, section 157.15, 
        subdivision 12a, is amended to read: 
           Subd. 12a.  [SEASONAL PERMANENT FOOD STAND.] "Seasonal 
        permanent food stand" means a food and beverage service 
        establishment which is a permanent food service stand or 
        building, but which operates no more than 14 21 days annually. 
           Sec. 90.  Minnesota Statutes 1996, section 157.15, 
        subdivision 13, is amended to read: 
           Subd. 13.  [SEASONAL TEMPORARY FOOD STAND.] "Seasonal 
        temporary food stand" means a food and beverage service 
        establishment that is a food stand which is disassembled and 
        moved from location to location, but which operates no more than 
        14 21 days annually at any one location. 
           Sec. 91.  Minnesota Statutes 1996, section 157.15, 
        subdivision 14, is amended to read: 
           Subd. 14.  [SPECIAL EVENT FOOD STAND.] "Special event food 
        stand" means a food and beverage service establishment which is 
        used in conjunction with celebrations and special events, and 
        which operates once or twice no more than three times annually 
        for no more than seven ten total days. 
           Sec. 92.  Minnesota Statutes 1997 Supplement, 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), clause (1), (2), (3), or (4), and establishments 
        serving alcohol must pay the highest applicable fee under 
        paragraph (e), clause (6) or (7). 
           (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 $100.
           (c) A special event food stand shall pay a flat fee 
        of $60 $30 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) A special event food stand-limited shall pay a flat fee 
        of $30. 
           (e) 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 specified in this paragraph: 
           (1) Limited food menu selection, $30.  "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, 
        $55.  "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, $150.  "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, $250.  "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, $30. 
           (6) Beer or wine table service, $30.  "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, $75. 
           "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, $4, including 
        hotels, motels, lodging establishments, and resorts, up to a 
        maximum of $400.  "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, $100; each additional 
        public swimming pool, $50.  "Public swimming pool" means a fee 
        category that has the meaning given in Minnesota Rules, part 
        4717.0250, subpart 8. 
           (10) First spa, $50; each additional spa, $25.  "Spa pool" 
        means a fee category that has the meaning given in Minnesota 
        Rules, part 4717.0250, subpart 9. 
           (11) Private sewer or water, $30.  "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. 
           (f) (e) A fee is not required for a food and beverage 
        service establishment operated by a school as defined in 
        sections 120.05 and 120.101. 
           (g) (f) A fee of $150 for review of the construction plans 
        must accompany the initial license application for food and 
        beverage service establishments, hotels, motels, lodging 
        establishments, or resorts. 
           (h) (g) When existing food and beverage service 
        establishments, hotels, motels, lodging establishments, or 
        resorts are extensively remodeled, a fee of $150 must be 
        submitted with the remodeling plans. 
           (i) (h) Seasonal temporary food stands, and special event 
        food stands, and special event food stands-limited are not 
        required to submit construction or remodeling plans for review. 
           Sec. 93.  Minnesota Statutes 1996, section 214.03, is 
        amended to read: 
           214.03 [STANDARDIZED TESTS.] 
           Subdivision 1.  [STANDARDIZED TESTS USED.] All state 
        examining and licensing boards, other than the state board of 
        law examiners, the state board of professional responsibility or 
        any other board established by the supreme court to regulate the 
        practice of law and judicial functions, shall use national 
        standardized tests for the objective, nonpractical portion of 
        any examination given to prospective licensees to the extent 
        that such national standardized tests are appropriate, except 
        when the subject matter of the examination relates to the 
        application of Minnesota law to the profession or calling being 
        licensed.  
           Subd. 2.  [HEALTH-RELATED BOARDS; SPECIAL ACCOUNT.] An 
        account is established in the special revenue fund where a 
        health-related licensing board may deposit applicants' payments 
        for national or regional standardized tests.  Money in the 
        account is appropriated to each board that has deposited monies 
        into the account, in an amount equal to the amount deposited by 
        the board, to pay for the use of national or regional 
        standardized tests. 
           Sec. 94.  Minnesota Statutes 1997 Supplement, section 
        214.32, subdivision 1, is amended to read: 
           Subdivision 1.  [MANAGEMENT.] (a) A health professionals 
        services program committee is established, consisting of one 
        person appointed by each participating board, with each 
        participating board having one vote.  The committee shall 
        designate one board to provide administrative management of the 
        program, set the program budget and the pro rata share of 
        program expenses to be borne by each participating board, 
        provide guidance on the general operation of the program, 
        including hiring of program personnel, and ensure that the 
        program's direction is in accord with its authority.  No more 
        than half plus one of the members of the committee may be of one 
        gender.  If the participating boards change which board is 
        designated to provide administrative management of the program, 
        any appropriation remaining for the program shall transfer to 
        the newly designated board on the effective date of the change.  
        The participating boards must inform the appropriate legislative 
        committees and the commissioner of finance of any change in the 
        administrative management of the program, and the amount of any 
        appropriation transferred under this provision. 
           (b) The designated board, upon recommendation of the health 
        professional services program committee, shall hire the program 
        manager and employees and pay expenses of the program from funds 
        appropriated for that purpose.  The designated board may apply 
        for grants to pay program expenses and may enter into contracts 
        on behalf of the program to carry out the purposes of the 
        program.  The participating boards shall enter into written 
        agreements with the designated board. 
           (c) An advisory committee is established to advise the 
        program committee consisting of: 
           (1) one member appointed by each of the following:  the 
        Minnesota Academy of Physician Assistants, the Minnesota Dental 
        Association, the Minnesota Chiropractic Association, the 
        Minnesota Licensed Practical Nurse Association, the Minnesota 
        Medical Association, the Minnesota Nurses Association, and the 
        Minnesota Podiatric Medicine Association; 
           (2) one member appointed by each of the professional 
        associations of the other professions regulated by a 
        participating board not specified in clause (1); and 
           (3) two public members, as defined by section 214.02.  
        Members of the advisory committee shall be appointed for two 
        years and members may be reappointed.  
           No more than half plus one of the members of the committee 
        may be of one gender. 
           The advisory committee expires June 30, 2001. 
           Sec. 95.  Minnesota Statutes 1996, section 254A.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MATERNAL AND CHILD SERVICE PROGRAMS.] (a) 
        The commissioner shall fund maternal and child health and social 
        service programs designed to improve the health and functioning 
        of children born to mothers using alcohol and controlled 
        substances.  Comprehensive programs shall include immediate and 
        ongoing intervention, treatment, and coordination of medical, 
        educational, and social services through a child's preschool 
        years.  Programs shall also include research and evaluation to 
        identify methods most effective in improving outcomes among this 
        high-risk population.  The commissioner shall ensure that the 
        programs are available on a statewide basis to the extent 
        possible with available funds.  
           (b) The commissioner of human services shall develop models 
        for the treatment of children ages 6 to 12 who are in need of 
        chemical dependency treatment.  The commissioner shall fund at 
        least two pilot projects with qualified providers to provide 
        nonresidential treatment for children in this age group.  Model 
        programs must include a component to monitor and evaluate 
        treatment outcomes. 
           Sec. 96.  Minnesota Statutes 1996, section 254A.17, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [INTERVENTION AND ADVOCACY PROGRAM.] Within the 
        limits of money available, the commissioner of human services 
        shall fund voluntary hospital-based outreach programs targeted 
        at women who deliver children affected by prenatal alcohol or 
        drug use.  The program shall help women obtain treatment, stay 
        in recovery, and plan any future pregnancies.  An advocate shall 
        be assigned to each woman in the program to provide guidance and 
        advice with respect to treatment programs, child safety and 
        parenting, housing, family planning, and any other personal 
        issues that are barriers to remaining free of chemical 
        dependence.  The commissioner shall develop an evaluation 
        component and provide centralized coordination of the evaluation 
        process. 
           Sec. 97.  Minnesota Statutes 1996, section 268.92, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LEAD CONTRACTORS SUPERVISOR OR CERTIFIED FIRM.] 
        (a) Eligible organizations and lead contractors supervisors or 
        certified firms may participate in the swab team program.  An 
        eligible organization receiving a grant under this section must 
        assure that all participating lead contractors supervisors or 
        certified firms are licensed and that all swab team workers are 
        certified by the department of health under section 144.9505.  
        Eligible organizations and lead contractors supervisors or 
        certified firms may distinguish between interior and exterior 
        services in assigning duties and may participate in the program 
        by: 
           (1) providing on-the-job training for swab team workers; 
           (2) providing swab team services to meet the requirements 
        of sections 144.9503, subdivision 4, and 144.9504, subdivision 
        6; 
           (3) providing a removal and replacement component using 
        skilled craft workers under subdivision 7; 
           (4) providing lead testing according to subdivision 7a; 
           (5) providing lead dust cleaning supplies, as described in 
        section 144.9503 144.9507, subdivision 5 4, 
        paragraph (b) (c), to residents; or 
           (6) having a swab team worker instruct residents and 
        property owners on appropriate lead control techniques, 
        including the lead-safe directives developed by the commissioner 
        of health.  
           (b) Participating lead contractors supervisors or certified 
        firms must: 
           (1) demonstrate proof of workers' compensation and general 
        liability insurance coverage; 
           (2) be knowledgeable about lead abatement requirements 
        established by the Department of Housing and Urban Development 
        and the Occupational Safety and Health Administration and lead 
        hazard reduction requirements and lead-safe directives of the 
        commissioner of health; 
           (3) demonstrate experience with on-the-job training 
        programs; 
           (4) demonstrate an ability to recruit employees from areas 
        at high risk for toxic lead exposure; and 
           (5) demonstrate experience in working with low-income 
        clients. 
           Sec. 98.  [REPORT BY THE UNIVERSITY OF MINNESOTA ACADEMIC 
        HEALTH CENTER.] 
           The University of Minnesota academic health center, after 
        consultation with the health care community and the medical 
        education and research costs advisory committee, is requested to 
        report to the commissioner of health and the legislative 
        commission on health care access by January 15, 1999, on plans 
        for the strategic direction and vision of the academic health 
        center.  The report shall address plans for the ongoing 
        assessment of health provider workforce needs; plans for the 
        ongoing assessment of the educational needs of health 
        professionals and the implications for their education and 
        training programs; and plans for ongoing, meaningful input from 
        the health care community on health-related research and 
        education programs administered by the academic health center. 
           Sec. 99.  [ADVICE AND RECOMMENDATIONS.] 
           The commissioners of health and commerce shall convene an 
        ad hoc advisory panel of selected representatives of health plan 
        companies, purchasers, and provider groups engaged in the 
        practice of health care in Minnesota, and interested 
        legislators.  This advisory panel shall meet and assist the 
        commissioners in developing measures to prevent discrimination 
        against providers and provider groups in managed care in 
        Minnesota and clarify the requirements of Minnesota Statutes, 
        section 62Q.23, paragraph (c).  Any such measures shall be 
        reported to the legislature prior to November 15, 1998.  
           Sec. 100.  [OMBUDSMAN STUDY.] 
           The ombudsman for mental health and mental retardation and 
        the ombudsman for older Minnesotans shall convene a work group 
        to develop recommendations for interagency cooperation and/or 
        the consolidation of all health-related ombudsman and advocacy 
        programs provided by state agencies and to address issues to 
        improve ombudsmen and advocacy services to health care 
        consumers, including ease of access, timeliness of response, and 
        quality of outcome.  In developing its recommendations, the work 
        group shall consider the unique needs of different populations 
        of health care consumers.  It shall also consider: 
           (1) seamless access for health care consumers; 
           (2) consumer outreach methods; 
           (3) opportunities to share resources and training; 
           (4) nonduplication of effort; and 
           (5) the feasibility of colocation.  
           In developing its recommendations, the work group shall 
        confer with and have representatives of consumers, advocacy 
        organizations, the consumer advisory board, the office of health 
        care consumer assistance, advocacy, and information, affected 
        state agencies, the board on aging, and the advisory committee 
        to the ombudsman for mental health and mental retardation.  The 
        work group shall make recommendations on how to better 
        coordinate consumer services and submit a report to the 
        legislature by December 15, 1999. 
           Sec. 101.  [COMPLAINT PROCESS STUDY.] 
           The complaint process work group established by the 
        commissioners of health and commerce as required under Laws 
        1997, chapter 237, section 20, shall continue to meet to develop 
        a complaint resolution process for health plan companies to make 
        available to enrollees as required under Minnesota Statutes, 
        sections 62Q.105, 62Q.11, and 62Q.30.  The commissioners of 
        health and commerce shall submit a progress report to the 
        legislative commission on health care access by September 15, 
        1998, and shall submit final recommendations to the legislature, 
        including draft legislation on developing such a process by 
        November 15, 1998.  The recommendations must also include, in 
        consultation with the work group, a permanent method of 
        financing the office of health care consumer assistance, 
        advocacy, and information. 
           Sec. 102.  [RESIDENTIAL HOSPICE ADVISORY TASK FORCE.] 
           The commissioner of health shall convene an advisory task 
        force to study issues related to the building codes and safety 
        standards that residential hospice facilities must meet for 
        licensure and to make recommendations on changes to these 
        standards.  Task force membership shall include representatives 
        of residential hospices, pediatric residential hospices, the 
        Minnesota hospice organization, the Minnesota department of 
        health, and other interested parties.  The task force is 
        governed by Minnesota Statutes, section 15.059, subdivision 6.  
        The task force shall submit recommendations and any draft 
        legislation to the legislature by January 15, 1999.  
           Sec. 103.  [TEMPORARY LICENSURE WAIVER FOR DIETITIANS.] 
           Until October 31, 1998, the board of dietetics and 
        nutrition practice may waive the requirements for licensure as a 
        dietitian established in Minnesota Statutes, section 148.624, 
        subdivision 1, clause (1), and may issue a license to an 
        applicant who meets the qualifications for licensure specified 
        in Minnesota Statutes, section 148.627, subdivision 1.  A waiver 
        may be granted in cases in which unusual or extraordinary 
        job-related circumstances prevented an applicant from applying 
        for licensure during the transition period specified in 
        Minnesota Statutes, section 148.627, subdivision 1.  An 
        applicant must request a waiver in writing and must explain the 
        circumstances that prevented the applicant from applying for 
        licensure during the transition period. 
           Sec. 104.  [UNITED STATES NUCLEAR REGULATORY COMMISSION 
        AGREEMENT.] 
           Subdivision 1.  [AGREEMENT AUTHORIZED.] In order to have a 
        comprehensive program to protect the public from radiation 
        hazards, the governor may enter into an agreement with the 
        United States Nuclear Regulatory Commission, under the Atomic 
        Energy Act of 1954, United States Code, title 42, section 2021, 
        paragraph (b).  The agreement may allow the state to assume 
        regulation over nonpower plant radiation hazards including 
        certain by-product, source, and special nuclear materials not 
        sufficient to form a critical mass.  The agreement must be 
        approved in law prior to being implemented.  
           Subd. 2.  [HEALTH DEPARTMENT DESIGNATED LEAD.] The 
        department of health is designated as the lead agency to pursue 
        an agreement on behalf of the governor, and for any assumption 
        of specified licensing and regulatory authority from the Nuclear 
        Regulatory Commission under an agreement.  The commissioner may 
        enter into negotiations with the Nuclear Regulatory Commission 
        for that purpose.  The commissioner of health shall establish an 
        advisory group to assist in preparing the state to meet the 
        requirements for achieving an agreement. 
           Subd. 3.  [RULES.] The commissioner of health may adopt 
        rules for the state assumption of regulation under an agreement 
        under this section, including the licensing and regulation of 
        by-product, source, and special nuclear material not sufficient 
        to form a critical mass. 
           Subd. 4.  [TRANSITION.] A person who, on the effective date 
        of an agreement under this section, possesses a Nuclear 
        Regulatory Commission license that is subject to the agreement 
        shall be deemed to possess a similar license issued by the 
        department of health.  Licenses shall expire on the expiration 
        date specified in the federal license. 
           Subd. 5.  [SUNSET.] An agreement entered into before August 
        2, 2002, shall remain in effect until terminated or suspended 
        under the Atomic Energy Act of 1954, United States Code, title 
        42, section 2021, paragraph (j).  The governor may not enter 
        into an initial agreement with the Nuclear Regulatory Commission 
        after August 1, 2002.  If an agreement is not entered into, any 
        rules adopted under this section are repealed on that date. 
           Sec. 105.  [STUDY OF EXTENT OF FETAL ALCOHOL SYNDROME.] 
           The commissioner of health shall conduct a study of the 
        incidence and prevalence of fetal alcohol syndrome in Minnesota. 
        The commissioner shall not collect individually identifiable 
        data for this study. 
           Sec. 106.  [MEDICAL EDUCATION AND RESEARCH TRUST FUND 
        STUDY.] 
           The commissioner of health shall review the current medical 
        education and research costs advisory committee structure and 
        composition and recommend methods to ensure balanced and 
        appropriate representation of major training programs.  The 
        commissioner shall also review the statutory formula for the 
        prepaid medical assistance carve out to determine if any 
        adjustments should be made to correct existing or potential 
        inequities on current training programs.  The commissioner shall 
        determine if there should be other criteria for weighting future 
        distributions of medical education and research funds beyond the 
        current statutory criteria, including the criteria that trainees 
        continue to practice in Minnesota.  The commissioner shall 
        report the findings and recommendations to the legislative 
        commission on health care access by December 15, 1998. 
           Sec. 107.  [FUNDING FOR IMMUNIZATIONS.] 
           The commissioner of health, in consultation with the 
        commissioner of children, families, and learning, 
        representatives of school nurses, and other interested parties, 
        shall develop recommendations on how to provide ongoing funding 
        for school districts to implement the provisions of Minnesota 
        Statutes, section 123.70.  These recommendations shall specify 
        any statutory changes needed for their implementation.  The 
        commissioners of health and of children, families, and learning 
        shall consider the recommendations in developing their budget 
        requests for the 2000-2001 biennial budget.  The recommendations 
        and any draft legislation needed to implement the 
        recommendations shall be submitted to the chairs of the senate 
        health and family security budget division, the house health and 
        human services finance division, the senate K-12 education 
        budget division, and the house K-12 education finance division 
        by December 15, 1998. 
           Sec. 108.  [BOARD OF REHABILITATION THERAPY.] 
           The commissioner of health shall convene a work group to 
        study the feasibility and need of creating a separate board of 
        rehabilitation therapy to regulate rehabilitation therapy 
        occupations, including physical therapists, occupational 
        therapists, speech-language pathologists, audiologists, and 
        hearing instrument dispensers.  The work group shall consist of 
        members representing physical therapists, occupational 
        therapists, speech-language pathologists, audiologists, hearing 
        instrument dispensers, and any other related occupation group 
        that the commissioner determines should be included.  The 
        commissioner, in consultation with the work group, shall submit 
        to the legislature by January 15, 1999, recommendations on 
        establishing a board of rehabilitation therapy and on the 
        appropriate occupational groups to be regulated by this board. 
           Sec. 109.  [REPEALER.] 
           Minnesota Statutes 1996, sections 62J.685; 144.491; 
        144.9501, subdivisions 12, 14, and 16; and 144.9503, 
        subdivisions 5, 8, and 9; and 157.15, subdivision 15, are 
        repealed. 
           Sec. 110.  [EFFECTIVE DATES.] 
           (a) Sections 2, 8, 20, 22, 34 to 80, 93, 94, and 97 to 108 
        are effective the day following final enactment. 
           (b) Sections 9 to 13, 21, and 81 are effective January 1, 
        1999. 
                                   ARTICLE 3 
                                 LONG-TERM CARE 
           Section 1.  Minnesota Statutes 1996, section 144A.04, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ADMINISTRATORS.] Except as otherwise provided by 
        this subdivision, a nursing home must have a full time licensed 
        nursing home administrator serving the facility.  In any nursing 
        home of less than 25 31 beds, the director of nursing services 
        may also serve as the licensed nursing home administrator.  Two 
        nursing homes under common ownership having a total of 150 beds 
        or less and located within 75 miles of each other may share the 
        services of a licensed administrator if the administrator 
        divides full-time work week between the two facilities in 
        proportion to the number of beds in each facility.  Every 
        nursing home shall have a person-in-charge on the premises at 
        all times in the absence of the licensed administrator.  The 
        name of the person in charge must be posted in a conspicuous 
        place in the facility.  The commissioner of health shall by rule 
        promulgate minimum education and experience requirements for 
        persons-in-charge, and may promulgate rules specifying the times 
        of day during which a licensed administrator must be on the 
        nursing home's premises.  In the absence of rules adopted by the 
        commissioner governing the division of an administrator's time 
        between two nursing homes, the administrator shall designate and 
        post the times the administrator will be on site in each home on 
        a regular basis.  A nursing home may employ as its administrator 
        the administrator of a hospital licensed pursuant to sections 
        144.50 to 144.56 if the individual is licensed as a nursing home 
        administrator pursuant to section 144A.20 and the nursing home 
        and hospital have a combined total of 150 beds or less and are 
        located within one mile of each other.  A nonproprietary 
        retirement home having fewer than 15 licensed nursing home beds 
        may share the services of a licensed administrator with a 
        nonproprietary nursing home, having fewer than 150 licensed 
        nursing home beds, that is located within 25 miles of the 
        retirement home.  A nursing home which is located in a facility 
        licensed as a hospital pursuant to sections 144.50 to 144.56, 
        may employ as its administrator the administrator of the 
        hospital if the individual meets minimum education and long term 
        care experience criteria set by rule of the commissioner of 
        health. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        144A.071, subdivision 4a, is amended to read: 
           Subd. 4a.  [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the 
        best interest of the state to ensure that nursing homes and 
        boarding care homes continue to meet the physical plant 
        licensing and certification requirements by permitting certain 
        construction projects.  Facilities should be maintained in 
        condition to satisfy the physical and emotional needs of 
        residents while allowing the state to maintain control over 
        nursing home expenditure growth. 
           The commissioner of health in coordination with the 
        commissioner of human services, may approve the renovation, 
        replacement, upgrading, or relocation of a nursing home or 
        boarding care home, under the following conditions: 
           (a) to license or certify beds in a new facility 
        constructed to replace a facility or to make repairs in an 
        existing facility that was destroyed or damaged after June 30, 
        1987, by fire, lightning, or other hazard provided:  
           (i) destruction was not caused by the intentional act of or 
        at the direction of a controlling person of the facility; 
           (ii) at the time the facility was destroyed or damaged the 
        controlling persons of the facility maintained insurance 
        coverage for the type of hazard that occurred in an amount that 
        a reasonable person would conclude was adequate; 
           (iii) the net proceeds from an insurance settlement for the 
        damages caused by the hazard are applied to the cost of the new 
        facility or repairs; 
           (iv) the new facility is constructed on the same site as 
        the destroyed facility or on another site subject to the 
        restrictions in section 144A.073, subdivision 5; 
           (v) the number of licensed and certified beds in the new 
        facility does not exceed the number of licensed and certified 
        beds in the destroyed facility; and 
           (vi) the commissioner determines that the replacement beds 
        are needed to prevent an inadequate supply of beds. 
        Project construction costs incurred for repairs authorized under 
        this clause shall not be considered in the dollar threshold 
        amount defined in subdivision 2; 
           (b) to license or certify beds that are moved from one 
        location to another within a nursing home facility, provided the 
        total costs of remodeling performed in conjunction with the 
        relocation of beds does not exceed $750,000; 
           (c) to license or certify beds in a project recommended for 
        approval under section 144A.073; 
           (d) to license or certify beds that are moved from an 
        existing state nursing home to a different state facility, 
        provided there is no net increase in the number of state nursing 
        home beds; 
           (e) to certify and license as nursing home beds boarding 
        care beds in a certified boarding care facility if the beds meet 
        the standards for nursing home licensure, or in a facility that 
        was granted an exception to the moratorium under section 
        144A.073, and if the cost of any remodeling of the facility does 
        not exceed $750,000.  If boarding care beds are licensed as 
        nursing home beds, the number of boarding care beds in the 
        facility must not increase beyond the number remaining at the 
        time of the upgrade in licensure.  The provisions contained in 
        section 144A.073 regarding the upgrading of the facilities do 
        not apply to facilities that satisfy these requirements; 
           (f) to license and certify up to 40 beds transferred from 
        an existing facility owned and operated by the Amherst H. Wilder 
        Foundation in the city of St. Paul to a new unit at the same 
        location as the existing facility that will serve persons with 
        Alzheimer's disease and other related disorders.  The transfer 
        of beds may occur gradually or in stages, provided the total 
        number of beds transferred does not exceed 40.  At the time of 
        licensure and certification of a bed or beds in the new unit, 
        the commissioner of health shall delicense and decertify the 
        same number of beds in the existing facility.  As a condition of 
        receiving a license or certification under this clause, the 
        facility must make a written commitment to the commissioner of 
        human services that it will not seek to receive an increase in 
        its property-related payment rate as a result of the transfers 
        allowed under this paragraph; 
           (g) to license and certify nursing home beds to replace 
        currently licensed and certified boarding care beds which may be 
        located either in a remodeled or renovated boarding care or 
        nursing home facility or in a remodeled, renovated, newly 
        constructed, or replacement nursing home facility within the 
        identifiable complex of health care facilities in which the 
        currently licensed boarding care beds are presently located, 
        provided that the number of boarding care beds in the facility 
        or complex are decreased by the number to be licensed as nursing 
        home beds and further provided that, if the total costs of new 
        construction, replacement, remodeling, or renovation exceed ten 
        percent of the appraised value of the facility or $200,000, 
        whichever is less, the facility makes a written commitment to 
        the commissioner of human services that it will not seek to 
        receive an increase in its property-related payment rate by 
        reason of the new construction, replacement, remodeling, or 
        renovation.  The provisions contained in section 144A.073 
        regarding the upgrading of facilities do not apply to facilities 
        that satisfy these requirements; 
           (h) to license as a nursing home and certify as a nursing 
        facility a facility that is licensed as a boarding care facility 
        but not certified under the medical assistance program, but only 
        if the commissioner of human services certifies to the 
        commissioner of health that licensing the facility as a nursing 
        home and certifying the facility as a nursing facility will 
        result in a net annual savings to the state general fund of 
        $200,000 or more; 
           (i) to certify, after September 30, 1992, and prior to July 
        1, 1993, existing nursing home beds in a facility that was 
        licensed and in operation prior to January 1, 1992; 
           (j) to license and certify new nursing home beds to replace 
        beds in a facility condemned acquired by the Minneapolis 
        community development agency as part of an economic 
        redevelopment plan activities in a city of the first class, 
        provided the new facility is located within one mile three miles 
        of the site of the old facility.  Operating and property costs 
        for the new facility must be determined and allowed 
        under existing reimbursement rules section 256B.431 or 256B.434; 
           (k) to license and certify up to 20 new nursing home beds 
        in a community-operated hospital and attached convalescent and 
        nursing care facility with 40 beds on April 21, 1991, that 
        suspended operation of the hospital in April 1986.  The 
        commissioner of human services shall provide the facility with 
        the same per diem property-related payment rate for each 
        additional licensed and certified bed as it will receive for its 
        existing 40 beds; 
           (l) to license or certify beds in renovation, replacement, 
        or upgrading projects as defined in section 144A.073, 
        subdivision 1, so long as the cumulative total costs of the 
        facility's remodeling projects do not exceed $750,000; 
           (m) to license and certify beds that are moved from one 
        location to another for the purposes of converting up to five 
        four-bed wards to single or double occupancy rooms in a nursing 
        home that, as of January 1, 1993, was county-owned and had a 
        licensed capacity of 115 beds; 
           (n) to allow a facility that on April 16, 1993, was a 
        106-bed licensed and certified nursing facility located in 
        Minneapolis to layaway all of its licensed and certified nursing 
        home beds.  These beds may be relicensed and recertified in a 
        newly-constructed teaching nursing home facility affiliated with 
        a teaching hospital upon approval by the legislature.  The 
        proposal must be developed in consultation with the interagency 
        committee on long-term care planning.  The beds on layaway 
        status shall have the same status as voluntarily delicensed and 
        decertified beds, except that beds on layaway status remain 
        subject to the surcharge in section 256.9657.  This layaway 
        provision expires July 1, 1998; 
           (o) to allow a project which will be completed in 
        conjunction with an approved moratorium exception project for a 
        nursing home in southern Cass county and which is directly 
        related to that portion of the facility that must be repaired, 
        renovated, or replaced, to correct an emergency plumbing problem 
        for which a state correction order has been issued and which 
        must be corrected by August 31, 1993; 
           (p) to allow a facility that on April 16, 1993, was a 
        368-bed licensed and certified nursing facility located in 
        Minneapolis to layaway, upon 30 days prior written notice to the 
        commissioner, up to 30 of the facility's licensed and certified 
        beds by converting three-bed wards to single or double 
        occupancy.  Beds on layaway status shall have the same status as 
        voluntarily delicensed and decertified beds except that beds on 
        layaway status remain subject to the surcharge in section 
        256.9657, remain subject to the license application and renewal 
        fees under section 144A.07 and shall be subject to a $100 per 
        bed reactivation fee.  In addition, at any time within three 
        years of the effective date of the layaway, the beds on layaway 
        status may be: 
           (1) relicensed and recertified upon relocation and 
        reactivation of some or all of the beds to an existing licensed 
        and certified facility or facilities located in Pine River, 
        Brainerd, or International Falls; provided that the total 
        project construction costs related to the relocation of beds 
        from layaway status for any facility receiving relocated beds 
        may not exceed the dollar threshold provided in subdivision 2 
        unless the construction project has been approved through the 
        moratorium exception process under section 144A.073; 
           (2) relicensed and recertified, upon reactivation of some 
        or all of the beds within the facility which placed the beds in 
        layaway status, if the commissioner has determined a need for 
        the reactivation of the beds on layaway status. 
           The property-related payment rate of a facility placing 
        beds on layaway status must be adjusted by the incremental 
        change in its rental per diem after recalculating the rental per 
        diem as provided in section 256B.431, subdivision 3a, paragraph 
        (d).  The property-related payment rate for a facility 
        relicensing and recertifying beds from layaway status must be 
        adjusted by the incremental change in its rental per diem after 
        recalculating its rental per diem using the number of beds after 
        the relicensing to establish the facility's capacity day 
        divisor, which shall be effective the first day of the month 
        following the month in which the relicensing and recertification 
        became effective.  Any beds remaining on layaway status more 
        than three years after the date the layaway status became 
        effective must be removed from layaway status and immediately 
        delicensed and decertified; 
           (q) to license and certify beds in a renovation and 
        remodeling project to convert 12 four-bed wards into 24 two-bed 
        rooms, expand space, and add improvements in a nursing home 
        that, as of January 1, 1994, met the following conditions:  the 
        nursing home was located in Ramsey county; had a licensed 
        capacity of 154 beds; and had been ranked among the top 15 
        applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process; 
           (r) to license and certify up to 117 beds that are 
        relocated from a licensed and certified 138-bed nursing facility 
        located in St. Paul to a hospital with 130 licensed hospital 
        beds located in South St. Paul, provided that the nursing 
        facility and hospital are owned by the same or a related 
        organization and that prior to the date the relocation is 
        completed the hospital ceases operation of its inpatient 
        hospital services at that hospital.  After relocation, the 
        nursing facility's status under section 256B.431, subdivision 
        2j, shall be the same as it was prior to relocation.  The 
        nursing facility's property-related payment rate resulting from 
        the project authorized in this paragraph shall become effective 
        no earlier than April 1, 1996.  For purposes of calculating the 
        incremental change in the facility's rental per diem resulting 
        from this project, the allowable appraised value of the nursing 
        facility portion of the existing health care facility physical 
        plant prior to the renovation and relocation may not exceed 
        $2,490,000; 
           (s) to license and certify two beds in a facility to 
        replace beds that were voluntarily delicensed and decertified on 
        June 28, 1991; 
           (t) to allow 16 licensed and certified beds located on July 
        1, 1994, in a 142-bed nursing home and 21-bed boarding care home 
        facility in Minneapolis, notwithstanding the licensure and 
        certification after July 1, 1995, of the Minneapolis facility as 
        a 147-bed nursing home facility after completion of a 
        construction project approved in 1993 under section 144A.073, to 
        be laid away upon 30 days' prior written notice to the 
        commissioner.  Beds on layaway status shall have the same status 
        as voluntarily delicensed or decertified beds except that they 
        shall remain subject to the surcharge in section 256.9657.  The 
        16 beds on layaway status may be relicensed as nursing home beds 
        and recertified at any time within five years of the effective 
        date of the layaway upon relocation of some or all of the beds 
        to a licensed and certified facility located in Watertown, 
        provided that the total project construction costs related to 
        the relocation of beds from layaway status for the Watertown 
        facility may not exceed the dollar threshold provided in 
        subdivision 2 unless the construction project has been approved 
        through the moratorium exception process under section 144A.073. 
           The property-related payment rate of the facility placing 
        beds on layaway status must be adjusted by the incremental 
        change in its rental per diem after recalculating the rental per 
        diem as provided in section 256B.431, subdivision 3a, paragraph 
        (d).  The property-related payment rate for the facility 
        relicensing and recertifying beds from layaway status must be 
        adjusted by the incremental change in its rental per diem after 
        recalculating its rental per diem using the number of beds after 
        the relicensing to establish the facility's capacity day 
        divisor, which shall be effective the first day of the month 
        following the month in which the relicensing and recertification 
        became effective.  Any beds remaining on layaway status more 
        than five years after the date the layaway status became 
        effective must be removed from layaway status and immediately 
        delicensed and decertified; 
           (u) to license and certify beds that are moved within an 
        existing area of a facility or to a newly constructed addition 
        which is built for the purpose of eliminating three- and 
        four-bed rooms and adding space for dining, lounge areas, 
        bathing rooms, and ancillary service areas in a nursing home 
        that, as of January 1, 1995, was located in Fridley and had a 
        licensed capacity of 129 beds; 
           (v) to relocate 36 beds in Crow Wing county and four beds 
        from Hennepin county to a 160-bed facility in Crow Wing county, 
        provided all the affected beds are under common ownership; 
           (w) to license and certify a total replacement project of 
        up to 49 beds located in Norman county that are relocated from a 
        nursing home destroyed by flood and whose residents were 
        relocated to other nursing homes.  The operating cost payment 
        rates for the new nursing facility shall be determined based on 
        the interim and settle-up payment provisions of Minnesota Rules, 
        part 9549.0057, and the reimbursement provisions of section 
        256B.431, except that subdivision 26, paragraphs (a) and (b), 
        shall not apply until the second rate year after the settle-up 
        cost report is filed.  Property-related reimbursement rates 
        shall be determined under section 256B.431, taking into account 
        any federal or state flood-related loans or grants provided to 
        the facility; 
           (x) to license and certify a total replacement project of 
        up to 129 beds located in Polk county that are relocated from a 
        nursing home destroyed by flood and whose residents were 
        relocated to other nursing homes.  The operating cost payment 
        rates for the new nursing facility shall be determined based on 
        the interim and settle-up payment provisions of Minnesota Rules, 
        part 9549.0057, and the reimbursement provisions of section 
        256B.431, except that subdivision 26, paragraphs (a) and (b), 
        shall not apply until the second rate year after the settle-up 
        cost report is filed.  Property-related reimbursement rates 
        shall be determined under section 256B.431, taking into account 
        any federal or state flood-related loans or grants provided to 
        the facility; or 
           (y) to license and certify beds in a renovation and 
        remodeling project to convert 13 three-bed wards into 13 two-bed 
        rooms and 13 single-bed rooms, expand space, and add 
        improvements in a nursing home that, as of January 1, 1994, met 
        the following conditions:  the nursing home was located in 
        Ramsey county, was not owned by a hospital corporation, had a 
        licensed capacity of 64 beds, and had been ranked among the top 
        15 applicants by the 1993 moratorium exceptions advisory review 
        panel.  The total project construction cost estimate for this 
        project must not exceed the cost estimate submitted in 
        connection with the 1993 moratorium exception process.; 
           (z) to license and certify up to 150 nursing home beds to 
        replace an existing 285 bed nursing facility located in St. 
        Paul.  The replacement project shall include both the renovation 
        of existing buildings and the construction of new facilities at 
        the existing site.  The reduction in the licensed capacity of 
        the existing facility shall occur during the construction 
        project as beds are taken out of service due to the construction 
        process.  Prior to the start of the construction process, the 
        facility shall provide written information to the commissioner 
        of health describing the process for bed reduction, plans for 
        the relocation of residents, and the estimated construction 
        schedule.  The relocation of residents shall be in accordance 
        with the provisions of law and rule; or 
           (aa) to allow the commissioner of human services to license 
        an additional 36 beds to provide residential services for the 
        physically handicapped under Minnesota Rules, parts 9570.2000 to 
        9570.3400, in a 198-bed nursing home located in Red Wing, 
        provided that the total number of licensed and certified beds at 
        the facility does not increase.  
           Sec. 3.  Minnesota Statutes 1996, section 144A.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SPIRITUAL MEANS FOR HEALING.] No rule 
        established Sections 144A.04, subdivision 5, and 144A.18 to 
        144A.27, and rules adopted under sections 144A.01 to 144A.16 
        other than a rule relating to sanitation and safety of premises, 
        to cleanliness of operation, or to physical equipment shall do 
        not apply to a nursing home conducted by and for the adherents 
        of any recognized church or religious denomination for the 
        purpose of providing care and treatment for those who select and 
        depend upon spiritual means through prayer alone, in lieu of 
        medical care, for healing.  
           Sec. 4.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 2i, is amended to read: 
           Subd. 2i.  [OPERATING COSTS AFTER JULY 1, 1988.] (a)  
        [OTHER OPERATING COST LIMITS.] For the rate year beginning July 
        1, 1988, the commissioner shall increase the other operating 
        cost limits established in Minnesota Rules, part 9549.0055, 
        subpart 2, item E, to 110 percent of the median of the array of 
        allowable historical other operating cost per diems and index 
        these limits as in Minnesota Rules, part 9549.0056, subparts 3 
        and 4.  The limits must be established in accordance with 
        subdivision 2b, paragraph (d).  For rate years beginning on or 
        after July 1, 1989, the adjusted other operating cost limits 
        must be indexed as in Minnesota Rules, part 9549.0056, subparts 
        3 and 4.  For the rate period beginning October 1, 1992, and for 
        rate years beginning after June 30, 1993, the amount of the 
        surcharge under section 256.9657, subdivision 1, shall be 
        included in the plant operations and maintenance operating cost 
        category.  The surcharge shall be an allowable cost for the 
        purpose of establishing the payment rate. 
           (b)  [CARE-RELATED OPERATING COST LIMITS.] For the rate 
        year beginning July 1, 1988, the commissioner shall increase the 
        care-related operating cost limits established in Minnesota 
        Rules, part 9549.0055, subpart 2, items A and B, to 125 percent 
        of the median of the array of the allowable historical case mix 
        operating cost standardized per diems and the allowable 
        historical other care-related operating cost per diems and index 
        those limits as in Minnesota Rules, part 9549.0056, subparts 1 
        and 2.  The limits must be established in accordance with 
        subdivision 2b, paragraph (d).  For rate years beginning on or 
        after July 1, 1989, the adjusted care-related limits must be 
        indexed as in Minnesota Rules, part 9549.0056, subparts 1 and 2. 
           (c)  [SALARY ADJUSTMENT PER DIEM.] For the rate period 
        Effective October July 1, 1988 1998, to June 30, 1990 
        2000, the commissioner shall add the appropriate make available 
        the salary adjustment per diem calculated in clause (1) or (2) 
        to the total operating cost payment rate of each nursing 
        facility reimbursed under this section or section 256B.434.  The 
        salary adjustment per diem for each nursing facility must be 
        determined as follows:  
           (1) For each nursing facility that reports salaries for 
        registered nurses, licensed practical nurses, and aides, 
        orderlies and attendants separately, the commissioner shall 
        determine the salary adjustment per diem by multiplying the 
        total salaries, payroll taxes, and fringe benefits allowed in 
        each operating cost category, except management fees and 
        administrator and central office salaries and the related 
        payroll taxes and fringe benefits, by 3.5 3.0 percent and then 
        dividing the resulting amount by the nursing facility's actual 
        resident days; and. 
           (2) For each nursing facility that does not report salaries 
        for registered nurses, licensed practical nurses, aides, 
        orderlies, and attendants separately, the salary adjustment per 
        diem is the weighted average salary adjustment per diem increase 
        determined under clause (1).  
           Each nursing facility that receives a salary adjustment per 
        diem pursuant to this subdivision shall adjust nursing facility 
        employee salaries by a minimum of the amount determined in 
        clause (1) or (2).  The commissioner shall review allowable 
        salary costs, including payroll taxes and fringe benefits, for 
        the reporting year ending September 30, 1989, to determine 
        whether or not each nursing facility complied with this 
        requirement.  The commissioner shall report the extent to which 
        each nursing facility complied with the legislative commission 
        on long-term care by August 1, 1990.  
           (3) A nursing facility may apply for the salary adjustment 
        per diem calculated under clauses (1) and (2).  The application 
        must be made to the commissioner and contain a plan by which the 
        nursing facility will distribute the salary adjustment to 
        employees of the nursing facility.  In order to apply for a 
        salary adjustment, a nursing facility reimbursed under section 
        256B.434, must report the information required by clause (1) or 
        (2) in the application, in the manner specified by the 
        commissioner.  For nursing facilities in which the employees are 
        represented by an exclusive bargaining representative, an 
        agreement negotiated and agreed to by the employer and the 
        exclusive bargaining representative, after July 1, 1998, may 
        constitute the plan for the salary distribution.  The 
        commissioner shall review the plan to ensure that the salary 
        adjustment per diem is used solely to increase the compensation 
        of nursing home facility employees.  To be eligible, a facility 
        must submit its plan for the salary distribution by December 31, 
        1998.  If a facility's plan for salary distribution is effective 
        for its employees after July 1, 1998, the salary adjustment cost 
        per diem shall be effective the same date as its plan. 
           (4) Additional costs incurred by nursing facilities as a 
        result of this salary adjustment are not allowable costs for 
        purposes of the September 30, 1998, cost report. 
           (d)  [NEW BASE YEAR.] The commissioner shall establish new 
        base years for both the reporting year ending September 30, 
        1989, and the reporting year ending September 30, 1990.  In 
        establishing new base years, the commissioner must take into 
        account:  
           (1) statutory changes made in geographic groups; 
           (2) redefinitions of cost categories; and 
           (3) reclassification, pass-through, or exemption of certain 
        costs such as public employee retirement act contributions. 
           (e)  [NEW BASE YEAR.] The commissioner shall establish a 
        new base year for the reporting years ending September 30, 1991, 
        and September 30, 1992.  In establishing a new base year, the 
        commissioner must take into account:  
           (1) statutory changes made in geographic groups; 
           (2) redefinitions of cost categories; and 
           (3) reclassification, pass-through, or exemption of certain 
        costs. 
           Sec. 5.  Minnesota Statutes 1996, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 2s.  [NONALLOWABLE COST.] Costs incurred for any 
        activities which are directed at or are intended to influence or 
        dissuade employees in the exercise of their legal rights to 
        freely engage in the process of selecting an exclusive 
        representative for the purpose of collective bargaining with 
        their employer shall not be allowable for purposes of setting 
        payment rates. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        256B.431, subdivision 3f, is amended to read: 
           Subd. 3f.  [PROPERTY COSTS AFTER JULY 1, 1988.] (a)  
        [INVESTMENT PER BED LIMIT.] For the rate year beginning July 1, 
        1988, the replacement-cost-new per bed limit must be $32,571 per 
        licensed bed in multiple bedrooms and $48,857 per licensed bed 
        in a single bedroom.  For the rate year beginning July 1, 1989, 
        the replacement-cost-new per bed limit for a single bedroom must 
        be $49,907 adjusted according to Minnesota Rules, part 
        9549.0060, subpart 4, item A, subitem (1).  Beginning January 1, 
        1990, the replacement-cost-new per bed limits must be adjusted 
        annually as specified in Minnesota Rules, part 9549.0060, 
        subpart 4, item A, subitem (1).  Beginning January 1, 1991, the 
        replacement-cost-new per bed limits will be adjusted annually as 
        specified in Minnesota Rules, part 9549.0060, subpart 4, item A, 
        subitem (1), except that the index utilized will be the Bureau 
        of the Census:  Composite fixed-weighted price index as 
        published in the C30 Report, Value of New Construction Put in 
        Place. 
           (b)  [RENTAL FACTOR.] For the rate year beginning July 1, 
        1988, the commissioner shall increase the rental factor as 
        established in Minnesota Rules, part 9549.0060, subpart 8, item 
        A, by 6.2 percent rounded to the nearest 100th percent for the 
        purpose of reimbursing nursing facilities for soft costs and 
        entrepreneurial profits not included in the cost valuation 
        services used by the state's contracted appraisers.  For rate 
        years beginning on or after July 1, 1989, the rental factor is 
        the amount determined under this paragraph for the rate year 
        beginning July 1, 1988. 
           (c)  [OCCUPANCY FACTOR.] For rate years beginning on or 
        after July 1, 1988, in order to determine property-related 
        payment rates under Minnesota Rules, part 9549.0060, for all 
        nursing facilities except those whose average length of stay in 
        a skilled level of care within a nursing facility is 180 days or 
        less, the commissioner shall use 95 percent of capacity days.  
        For a nursing facility whose average length of stay in a skilled 
        level of care within a nursing facility is 180 days or less, the 
        commissioner shall use the greater of resident days or 80 
        percent of capacity days but in no event shall the divisor 
        exceed 95 percent of capacity days. 
           (d)  [EQUIPMENT ALLOWANCE.] For rate years beginning on 
        July 1, 1988, and July 1, 1989, the commissioner shall add ten 
        cents per resident per day to each nursing facility's 
        property-related payment rate.  The ten-cent property-related 
        payment rate increase is not cumulative from rate year to rate 
        year.  For the rate year beginning July 1, 1990, the 
        commissioner shall increase each nursing facility's equipment 
        allowance as established in Minnesota Rules, part 9549.0060, 
        subpart 10, by ten cents per resident per day.  For rate years 
        beginning on or after July 1, 1991, the adjusted equipment 
        allowance must be adjusted annually for inflation as in 
        Minnesota Rules, part 9549.0060, subpart 10, item E.  For the 
        rate period beginning October 1, 1992, the equipment allowance 
        for each nursing facility shall be increased by 28 percent.  For 
        rate years beginning after June 30, 1993, the allowance must be 
        adjusted annually for inflation. 
           (e)  [POST CHAPTER 199 RELATED-ORGANIZATION DEBTS AND 
        INTEREST EXPENSE.] For rate years beginning on or after July 1, 
        1990, Minnesota Rules, part 9549.0060, subpart 5, item E, shall 
        not apply to outstanding related organization debt incurred 
        prior to May 23, 1983, provided that the debt was an allowable 
        debt under Minnesota Rules, parts 9510.0010 to 9510.0480, the 
        debt is subject to repayment through annual principal payments, 
        and the nursing facility demonstrates to the commissioner's 
        satisfaction that the interest rate on the debt was less than 
        market interest rates for similar arms-length transactions at 
        the time the debt was incurred.  If the debt was incurred due to 
        a sale between family members, the nursing facility must also 
        demonstrate that the seller no longer participates in the 
        management or operation of the nursing facility.  Debts meeting 
        the conditions of this paragraph are subject to all other 
        provisions of Minnesota Rules, parts 9549.0010 to 9549.0080. 
           (f)  [BUILDING CAPITAL ALLOWANCE FOR NURSING FACILITIES 
        WITH OPERATING LEASES.] For rate years beginning on or after 
        July 1, 1990, a nursing facility with operating lease costs 
        incurred for the nursing facility's buildings shall receive its 
        building capital allowance computed in accordance with Minnesota 
        Rules, part 9549.0060, subpart 8.  If an operating lease 
        provides that the lessee's rent is adjusted to recognize 
        improvements made by the lessor and related debt, the costs for 
        capital improvements and related debt shall be allowed in the 
        computation of the lessee's building capital allowance, provided 
        that reimbursement for these costs under an operating lease 
        shall not exceed the rate otherwise paid. 
           Sec. 7.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SPECIAL RATES.] (a) For the rate years beginning 
        July 1, 1983, and July 1, 1984, a newly constructed nursing 
        facility or one with a capacity increase of 50 percent or more 
        may, upon written application to the commissioner, receive an 
        interim payment rate for reimbursement for property-related 
        costs calculated pursuant to the statutes and rules in effect on 
        May 1, 1983, and for operating costs negotiated by the 
        commissioner based upon the 60th percentile established for the 
        appropriate group under subdivision 2a, to be effective from the 
        first day a medical assistance recipient resides in the facility 
        or for the added beds.  For newly constructed nursing facilities 
        which are not included in the calculation of the 60th percentile 
        for any group, subdivision 2f, the commissioner shall establish 
        by rule procedures for determining interim operating cost 
        payment rates and interim property-related cost payment rates.  
        The interim payment rate shall not be in effect for more than 17 
        months.  The commissioner shall establish, by emergency and 
        permanent rules, procedures for determining the interim rate and 
        for making a retroactive cost settle-up after the first year of 
        operation; the cost settled operating cost per diem shall not 
        exceed 110 percent of the 60th percentile established for the 
        appropriate group.  Until procedures determining operating cost 
        payment rates according to mix of resident needs are 
        established, the commissioner shall establish by rule procedures 
        for determining payment rates for nursing facilities which 
        provide care under a lesser care level than the level for which 
        the nursing facility is certified.  
           (b) For the rate years beginning on or after July 1, 1985, 
        a newly constructed nursing facility or one with a capacity 
        increase of 50 percent or more may, upon written application to 
        the commissioner, receive an interim payment rate for 
        reimbursement for property related costs, operating costs, and 
        real estate taxes and special assessments calculated under rules 
        promulgated by the commissioner. 
           (c) For rate years beginning on or after July 1, 1983, the 
        commissioner may exclude from a provision of 12 MCAR S 2.050 any 
        facility that is licensed by the commissioner of health only as 
        a boarding care home, certified by the commissioner of health as 
        an intermediate care facility, is licensed by the commissioner 
        of human services under Minnesota Rules, parts 9520.0500 to 
        9520.0690, and has less than five percent of its licensed 
        boarding care capacity reimbursed by the medical assistance 
        program.  Until a permanent rule to establish the payment rates 
        for facilities meeting these criteria is promulgated, the 
        commissioner shall establish the medical assistance payment rate 
        as follows:  
           (1) The desk audited payment rate in effect on June 30, 
        1983, remains in effect until the end of the facility's fiscal 
        year.  The commissioner shall not allow any amendments to the 
        cost report on which this desk audited payment rate is based.  
           (2) For each fiscal year beginning between July 1, 1983, 
        and June 30, 1985, the facility's payment rate shall be 
        established by increasing the desk audited operating cost 
        payment rate determined in clause (1) at an annual rate of five 
        percent.  
           (3) For fiscal years beginning on or after July 1, 1985, 
        but before January 1, 1988, the facility's payment rate shall be 
        established by increasing the facility's payment rate in the 
        facility's prior fiscal year by the increase indicated by the 
        consumer price index for Minneapolis and St. Paul.  
           (4) For the fiscal year beginning on January 1, 1988, the 
        facility's payment rate must be established using the following 
        method:  The commissioner shall divide the real estate taxes and 
        special assessments payable as stated in the facility's current 
        property tax statement by actual resident days to compute a real 
        estate tax and special assessment per diem.  Next, the prior 
        year's payment rate must be adjusted by the higher of (1) the 
        percentage change in the consumer price index (CPI-U U.S. city 
        average) as published by the Bureau of Labor Statistics between 
        the previous two Septembers, new series index (1967-100), or (2) 
        2.5 percent, to determine an adjusted payment rate.  The 
        facility's payment rate is the adjusted prior year's payment 
        rate plus the real estate tax and special assessment per diem. 
           (5) For fiscal years beginning on or after January 1, 1989, 
        the facility's payment rate must be established using the 
        following method:  The commissioner shall divide the real estate 
        taxes and special assessments payable as stated in the 
        facility's current property tax statement by actual resident 
        days to compute a real estate tax and special assessment per 
        diem.  Next, the prior year's payment rate less the real estate 
        tax and special assessment per diem must be adjusted by the 
        higher of (1) the percentage change in the consumer price index 
        (CPI-U U.S. city average) as published by the Bureau of Labor 
        Statistics between the previous two Septembers, new series index 
        (1967-100), or (2) 2.5 percent, to determine an adjusted payment 
        rate.  The facility's payment rate is the adjusted payment rate 
        plus the real estate tax and special assessment per diem. 
           (6) For the purpose of establishing payment rates under 
        this paragraph, the facility's rate and reporting years coincide 
        with the facility's fiscal year.  
           (d) A facility that meets the criteria of paragraph (c) 
        shall submit annual cost reports on forms prescribed by the 
        commissioner.  
           (e) (c) For the rate year beginning July 1, 1985, each 
        nursing facility total payment rate must be effective two 
        calendar months from the first day of the month after the 
        commissioner issues the rate notice to the nursing facility.  
        From July 1, 1985, until the total payment rate becomes 
        effective, the commissioner shall make payments to each nursing 
        facility at a temporary rate that is the prior rate year's 
        operating cost payment rate increased by 2.6 percent plus the 
        prior rate year's property-related payment rate and the prior 
        rate year's real estate taxes and special assessments payment 
        rate.  The commissioner shall retroactively adjust the 
        property-related payment rate and the real estate taxes and 
        special assessments payment rate to July 1, 1985, but must not 
        retroactively adjust the operating cost payment rate. 
           (f) (d) For the purposes of Minnesota Rules, part 
        9549.0060, subpart 13, item F, the following types of 
        transactions shall not be considered a sale or reorganization of 
        a provider entity: 
           (1) the sale or transfer of a nursing facility upon death 
        of an owner; 
           (2) the sale or transfer of a nursing facility due to 
        serious illness or disability of an owner as defined under the 
        social security act; 
           (3) the sale or transfer of the nursing facility upon 
        retirement of an owner at 62 years of age or older; 
           (4) any transaction in which a partner, owner, or 
        shareholder acquires an interest or share of another partner, 
        owner, or shareholder in a nursing facility business provided 
        the acquiring partner, owner, or shareholder has less than 50 
        percent ownership after the acquisition; 
           (5) a sale and leaseback to the same licensee which does 
        not constitute a change in facility license; 
           (6) a transfer of an interest to a trust; 
           (7) gifts or other transfers for no consideration; 
           (8) a merger of two or more related organizations; 
           (9) a transfer of interest in a facility held in 
        receivership; 
           (10) a change in the legal form of doing business other 
        than a publicly held organization which becomes privately held 
        or vice versa; 
           (11) the addition of a new partner, owner, or shareholder 
        who owns less than 20 percent of the nursing facility or the 
        issuance of stock; or 
           (12) an involuntary transfer including foreclosure, 
        bankruptcy, or assignment for the benefit of creditors. 
           Any increase in allowable debt or allowable interest 
        expense or other cost incurred as a result of the foregoing 
        transactions shall be a nonallowable cost for purposes of 
        reimbursement under Minnesota Rules, parts 9549.0010 to 
        9549.0080. 
           Sec. 8.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 11, is amended to read: 
           Subd. 11.  [SPECIAL PROPERTY RATE SETTING PROCEDURES FOR 
        CERTAIN NURSING FACILITIES.] (a) Notwithstanding Minnesota 
        Rules, part 9549.0060, subpart 13, item H, to the contrary, for 
        the rate year beginning July 1, 1990, a nursing facility leased 
        prior to January 1, 1986, and currently subject to adverse 
        licensure action under section 144A.04, subdivision 4, paragraph 
        (a), or section 144A.11, subdivision 2, and whose ownership 
        changes prior to July 1, 1990, shall be allowed a 
        property-related payment equal to the lesser of its current 
        lease obligation divided by its capacity days as determined in 
        Minnesota Rules, part 9549.0060, subpart 11, as modified by 
        subdivision 3f, paragraph (c), or the frozen property-related 
        payment rate in effect for the rate year beginning July 1, 
        1989.  For rate years beginning on or after July 1, 1991, the 
        property-related payment rate shall be its rental rate computed 
        using the previous owner's allowable principal and interest 
        expense as allowed by the department prior to that prior owner's 
        sale and lease-back transaction of December 1985. 
           (b) Notwithstanding other provisions of applicable law, a 
        nursing facility licensed for 122 beds on January 1, 1998, and 
        located in Columbia Heights shall have its property-related 
        payment rate set under this subdivision.  The commissioner shall 
        make a rate adjustment by adding $2.41 to the facility's July 1, 
        1997, property-related payment rate.  The adjusted 
        property-related payment rate shall be effective for rate years 
        beginning on or after July 1, 1998.  The adjustment in this 
        paragraph shall remain in effect so long as the facility's rates 
        are set under this section.  If the facility participates in the 
        alternative payment system under section 256B.434, the 
        adjustment in this paragraph shall be included in the facility's 
        contract payment rate.  If historical rates or property costs 
        recognized under this section become the basis for future 
        medical assistance payments to the facility under a managed 
        care, capitation, or other alternative payment system, the 
        adjustment in this paragraph shall be included in the 
        computation of the facility's payments. 
           Sec. 9.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 22, is amended to read: 
           Subd. 22.  [CHANGES TO NURSING FACILITY REIMBURSEMENT.] The 
        nursing facility reimbursement changes in paragraphs (a) to (e) 
        apply to Minnesota Rules, parts 9549.0010 to 9549.0080, and this 
        section, and are effective for rate years beginning on or after 
        July 1, 1993, unless otherwise indicated. 
           (a) In addition to the approved pension or profit sharing 
        plans allowed by the reimbursement rule, the commissioner shall 
        allow those plans specified in Internal Revenue Code, sections 
        403(b) and 408(k). 
           (b) The commissioner shall allow as workers' compensation 
        insurance costs under section 256B.421, subdivision 14, the 
        costs of workers' compensation coverage obtained under the 
        following conditions: 
           (1) a plan approved by the commissioner of commerce as a 
        Minnesota group or individual self-insurance plan as provided in 
        section 79A.03; 
           (2) a plan in which: 
           (i) the nursing facility, directly or indirectly, purchases 
        workers' compensation coverage in compliance with section 
        176.181, subdivision 2, from an authorized insurance carrier; 
           (ii) a related organization to the nursing facility 
        reinsures the workers' compensation coverage purchased, directly 
        or indirectly, by the nursing facility; and 
           (iii) all of the conditions in clause (4) are met; 
           (3) a plan in which: 
           (i) the nursing facility, directly or indirectly, purchases 
        workers' compensation coverage in compliance with section 
        176.181, subdivision 2, from an authorized insurance carrier; 
           (ii) the insurance premium is calculated retrospectively, 
        including a maximum premium limit, and paid using the paid loss 
        retro method; and 
           (iii) all of the conditions in clause (4) are met; 
           (4) additional conditions are: 
           (i) the costs of the plan are allowable under the federal 
        Medicare program; 
           (ii) the reserves for the plan are maintained in an account 
        controlled and administered by a person which is not a related 
        organization to the nursing facility; 
           (iii) the reserves for the plan cannot be used, directly or 
        indirectly, as collateral for debts incurred or other 
        obligations of the nursing facility or related organizations to 
        the nursing facility; 
           (iv) if the plan provides workers' compensation coverage 
        for non-Minnesota nursing facilities, the plan's cost 
        methodology must be consistent among all nursing facilities 
        covered by the plan, and if reasonable, is allowed 
        notwithstanding any reimbursement laws regarding cost allocation 
        to the contrary; 
           (v) central, affiliated, corporate, or nursing facility 
        costs related to their administration of the plan are costs 
        which must remain in the nursing facility's administrative cost 
        category and must not be allocated to other cost categories; and 
           (vi) required security deposits, whether in the form of 
        cash, investments, securities, assets, letters of credit, or in 
        any other form are not allowable costs for purposes of 
        establishing the facilities payment rate.; and 
           (vii) for the rate year beginning on July 1, 1998, a group 
        of nursing facilities related by common ownership that 
        self-insures workers' compensation may allocate its directly 
        identified costs of self-insuring its Minnesota nursing facility 
        workers among those nursing facilities in the group that are 
        reimbursed under this section or section 256B.434.  The method 
        of cost allocation shall be based on the ratio of each nursing 
        facility's total allowable salaries and wages to that of the 
        nursing facility group's total allowable salaries and wages, 
        then similarly allocated within each nursing facility's 
        operating cost categories.  The costs associated with the 
        administration of the group's self-insurance plan must remain 
        classified in the nursing facility's administrative cost 
        category.  A written request of the nursing facility group's 
        election to use this alternate method of allocation of 
        self-insurance costs must be received by the commissioner no 
        later than May 1, 1998, to take effect July 1, 1998, or such 
        costs shall continue to be allocated under the existing cost 
        allocation methods.  Once a nursing facility group elects this 
        method of cost allocation for its workers' compensation 
        self-insurance costs, it shall remain in effect until such time 
        as the group no longer self-insures these costs; 
           (5) any costs allowed pursuant to clauses (1) to (3) are 
        subject to the following requirements: 
           (i) if the nursing facility is sold or otherwise ceases 
        operations, the plan's reserves must be subject to an 
        actuarially based settle-up after 36 months from the date of 
        sale or the date on which operations ceased.  The facility's 
        medical assistance portion of the total excess plan reserves 
        must be paid to the state within 30 days following the date on 
        which excess plan reserves are determined; 
           (ii) any distribution of excess plan reserves made to or 
        withdrawals made by the nursing facility or a related 
        organization are applicable credits and must be used to reduce 
        the nursing facility's workers' compensation insurance costs in 
        the reporting period in which a distribution or withdrawal is 
        received; 
           (iii) if reimbursement for the plan is sought under the 
        federal Medicare program, and is audited pursuant to the 
        Medicare program, the nursing facility must provide a copy of 
        Medicare's final audit report, including attachments and 
        exhibits, to the commissioner within 30 days of receipt by the 
        nursing facility or any related organization.  The commissioner 
        shall implement the audit findings associated with the plan upon 
        receipt of Medicare's final audit report.  The department's 
        authority to implement the audit findings is independent of its 
        authority to conduct a field audit. 
           (c) In the determination of incremental increases in the 
        nursing facility's rental rate as required in subdivisions 14 to 
        21, except for a refinancing permitted under subdivision 19, the 
        commissioner must adjust the nursing facility's property-related 
        payment rate for both incremental increases and decreases in 
        recomputations of its rental rate; 
           (d) A nursing facility's administrative cost limitation 
        must be modified as follows: 
           (1) if the nursing facility's licensed beds exceed 195 
        licensed beds, the general and administrative cost category 
        limitation shall be 13 percent; 
           (2) if the nursing facility's licensed beds are more than 
        150 licensed beds, but less than 196 licensed beds, the general 
        and administrative cost category limitation shall be 14 percent; 
        or 
           (3) if the nursing facility's licensed beds is less than 
        151 licensed beds, the general and administrative cost category 
        limitation shall remain at 15 percent. 
           (e) The care related operating rate shall be increased by 
        eight cents to reimburse facilities for unfunded federal 
        mandates, including costs related to hepatitis B vaccinations. 
           (f) For the rate year beginning on July 1, 1998, a group of 
        nursing facilities related by common ownership that self-insures 
        group health, dental, or life insurance may allocate its 
        directly identified costs of self-insuring its Minnesota nursing 
        facility workers among those nursing facilities in the group 
        that are reimbursed under this section or section 256B.434.  The 
        method of cost allocation shall be based on the ratio of each 
        nursing facility's total allowable salaries and wages to that of 
        the nursing facility group's total allowable salaries and wages, 
        then similarly allocated within each nursing facility's 
        operating cost categories.  The costs associated with the 
        administration of the group's self-insurance plan must remain 
        classified in the nursing facility's administrative cost 
        category.  A written request of the nursing facility group's 
        election to use this alternate method of allocation of 
        self-insurance costs must be received by the commissioner no 
        later than May 1, 1998, to take effect July 1, 1998, or those 
        self-insurance costs shall continue to be allocated under the 
        existing cost allocation methods.  Once a nursing facility group 
        elects this method of cost allocation for its group health, 
        dental, or life insurance self-insurance costs, it shall remain 
        in effect until such time as the group no longer self-insures 
        these costs. 
           Sec. 10.  Minnesota Statutes 1997 Supplement, section 
        256B.431, subdivision 26, is amended to read: 
           Subd. 26.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
        BEGINNING JULY 1, 1997.] The nursing facility reimbursement 
        changes in paragraphs (a) to (f) shall apply in the sequence 
        specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and 
        this section, beginning July 1, 1997. 
           (a) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit a nursing facility's allowable 
        operating per diem for each case mix category for each rate year.
        The commissioner shall group nursing facilities into two groups, 
        freestanding and nonfreestanding, within each geographic group, 
        using their operating cost per diem for the case mix A 
        classification.  A nonfreestanding nursing facility is a nursing 
        facility whose other operating cost per diem is subject to the 
        hospital attached, short length of stay, or the rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities in each grouping by their allowable case mix 
        A operating cost per diem.  In calculating a nursing facility's 
        operating cost per diem for this purpose, the commissioner shall 
        exclude the raw food cost per diem related to providing special 
        diets that are based on religious beliefs, as determined in 
        subdivision 2b, paragraph (h).  For those nursing facilities in 
        each grouping whose case mix A operating cost per diem: 
           (1) is at or below the median of the array, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diem 
        as specified in Laws 1996, chapter 451, article 3, section 11, 
        paragraph (h), plus the inflation factor as established in 
        paragraph (d), clause (2), increased by two percentage points, 
        or the current reporting year's corresponding allowable 
        operating cost per diem; or 
           (2) is above the median of the array, the commissioner 
        shall limit the nursing facility's allowable operating cost per 
        diem for each case mix category to the lesser of the prior 
        reporting year's allowable operating cost per diem as specified 
        in Laws 1996, chapter 451, article 3, section 11, paragraph (h), 
        plus the inflation factor as established in paragraph (d), 
        clause (2), increased by one percentage point, or the current 
        reporting year's corresponding allowable operating cost per diem.
           For purposes of paragraph (a), if a nursing facility 
        reports on its cost report a reduction in cost due to a refund 
        or credit for a rate year beginning on or after July 1, 1998, 
        the commissioner shall increase that facility's spend-up limit 
        for the rate year following the current rate year by the amount 
        of the cost reduction divided by its resident days for the 
        reporting year preceding the rate year in which the adjustment 
        is to be made. 
           (b) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit the allowable operating cost per diem 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (a) to each nursing facility's operating 
        cost per diem, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diem are subject 
        to hospital attached, short length of stay, or rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities within each grouping by their allowable case 
        mix A operating cost per diem.  In calculating a nursing 
        facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  For those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diem by three percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diem by two percent.  
        However, in no case shall a nursing facility's operating cost 
        per diem be reduced below its grouping's limit established at 
        0.5 standard deviations above the median. 
           (c) For rate years beginning on or after July 1, 1997, the 
        commissioner shall determine a nursing facility's efficiency 
        incentive by first computing the allowable difference, which is 
        the lesser of $4.50 or the amount by which the facility's other 
        operating cost limit exceeds its nonadjusted other operating 
        cost per diem for that rate year.  The commissioner shall 
        compute the efficiency incentive by: 
           (1) subtracting the allowable difference from $4.50 and 
        dividing the result by $4.50; 
           (2) multiplying 0.20 by the ratio resulting from clause 
        (1), and then; 
           (3) adding 0.50 to the result from clause (2); and 
           (4) multiplying the result from clause (3) times the 
        allowable difference. 
           The nursing facility's efficiency incentive payment shall 
        be the lesser of $2.25 or the product obtained in clause (4). 
           (d) For rate years beginning on or after July 1, 1997, the 
        forecasted price index for a nursing facility's allowable 
        operating cost per diem shall be determined under clauses (1) 
        and (2) using the change in the Consumer Price Index-All Items 
        (United States city average) (CPI-U) as forecasted by Data 
        Resources, Inc.  The commissioner shall use the indices as 
        forecasted in the fourth quarter of the calendar year preceding 
        the rate year, subject to subdivision 2l, paragraph (c).  
           (1) The CPI-U forecasted index for allowable operating cost 
        per diem shall be based on the 21-month period from the midpoint 
        of the nursing facility's reporting year to the midpoint of the 
        rate year following the reporting year. 
           (2) For rate years beginning on or after July 1, 1997, the 
        forecasted index for operating cost limits referred to in 
        subdivision 21, paragraph (b), shall be based on the CPI-U for 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (e) After applying these provisions for the respective rate 
        years, the commissioner shall index these allowable operating 
        cost per diem by the inflation factor provided for in paragraph 
        (d), clause (1), and add the nursing facility's efficiency 
        incentive as computed in paragraph (c). 
           (f) For rate years beginning on or after July 1, 1997, the 
        total operating cost payment rates for a nursing facility shall 
        be the greater of the total operating cost payment rates 
        determined under this section or the total operating cost 
        payment rates in effect on June 30, 1997, subject to rate 
        adjustments due to field audit or rate appeal resolution.  This 
        provision shall not apply to subsequent field audit adjustments 
        of the nursing facility's operating cost rates for rate years 
        beginning on or after July 1, 1997. 
           (g) For the rate years beginning on July 1, 1997, and July 
        1, 1998, and July 1, 1999, a nursing facility licensed for 40 
        beds effective May 1, 1992, with a subsequent increase of 20 
        Medicare/Medicaid certified beds, effective January 26, 1993, in 
        accordance with an increase in licensure is exempt from 
        paragraphs (a) and (b). 
           (h) For a nursing facility whose construction project was 
        authorized according to section 144A.073, subdivision 5, 
        paragraph (g), the operating cost payment rates for the third 
        location shall be determined based on Minnesota Rules, part 
        9549.0057.  Paragraphs (a) and (b) shall not apply until the 
        second rate year after the settle-up cost report is filed.  
        Notwithstanding subdivision 2b, paragraph (g), real estate taxes 
        and special assessments payable by the third location, a 
        501(c)(3) nonprofit corporation, shall be included in the 
        payment rates determined under this subdivision for all 
        subsequent rate years. 
           (i) For the rate year beginning July 1, 1997, the 
        commissioner shall compute the payment rate for a nursing 
        facility licensed for 94 beds on September 30, 1996, that 
        applied in October 1993 for approval of a total replacement 
        under the moratorium exception process in section 144A.073, and 
        completed the approved replacement in June 1995, with other 
        operating cost spend-up limit under paragraph (a), increased by 
        $3.98, and after computing the facility's payment rate according 
        to this section, the commissioner shall make a one-year positive 
        rate adjustment of $3.19 for operating costs related to the 
        newly constructed total replacement, without application of 
        paragraphs (a) and (b).  The facility's per diem, before the 
        $3.19 adjustment, shall be used as the prior reporting year's 
        allowable operating cost per diem for payment rate calculation 
        for the rate year beginning July 1, 1998.  A facility described 
        in this paragraph is exempt from paragraph (b) for the rate 
        years beginning July 1, 1997, and July 1, 1998. 
           (j) For the purpose of applying the limit stated in 
        paragraph (a), a nursing facility in Kandiyohi county licensed 
        for 86 beds that was granted hospital-attached status on 
        December 1, 1994, shall have the prior year's allowable 
        care-related per diem increased by $3.207 and the prior year's 
        other operating cost per diem increased by $4.777 before adding 
        the inflation in paragraph (d), clause (2), for the rate year 
        beginning on July 1, 1997. 
           (k) For the purpose of applying the limit stated in 
        paragraph (a), a 117 bed nursing facility located in Pine county 
        shall have the prior year's allowable other operating cost per 
        diem increased by $1.50 before adding the inflation in paragraph 
        (d), clause (2), for the rate year beginning on July 1, 1997. 
           (l) For the purpose of applying the limit under paragraph 
        (a), a nursing facility in Hibbing licensed for 192 beds shall 
        have the prior year's allowable other operating cost per diem 
        increased by $2.67 before adding the inflation in paragraph (d), 
        clause (2), for the rate year beginning July 1, 1997. 
           Sec. 11.  Minnesota Statutes 1996, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 27.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
        BEGINNING JULY 1, 1998.] (a) For the purpose of applying the 
        limit stated in subdivision 26, paragraph (a), a nursing 
        facility in Hennepin county licensed for 181 beds on September 
        30, 1996, shall have the prior year's allowable care-related per 
        diem increased by $1.455 and the prior year's other operating 
        cost per diem increased by $0.439 before adding the inflation in 
        subdivision 26, paragraph (d), clause (2), for the rate year 
        beginning on July 1, 1998. 
           (b) For the purpose of applying the limit stated in 
        subdivision 26, paragraph (a), a nursing facility in Hennepin 
        county licensed for 161 beds on September 30, 1996, shall have 
        the prior year's allowable care-related per diem increased by 
        $1.154 and the prior year's other operating cost per diem 
        increased by $0.256 before adding the inflation in subdivision 
        26, paragraph (d), clause (2), for the rate year beginning on 
        July 1, 1998. 
           (c) For the purpose of applying the limit stated in 
        subdivision 26, paragraph (a), a nursing facility in Ramsey 
        county licensed for 176 beds on September 30, 1996, shall have 
        the prior year's allowable care-related per diem increased by 
        $0.803 and the prior year's other operating cost per diem 
        increased by $0.272 before adding the inflation in subdivision 
        26, paragraph (d), clause (2), for the rate year beginning on 
        July 1, 1998. 
           (d) For the purpose of applying the limit stated in 
        subdivision 26, paragraph (a), a nursing facility in Brown 
        county licensed for 86 beds on September 30, 1996, shall have 
        the prior year's allowable care-related per diem increased by 
        $0.850 and the prior year's other operating cost per diem 
        increased by $0.275 before adding the inflation in subdivision 
        26, paragraph (d), clause (2), for the rate year beginning on 
        July 1, 1998. 
           (e) For the rate year beginning July 1, 1998, the 
        commissioner shall compute the payment rate for a nursing 
        facility, which was licensed for 110 beds on May 1, 1997, was 
        granted approval in January 1994 for a replacement and 
        remodeling project under the moratorium exception process in 
        section 144A.073, and completed the approved replacement and 
        remodeling project on March 14, 1997, by increasing the other 
        operating cost spend-up limit under paragraph (a) by $1.64.  
        After computing the facility's payment rate for the rate year 
        beginning July 1, 1998, according to this section, the 
        commissioner shall make a one-year positive rate adjustment of 
        48 cents for increased real estate taxes resulting from 
        completion of the moratorium exception project, without 
        application of paragraphs (a) and (b). 
           (f) For the rate year beginning July 1, 1998, the 
        commissioner shall compute the payment rate for a nursing 
        facility exempted from care-related limits under subdivision 2b, 
        paragraph (d), clause (2), with a minimum of three-quarters of 
        its beds licensed to provide residential services for the 
        physically handicapped under Minnesota Rules, parts 9570.2000 to 
        9570.3400, with the care-related spend-up limit under 
        subdivision 26, paragraph (a), increased by $13.21 for the rate 
        year beginning July 1, 1998, without application of subdivision 
        26, paragraph (b).  For rate years beginning on or after July 1, 
        1999, the commissioner shall exclude that amount in calculating 
        the facility's operating cost per diem for purposes of applying 
        subdivision 26, paragraph (b). 
           (g) For the rate year beginning July 1, 1998, a nursing 
        facility in Canby, Minnesota, licensed for 75 beds shall be 
        reimbursed without the limitation imposed under subdivision 26, 
        paragraph (a), and for rate years beginning on or after July 1, 
        1999, its base costs shall be calculated on the basis of its 
        September 30, 1997, cost report. 
           (h) The nursing facility reimbursement changes in 
        paragraphs (i) and (j) shall apply in the sequence specified in 
        this section and Minnesota Rules, parts 9549.0010 to 9549.0080, 
        beginning July 1, 1998. 
           (i) For rate years beginning on or after July 1, 1998, the 
        operating cost limits established in subdivisions 2, 2b, 2i, 3c, 
        and 22, paragraph (d), and any previously effective 
        corresponding limits in law or rule shall not apply, except that 
        these cost limits shall still be calculated for purposes of 
        determining efficiency incentive per diems.  For rate years 
        beginning on or after July 1, 1998, the total operating cost 
        payment rates for a nursing facility shall be the greater of the 
        total operating cost payment rates determined under this section 
        or the total operating cost payment rates in effect on June 30, 
        1998, subject to rate adjustments due to field audit or rate 
        appeal resolution.  
           (j) For rate years beginning on or after July 1, 1998, the 
        operating cost per diem referred to in subdivision 26, paragraph 
        (a), clauses (1) and (2), is the sum of the care-related and 
        other operating per diems for a given case mix class.  Any 
        reductions to the combined operating per diem shall be divided 
        proportionately between the care-related and other operating per 
        diems. 
           (k) For rate years beginning on or after July 1, 1998, the 
        commissioner shall modify the determination of the spend-up 
        limits referred to in subdivision 26, paragraph (a), by indexing 
        each group's previous year's median value by the factor in 
        subdivision 26, paragraph (d), clause (2), plus one percentage 
        point.  
           (l) For rate years beginning on or after July 1, 1998, the 
        commissioner shall modify the determination of the high cost 
        limits referred to in subdivision 26, paragraph (b), by indexing 
        each group's previous year's high cost per diem limits at .5 and 
        one standard deviations above the median by the factor in 
        subdivision 26, paragraph (d), clause (2), plus one percentage 
        point. 
           Sec. 12.  Minnesota Statutes 1997 Supplement, section 
        256B.433, subdivision 3a, is amended to read: 
           Subd. 3a.  [EXEMPTION FROM REQUIREMENT FOR SEPARATE THERAPY 
        BILLING.] The provisions of subdivision 3 do not apply to 
        nursing facilities that are reimbursed according to the 
        provisions of section 256B.431 and are located in a county 
        participating in the prepaid medical assistance 
        program.  Nursing facilities that are reimbursed according to 
        the provisions of section 256B.434 and are located in a county 
        participating in the prepaid medical assistance program are 
        exempt from the maximum therapy rent revenue provisions of 
        subdivision 3, paragraph (c). 
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        256B.434, subdivision 10, is amended to read: 
           Subd. 10.  [EXEMPTIONS.] (a) To the extent permitted by 
        federal law, (1) a facility that has entered into a contract 
        under this section is not required to file a cost report, as 
        defined in Minnesota Rules, part 9549.0020, subpart 13, for any 
        year after the base year that is the basis for the calculation 
        of the contract payment rate for the first rate year of the 
        alternative payment demonstration project contract; and (2) a 
        facility under contract is not subject to audits of historical 
        costs or revenues, or paybacks or retroactive adjustments based 
        on these costs or revenues, except audits, paybacks, or 
        adjustments relating to the cost report that is the basis for 
        calculation of the first rate year under the contract. 
           (b) A facility that is under contract with the commissioner 
        under this section is not subject to the moratorium on licensure 
        or certification of new nursing home beds in section 144A.071, 
        unless the project results in a net increase in bed capacity or 
        involves relocation of beds from one site to another.  Contract 
        payment rates must not be adjusted to reflect any additional 
        costs that a nursing facility incurs as a result of a 
        construction project undertaken under this paragraph.  In 
        addition, as a condition of entering into a contract under this 
        section, a nursing facility must agree that any future medical 
        assistance payments for nursing facility services will not 
        reflect any additional costs attributable to the sale of a 
        nursing facility under this section and to construction 
        undertaken under this paragraph that otherwise would not be 
        authorized under the moratorium in section 144A.073.  Nothing in 
        this section prevents a nursing facility participating in the 
        alternative payment demonstration project under this section 
        from seeking approval of an exception to the moratorium through 
        the process established in section 144A.073, and if approved the 
        facility's rates shall be adjusted to reflect the cost of the 
        project.  Nothing in this section prevents a nursing facility 
        participating in the alternative payment demonstration project 
        from seeking legislative approval of an exception to the 
        moratorium under section 144A.071, and, if enacted, the 
        facility's rates shall be adjusted to reflect the cost of the 
        project. 
           (c) Notwithstanding section 256B.48, subdivision 6, 
        paragraphs (c), (d), and (e), and pursuant to any terms and 
        conditions contained in the facility's contract, a nursing 
        facility that is under contract with the commissioner under this 
        section is in compliance with section 256B.48, subdivision 6, 
        paragraph (b), if the facility is Medicare certified. 
           (d) Notwithstanding paragraph (a), if by April 1, 1996, the 
        health care financing administration has not approved a required 
        waiver, or the health care financing administration otherwise 
        requires cost reports to be filed prior to the waiver's 
        approval, the commissioner shall require a cost report for the 
        rate year. 
           (e) A facility that is under contract with the commissioner 
        under this section shall be allowed to change therapy 
        arrangements from an unrelated vendor to a related vendor during 
        the term of the contract.  The commissioner may develop 
        reasonable requirements designed to prevent an increase in 
        therapy utilization for residents enrolled in the medical 
        assistance program. 
           Sec. 14. [256B.435] [NURSING FACILITY REIMBURSEMENT SYSTEM 
        EFFECTIVE JULY 1, 2000.] 
           Subdivision 1.  [IN GENERAL.] Effective July 1, 2000, the 
        commissioner shall implement a performance-based contracting 
        system to replace the current method of setting operating cost 
        payment rates under sections 256B.431 and 256B.434 and Minnesota 
        Rules, parts 9549.0010 to 9549.0080.  A nursing facility in 
        operation on May 1, 1998, with payment rates not established 
        under section 256B.431 or 256B.434 on that date, is ineligible 
        for this performance-based contracting system.  In determining 
        prospective payment rates of nursing facility services, the 
        commissioner shall distinguish between operating costs and 
        property-related costs.  The commissioner of finance shall 
        include an annual inflationary adjustment in operating costs for 
        nursing facilities using the inflation factor specified in 
        subdivision 3 as a budget change request in each biennial 
        detailed expenditure budget submitted to the legislature under 
        section 16A.11.  Property related payment rates, including real 
        estate taxes and special assessments, shall be determined under 
        section 256B.431 or 256B.434 or under a new property-related 
        reimbursement system, if one is implemented by the commissioner 
        under subdivision 3. 
           Subd. 2.  [CONTRACT PROVISIONS.] (a) The performance-based 
        contract with each nursing facility must include provisions that:
           (1) apply the resident case mix assessment provisions of 
        Minnesota Rules, parts 9549.0051, 9549.0058, and 9549.0059, or 
        another assessment system, with the goal of moving to a single 
        assessment system; 
           (2) monitor resident outcomes through various methods, such 
        as quality indicators based on the minimum data set and other 
        utilization and performance measures; 
           (3) require the establishment and use of a continuous 
        quality improvement process that integrates information from 
        quality indicators and regular resident and family satisfaction 
        interviews; 
           (4) require annual reporting of facility statistical 
        information, including resident days by case mix category, 
        productive nursing hours, wages and benefits, and raw food costs 
        for use by the commissioner in the development of facility 
        profiles that include trends in payment and service utilization; 
           (5) require from each nursing facility an annual certified 
        audited financial statement consisting of a balance sheet, 
        income and expense statements, and an opinion from either a 
        licensed or certified public accountant, if a certified audit 
        was prepared, or unaudited financial statements if no certified 
        audit was prepared; and 
           (6) establish additional requirements and penalties for 
        nursing facilities not meeting the standards set forth in the 
        performance-based contract. 
           (b) The commissioner may develop additional incentive-based 
        payments for achieving outcomes specified in each contract.  The 
        specified facility-specific outcomes must be measurable and 
        approved by the commissioner. 
           (c) The commissioner may also contract with nursing 
        facilities in other ways through requests for proposals, 
        including contracts on a risk or nonrisk basis, with nursing 
        facilities or consortia of nursing facilities, to provide 
        comprehensive long-term care coverage on a premium or capitated 
        basis. 
           Subd. 3.  [PAYMENT RATE PROVISIONS.] (a) For rate years 
        beginning on or after July 1, 2000, within the limits of 
        appropriations specifically for this purpose, the commissioner 
        shall determine operating cost payment rates for each licensed 
        and certified nursing facility by indexing its operating cost 
        payment rates in effect on June 30, 2000, for inflation.  The 
        inflation factor to be used must be based on the change in the 
        Consumer Price Index-All Items, United States city average 
        (CPI-U) as forecasted by Data Resources, Inc. in the fourth 
        quarter preceding the rate year.  The CPI-U forecasted index for 
        operating cost payment rates shall be based on the 12-month 
        period from the midpoint of the nursing facility's prior rate 
        year to the midpoint of the rate year for which the operating 
        payment rate is being determined. 
           (b) Beginning July 1, 2000, each nursing facility subject 
        to a performance-based contract under this section shall choose 
        one of two methods of payment for property related costs: 
           (1) the method established in section 256B.434; or 
           (2) the method established in section 256B.431.  
        Once the nursing facility has made the election in paragraph 
        (b), that election shall remain in effect for at least four 
        years or until an alternative property payment system is 
        developed. 
           (c) For rate years beginning on or after July 1, 2000, the 
        commissioner may implement a new method of payment for property 
        related costs that addresses the capital needs of nursing 
        facilities.  Notwithstanding paragraph (b), the new property 
        payment system or systems, if implemented, shall replace the 
        current method of setting property payment rates under sections 
        256B.431 and 256B.434.  
           Sec. 15.  Minnesota Statutes 1996, section 256B.501, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ICF/MR SALARY ADJUSTMENTS.] For the rate period 
        beginning January Effective July 1, 1992 1998, and ending 
        September 30, 1993 to September 30, 2000, the commissioner shall 
        add make available the appropriate salary adjustment cost per 
        diem calculated in paragraphs (a) to (d) (e) to the total 
        operating cost payment rate of each facility subject to 
        reimbursement under this section and Laws 1993 First Special 
        Session, chapter 1, article 4, section 11.  The salary 
        adjustment cost per diem must be determined as follows: 
           (a)  [COMPUTATION AND REVIEW GUIDELINES.] Except as 
        provided in paragraph (c), A state-operated community service, 
        and any facility whose payment rates are governed by closure 
        agreements, receivership agreements, or Minnesota Rules, part 
        9553.0075, are is not eligible for a salary adjustment otherwise 
        granted under this subdivision.  For purposes of the salary 
        adjustment per diem computation and reviews in this subdivision, 
        the term "salary adjustment cost" means the facility's allowable 
        program operating cost category employee training expenses, and 
        the facility's allowable salaries, payroll taxes, and fringe 
        benefits.  The term does not include these same salary-related 
        costs for both administrative or central office employees. 
           For the purpose of determining the amount of salary 
        adjustment to be granted under this subdivision, the 
        commissioner must use the reporting year ending December 31, 
        1990 1996, as the base year for the salary adjustment per diem 
        computation.  For the purpose of both years' salary adjustment 
        cost review, the commissioner must use the facility's salary 
        adjustment cost for the reporting year ending December 31, 1991, 
        as the base year.  If the base year and the reporting years 
        subject to review include salary cost reclassifications made by 
        the department, the commissioner must reconcile those 
        differences before completing the salary adjustment per diem 
        review. 
           (b)  [SALARY ADJUSTMENT PER DIEM COMPUTATION.] For the rate 
        period beginning January 1, 1992 July 1, 1998, each facility 
        shall receive a salary adjustment cost per diem equal to its 
        salary adjustment costs multiplied by 1-1/2 3.0 percent, and 
        then divided by the facility's resident days.  
           (c)  [ADJUSTMENTS FOR NEW FACILITIES.] For newly 
        constructed or newly established facilities, except for 
        state-operated community services, whose payment rates are 
        governed by Minnesota Rules, part 9553.0075, if the settle-up 
        cost report includes a reporting year which is subject to review 
        under this subdivision, the commissioner shall adjust the rule 
        provision governing the maximum settle-up payment rate by 
        increasing the .4166 percent for each full month of the 
        settle-up cost report to .7083.  For any subsequent rate period 
        which is authorized for salary adjustments under this 
        subdivision, the commissioner shall compute salary adjustment 
        cost per diems by annualizing the salary adjustment costs for 
        the settle-up cost report period and treat that period as the 
        base year for purposes of reviewing salary adjustment cost per 
        diems. 
           (d)  [SALARY ADJUSTMENT PER DIEM REVIEW.] The commissioner 
        shall review the implementation of the salary adjustments on a 
        per diem basis.  For reporting years ending December 31, 1992, 
        and December 31, 1993, the commissioner must review and 
        determine the amount of change in salary adjustment costs in 
        both of the above reporting years over the base year after the 
        reporting year ending December 31, 1993.  The commissioner must 
        inflate the base year's salary adjustment costs by the 
        cumulative percentage increase granted in paragraph (b), plus 
        three percentage points for each of the two years reviewed.  The 
        commissioner must then compare each facility's salary adjustment 
        costs for the reporting year divided by the facility's resident 
        days for both reporting years to the base year's inflated salary 
        adjustment cost divided by the facility's resident days for the 
        base year.  If the facility has had a one-time program operating 
        cost adjustment settle-up during any of the reporting years 
        subject to review, the commissioner must remove the per diem 
        effect of the one-time program adjustment before completing the 
        review and per diem comparison. 
           The review and per diem comparison must be done by the 
        commissioner after the reporting year ending December 31, 1993.  
        If the salary adjustment cost per diem for the reporting years 
        being reviewed is less than the base year's inflated salary 
        adjustment cost per diem, the commissioner must recover the 
        difference within 120 days after the date of written notice.  
        The amount of the recovery shall be equal to the per diem 
        difference multiplied by the facility's resident days in the 
        reporting years being reviewed.  Written notice of the amount 
        subject to recovery must be given by the commissioner following 
        both reporting years reviewed.  Interest charges must be 
        assessed by the commissioner after the 120th day of that notice 
        at the same interest rate the commissioner assesses for other 
        balance outstanding. 
           (c)  [SUBMITTAL OF PLAN.] A facility may apply for the 
        salary adjustment per diem calculated under this subdivision.  
        The application must be made to the commissioner and contain a 
        plan by which the facility will distribute the salary adjustment 
        to employees of the facility.  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, after July 
        1, 1998, may constitute the plan for the salary distribution.  
        The commissioner shall review the plan to ensure that the salary 
        adjustment per diem is used solely to increase the compensation 
        of facility employees.  To be eligible, a facility must submit 
        its plan for the salary distribution by December 31, 1998.  If a 
        facility's plan for salary distribution is effective for its 
        employees after July 1, 1998, the salary adjustment cost per 
        diem shall be effective the same date as its plan. 
           (d)  [COST REPORT.] Additional costs incurred by facilities 
        as a result of this salary adjustment are not allowable costs 
        for purposes of the December 31, 1998, cost report. 
           (e)  [SALARY ADJUSTMENT.] In order to apply for a salary 
        adjustment, a facility reimbursed under Laws 1993, First Special 
        Session chapter 1, article 4, section 11, must report the 
        information referred to in paragraph (a) in the application, in 
        the manner specified by the commissioner. 
           Sec. 16.  [256B.5011] [ICF/MR REIMBURSEMENT SYSTEM 
        EFFECTIVE OCTOBER 1, 2000.] 
           Subdivision 1.  [IN GENERAL.] Effective October 1, 2000, 
        the commissioner shall implement a performance-based contracting 
        system to replace the current method of setting total cost 
        payment rates under section 256B.501 and Minnesota Rules, parts 
        9553.0010 to 9553.0080.  In determining prospective payment 
        rates of intermediate care facilities for persons with mental 
        retardation or related conditions, the commissioner shall index 
        each facility's total payment rate by an inflation factor as 
        described in subdivision 3.  The commissioner of finance shall 
        include annual inflation adjustments in operating costs for 
        intermediate care facilities for persons with mental retardation 
        and related conditions as a budget change request in each 
        biennial detailed expenditure budget submitted to the 
        legislature under section 16A.11. 
           Subd. 2.  [CONTRACT PROVISIONS.] The performance-based 
        contract with each intermediate care facility must include 
        provisions for: 
           (1) modifying payments when significant changes occur in 
        the needs of the consumers; 
           (2) monitoring service quality using performance indicators 
        that measure consumer outcomes; 
           (3) the establishment and use of continuous quality 
        improvement processes using the results attained through service 
        quality monitoring; 
           (4) the annual reporting of facility statistical 
        information on all supervisory personnel, direct care personnel, 
        specialized support personnel, hours, wages and benefits, 
        staff-to-consumer ratios, and staffing patterns; 
           (5) annual aggregate facility financial information or an 
        annual certified audited financial statement, including a 
        balance sheet and income and expense statements for each 
        facility, if a certified audit was prepared; and 
           (6) additional requirements and penalties for intermediate 
        care facilities not meeting the standards set forth in the 
        performance-based contract. 
           Subd. 3.  [PAYMENT RATE PROVISIONS.] For rate years 
        beginning on or after October 1, 2000, within the limits of 
        appropriations specifically for this purpose, the commissioner 
        shall determine the total payment rate for each licensed and 
        certified intermediate care facility by indexing the total 
        payment rate in effect on September 30, 2000, for inflation.  
        The inflation factor to be used must be based on the change in 
        the Consumer Price Index-All Items, United States city average 
        (CPI-U) as forecasted by Data Resources, Inc. in the first 
        quarter of the calendar year during which the rate year begins.  
        The CPI-U forecasted index for total payment rates shall be 
        based on the 12-month period from the midpoint of the facility's 
        prior rate year to the midpoint of the rate year for which the 
        operating payment rate is being determined.  
           Sec. 17.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 25.  [CONTINUATION OF PAYMENTS THROUGH DISCHARGE.] In 
        the event a medical assistance recipient or beneficiary enrolled 
        in a health plan under this section is denied nursing facility 
        services after residing in the facility for more than 180 days, 
        any denial of medical assistance payment to a provider under 
        this section shall be prospective only and payments to the 
        provider shall continue until the resident is discharged or 30 
        days after the effective date of the service denial, whichever 
        is sooner. 
           Sec. 18.  Minnesota Statutes 1996, section 256I.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INDIVIDUAL ELIGIBILITY REQUIREMENTS.] An 
        individual is eligible for and entitled to a group residential 
        housing payment to be made on the individual's behalf if the 
        county agency has approved the individual's residence in a group 
        residential housing setting and the individual meets the 
        requirements in paragraph (a) or (b).  
           (a) The individual is aged, blind, or is over 18 years of 
        age and disabled as determined under the criteria used by the 
        title II program of the Social Security Act, and meets the 
        resource restrictions and standards of the supplemental security 
        income program, and the individual's countable income after 
        deducting the (1) exclusions and disregards of the SSI 
        program and, (2) the medical assistance personal needs allowance 
        under section 256B.35, and (3) an amount equal to the income 
        actually made available to a community spouse by an elderly 
        waiver recipient under the provisions of sections 256B.0575, 
        paragraph (a), clause (4), and 256B.058, subdivision 2, is less 
        than the monthly rate specified in the county agency's agreement 
        with the provider of group residential housing in which the 
        individual resides.  
           (b) The individual meets a category of eligibility under 
        section 256D.05, subdivision 1, paragraph (a), and the 
        individual's resources are less than the standards specified by 
        section 256D.08, and the individual's countable income as 
        determined under sections 256D.01 to 256D.21, less the medical 
        assistance personal needs allowance under section 256B.35 is 
        less than the monthly rate specified in the county agency's 
        agreement with the provider of group residential housing in 
        which the individual resides. 
           Sec. 19.  Minnesota Statutes 1996, section 256I.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MORATORIUM ON THE DEVELOPMENT OF GROUP 
        RESIDENTIAL HOUSING BEDS.] (a) County agencies shall not enter 
        into agreements for new group residential housing beds with 
        total rates in excess of the MSA equivalent rate except:  (1) 
        for group residential housing establishments meeting the 
        requirements of subdivision 2a, clause (2) with department 
        approval; (2) for group residential housing establishments 
        licensed under Minnesota Rules, parts 9525.0215 to 9525.0355, 
        provided the facility is needed to meet the census reduction 
        targets for persons with mental retardation or related 
        conditions at regional treatment centers; (3) to ensure 
        compliance with the federal Omnibus Budget Reconciliation Act 
        alternative disposition plan requirements for inappropriately 
        placed persons with mental retardation or related conditions or 
        mental illness; (4) up to 80 beds in a single, specialized 
        facility located in Hennepin county that will provide housing 
        for chronic inebriates who are repetitive users of 
        detoxification centers and are refused placement in emergency 
        shelters because of their state of intoxication., and planning 
        for the specialized facility must have been initiated before 
        July 1, 1991, in anticipation of receiving a grant from the 
        housing finance agency under section 462A.05, subdivision 20a, 
        paragraph (b); or (5) notwithstanding the provisions of 
        subdivision 2a, for up to 180 190 supportive housing units in 
        Anoka, Dakota, Hennepin, or Ramsey county for homeless adults 
        with a mental illness, a history of substance abuse, or human 
        immunodeficiency virus or acquired immunodeficiency syndrome.  
        For purposes of this section, "homeless adult" means a person 
        who is living on the street or in a shelter or is evicted from a 
        dwelling unit or discharged from a regional treatment center, 
        community hospital, or residential treatment program and has no 
        appropriate housing available and lacks the resources and 
        support necessary to access appropriate housing.  At least 70 
        percent of the supportive housing units must serve homeless 
        adults with mental illness, substance abuse problems, or human 
        immunodeficiency virus or acquired immunodeficiency syndrome who 
        are about to be or, within the previous six months, has been 
        discharged from a regional treatment center, or a 
        state-contracted psychiatric bed in a community hospital, or a 
        residential mental health or chemical dependency treatment 
        program.  If a person meets the requirements of subdivision 1, 
        paragraph (a), and receives a federal Section 8 or state housing 
        subsidy, the group residential housing rate for that person is 
        limited to the supplementary rate under section 256I.05, 
        subdivision 1a, and is determined by subtracting the amount of 
        the person's countable income that exceeds the MSA equivalent 
        rate from the group residential housing supplementary rate.  A 
        resident in a demonstration project site who no longer 
        participates in the demonstration program shall retain 
        eligibility for a group residential housing payment in an amount 
        determined under section 256I.06, subdivision 8, using the MSA 
        equivalent rate.  Service funding under section 256I.05, 
        subdivision 1a, will end June 30, 1997, if federal matching 
        funds are available and the services can be provided through a 
        managed care entity.  If federal matching funds are not 
        available, then service funding will continue under section 
        256I.05, subdivision 1a.  
           (b) A county agency may enter into a group residential 
        housing agreement for beds with rates in excess of the MSA 
        equivalent rate in addition to those currently covered under a 
        group residential housing agreement if the additional beds are 
        only a replacement of beds with rates in excess of the MSA 
        equivalent rate which have been made available due to closure of 
        a setting, a change of licensure or certification which removes 
        the beds from group residential housing payment, or as a result 
        of the downsizing of a group residential housing setting.  The 
        transfer of available beds from one county to another can only 
        occur by the agreement of both counties. 
           Sec. 20.  Minnesota Statutes 1996, section 256I.04, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [RENTAL ASSISTANCE.] For participants in the 
        Minnesota supportive housing demonstration program under 
        subdivision 3, paragraph (a), clause (5), notwithstanding the 
        provisions of section 256I.06, subdivision 8, the amount of the 
        group residential housing payment for room and board must be 
        calculated by subtracting 30 percent of the recipient's adjusted 
        income as defined by the United States Department of Housing and 
        Urban Development for the Section 8 program from the fair market 
        rent established for the recipient's living unit by the federal 
        Department of Housing and Urban Development.  This payment shall 
        be regarded as a state housing subsidy for the purposes of 
        subdivision 3.  Notwithstanding the provisions of section 
        256I.06, subdivision 6, the recipient's countable income will 
        only be adjusted when a change of greater than $100 in a month 
        occurs or upon annual redetermination of eligibility, whichever 
        is sooner.  The commissioner is directed to study the 
        feasibility of developing a rental assistance program to serve 
        persons traditionally served in group residential housing 
        settings and report to the legislature by February 15, 1999. 
           Sec. 21.  Minnesota Statutes 1996, section 256I.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MONTHLY RATES; EXEMPTIONS.] The maximum group 
        residential housing rate does not apply to a residence that on 
        August 1, 1984, was licensed by the commissioner of health only 
        as a boarding care home, certified by the commissioner of health 
        as an intermediate care facility, and licensed by the 
        commissioner of human services under Minnesota Rules, parts 
        9520.0500 to 9520.0690.  Notwithstanding the provisions of 
        subdivision 1c, the rate paid to a facility reimbursed under 
        this subdivision shall be determined under Minnesota Rules, 
        parts 9510.0010 to 9510.0480 section 256B.431, or under section 
        256B.434 if the facility is accepted by the commissioner for 
        participation in the alternative payment demonstration project. 
           Sec. 22.  Laws 1997, chapter 207, section 7, is amended to 
        read: 
           Sec. 7.  [PRIVATE SALE OF TAX-FORFEITED LAND; CARLTON 
        COUNTY.] 
           (a) Notwithstanding Minnesota Statutes, sections 92.45 and 
        282.018, subdivision 1, and the public sale provisions of 
        Minnesota Statutes, chapter 282, Carlton county may sell by 
        private sale the tax-forfeited land described in paragraph (d) 
        under the remaining provisions of Minnesota Statutes, chapter 
        282. 
           (b) The land described in paragraph (d) may be sold by 
        private sale.  The consideration for the conveyance must include 
        the taxes due on the property and any penalties, interest, and 
        costs shall be the appraised value of the land.  If the lands 
        are sold, the conveyance must reserve to the state a 
        conservation perpetual easement, in a form prescribed by the 
        commissioner of natural resources, for the land within 100 feet 
        of the ordinary high water level of Slaughterhouse creek for 
        public angler access and stream habitat protection and 
        enhancement for the benefit of the state of Minnesota, 
        department of natural resources, over the following lands: 
           A strip of land lying in the North 6.66 acres of the West 
        Half of the Northeast Quarter of the Southwest Quarter of 
        Section 6, Township 48 North, Range 16 West, Carlton county.  
        Said strip lying 100 feet on each side of the centerline of 
        Slaughterhouse Creek. 
           (c) The conveyance must be in a form approved by the 
        attorney general. 
           (d) The land to be conveyed is located in Carlton county 
        and is described as: 
           North 6.66 acres of the West Half of the Northeast Quarter 
        of the Southwest Quarter, subject to pipeline easement, Section 
        6, Township 48 North, Range 16 West, City of Carlton. 
           (e) Carlton county has determined that this sale best 
        serves the land management interests of Carlton county. 
           Sec. 23.  [RECOMMENDATIONS TO IMPLEMENT NEW REIMBURSEMENT 
        SYSTEM.] 
           (a) By January 15, 1999, the commissioner shall make 
        recommendations to the chairs of the health and human services 
        policy and fiscal committees on the repeal of specific statutes 
        and rules as well as any other additional recommendations 
        related to implementation of sections 11 and 12. 
           (b) In developing recommendations for nursing facility 
        reimbursement, the commissioner shall consider making each 
        nursing facility's total payment rates, both operating and 
        property rate components, prospective.  The commissioner shall 
        involve nursing facility industry and consumer representatives 
        in the development of these recommendations. 
           (c) In making recommendations for ICF/MR reimbursement, the 
        commissioner may consider methods of establishing payment rates 
        that take into account individual client costs and needs, 
        include provisions to establish links between performance 
        indicators and reimbursement and other performance incentives, 
        and allow local control over resources necessary for local 
        agencies to set rates and contract with ICF/MR facilities.  In 
        addition, the commissioner may establish methods that provide 
        information to consumers regarding service quality as measured 
        by performance indicators.  The commissioner shall involve 
        ICF/MR industry and consumer representatives in the development 
        of these recommendations. 
           Sec. 24.  [APPROVAL EXTENDED.] 
           Notwithstanding Minnesota Statutes, section 144A.073, 
        subdivision 3, the commissioner of health shall grant an 
        additional 18 months of approval for a proposed exception to the 
        nursing home licensure and certification moratorium, if the 
        proposal is to replace a 96-bed nursing home facility in Carlton 
        county and if initial approval for the proposal was granted in 
        November 1996. 
           Sec. 25.  [EFFECTIVE DATE.] 
           Sections 1, 3, 22, and 24 are effective the day following 
        final enactment. 
                                   ARTICLE 4 
                  HEALTH CARE PROGRAMS, INCLUDING MA AND GAMC 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        171.29, subdivision 2, is amended to read: 
           Subd. 2.  [FEES, ALLOCATION.] (a) A person whose driver's 
        license has been revoked as provided in subdivision 1, except 
        under section 169.121 or 169.123, shall pay a $30 fee before the 
        driver's license is reinstated. 
           (b) A person whose driver's license has been revoked as 
        provided in subdivision 1 under section 169.121 or 169.123 shall 
        pay a $250 fee plus a $10 surcharge before the driver's license 
        is reinstated.  The $250 fee is to be credited as follows: 
           (1) Twenty percent shall be credited to the trunk highway 
        fund. 
           (2) Fifty-five percent shall be credited to the general 
        fund. 
           (3) Eight percent shall be credited to a separate account 
        to be known as the bureau of criminal apprehension account.  
        Money in this account may be appropriated to the commissioner of 
        public safety and the appropriated amount shall be apportioned 
        80 percent for laboratory costs and 20 percent for carrying out 
        the provisions of section 299C.065. 
           (4) Twelve percent shall be credited to a separate account 
        to be known as the alcohol-impaired driver education account.  
        Money in the account is appropriated as follows: 
           (i) The first $200,000 in a fiscal year is to the 
        commissioner of children, families, and learning for programs in 
        elementary and secondary schools. 
           (ii) The remainder credited in a fiscal year is 
        appropriated to the commissioner of transportation to be spent 
        as grants to the Minnesota highway safety center at St. Cloud 
        State University for programs relating to alcohol and highway 
        safety education in elementary and secondary schools. 
           (5) Five percent shall be credited to a separate account to 
        be known as the traumatic brain injury and spinal cord injury 
        account.  $100,000 is annually appropriated from the account to 
        the commissioner of human services for traumatic brain injury 
        case management services.  The remaining money in the account is 
        annually appropriated to the commissioner of health to be used 
        as follows:  35 percent for a contract with a qualified 
        community-based organization to provide information, resources, 
        and support to assist persons with traumatic brain injury and 
        their families to access services, and 65 percent to establish 
        and maintain the traumatic brain injury and spinal cord injury 
        registry created in section 144.662 and to reimburse the 
        commissioner of economic security for the reasonable cost of 
        services provided under section 268A.03, clause (o).  For the 
        purposes of this clause, a "qualified community-based 
        organization" is a private, not-for-profit organization of 
        consumers of traumatic brain injury services and their family 
        members.  The organization must be registered with the United 
        States Internal Revenue Service under the provisions of section 
        501(c)(3) as a tax exempt organization and must have as its 
        purposes:  
           (i) the promotion of public, family, survivor, and 
        professional awareness of the incidence and consequences of 
        traumatic brain injury; 
           (ii) the provision of a network of support for persons with 
        traumatic brain injury, their families, and friends; 
           (iii) the development and support of programs and services 
        to prevent traumatic brain injury; 
           (iv) the establishment of education programs for persons 
        with traumatic brain injury; and 
           (v) the empowerment of persons with traumatic brain injury 
        through participation in its governance. 
           No patient's name, identifying information or identifiable 
        medical data will be disclosed to the organization without the 
        informed voluntary written consent of the patient or patient's 
        guardian, or if the patient is a minor, of the parent or 
        guardian of the patient. 
           (c) The $10 surcharge shall be credited to a separate 
        account to be known as the remote electronic alcohol monitoring 
        pilot program account.  The commissioner shall transfer the 
        balance of this account to the commissioner of finance on a 
        monthly basis for deposit in the general fund. 
           Sec. 2.  Minnesota Statutes 1996, section 245.462, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CASE MANAGER.] (a) "Case manager" means an 
        individual employed by the county or other entity authorized by 
        the county board to provide case management services specified 
        in section 245.4711.  A case manager must have a bachelor's 
        degree in one of the behavioral sciences or related fields from 
        an accredited college or university and have at least 2,000 
        hours of supervised experience in the delivery of services to 
        adults with mental illness, must be skilled in the process of 
        identifying and assessing a wide range of client needs, and must 
        be knowledgeable about local community resources and how to use 
        those resources for the benefit of the client.  The case manager 
        shall meet in person with a mental health professional at least 
        once each month to obtain clinical supervision of the case 
        manager's activities.  Case managers with a bachelor's degree 
        but without 2,000 hours of supervised experience in the delivery 
        of services to adults with mental illness must complete 40 hours 
        of training approved by the commissioner of human services in 
        case management skills and in the characteristics and needs of 
        adults with serious and persistent mental illness and must 
        receive clinical supervision regarding individual service 
        delivery from a mental health professional at least once each 
        week until the requirement of 2,000 hours of supervised 
        experience is met.  Clinical supervision must be documented in 
        the client record. 
           Until June 30, 1999, a refugee an immigrant who does not 
        have the qualifications specified in this subdivision may 
        provide case management services to adult refugees immigrants 
        with serious and persistent mental illness who are members of 
        the same ethnic group as the case manager if the person:  (1) is 
        actively pursuing credits toward the completion of a bachelor's 
        degree in one of the behavioral sciences or a related field from 
        an accredited college or university; (2) completes 40 hours of 
        training as specified in this subdivision; and (3) receives 
        clinical supervision at least once a week until the requirements 
        of obtaining a bachelor's degree and 2,000 hours of supervised 
        experience this subdivision are met. 
           (b) The commissioner may approve waivers submitted by 
        counties to allow case managers without a bachelor's degree but 
        with 6,000 hours of supervised experience in the delivery of 
        services to adults with mental illness if the person: 
           (1) meets the qualifications for a mental health 
        practitioner in subdivision 26; 
           (2) has completed 40 hours of training approved by the 
        commissioner in case management skills and in the 
        characteristics and needs of adults with serious and persistent 
        mental illness; and 
           (3) demonstrates that the 6,000 hours of supervised 
        experience are in identifying functional needs of persons with 
        mental illness, coordinating assessment information and making 
        referrals to appropriate service providers, coordinating a 
        variety of services to support and treat persons with mental 
        illness, and monitoring to ensure appropriate provision of 
        services.  The county board is responsible to verify that all 
        qualifications, including content of supervised experience, have 
        been met.  
           Sec. 3.  Minnesota Statutes 1996, section 245.462, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DAY TREATMENT SERVICES.] "Day treatment," "day 
        treatment services," or "day treatment program" means a 
        structured program of treatment and care provided to an adult in 
        or by:  (1) a hospital accredited by the joint commission on 
        accreditation of health organizations and licensed under 
        sections 144.50 to 144.55; (2) a community mental health center 
        under section 245.62; or (3) an entity that is under contract 
        with the county board to operate a program that meets the 
        requirements of section 245.4712, subdivision 2, and Minnesota 
        Rules, parts 9505.0170 to 9505.0475.  Day treatment consists of 
        group psychotherapy and other intensive therapeutic services 
        that are provided at least one day a week for a minimum 
        three-hour time block by a multidisciplinary staff under the 
        clinical supervision of a mental health professional.  The 
        services are aimed at stabilizing the adult's mental health 
        status, providing mental health services, and developing and 
        improving the adult's independent living and socialization 
        skills.  The goal of day treatment is to reduce or relieve 
        mental illness and to enable the adult to live in the 
        community.  Day treatment services are not a part of inpatient 
        or residential treatment services.  Day treatment services are 
        distinguished from day care by their structured therapeutic 
        program of psychotherapy services.  The commissioner may limit 
        medical assistance reimbursement for day treatment to 15 hours 
        per week per person instead of the three hours per day per 
        person specified in Minnesota Rules, part 9505.0323, subpart 15. 
           Sec. 4.  Minnesota Statutes 1996, section 245.4871, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CASE MANAGER.] (a) "Case manager" means an 
        individual employed by the county or other entity authorized by 
        the county board to provide case management services specified 
        in subdivision 3 for the child with severe emotional disturbance 
        and the child's family.  A case manager must have experience and 
        training in working with children. 
           (b) A case manager must: 
           (1) have at least a bachelor's degree in one of the 
        behavioral sciences or a related field from an accredited 
        college or university; 
           (2) have at least 2,000 hours of supervised experience in 
        the delivery of mental health services to children; 
           (3) have experience and training in identifying and 
        assessing a wide range of children's needs; and 
           (4) be knowledgeable about local community resources and 
        how to use those resources for the benefit of children and their 
        families. 
           (c) The case manager may be a member of any professional 
        discipline that is part of the local system of care for children 
        established by the county board. 
           (d) The case manager must meet in person with a mental 
        health professional at least once each month to obtain clinical 
        supervision. 
           (e) Case managers with a bachelor's degree but without 
        2,000 hours of supervised experience in the delivery of mental 
        health services to children with emotional disturbance must: 
           (1) begin 40 hours of training approved by the commissioner 
        of human services in case management skills and in the 
        characteristics and needs of children with severe emotional 
        disturbance before beginning to provide case management 
        services; and 
           (2) receive clinical supervision regarding individual 
        service delivery from a mental health professional at least once 
        each week until the requirement of 2,000 hours of experience is 
        met. 
           (f) Clinical supervision must be documented in the child's 
        record.  When the case manager is not a mental health 
        professional, the county board must provide or contract for 
        needed clinical supervision. 
           (g) The county board must ensure that the case manager has 
        the freedom to access and coordinate the services within the 
        local system of care that are needed by the child. 
           (h) Until June 30, 1999, a refugee an immigrant who does 
        not have the qualifications specified in this subdivision may 
        provide case management services to child refugees immigrants 
        with severe emotional disturbance of the same ethnic group as 
        the refugee immigrant if the person:  
           (1) is actively pursuing credits toward the completion of a 
        bachelor's degree in one of the behavioral sciences or related 
        fields at an accredited college or university; 
           (2) completes 40 hours of training as specified in this 
        subdivision; and 
           (3) receives clinical supervision at least once a week 
        until the requirements of obtaining a bachelor's degree and 
        2,000 hours of supervised experience are met. 
           (i) The commissioner may approve waivers submitted by 
        counties to allow case managers without a bachelor's degree but 
        with 6,000 hours of supervised experience in the delivery of 
        services to children with severe emotional disturbance if the 
        person: 
           (1) meets the qualifications for a mental health 
        practitioner in subdivision 26; 
           (2) has completed 40 hours of training approved by the 
        commissioner in case management skills and in the 
        characteristics and needs of children with severe emotional 
        disturbance; and 
           (3) demonstrates that the 6,000 hours of supervised 
        experience are in identifying functional needs of children with 
        severe emotional disturbance, coordinating assessment 
        information and making referrals to appropriate service 
        providers, coordinating a variety of services to support and 
        treat children with severe emotional disturbance, and monitoring 
        to ensure appropriate provision of services.  The county board 
        is responsible to verify that all qualifications, including 
        content of supervised experience, have been met. 
           Sec. 5.  Minnesota Statutes 1996, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [INFORMATION FOR PERSONS WITH LIMITED 
        ENGLISH-LANGUAGE PROFICIENCY.] By July 1, 1998, the commissioner 
        shall implement a procedure for public assistance applicants and 
        recipients to identify a language preference other than English 
        in order to receive information pertaining to the public 
        assistance programs in that preferred language. 
           Sec. 6.  [256.9364] [POST-KIDNEY TRANSPLANT DRUG PROGRAM.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of human 
        services shall establish and administer a program to pay for 
        costs of drugs prescribed exclusively for post-kidney transplant 
        maintenance when those costs are not otherwise reimbursed by a 
        third-party payer.  The commissioner may contract with a 
        nonprofit entity to administer this program.  
           Subd. 2.  [ELIGIBILITY REQUIREMENTS.] To be eligible for 
        the program, an applicant must satisfy the following 
        requirements:  
           (1) the applicant's family gross income must not exceed 275 
        percent of the federal poverty level; and 
           (2) the applicant must be a Minnesota resident who has 
        resided in Minnesota for at least 12 months.  
        An applicant shall not be excluded because the applicant 
        received the transplant outside the state of Minnesota, so long 
        as the other requirements are met. 
           Subd. 3.  [PAYMENT AMOUNTS.] (a) The amount of the payments 
        made for each eligible recipient shall be based on the following:
           (1) available funds; and 
           (2) the cost of the post-kidney transplant maintenance 
        drugs.  
           (b) The payment rate under this program must be no greater 
        than the medical assistance reimbursement rate for the 
        prescribed drug. 
           (c) Payments shall be made to or on behalf of an eligible 
        recipient for the cost of the post-kidney transplant maintenance 
        drugs that is not covered, reimbursed, or eligible for 
        reimbursement by any other third party or government entity, 
        including, but not limited to, private or group health 
        insurance, medical assistance, Medicare, the Veterans 
        Administration, the senior citizen drug program established 
        under section 256.955, or under any waiver arrangement received 
        by the state to provide a prescription drug benefit for 
        qualified Medicare beneficiaries or service-limited Medicare 
        beneficiaries.  
           (d) The commissioner may restrict or categorize payments to 
        meet the appropriation allocated for this program. 
           (e) Any cost of the post-kidney transplant maintenance 
        drugs that is not reimbursed under this program is the 
        responsibility of the program recipient. 
           Subd. 4.  [DRUG FORMULARY.] The commissioner shall maintain 
        a drug formulary that includes all drugs eligible for 
        reimbursement by the program.  The commissioner may use the drug 
        formulary established under section 256B.0625, subdivision 13.  
        The commissioner shall establish an internal review procedure 
        for updating the formulary that allows for the addition and 
        deletion of drugs to the formulary.  The drug formulary must be 
        reviewed at least quarterly per fiscal year. 
           Subd. 5.  [PRIVATE DONATIONS.] The commissioner may accept 
        funding from other public or private sources. 
           Subd. 6.  [SUNSET.] This program expires on July 1, 2000. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        256.9657, subdivision 3, is amended to read: 
           Subd. 3.  [HEALTH MAINTENANCE ORGANIZATION; COMMUNITY 
        INTEGRATED SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 
        1992, each health maintenance organization with a certificate of 
        authority issued by the commissioner of health under chapter 62D 
        and each community integrated service network licensed by the 
        commissioner under chapter 62N shall pay to the commissioner of 
        human services a surcharge equal to six-tenths of one percent of 
        the total premium revenues of the health maintenance 
        organization or community integrated service network as reported 
        to the commissioner of health according to the schedule in 
        subdivision 4.  
           (b) For purposes of this subdivision, total premium revenue 
        means: 
           (1) premium revenue recognized on a prepaid basis from 
        individuals and groups for provision of a specified range of 
        health services over a defined period of time which is normally 
        one month, excluding premiums paid to a health maintenance 
        organization or community integrated service network from the 
        Federal Employees Health Benefit Program; 
           (2) premiums from Medicare wrap-around subscribers for 
        health benefits which supplement Medicare coverage; 
           (3) Medicare revenue, as a result of an arrangement between 
        a health maintenance organization or a community integrated 
        service network and the health care financing administration of 
        the federal Department of Health and Human Services, for 
        services to a Medicare beneficiary, excluding Medicare revenue 
        that states are prohibited from taxing under sections 4001 and 
        4002 of Public Law Number 105-33 received by a health 
        maintenance organization or community integrated service network 
        through risk sharing or Medicare Choice Plus contracts; and 
           (4) medical assistance revenue, as a result of an 
        arrangement between a health maintenance organization or 
        community integrated service network and a Medicaid state 
        agency, for services to a medical assistance beneficiary. 
           If advance payments are made under clause (1) or (2) to the 
        health maintenance organization or community integrated service 
        network for more than one reporting period, the portion of the 
        payment that has not yet been earned must be treated as a 
        liability. 
           (c) When a health maintenance organization or community 
        integrated service network merges or consolidates with or is 
        acquired by another health maintenance organization or community 
        integrated service network, the surviving corporation or the new 
        corporation shall be responsible for the annual surcharge 
        originally imposed on each of the entities or corporations 
        subject to the merger, consolidation, or acquisition, regardless 
        of whether one of the entities or corporations does not retain a 
        certificate of authority under chapter 62D or a license under 
        chapter 62N. 
           (d) Effective July 1 of each year, the surviving 
        corporation's or the new corporation's surcharge shall be based 
        on the revenues earned in the second previous calendar year by 
        all of the entities or corporations subject to the merger, 
        consolidation, or acquisition regardless of whether one of the 
        entities or corporations does not retain a certificate of 
        authority under chapter 62D or a license under chapter 62N until 
        the total premium revenues of the surviving corporation include 
        the total premium revenues of all the merged entities as 
        reported to the commissioner of health. 
           (e) When a health maintenance organization or community 
        integrated service network, which is subject to liability for 
        the surcharge under this chapter, transfers, assigns, sells, 
        leases, or disposes of all or substantially all of its property 
        or assets, liability for the surcharge imposed by this chapter 
        is imposed on the transferee, assignee, or buyer of the health 
        maintenance organization or community integrated service network.
           (f) In the event a health maintenance organization or 
        community integrated service network converts its licensure to a 
        different type of entity subject to liability for the surcharge 
        under this chapter, but survives in the same or substantially 
        similar form, the surviving entity remains liable for the 
        surcharge regardless of whether one of the entities or 
        corporations does not retain a certificate of authority under 
        chapter 62D or a license under chapter 62N. 
           (g) The surcharge assessed to a health maintenance 
        organization or community integrated service network ends when 
        the entity ceases providing services for premiums and the 
        cessation is not connected with a merger, consolidation, 
        acquisition, or conversion. 
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        256.9685, subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY.] The commissioner shall 
        establish procedures for determining medical assistance and 
        general assistance medical care payment rates under a 
        prospective payment system for inpatient hospital services in 
        hospitals that qualify as vendors of medical assistance.  The 
        commissioner shall establish, by rule, procedures for 
        implementing this section and sections 256.9686, 256.969, and 
        256.9695.  The medical assistance payment rates must be based on 
        methods and standards that the commissioner finds are adequate 
        to provide for the costs that must be incurred for the care of 
        recipients in efficiently and economically operated hospitals.  
        Services must meet the requirements of section 256B.04, 
        subdivision 15, or 256D.03, subdivision 7, paragraph (b), to be 
        eligible for payment. 
           Sec. 9.  Minnesota Statutes 1996, section 256.969, 
        subdivision 16, is amended to read: 
           Subd. 16.  [INDIAN HEALTH SERVICE FACILITIES.] Indian 
        health service Facilities of the Indian health service and 
        facilities operated by a tribe or tribal organization under 
        funding authorized by title III of the Indian Self-Determination 
        and Education Assistance Act, Public Law Number 93-638, or by 
        United States Code, title 25, chapter 14, subchapter II, 
        sections 450f to 450n, are exempt from the rate establishment 
        methods required by this section and shall be reimbursed at 
        charges as limited to the amount allowed under federal law paid 
        according to the rate published by the United States assistant 
        secretary for health under authority of United States Code, 
        title 42, sections 248A and 248B.  
           Sec. 10.  Minnesota Statutes 1996, section 256.969, 
        subdivision 17, is amended to read: 
           Subd. 17.  [OUT-OF-STATE HOSPITALS IN LOCAL TRADE AREAS.] 
        Out-of-state hospitals that are located within a Minnesota local 
        trade area and that have more than 20 admissions in the base 
        year shall have rates established using the same procedures and 
        methods that apply to Minnesota hospitals.  For this subdivision 
        and subdivision 18, local trade area means a county contiguous 
        to Minnesota and located in a metropolitan statistical area as 
        determined by Medicare for October 1 prior to the most current 
        rebased rate year.  Hospitals that are not required by law to 
        file information in a format necessary to establish rates shall 
        have rates established based on the commissioner's estimates of 
        the information.  Relative values of the diagnostic categories 
        shall not be redetermined under this subdivision until required 
        by rule.  Hospitals affected by this subdivision shall then be 
        included in determining relative values.  However, hospitals 
        that have rates established based upon the commissioner's 
        estimates of information shall not be included in determining 
        relative values.  This subdivision is effective for hospital 
        fiscal years beginning on or after July 1, 1988.  A hospital 
        shall provide the information necessary to establish rates under 
        this subdivision at least 90 days before the start of the 
        hospital's fiscal year. 
           Sec. 11.  Minnesota Statutes 1996, section 256B.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMERICAN INDIAN HEALTH FUNDING TRIBAL PURCHASING 
        MODEL.] (a) Notwithstanding subdivision 1 and sections 256B.0625 
        and 256D.03, subdivision 4, paragraph (f) (i), the commissioner 
        may make payments to federally recognized Indian tribes with a 
        reservation in the state to provide medical assistance and 
        general assistance medical care to Indians, as defined under 
        federal law, who reside on or near the reservation.  The 
        payments may be made in the form of a block grant or other 
        payment mechanism determined in consultation with the tribe.  
        Any alternative payment mechanism agreed upon by the tribes and 
        the commissioner under this subdivision is not dependent upon 
        county or health plan agreement but is intended to create a 
        direct payment mechanism between the state and the tribe for the 
        administration of the medical assistance program and general 
        assistance medical care programs, and for covered services.  
           (b) A tribe that implements a purchasing model under this 
        subdivision shall report to the commissioner at least annually 
        on the operation of the model.  The commissioner and the tribe 
        shall cooperatively determine the data elements, format, and 
        timetable for the report. 
           (c) For purposes of this subdivision, "Indian tribe" means 
        a tribe, band, or nation, or other organized group or community 
        of Indians that is recognized as eligible for the special 
        programs and services provided by the United States to Indians 
        because of their status as Indians and for which a reservation 
        exists as is consistent with Public Law Number 100-485, as 
        amended. 
           (d) Payments under this subdivision may not result in an 
        increase in expenditures that would not otherwise occur in the 
        medical assistance program under this chapter or the general 
        assistance medical care program under chapter 256D. 
           Sec. 12.  [256B.038] [PROVIDER RATE INCREASES AFTER JUNE 
        30, 1999.] 
           (a) For fiscal years beginning on or after July 1, 1999, 
        the commissioner of finance shall include an annual inflationary 
        adjustment in payment rates for the services listed in paragraph 
        (b) as a budget change request in each biennial detailed 
        expenditure budget submitted to the legislature under section 
        16A.11.  The adjustment shall be accomplished by indexing the 
        rates in effect for inflation based on the change in the 
        Consumer Price Index-All Items (United States city 
        average)(CPI-U) as forecasted by Data Resources, Inc., in the 
        fourth quarter of the prior year for the calendar year during 
        which the rate increase occurs. 
           (b) Within the limits of appropriations specifically for 
        this purpose, the commissioner shall apply the rate increases in 
        paragraph (a) to home and community-based waiver services for 
        persons with mental retardation or related conditions under 
        section 256B.501; home and community-based waiver services for 
        the elderly under section 256B.0915; waivered services under 
        community alternatives for disabled individuals under section 
        256B.49; community alternative care waivered services under 
        section 256B.49; traumatic brain injury waivered services under 
        section 256B.49; nursing services and home health services under 
        section 256B.0625, subdivision 6a; personal care services and 
        nursing supervision of personal care services under section 
        256B.0625, subdivision 19a; private duty nursing services under 
        section 256B.0625, subdivision 7; day training and habilitation 
        services for adults with mental retardation or related 
        conditions under sections 252.40 to 252.46; physical therapy 
        services under sections 256B.0625, subdivision 8, and 256D.03, 
        subdivision 4; occupational therapy services under sections 
        256B.0625, subdivision 8a, and 256D.03, subdivision 4; 
        speech-language therapy services under section 256D.03, 
        subdivision 4, and Minnesota Rules, part 9505.0390; respiratory 
        therapy services under section 256D.03, subdivision 4, and 
        Minnesota Rules, part 9505.0295; physician services under 
        section 256B.0625, subdivision 3; dental services under sections 
        256B.0625, subdivision 9, and 256D.03, subdivision 4; 
        alternative care services under section 256B.0913; adult 
        residential program grants under Minnesota Rules, parts 
        9535.2000 to 9535.3000; adult and family community support 
        grants under Minnesota Rules, parts 9535.1700 to 9535.1760; and 
        semi-independent living services under section 252.275, 
        including SILS funding under county social services grants 
        formerly funded under chapter 256I. 
           (c) The commissioner shall increase prepaid medical 
        assistance program capitation rates as appropriate to reflect 
        the rate increases in this section. 
           (d) In implementing this section, the commissioner shall 
        consider proposing a schedule to equalize rates paid by 
        different programs for the same service. 
           Sec. 13.  Minnesota Statutes 1996, section 256B.055, 
        subdivision 7, is amended to read: 
           Subd. 7.  [AGED, BLIND, OR DISABLED PERSONS.] Medical 
        assistance may be paid for a person who meets the categorical 
        eligibility requirements of the supplemental security income 
        program or, who would meet those requirements except for excess 
        income or assets, and who meets the other eligibility 
        requirements of this section.  
           Effective February 1, 1989, and to the extent allowed by 
        federal law the commissioner shall deduct state and federal 
        income taxes and federal insurance contributions act payments 
        withheld from the individual's earned income in determining 
        eligibility under this subdivision. 
           Sec. 14.  Minnesota Statutes 1996, section 256B.055, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [SPECIAL CATEGORY FOR DISABLED 
        CHILDREN.] Medical assistance may be paid for a person who is 
        under age 18 and who meets income and asset eligibility 
        requirements of the Supplemental Security Income program if the 
        person was receiving Supplemental Security Income payments on 
        the date of enactment of section 211(a) of Public Law Number 
        104-193, the Personal Responsibility and Work Opportunity Act of 
        1996, and the person would have continued to receive the 
        payments except for the change in the childhood disability 
        criteria in section 211(a) of Public Law Number 104-193. 
           Sec. 15.  Minnesota Statutes 1997 Supplement, section 
        256B.056, subdivision 1a, is amended to read: 
           Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
        specifically required by state law or rule or federal law or 
        regulation, the methodologies used in counting income and assets 
        to determine eligibility for medical assistance for persons 
        whose eligibility category is based on blindness, disability, or 
        age of 65 or more years, the methodologies for the supplemental 
        security income program shall be used, except that payments made 
        according to a court order for the support of children shall be 
        excluded from income in an amount not to exceed the difference 
        between the applicable income standard used in the state's 
        medical assistance program for aged, blind, and disabled persons 
        and the applicable income standard used in the state's medical 
        assistance program for families with children.  Exclusion of 
        court-ordered child support payments is subject to the condition 
        that if there has been a change in the financial circumstances 
        of the person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for modification of the support 
        order.  For families and children, which includes all other 
        eligibility categories, the methodologies under the state's AFDC 
        plan in effect as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193, shall be used.  Effective 
        upon federal approval, in-kind contributions to, and payments 
        made on behalf of, a recipient, by an obligor, in satisfaction 
        of or in addition to a temporary or permanent order for child 
        support or maintenance, shall be considered income to the 
        recipient.  For these purposes, a "methodology" does not include 
        an asset or income standard, or accounting method, or method of 
        determining effective dates. 
           Sec. 16.  Minnesota Statutes 1997 Supplement, section 
        256B.056, subdivision 4, is amended to read: 
           Subd. 4.  [INCOME.] To be eligible for medical assistance, 
        a person must not have, or anticipate receiving, semiannual 
        income in excess of 120 percent of the income standards by 
        family size used under the aid to families with dependent 
        children state plan as of July 16, 1996, as required by the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (PRWORA), Public Law Number 104-193, except 
        that eligible under section 256B.055, subdivision 7, and 
        families and children may have an income up to 133-1/3 percent 
        of the AFDC income standard in effect under the July 16, 1996, 
        AFDC state plan.  For rate years beginning on or after July 1, 
        1999, the commissioner shall consider increasing the base AFDC 
        standard in effect July 16, 1996, by an amount equal to the 
        percent change in the Consumer Price Index for all urban 
        consumers for the previous October compared to one year 
        earlier.  In computing income to determine eligibility of 
        persons who are not residents of long-term care facilities, the 
        commissioner shall disregard increases in income as required by 
        Public Law Numbers 94-566, section 503; 99-272; and 99-509.  
        Veterans aid and attendance benefits and Veterans Administration 
        unusual medical expense payments are considered income to the 
        recipient. 
           Sec. 17.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [ELIGIBILITY FOR PAYMENT OF MEDICARE PART B 
        PREMIUMS.] A person who would otherwise be eligible as a 
        qualified Medicare beneficiary under subdivision 3, except the 
        person's income is in excess of the limit, is eligible for 
        medical assistance reimbursement of Medicare Part B premiums if 
        the person's income is less than 110 120 percent of the official 
        federal poverty guidelines for the applicable family size.  The 
        income limit shall increase to 120 percent of the official 
        federal poverty guidelines for the applicable family size on 
        January 1, 1995. 
           Sec. 18.  Minnesota Statutes 1996, section 256B.057, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [QUALIFYING INDIVIDUALS.] Beginning July 1, 
        1998, to the extent of the federal allocation to Minnesota, a 
        person, who would otherwise be eligible as a qualified Medicare 
        beneficiary under subdivision 3, except that the person's income 
        is in excess of the limit, is eligible as a qualifying 
        individual according to the following criteria: 
           (1) if the person's income is greater than 120 percent, but 
        less than 135 percent of the official federal poverty guidelines 
        for the applicable family size, the person is eligible for 
        medical assistance reimbursement of Medicare Part B premiums; or 
           (2) if the person's income is equal to or greater than 135 
        percent but less than 175 percent of the official federal 
        poverty guidelines for the applicable family size, the person is 
        eligible for medical assistance reimbursement of that portion of 
        the Medicare Part B premium attributable to an increase in Part 
        B expenditures which resulted from the shift of home care 
        services from Medicare Part A to Medicare Part B under Public 
        Law Number 105-33, section 4732, the Balanced Budget Act of 1997.
           The commissioner shall limit enrollment of qualifying 
        individuals under this subdivision according to the requirements 
        of Public Law Number 105-33, section 4732. 
           Sec. 19.  Minnesota Statutes 1997 Supplement, section 
        256B.06, subdivision 4, is amended to read: 
           Subd. 4.  [CITIZENSHIP REQUIREMENTS.] (a) Eligibility for 
        medical assistance is limited to citizens of the United States, 
        qualified noncitizens as defined in this subdivision, and other 
        persons residing lawfully in the United States. 
           (b) "Qualified noncitizen" means a person who meets one of 
        the following immigration criteria: 
           (1) admitted for lawful permanent residence according to 
        United States Code, title 8; 
           (2) admitted to the United States as a refugee according to 
        United States Code, title 8, section 1157; 
           (3) granted asylum according to United States Code, title 
        8, section 1158; 
           (4) granted withholding of deportation according to United 
        States Code, title 8, section 1253(h); 
           (5) paroled for a period of at least one year according to 
        United States Code, title 8, section 1182(d)(5); 
           (6) granted conditional entrant status according to United 
        States Code, title 8, section 1153(a)(7); or 
           (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 Number 
        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 Number 104-200; or 
           (9) determined to be a Cuban or Haitian entrant as defined 
        in section 501(e) of Public Law Number 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 chapter 256B, 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 chapter 256B, 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 chapter 256B 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 chapter 256B, 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 chapter 256B 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 chapter 256B, 
        if such care and services are necessary for the treatment of an 
        emergency medical condition, except for organ transplants and 
        related care and services and routine prenatal care.  
           (h) For purposes of this subdivision, the term "emergency 
        medical condition" means a medical condition that meets the 
        requirements of United States Code, title 42, section 1396b(v). 
           (i) Pregnant noncitizens who are undocumented or 
        nonimmigrants, who otherwise meet the eligibility requirements 
        of chapter 256B, are eligible for medical assistance payment 
        without federal financial participation for care and services 
        through the period of pregnancy, and 60 days postpartum, except 
        for labor and delivery.  
           (j) Qualified noncitizens as described in paragraph (d), 
        and all other noncitizens lawfully residing in the United States 
        as described in paragraph (e), who are ineligible for medical 
        assistance with federal financial participation and who 
        otherwise meet the eligibility requirements of chapter 256B and 
        of this paragraph, are eligible for medical assistance without 
        federal financial participation.  Qualified noncitizens as 
        described in paragraph (d) are only eligible for medical 
        assistance without federal financial participation for five 
        years from their date of entry into the United States.  
           (k) The commissioner shall submit to the legislature by 
        December 31, 1998, a report on the number of recipients and cost 
        of coverage of care and services made according to paragraphs 
        (i) and (j). 
           Sec. 20.  Minnesota Statutes 1996, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [GENDER REASSIGNMENT SURGERY.] Gender 
        reassignment surgery and other gender reassignment medical 
        procedures including drug therapy for gender reassignment are 
        not covered unless the individual began receiving gender 
        reassignment services prior to July 1, 1998. 
           Sec. 21.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PRIVATE DUTY NURSING.] Medical assistance covers 
        private duty nursing services in a recipient's home.  Recipients 
        who are authorized to receive private duty nursing services in 
        their home may use approved hours outside of the home during 
        hours when normal life activities take them outside of their 
        home and when, without the provision of private duty nursing, 
        their health and safety would be jeopardized.  To use private 
        duty nursing services at school, the recipient or responsible 
        party must provide written authorization in the care plan 
        identifying the chosen provider and the daily amount of services 
        to be used at school.  Medical assistance does not cover private 
        duty nursing services for residents of a hospital, nursing 
        facility, intermediate care facility, or a health care facility 
        licensed by the commissioner of health, except as authorized in 
        section 256B.64 for ventilator-dependent recipients in hospitals 
        or unless a resident who is otherwise eligible is on leave from 
        the facility and the facility either pays for the private duty 
        nursing services or forgoes the facility per diem for the leave 
        days that private duty nursing services are used.  Total hours 
        of service and payment allowed for services outside the home 
        cannot exceed that which is otherwise allowed in an in-home 
        setting according to section 256B.0627.  All private duty 
        nursing services must be provided according to the limits 
        established under section 256B.0627.  Private duty nursing 
        services may not be reimbursed if the nurse is the spouse of the 
        recipient or the parent or foster care provider of a recipient 
        who is under age 18, or the recipient's legal guardian. 
           Sec. 22.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 17, is amended to read: 
           Subd. 17.  [TRANSPORTATION COSTS.] (a) Medical assistance 
        covers transportation costs incurred solely for obtaining 
        emergency medical care or transportation costs incurred by 
        nonambulatory persons in obtaining emergency or nonemergency 
        medical care when paid directly to an ambulance company, common 
        carrier, or other recognized providers of transportation 
        services.  For the purpose of this subdivision, a person who is 
        incapable of transport by taxicab or bus shall be considered to 
        be nonambulatory. 
           (b) Medical assistance covers special transportation, as 
        defined in Minnesota Rules, part 9505.0315, subpart 1, item F, 
        if the provider receives and maintains a current physician's 
        order by the recipient's attending physician certifying that 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.  
        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.  The 
        commissioner shall establish maximum medical assistance 
        reimbursement rates for special transportation services for 
        persons who need a wheelchair lift van or stretcher-equipped 
        vehicle and for those who do not need a wheelchair lift van or 
        stretcher-equipped vehicle.  The average of these two rates per 
        trip must not exceed $14 $15 for the base rate and $1.10 $1.20 
        per mile.  Special transportation provided to nonambulatory 
        persons who do not need a wheelchair lift van or 
        stretcher-equipped vehicle, may be reimbursed at a lower rate 
        than special transportation provided to persons who need a 
        wheelchair lift van or stretcher-equipped vehicle. 
           Sec. 23.  Minnesota Statutes 1996, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 17a.  [PAYMENT FOR AMBULANCE SERVICES.] Effective for 
        services rendered on or after July 1, 1999, medical assistance 
        payments for ambulance services shall be increased by five 
        percent.  
           Sec. 24.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 19a, is amended to read: 
           Subd. 19a.  [PERSONAL CARE SERVICES.] Medical assistance 
        covers personal care services in a recipient's home.  To qualify 
        for personal care services, recipients or responsible parties 
        must be able to identify the recipient's needs, direct and 
        evaluate task accomplishment, and provide for health and 
        safety.  Approved hours may be used outside the home when normal 
        life activities take them outside the home and when, without the 
        provision of personal care, their health and safety would be 
        jeopardized.  To use personal care services at school, the 
        recipient or responsible party must provide written 
        authorization in the care plan identifying the chosen provider 
        and the daily amount of services to be used at school.  Total 
        hours for services, whether actually performed inside or outside 
        the recipient's home, cannot exceed that which is otherwise 
        allowed for personal care services in an in-home setting 
        according to section 256B.0627.  Medical assistance does not 
        cover personal care services for residents of a hospital, 
        nursing facility, intermediate care facility, health care 
        facility licensed by the commissioner of health, or unless a 
        resident who is otherwise eligible is on leave from the facility 
        and the facility either pays for the personal care services or 
        forgoes the facility per diem for the leave days that personal 
        care services are used.  All personal care services must be 
        provided according to section 256B.0627.  Personal care services 
        may not be reimbursed if the personal care assistant is the 
        spouse or legal guardian of the recipient or the parent of a 
        recipient under age 18, or the responsible party or the foster 
        care provider of a recipient who cannot direct the recipient's 
        own care unless, in the case of a foster care provider, a county 
        or state case manager visits the recipient as needed, but not 
        less than every six months, to monitor the health and safety of 
        the recipient and to ensure the goals of the care plan are met.  
        Parents of adult recipients, adult children of the recipient or 
        adult siblings of the recipient may be reimbursed for personal 
        care services if they are not the recipient's legal guardian and 
        are granted a waiver under section 256B.0627. 
           Sec. 25.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 20, is amended to read: 
           Subd. 20.  [MENTAL ILLNESS HEALTH CASE MANAGEMENT.] (a) To 
        the extent authorized by rule of the state agency, medical 
        assistance covers case management services to persons with 
        serious and persistent mental illness or subject to federal 
        approval, and children with severe emotional disturbance.  
        Services provided under this section must meet the relevant 
        standards in sections 245.461 to 245.4888, the Comprehensive 
        Adult and Children's Mental Health Acts, Minnesota Rules, parts 
        9520.0900 to 9520.0926, and 9505.0322, excluding subpart 10. 
           (b) Entities meeting program standards set out in rules 
        governing family community support services as defined in 
        section 245.4871, subdivision 17, are eligible for medical 
        assistance reimbursement for case management services for 
        children with severe emotional disturbance when these services 
        meet the program standards in Minnesota Rules, parts 9520.0900 
        to 9520.0926 and 9505.0322, excluding subpart 6 subparts 6 and 
        10. 
           (b) In counties where fewer than 50 percent of children 
        estimated to be eligible under medical assistance to receive 
        case management services for children with severe emotional 
        disturbance actually receive these services in state fiscal year 
        1995, community mental health centers serving those counties, 
        entities meeting program standards in Minnesota Rules, parts 
        9520.0570 to 9520.0870, and other entities authorized by the 
        commissioner are eligible for medical assistance reimbursement 
        for case management services for children with severe emotional 
        disturbance when these services meet the program standards in 
        Minnesota Rules, parts 9520.0900 to 9520.0926 and 9505.0322, 
        excluding subpart 6. 
           (c) Medical assistance and MinnesotaCare payment for mental 
        health case management shall be made on a monthly basis.  In 
        order to receive payment for an eligible child, the provider 
        must document at least a face-to-face contact with the child, 
        the child's parents, or the child's legal representative.  To 
        receive payment for an eligible adult, the provider must 
        document at least a face-to-face contact with the adult or the 
        adult's legal representative. 
           (d) Payment for mental health case management provided by 
        county or state staff shall be based on the monthly rate 
        methodology under section 256B.094, subdivision 6, paragraph 
        (b), with separate rates calculated for child welfare and mental 
        health, and within mental health, separate rates for children 
        and adults. 
           (e) Payment for mental health case management provided by 
        county-contracted vendors shall be based on a monthly rate 
        negotiated by the host county.  The negotiated rate must not 
        exceed the rate charged by the vendor for the same service to 
        other payers.  If the service is provided by a team of 
        contracted vendors, the county may negotiate a team rate with a 
        vendor who is a member of the team.  The team shall determine 
        how to distribute the rate among its members.  No reimbursement 
        received by contracted vendors shall be returned to the county, 
        except to reimburse the county for advance funding provided by 
        the county to the vendor. 
           (f) If the service is provided by a team which includes 
        contracted vendors and county or state staff, the costs for 
        county or state staff participation in the team shall be 
        included in the rate for county-provided services.  In this 
        case, the contracted vendor and the county may each receive 
        separate payment for services provided by each entity in the 
        same month.  In order to prevent duplication of services, the 
        county must document, in the recipient's file, the need for team 
        case management and a description of the roles of the team 
        members. 
           (g) The commissioner shall calculate the nonfederal share 
        of actual medical assistance and general assistance medical care 
        payments for each county, based on the higher of calendar year 
        1995 or 1996, by service date, project that amount forward to 
        1999, and transfer one-half of the result from medical 
        assistance and general assistance medical care to each county's 
        mental health grants under sections 245.4886 and 256E.12 for 
        calendar year 1999.  The annualized minimum amount added to each 
        county's mental health grant shall be $3,000 per year for 
        children and $5,000 per year for adults.  The commissioner may 
        reduce the statewide growth factor in order to fund these 
        minimums.  The annualized total amount transferred shall become 
        part of the base for future mental health grants for each county.
           (h) Any net increase in revenue to the county as a result 
        of the change in this section must be used to provide expanded 
        mental health services as defined in sections 245.461 to 
        245.4888, the Comprehensive Adult and Children's Mental Health 
        Acts, excluding inpatient and residential treatment.  For 
        adults, increased revenue may also be used for services and 
        consumer supports which are part of adult mental health projects 
        approved under Laws 1997, chapter 203, article 7, section 25.  
        For children, increased revenue may also be used for respite 
        care and nonresidential individualized rehabilitation services 
        as defined in section 245.492, subdivisions 17 and 23.  
        "Increased revenue" has the meaning given in Minnesota Rules, 
        part 9520.0903, subpart 3.  
           (i) Notwithstanding section 256B.19, subdivision 1, the 
        nonfederal share of costs for mental health case management 
        shall be provided by the recipient's county of responsibility, 
        as defined in sections 256G.01 to 256G.12, from sources other 
        than federal funds or funds used to match other federal funds.  
           (j) The commissioner may suspend, reduce, or terminate the 
        reimbursement to a provider that does not meet the reporting or 
        other requirements of this section.  The county of 
        responsibility, as defined in sections 256G.01 to 256G.12, is 
        responsible for any federal disallowances.  The county may share 
        this responsibility with its contracted vendors.  
           (k) The commissioner shall set aside a portion of the 
        federal funds earned under this section to repay the special 
        revenue maximization account under section 256.01, subdivision 
        2, clause (15).  The repayment is limited to: 
           (1) the costs of developing and implementing this section; 
        and 
           (2) programming the information systems. 
           (l) Notwithstanding section 256.025, subdivision 2, 
        payments to counties for case management expenditures under this 
        section shall only be made from federal earnings from services 
        provided under this section.  Payments to contracted vendors 
        shall include both the federal earnings and the county share. 
           (m) Notwithstanding section 256B.041, county payments for 
        the cost of mental health case management services provided by 
        county or state staff shall not be made to the state treasurer.  
        For the purposes of mental health case management services 
        provided by county or state staff under this section, the 
        centralized disbursement of payments to counties under section 
        256B.041 consists only of federal earnings from services 
        provided under this section. 
           (n) Case management services under this subdivision do not 
        include therapy, treatment, legal, or outreach services. 
           (o) If the recipient is a resident of a nursing facility, 
        intermediate care facility, or hospital, and the recipient's 
        institutional care is paid by medical assistance, payment for 
        case management services under this subdivision is limited to 
        the last 30 days of the recipient's residency in that facility 
        and may not exceed more than two months in a calendar year. 
           (p) Payment for case management services under this 
        subdivision shall not duplicate payments made under other 
        program authorities for the same purpose. 
           (q) By July 1, 2000, the commissioner shall evaluate the 
        effectiveness of the changes required by this section, including 
        changes in number of persons receiving mental health case 
        management, changes in hours of service per person, and changes 
        in caseload size. 
           (r) For each calendar year beginning with the calendar year 
        2001, the annualized amount of state funds for each county 
        determined under paragraph (g) shall be adjusted by the county's 
        percentage change in the average number of clients per month who 
        received case management under this section during the fiscal 
        year that ended six months prior to the calendar year in 
        question, in comparison to the prior fiscal year. 
           Sec. 26.  Minnesota Statutes 1997 Supplement, section 
        256B.0625, subdivision 31a, is amended to read: 
           Subd. 31a.  [AUGMENTATIVE AND ALTERNATIVE COMMUNICATION 
        SYSTEMS.] (a) Medical assistance covers augmentative and 
        alternative communication systems consisting of electronic or 
        nonelectronic devices and the related components necessary to 
        enable a person with severe expressive communication limitations 
        to produce or transmit messages or symbols in a manner that 
        compensates for that disability. 
           (b) By January 1, 1998, the commissioner, in cooperation 
        with the commissioner of administration, shall establish an 
        augmentative and alternative communication system purchasing 
        program within a state agency or by contract with a qualified 
        private entity.  The purpose of this service is to facilitate 
        ready availability of the augmentative and alternative 
        communication systems needed to meet the needs of persons with 
        severe expressive communication limitations in an efficient and 
        cost-effective manner.  This program shall: 
           (1) coordinate purchase and rental of augmentative and 
        alternative communication systems; 
           (2) negotiate agreements with manufacturers and vendors for 
        purchase of components of these systems, for warranty coverage, 
        and for repair service; 
           (3) when efficient and cost-effective, maintain and 
        refurbish if needed, an inventory of components of augmentative 
        and alternative communication systems for short- or long-term 
        loan to recipients; 
           (4) facilitate training sessions for service providers, 
        consumers, and families on augmentative and alternative 
        communication systems; and 
           (5) develop a recycling program for used augmentative and 
        alternative communications systems to be reissued and used for 
        trials and short-term use, when appropriate. 
           The availability of components of augmentative and 
        alternative communication systems through this program is 
        subject to prior authorization requirements established under 
        subdivision 25 Until the volume of systems purchased increases 
        to allow a discount price, the commissioner shall reimburse 
        augmentative and alternative communication manufacturers and 
        vendors at the manufacturer's suggested retail price for 
        augmentative and alternative communication systems and related 
        components.  The commissioner shall separately reimburse 
        providers for purchasing and integrating individual 
        communication systems which are unavailable as a package from an 
        augmentative and alternative communication vendor. 
           (c) Reimbursement rates established by this purchasing 
        program are not subject to Minnesota Rules, part 9505.0445, item 
        S or T. 
           Sec. 27.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 34, is amended to read: 
           Subd. 34.  [AMERICAN INDIAN HEALTH SERVICES FACILITIES.] 
        Medical assistance payments to American Indian health services 
        facilities for outpatient medical services billed after June 30, 
        1990, must be facilities of the Indian health service and 
        facilities operated by a tribe or tribal organization under 
        funding authorized by United States Code, title 25, sections 
        450f to 450n, or title III of the Indian Self-Determination and 
        Education Assistance Act, Public Law Number 93-638, shall be at 
        the option of the facility in accordance with the rate published 
        by the United States Assistant Secretary for Health under the 
        authority of United States Code, title 42, sections 248(a) and 
        249(b).  General assistance medical care payments to facilities 
        of the American Indian health services and facilities operated 
        by a tribe or tribal organization for the provision of 
        outpatient medical care services billed after June 30, 1990, 
        must be in accordance with the general assistance medical care 
        rates paid for the same services when provided in a facility 
        other than an American a facility of the Indian health 
        service or a facility operated by a tribe or tribal organization.
           Sec. 28.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 38, is amended to read: 
           Subd. 38.  [PAYMENTS FOR MENTAL HEALTH SERVICES.] Payments 
        for mental health services covered under the medical assistance 
        program that are provided by masters-prepared mental health 
        professionals shall be 80 percent of the rate paid to 
        doctoral-prepared professionals.  Payments for mental health 
        services covered under the medical assistance program that are 
        provided by masters-prepared mental health professionals 
        employed by community mental health centers shall be 100 percent 
        of the rate paid to doctoral-prepared professionals.  For 
        purposes of reimbursement of mental health professionals under 
        the medical assistance program, all social workers who: 
           (1) have received a master's degree in social work from a 
        program accredited by the council on social work education; 
           (2) are licensed at the level of graduate social worker or 
        independent social worker; and 
           (3) are practicing clinical social work under appropriate 
        supervision, as defined by section 148B.18; meet all 
        requirements under Minnesota Rules, part 9505.0323, subpart 24, 
        and shall be paid accordingly.  
           Sec. 29.  Minnesota Statutes 1996, section 256B.0627, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PERSONAL CARE SERVICES.] (a) The personal care 
        services that are eligible for payment are the following:  
           (1) bowel and bladder care; 
           (2) skin care to maintain the health of the skin; 
           (3) repetitive maintenance range of motion, muscle 
        strengthening exercises, and other tasks specific to maintaining 
        a recipient's optimal level of function; 
           (4) respiratory assistance; 
           (5) transfers and ambulation; 
           (6) bathing, grooming, and hairwashing necessary for 
        personal hygiene; 
           (7) turning and positioning; 
           (8) assistance with furnishing medication that is 
        self-administered; 
           (9) application and maintenance of prosthetics and 
        orthotics; 
           (10) cleaning medical equipment; 
           (11) dressing or undressing; 
           (12) assistance with eating and meal preparation and 
        necessary grocery shopping; 
           (13) accompanying a recipient to obtain medical diagnosis 
        or treatment; 
           (14) assisting, monitoring, or prompting the recipient to 
        complete the services in clauses (1) to (13); 
           (15) redirection, monitoring, and observation that are 
        medically necessary and an integral part of completing the 
        personal care services described in clauses (1) to (14); 
           (16) redirection and intervention for behavior, including 
        observation and monitoring; 
           (17) interventions for seizure disorders, including 
        monitoring and observation if the recipient has had a seizure 
        that requires intervention within the past three months; and 
           (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 
        (17) (18). 
        For purposes of this subdivision, monitoring and observation 
        means watching for outward visible signs that are likely to 
        occur and for which there is a covered personal care service or 
        an appropriate personal care intervention.  For purposes of this 
        subdivision, a clean procedure refers to a procedure that 
        reduces the numbers of microorganisms or prevents or reduces the 
        transmission of microorganisms from one person or place to 
        another.  A clean procedure may be used beginning 14 days after 
        insertion. 
           (b) The personal care services that are not eligible for 
        payment are the following:  
           (1) services not ordered by the physician; 
           (2) assessments by personal care provider organizations or 
        by independently enrolled registered nurses; 
           (3) services that are not in the service plan; 
           (4) services provided by the recipient's spouse, legal 
        guardian for an adult or child recipient, or parent of a 
        recipient under age 18; 
           (5) services provided by a foster care provider of a 
        recipient who cannot direct the recipient's own care, unless 
        monitored by a county or state case manager under section 
        256B.0625, subdivision 19a; 
           (6) services provided by the residential or program license 
        holder in a residence for more than four persons; 
           (7) services that are the responsibility of a residential 
        or program license holder under the terms of a service agreement 
        and administrative rules; 
           (8) sterile procedures; 
           (9) injections of fluids into veins, muscles, or skin; 
           (10) services provided by parents of adult recipients, 
        adult children or adult siblings of the recipient, unless these 
        relatives meet one of the following hardship criteria and the 
        commissioner waives this requirement: 
           (i) the relative resigns from a part-time or full-time job 
        to provide personal care for the recipient; 
           (ii) the relative goes from a full-time to a part-time job 
        with less compensation to provide personal care for the 
        recipient; 
           (iii) the relative takes a leave of absence without pay to 
        provide personal care for the recipient; 
           (iv) the relative incurs substantial expenses by providing 
        personal care for the recipient; or 
           (v) because of labor conditions or intermittent hours of 
        care needed, the relative is needed in order to provide an 
        adequate number of qualified personal care assistants to meet 
        the medical needs of the recipient; 
           (11) homemaker services that are not an integral part of a 
        personal care services; 
           (12) home maintenance, or chore services; 
           (13) services not specified under paragraph (a); and 
           (14) services not authorized by the commissioner or the 
        commissioner's designee. 
           Sec. 30.  Minnesota Statutes 1997 Supplement, section 
        256B.0627, subdivision 5, is amended to read: 
           Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
        payments for home care services shall be limited according to 
        this subdivision.  
           (a)  [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A 
        recipient may receive the following home care services during a 
        calendar year: 
           (1) any initial assessment; 
           (2) up to two reassessments per year done to determine a 
        recipient's need for personal care services; and 
           (3) up to five skilled nurse visits.  
           (b)  [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care 
        services above the limits in paragraph (a) must receive the 
        commissioner's prior authorization, except when: 
           (1) the home care services were required to treat an 
        emergency medical condition that if not immediately treated 
        could cause a recipient serious physical or mental disability, 
        continuation of severe pain, or death.  The provider must 
        request retroactive authorization no later than five working 
        days after giving the initial service.  The provider must be 
        able to substantiate the emergency by documentation such as 
        reports, notes, and admission or discharge histories; 
           (2) the home care services were provided on or after the 
        date on which the recipient's eligibility began, but before the 
        date on which the recipient was notified that the case was 
        opened.  Authorization will be considered if the request is 
        submitted by the provider within 20 working days of the date the 
        recipient was notified that the case was opened; 
           (3) a third-party payor for home care services has denied 
        or adjusted a payment.  Authorization requests must be submitted 
        by the provider within 20 working days of the notice of denial 
        or adjustment.  A copy of the notice must be included with the 
        request; 
           (4) the commissioner has determined that a county or state 
        human services agency has made an error; or 
           (5) the professional nurse determines an immediate need for 
        up to 40 skilled nursing or home health aide visits per calendar 
        year and submits a request for authorization within 20 working 
        days of the initial service date, and medical assistance is 
        determined to be the appropriate payer. 
           (c)  [RETROACTIVE AUTHORIZATION.] A request for retroactive 
        authorization will be evaluated according to the same criteria 
        applied to prior authorization requests.  
           (d)  [ASSESSMENT AND SERVICE PLAN.] Assessments under 
        section 256B.0627, subdivision 1, paragraph (a), shall be 
        conducted initially, and at least annually thereafter, in person 
        with the recipient and result in a completed service plan using 
        forms specified by the commissioner.  Within 30 days of 
        recipient or responsible party request for home care services, 
        the assessment, the service plan, and other information 
        necessary to determine medical necessity such as diagnostic or 
        testing information, social or medical histories, and hospital 
        or facility discharge summaries shall be submitted to the 
        commissioner.  For personal care services: 
           (1) The amount and type of service authorized based upon 
        the assessment and service plan will follow the recipient if the 
        recipient chooses to change providers.  
           (2) If the recipient's medical need changes, the 
        recipient's provider may assess the need for a change in service 
        authorization and request the change from the county public 
        health nurse.  Within 30 days of the request, the public health 
        nurse will determine whether to request the change in services 
        based upon the provider assessment, or conduct a home visit to 
        assess the need and determine whether the change is appropriate. 
           (3) To continue to receive personal care services when the 
        recipient displays no significant change, the county public 
        health nurse has the option to review with the commissioner, or 
        the commissioner's designee, the service plan on record and 
        receive authorization for up to an additional 12 months at a 
        time for up to three years. 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.  The service update may substitute for the annual 
        reassessment described in subdivision 1. 
           (e)  [PRIOR AUTHORIZATION.] The commissioner, or the 
        commissioner's designee, shall review the assessment, the 
        service plan, and any additional information that is submitted.  
        The commissioner shall, within 30 days after receiving a 
        complete request, assessment, and service plan, authorize home 
        care services as follows:  
           (1)  [HOME HEALTH SERVICES.] All home health services 
        provided by a licensed nurse or a home health aide must be prior 
        authorized by the commissioner or the commissioner's designee.  
        Prior authorization must be based on medical necessity and 
        cost-effectiveness when compared with other care options.  When 
        home health services are used in combination with personal care 
        and private duty nursing, the cost of all home care services 
        shall be considered for cost-effectiveness.  The commissioner 
        shall limit nurse and home health aide visits to no more than 
        one visit each per day. 
           (2)  [PERSONAL CARE SERVICES.] (i) All personal care 
        services and registered nurse supervision must be prior 
        authorized by the commissioner or the commissioner's designee 
        except for the assessments established in paragraph (a).  The 
        amount of personal care services authorized must be based on the 
        recipient's home care rating.  A child may not be found to be 
        dependent in an activity of daily living if because of the 
        child's age an adult would either perform the activity for the 
        child or assist the child with the activity and the amount of 
        assistance needed is similar to the assistance appropriate for a 
        typical child of the same age.  Based on medical necessity, the 
        commissioner may authorize: 
           (A) up to two times the average number of direct care hours 
        provided in nursing facilities for the recipient's comparable 
        case mix level; or 
           (B) up to three times the average number of direct care 
        hours provided in nursing facilities for recipients who have 
        complex medical needs or are dependent in at least seven 
        activities of daily living and need physical assistance with 
        eating or have a neurological diagnosis; or 
           (C) up to 60 percent of the average reimbursement rate, as 
        of July 1, 1991, for care provided in a regional treatment 
        center for recipients who have Level I behavior, plus any 
        inflation adjustment as provided by the legislature for personal 
        care service; or 
           (D) up to the amount the commissioner would pay, as of July 
        1, 1991, plus any inflation adjustment provided for home care 
        services, for care provided in a regional treatment center for 
        recipients referred to the commissioner by a regional treatment 
        center preadmission evaluation team.  For purposes of this 
        clause, home care services means all services provided in the 
        home or community that would be included in the payment to a 
        regional treatment center; or 
           (E) up to the amount medical assistance would reimburse for 
        facility care for recipients referred to the commissioner by a 
        preadmission screening team established under section 256B.0911 
        or 256B.092; and 
           (F) a reasonable amount of time for the provision of 
        nursing supervision of personal care services.  
           (ii) The number of direct care hours shall be determined 
        according to the annual cost report submitted to the department 
        by nursing facilities.  The average number of direct care hours, 
        as established by May 1, 1992, shall be calculated and 
        incorporated into the home care limits on July 1, 1992.  These 
        limits shall be calculated to the nearest quarter hour. 
           (iii) The home care rating shall be determined by the 
        commissioner or the commissioner's designee based on information 
        submitted to the commissioner by the county public health nurse 
        on forms specified by the commissioner.  The home care rating 
        shall be a combination of current assessment tools developed 
        under sections 256B.0911 and 256B.501 with an addition for 
        seizure activity that will assess the frequency and severity of 
        seizure activity and with adjustments, additions, and 
        clarifications that are necessary to reflect the needs and 
        conditions of recipients who need home care including children 
        and adults under 65 years of age.  The commissioner shall 
        establish these forms and protocols under this section and shall 
        use an advisory group, including representatives of recipients, 
        providers, and counties, for consultation in establishing and 
        revising the forms and protocols. 
           (iv) A recipient shall qualify as having complex medical 
        needs if the care required is difficult to perform and because 
        of recipient's medical condition requires more time than 
        community-based standards allow or requires more skill than 
        would ordinarily be required and the recipient needs or has one 
        or more of the following: 
           (A) daily tube feedings; 
           (B) daily parenteral therapy; 
           (C) wound or decubiti care; 
           (D) postural drainage, percussion, nebulizer treatments, 
        suctioning, tracheotomy care, oxygen, mechanical ventilation; 
           (E) catheterization; 
           (F) ostomy care; 
           (G) quadriplegia; or 
           (H) other comparable medical conditions or treatments the 
        commissioner determines would otherwise require institutional 
        care.  
           (v) A recipient shall qualify as having Level I behavior if 
        there is reasonable supporting evidence that the recipient 
        exhibits, or that without supervision, observation, or 
        redirection would exhibit, one or more of the following 
        behaviors that cause, or have the potential to cause: 
           (A) injury to the recipient's own body; 
           (B) physical injury to other people; or 
           (C) destruction of property. 
           (vi) Time authorized for personal care relating to Level I 
        behavior in subclause (v), items (A) to (C), shall be based on 
        the predictability, frequency, and amount of intervention 
        required. 
           (vii) A recipient shall qualify as having Level II behavior 
        if the recipient exhibits on a daily basis one or more of the 
        following behaviors that interfere with the completion of 
        personal care services under subdivision 4, paragraph (a): 
           (A) unusual or repetitive habits; 
           (B) withdrawn behavior; or 
           (C) offensive behavior. 
           (viii) A recipient with a home care rating of Level II 
        behavior in subclause (vii), items (A) to (C), shall be rated as 
        comparable to a recipient with complex medical needs under 
        subclause (iv).  If a recipient has both complex medical needs 
        and Level II behavior, the home care rating shall be the next 
        complex category up to the maximum rating under subclause (i), 
        item (B). 
           (3)  [PRIVATE DUTY NURSING SERVICES.] All private duty 
        nursing services shall be prior authorized by the commissioner 
        or the commissioner's designee.  Prior authorization for private 
        duty nursing services shall be based on medical necessity and 
        cost-effectiveness when compared with alternative care options.  
        The commissioner may authorize medically necessary private duty 
        nursing services in quarter-hour units when: 
           (i) the recipient requires more individual and continuous 
        care than can be provided during a nurse visit; or 
           (ii) the cares are outside of the scope of services that 
        can be provided by a home health aide or personal care assistant.
           The commissioner may authorize: 
           (A) up to two times the average amount of direct care hours 
        provided in nursing facilities statewide for case mix 
        classification "K" as established by the annual cost report 
        submitted to the department by nursing facilities in May 1992; 
           (B) private duty nursing in combination with other home 
        care services up to the total cost allowed under clause (2); 
           (C) up to 16 hours per day if the recipient requires more 
        nursing than the maximum number of direct care hours as 
        established in item (A) and the recipient meets the hospital 
        admission criteria established under Minnesota Rules, parts 
        9505.0500 to 9505.0540.  
           The commissioner may authorize up to 16 hours per day of 
        medically necessary private duty nursing services or up to 24 
        hours per day of medically necessary private duty nursing 
        services until such time as the commissioner is able to make a 
        determination of eligibility for recipients who are 
        cooperatively applying for home care services under the 
        community alternative care program developed under section 
        256B.49, or until it is determined by the appropriate regulatory 
        agency that a health benefit plan is or is not required to pay 
        for appropriate medically necessary health care services.  
        Recipients or their representatives must cooperatively assist 
        the commissioner in obtaining this determination.  Recipients 
        who are eligible for the community alternative care program may 
        not receive more hours of nursing under this section than would 
        otherwise be authorized under section 256B.49. 
           (4)  [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is 
        ventilator-dependent, the monthly medical assistance 
        authorization for home care services shall not exceed what the 
        commissioner would pay for care at the highest cost hospital 
        designated as a long-term hospital under the Medicare program.  
        For purposes of this clause, home care services means all 
        services provided in the home that would be included in the 
        payment for care at the long-term hospital.  
        "Ventilator-dependent" means an individual who receives 
        mechanical ventilation for life support at least six hours per 
        day and is expected to be or has been dependent for at least 30 
        consecutive days.  
           (f)  [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner 
        or the commissioner's designee shall determine the time period 
        for which a prior authorization shall be effective.  If the 
        recipient continues to require home care services beyond the 
        duration of the prior authorization, the home care provider must 
        request a new prior authorization.  Under no circumstances, 
        other than the exceptions in paragraph (b), shall a prior 
        authorization be valid prior to the date the commissioner 
        receives the request or for more than 12 months.  A recipient 
        who appeals a reduction in previously authorized home care 
        services may continue previously authorized services, other than 
        temporary services under paragraph (h), pending an appeal under 
        section 256.045.  The commissioner must provide a detailed 
        explanation of why the authorized services are reduced in amount 
        from those requested by the home care provider.  
           (g)  [APPROVAL OF HOME CARE SERVICES.] The commissioner or 
        the commissioner's designee shall determine the medical 
        necessity of home care services, the level of caregiver 
        according to subdivision 2, and the institutional comparison 
        according to this subdivision, the cost-effectiveness of 
        services, and the amount, scope, and duration of home care 
        services reimbursable by medical assistance, based on the 
        assessment, primary payer coverage determination information as 
        required, the service plan, the recipient's age, the cost of 
        services, the recipient's medical condition, and diagnosis or 
        disability.  The commissioner may publish additional criteria 
        for determining medical necessity according to section 256B.04. 
           (h)  [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] 
        The agency nurse, the independently enrolled private duty nurse, 
        or county public health nurse may request a temporary 
        authorization for home care services by telephone.  The 
        commissioner may approve a temporary level of home care services 
        based on the assessment, and service or care plan information, 
        and primary payer coverage determination information as required.
        Authorization for a temporary level of home care services 
        including nurse supervision is limited to the time specified by 
        the commissioner, but shall not exceed 45 days, unless extended 
        because the county public health nurse has not completed the 
        required assessment and service plan, or the commissioner's 
        determination has not been made.  The level of services 
        authorized under this provision shall have no bearing on a 
        future prior authorization. 
           (i)  [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] 
        Home care services provided in an adult or child foster care 
        setting must receive prior authorization by the department 
        according to the limits established in paragraph (a). 
           The commissioner may not authorize: 
           (1) home care services that are the responsibility of the 
        foster care provider under the terms of the foster care 
        placement agreement and administrative rules.  Requests for home 
        care services for recipients residing in a foster care setting 
        must include the foster care placement agreement and 
        determination of difficulty of care; 
           (2) personal care services when the foster care license 
        holder is also the personal care provider or personal care 
        assistant unless the recipient can direct the recipient's own 
        care, or case management is provided as required in section 
        256B.0625, subdivision 19a; 
           (3) personal care services when the responsible party is an 
        employee of, or under contract with, or has any direct or 
        indirect financial relationship with the personal care provider 
        or personal care assistant, unless case management is provided 
        as required in section 256B.0625, subdivision 19a; 
           (4) home care services when the number of foster care 
        residents is greater than four unless the county responsible for 
        the recipient's foster placement made the placement prior to 
        April 1, 1992, requests that home care services be provided, and 
        case management is provided as required in section 256B.0625, 
        subdivision 19a; or 
           (5) home care services when combined with foster care 
        payments, other than room and board payments that exceed the 
        total amount that public funds would pay for the recipient's 
        care in a medical institution. 
           Sec. 31.  Minnesota Statutes 1997 Supplement, section 
        256B.0627, subdivision 8, is amended to read: 
           Subd. 8.  [PERSONAL CARE ASSISTANT SERVICES; SHARED CARE.] 
        (a) Medical assistance payments for personal care assistance 
        shared care shall be limited according to this subdivision. 
           (b) Recipients of personal care assistant services may 
        share staff and the commissioner shall provide a rate system for 
        shared personal care assistant services.  For two persons 
        sharing care, the rate system paid to a provider shall not 
        exceed 1-1/2 times the amount rate paid for providing services 
        to one person serving a single individual, and shall increase 
        incrementally by one-half the cost of serving a single person, 
        for each person served.  A personal care assistant may not serve 
        more than three children in a single setting. for three persons 
        sharing care, the rate paid to a provider shall not exceed twice 
        the rate paid for serving a single individual.  These rates 
        apply only to situations in which all recipients were present 
        and received shared care on the date for which the service is 
        billed.  No more than three persons may receive shared care from 
        a personal care assistant in a single setting. 
           (c) Shared care is the provision of personal care services 
        by a personal care assistant to two or three recipients at the 
        same time and in the same setting.  For the purposes of this 
        subdivision, "setting" means: 
           (1) the home or foster care home of one of the individual 
        recipients; or 
           (2) a child care program in which all recipients served by 
        one personal care assistant are participating, which is licensed 
        under chapter 245A or operated by a local school district or 
        private school.  
           The provisions of this subdivision do not apply when a 
        personal care assistant is caring for multiple recipients in 
        more than one setting. 
           (d) The recipient or the recipient's responsible party, in 
        conjunction with the county public health nurse, shall determine:
           (1) whether shared care is an appropriate option based on 
        the individual needs and preferences of the recipient; and 
           (2) the amount of shared care allocated as part of the 
        overall authorization of personal care services. 
           The recipient or the responsible party, in conjunction with 
        the supervising registered nurse, shall approve the setting, 
        grouping, and arrangement of shared care based on the individual 
        needs and preferences of the recipients.  Decisions on the 
        selection of recipients to share care must be based on the ages 
        of the recipients, compatibility, and coordination of their care 
        needs. 
           (e) The following items must be considered by the recipient 
        or the responsible party and the supervising nurse, and 
        documented in the recipient's care plan: 
           (1) the additional qualifications needed by the personal 
        care assistant to provide care to several recipients in the same 
        setting; 
           (2) the additional training and supervision needed by the 
        personal care assistant to ensure that the needs of the 
        recipient are met appropriately and safely.  The provider must 
        provide on-site supervision by a registered nurse within the 
        first 14 days of shared care, and monthly thereafter; 
           (3) the setting in which the shared care will be provided; 
           (4) the ongoing monitoring and evaluation of the 
        effectiveness and appropriateness of the service and process 
        used to make changes in service or setting; and 
           (5) a contingency plan which accounts for absence of the 
        recipient in a shared care setting due to illness or other 
        circumstances and staffing contingencies. 
           (f) The provider must offer the recipient or the 
        responsible party the option of shared or individual personal 
        care assistant care.  The recipient or the responsible party can 
        withdraw from participating in a shared care arrangement at any 
        time. 
           (g) In addition to documentation requirements under 
        Minnesota Rules, part 9505.2175, a personal care provider must 
        meet documentation requirements for shared personal care 
        services and must document the following in the health service 
        record for each individual recipient sharing care: 
           (1) authorization by the recipient or the recipient's 
        responsible party, if any, for the maximum number of shared care 
        hours per week chosen by the recipient; 
           (2) authorization by the recipient or the recipient's 
        responsible party, if any, for personal care services provided 
        outside the recipient's residence; 
           (3) authorization by the recipient or the recipient's 
        responsible party, if any, for others to receive shared care in 
        the recipient's residence; 
           (4) revocation by the recipient or the recipient's 
        responsible party, if any, of the shared care authorization, or 
        the shared care to be provided to others in the recipient's 
        residence, or the shared care to be provided outside the 
        recipient's residence; 
           (5) supervision of the shared care by the supervisory 
        nurse, including the date, time of day, number of hours spent 
        supervising the provision of shared care services, whether the 
        supervision was face-to-face or another method of supervision, 
        changes in the recipient's condition, shared care scheduling 
        issues and recommendations; 
           (6) documentation by the personal care assistant of 
        telephone calls or other discussions with the supervisory nurse 
        regarding services being provided to the recipient; and 
           (7) daily documentation of the shared care services 
        provided by each identified personal care assistant including: 
           (i) the names of each recipient receiving shared care 
        together; 
           (ii) the setting for the day's care, including the starting 
        and ending times that the recipient received shared care; and 
           (iii) notes by the personal care assistant regarding 
        changes in the recipient's condition, problems that may arise 
        from the sharing of care, scheduling issues, care issues, and 
        other notes as required by the supervising nurse. 
           (h) Unless otherwise provided in this subdivision, all 
        other statutory and regulatory provisions relating to personal 
        care services apply to shared care services. 
           Nothing in this subdivision shall be construed to reduce 
        the total number of hours authorized for an individual recipient.
           Sec. 32.  Minnesota Statutes 1997 Supplement, section 
        256B.0645, is amended to read: 
           256B.0645 [PROVIDER PAYMENTS; RETROACTIVE CHANGES IN 
        ELIGIBILITY.] 
           Payment to a provider for a health care service provided to 
        a general assistance medical care recipient who is later 
        determined eligible for medical assistance or MinnesotaCare 
        according to section 256L.14 256L.03, subdivision 1a, for the 
        period in which the health care service was provided, shall be 
        considered payment in full, and shall not may be adjusted due to 
        the change in eligibility.  This section applies does not apply 
        to both fee-for-service payments and payments made to health 
        plans on a prepaid capitated basis. 
           Sec. 33.  Minnesota Statutes 1997 Supplement, section 
        256B.0911, subdivision 2, is amended to read: 
           Subd. 2.  [PERSONS REQUIRED TO BE SCREENED; EXEMPTIONS.] 
        All applicants to Medicaid certified nursing facilities must be 
        screened prior to admission, regardless of income, assets, or 
        funding sources, except the following: 
           (1) patients who, having entered acute care facilities from 
        certified nursing facilities, are returning to a certified 
        nursing facility; 
           (2) residents transferred from other certified nursing 
        facilities located within the state of Minnesota; 
           (3) individuals who have a contractual right to have their 
        nursing facility care paid for indefinitely by the veteran's 
        administration; 
           (4) individuals who are enrolled in the Ebenezer/Group 
        Health social health maintenance organization project, or 
        enrolled in a demonstration project under section 256B.69, 
        subdivision 18 8, at the time of application to a nursing home; 
           (5) individuals previously screened and currently being 
        served under the alternative care program or under a home and 
        community-based services waiver authorized under section 1915(c) 
        of the Social Security Act; or 
           (6) individuals who are admitted to a certified nursing 
        facility for a short-term stay, which, based upon a physician's 
        certification, is expected to be 14 days or less in duration, 
        and who have been screened and approved for nursing facility 
        admission within the previous six months.  This exemption 
        applies only if the screener determines at the time of the 
        initial screening of the six-month period that it is appropriate 
        to use the nursing facility for short-term stays and that there 
        is an adequate plan of care for return to the home or 
        community-based setting.  If a stay exceeds 14 days, the 
        individual must be referred no later than the first county 
        working day following the 14th resident day for a screening, 
        which must be completed within five working days of the 
        referral.  Payment limitations in subdivision 7 will apply to an 
        individual found at screening to not meet the level of care 
        criteria for admission to a certified nursing facility. 
           Regardless of the exemptions in clauses (2) to (6), persons 
        who have a diagnosis or possible diagnosis of mental illness, 
        mental retardation, or a related condition must receive a 
        preadmission screening before admission unless the admission 
        prior to screening is authorized by the local mental health 
        authority or the local developmental disabilities case manager, 
        or unless authorized by the county agency according to Public 
        Law Number 101-508. 
           Before admission to a Medicaid certified nursing home or 
        boarding care home, all persons must be screened and approved 
        for admission through an assessment process.  The nursing 
        facility is authorized to conduct case mix assessments which are 
        not conducted by the county public health nurse under Minnesota 
        Rules, part 9549.0059.  The designated county agency is 
        responsible for distributing the quality assurance and review 
        form for all new applicants to nursing homes. 
           Other persons who are not applicants to nursing facilities 
        must be screened if a request is made for a screening. 
           Sec. 34.  Minnesota Statutes 1996, section 256B.0911, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESPONSIBILITIES OF THE COUNTY AND THE SCREENING 
        TEAM.] (a) The county shall: 
           (1) provide information and education to the general public 
        regarding availability of the preadmission screening program; 
           (2) accept referrals from individuals, families, human 
        service and health professionals, and hospital and nursing 
        facility personnel; 
           (3) assess the health, psychological, and social needs of 
        referred individuals and identify services needed to maintain 
        these persons in the least restrictive environments; 
           (4) determine if the individual screened needs nursing 
        facility level of care; 
           (5) assess specialized service needs based upon an 
        evaluation by: 
           (i) a qualified independent mental health professional for 
        persons with a primary or secondary diagnosis of a serious 
        mental illness; and 
           (ii) a qualified mental retardation professional for 
        persons with a primary or secondary diagnosis of mental 
        retardation or related conditions.  For purposes of this clause, 
        a qualified mental retardation professional must meet the 
        standards for a qualified mental retardation professional in 
        Code of Federal Regulations, title 42, section 483.430; 
           (6) make recommendations for individuals screened regarding 
        cost-effective community services which are available to the 
        individual; 
           (7) make recommendations for individuals screened regarding 
        nursing home placement when there are no cost-effective 
        community services available; 
           (8) develop an individual's community care plan and provide 
        follow-up services as needed; and 
           (9) prepare and submit reports that may be required by the 
        commissioner of human services. 
           (b) The screener shall document that the most 
        cost-effective alternatives available were offered to the 
        individual or the individual's legal representative.  For 
        purposes of this section, "cost-effective alternatives" means 
        community services and living arrangements that cost the same or 
        less than nursing facility care. 
           (c) Screeners shall adhere to the level of care criteria 
        for admission to a certified nursing facility established under 
        section 144.0721.  
           (d) For persons who are eligible for medical assistance or 
        who would be eligible within 180 days of admission to a nursing 
        facility and who are admitted to a nursing facility, the nursing 
        facility must include a screener or the case manager in the 
        discharge planning process for those individuals who the team 
        has determined have discharge potential.  The screener or the 
        case manager must ensure a smooth transition and follow-up for 
        the individual's return to the community. 
           Screeners shall cooperate with other public and private 
        agencies in the community, in order to offer a variety of 
        cost-effective services to the disabled and elderly.  The 
        screeners shall encourage the use of volunteers from families, 
        religious organizations, social clubs, and similar civic and 
        service organizations to provide services. 
           Sec. 35.  Minnesota Statutes 1997 Supplement, section 
        256B.0911, subdivision 7, is amended to read: 
           Subd. 7.  [REIMBURSEMENT FOR CERTIFIED NURSING FACILITIES.] 
        (a) Medical assistance reimbursement for nursing facilities 
        shall be authorized for a medical assistance recipient only if a 
        preadmission screening has been conducted prior to admission or 
        the local county agency has authorized an exemption.  Medical 
        assistance reimbursement for nursing facilities shall not be 
        provided for any recipient who the local screener has determined 
        does not meet the level of care criteria for nursing facility 
        placement or, if indicated, has not had a level II PASARR 
        evaluation completed unless an admission for a recipient with 
        mental illness is approved by the local mental health authority 
        or an admission for a recipient with mental retardation or 
        related condition is approved by the state mental retardation 
        authority.  The county preadmission screening team may deny 
        certified nursing facility admission using the level of care 
        criteria established under section 144.0721 and deny medical 
        assistance reimbursement for certified nursing facility care.  
        Persons receiving care in a certified nursing facility or 
        certified boarding care home who are reassessed by the 
        commissioner of health according to section 144.0722 and 
        determined to no longer meet the level of care criteria for a 
        certified nursing facility or certified boarding care home may 
        no longer remain a resident in the certified nursing facility or 
        certified boarding care home and must be relocated to the 
        community if the persons were admitted on or after July 1, 1998. 
           (b) Persons receiving services under section 256B.0913, 
        subdivisions 1 to 14, or 256B.0915 who are reassessed and found 
        to not meet the level of care criteria for admission to a 
        certified nursing facility or certified boarding care home may 
        no longer receive these services if persons were admitted to the 
        program on or after July 1, 1998.  The commissioner shall make a 
        request to the health care financing administration for a waiver 
        allowing screening team approval of Medicaid payments for 
        certified nursing facility care.  An individual has a choice and 
        makes the final decision between nursing facility placement and 
        community placement after the screening team's recommendation, 
        except as provided in paragraphs (b) and (c).  
           (c) The local county mental health authority or the state 
        mental retardation authority under Public Law Numbers 100-203 
        and 101-508 may prohibit admission to a nursing facility, if the 
        individual does not meet the nursing facility level of care 
        criteria or needs specialized services as defined in Public Law 
        Numbers 100-203 and 101-508.  For purposes of this section, 
        "specialized services" for a person with mental retardation or a 
        related condition means "active treatment" as that term is 
        defined in Code of Federal Regulations, title 42, section 
        483.440(a)(1). 
           (d) Upon the receipt by the commissioner of approval by the 
        Secretary of Health and Human Services of the waiver requested 
        under paragraph (a), the local screener shall deny medical 
        assistance reimbursement for nursing facility care for an 
        individual whose long-term care needs can be met in a 
        community-based setting and whose cost of community-based home 
        care services is less than 75 percent of the average payment for 
        nursing facility care for that individual's case mix 
        classification, and who is either: 
           (i) a current medical assistance recipient being screened 
        for admission to a nursing facility; or 
           (ii) an individual who would be eligible for medical 
        assistance within 180 days of entering a nursing facility and 
        who meets a nursing facility level of care. 
           (e) Appeals from the screening team's recommendation or the 
        county agency's final decision shall be made according to 
        section 256.045, subdivision 3. 
           Sec. 36.  Minnesota Statutes 1997 Supplement, section 
        256B.0913, subdivision 14, is amended to read: 
           Subd. 14.  [REIMBURSEMENT AND RATE ADJUSTMENTS.] (a) 
        Reimbursement for expenditures for the alternative care services 
        as approved by the client's case manager shall be through the 
        invoice processing procedures of the department's Medicaid 
        Management Information System (MMIS).  To receive reimbursement, 
        the county or vendor must submit invoices within 12 months 
        following the date of service.  The county agency and its 
        vendors under contract shall not be reimbursed for services 
        which exceed the county allocation. 
           (b) If a county collects less than 50 percent of the client 
        premiums due under subdivision 12, the commissioner may withhold 
        up to three percent of the county's final alternative care 
        program allocation determined under subdivisions 10 and 11. 
           (c) For fiscal years beginning on or after July 1, 1993, 
        the commissioner of human services shall not provide automatic 
        annual inflation adjustments for alternative care services.  The 
        commissioner of finance shall include as a budget change request 
        in each biennial detailed expenditure budget submitted to the 
        legislature under section 16A.11 annual adjustments in 
        reimbursement rates for alternative care services based on the 
        forecasted percentage change in the Home Health Agency Market 
        Basket of Operating Costs, for the fiscal year beginning July 1, 
        compared to the previous fiscal year, unless otherwise adjusted 
        by statute.  The Home Health Agency Market Basket of Operating 
        Costs is published by Data Resources, Inc.  The forecast to be 
        used is the one published for the calendar quarter beginning 
        January 1, six months prior to the beginning of the fiscal year 
        for which rates are set. 
           (d) The county shall negotiate individual rates with 
        vendors and may be reimbursed for actual costs up to the greater 
        of the county's current approved rate or 60 percent of the 
        maximum rate in fiscal year 1994 and 65 percent of the maximum 
        rate in fiscal year 1995 for each alternative care service.  
        Notwithstanding any other rule or statutory provision to the 
        contrary, the commissioner shall not be authorized to increase 
        rates by an annual inflation factor, unless so authorized by the 
        legislature. 
           (e) (d) On July 1, 1993, the commissioner shall increase 
        the maximum rate for home delivered meals to $4.50 per meal. 
           Sec. 37.  Minnesota Statutes 1997 Supplement, section 
        256B.0915, subdivision 1d, is amended to read: 
           Subd. 1d.  [POSTELIGIBILITY TREATMENT OF INCOME AND 
        RESOURCES FOR ELDERLY WAIVER.] (a) Notwithstanding the 
        provisions of section 256B.056, the commissioner shall make the 
        following amendment to the medical assistance elderly waiver 
        program effective July 1, 1997 1999, or upon federal approval, 
        whichever is later. 
           A recipient's maintenance needs will be an amount equal to 
        the Minnesota supplemental aid equivalent rate as defined in 
        section 256I.03, subdivision 5, plus the medical assistance 
        personal needs allowance as defined in section 256B.35, 
        subdivision 1, paragraph (a), when applying posteligibility 
        treatment of income rules to the gross income of elderly waiver 
        recipients, except for individuals whose income is in excess of 
        the special income standard according to Code of Federal 
        Regulations, title 42, section 435.236.  Recipient maintenance 
        needs shall be adjusted under this provision each July 1. 
           (b) The commissioner of human services shall secure 
        approval of additional elderly waiver slots sufficient to serve 
        persons who will qualify under the revised income standard 
        described in paragraph (a) before implementing section 
        256B.0913, subdivision 16. 
           (c) In implementing this subdivision, the commissioner 
        shall consider allowing persons who would otherwise be eligible 
        for the alternative care program but would qualify for the 
        elderly waiver with a spenddown to remain on the alternative 
        care program. 
           Sec. 38.  Minnesota Statutes 1997 Supplement, section 
        256B.0915, subdivision 3, is amended to read: 
           Subd. 3.  [LIMITS OF CASES, RATES, REIMBURSEMENT, AND 
        FORECASTING.] (a) The number of medical assistance waiver 
        recipients that a county may serve must be allocated according 
        to the number of medical assistance waiver cases open on July 1 
        of each fiscal year.  Additional recipients may be served with 
        the approval of the commissioner. 
           (b) The monthly limit for the cost of waivered services to 
        an individual waiver client shall be the statewide average 
        payment rate of the case mix resident class to which the waiver 
        client would be assigned under the medical assistance case mix 
        reimbursement system.  If medical supplies and equipment or 
        adaptations are or will be purchased for an elderly waiver 
        services recipient, the costs may be prorated on a monthly basis 
        throughout the year in which they are purchased.  If the monthly 
        cost of a recipient's other waivered services exceeds the 
        monthly limit established in this paragraph, the annual cost of 
        the waivered services shall be determined.  In this event, the 
        annual cost of waivered services shall not exceed 12 times the 
        monthly limit calculated in this paragraph.  The statewide 
        average payment rate is calculated by determining the statewide 
        average monthly nursing home rate, effective July 1 of the 
        fiscal year in which the cost is incurred, less the statewide 
        average monthly income of nursing home residents who are age 65 
        or older, and who are medical assistance recipients in the month 
        of March of the previous state fiscal year.  The annual cost 
        divided by 12 of elderly or disabled waivered services for a 
        person who is a nursing facility resident at the time of 
        requesting a determination of eligibility for elderly or 
        disabled waivered services shall be the greater of the monthly 
        payment for:  (i) the resident class assigned under Minnesota 
        Rules, parts 9549.0050 to 9549.0059, for that resident in the 
        nursing facility where the resident currently resides; or (ii) 
        the statewide average payment of the case mix resident class to 
        which the resident would be assigned under the medical 
        assistance case mix reimbursement system, provided that the 
        limit under this clause only applies to persons discharged from 
        a nursing facility and found eligible for waivered services on 
        or after July 1, 1997.  The following costs must be included in 
        determining the total monthly costs for the waiver client: 
           (1) cost of all waivered services, including extended 
        medical supplies and equipment; and 
           (2) cost of skilled nursing, home health aide, and personal 
        care services reimbursable by medical assistance.  
           (c) Medical assistance funding for skilled nursing 
        services, private duty nursing, home health aide, and personal 
        care services for waiver recipients must be approved by the case 
        manager and included in the individual care plan. 
           (d) For both the elderly waiver and the nursing facility 
        disabled waiver, a county may purchase extended supplies and 
        equipment without prior approval from the commissioner when 
        there is no other funding source and the supplies and equipment 
        are specified in the individual's care plan as medically 
        necessary to enable the individual to remain in the community 
        according to the criteria in Minnesota Rules, part 9505.0210, 
        items A and B.  A county is not required to contract with a 
        provider of supplies and equipment if the monthly cost of the 
        supplies and equipment is less than $250.  
           (e) For the fiscal year beginning on July 1, 1993, and for 
        subsequent fiscal years, the commissioner of human services 
        shall not provide automatic annual inflation adjustments for 
        home and community-based waivered services.  The commissioner of 
        finance shall include as a budget change request in each 
        biennial detailed expenditure budget submitted to the 
        legislature under section 16A.11, annual adjustments in 
        reimbursement rates for home and community-based waivered 
        services, based on the forecasted percentage change in the Home 
        Health Agency Market Basket of Operating Costs, for the fiscal 
        year beginning July 1, compared to the previous fiscal year, 
        unless otherwise adjusted by statute.  The Home Health Agency 
        Market Basket of Operating Costs is published by Data Resources, 
        Inc.  The forecast to be used is the one published for the 
        calendar quarter beginning January 1, six months prior to the 
        beginning of the fiscal year for which rates are set.  The adult 
        foster care rate shall be considered a difficulty of care 
        payment and shall not include room and board. 
           (f) The adult foster care daily rate for the elderly and 
        disabled waivers shall be negotiated between the county agency 
        and the foster care provider.  The rate established under this 
        section shall not exceed the state average monthly nursing home 
        payment for the case mix classification to which the individual 
        receiving foster care is assigned; the rate must allow for other 
        waiver and medical assistance home care services to be 
        authorized by the case manager. 
           (g) (f) The assisted living and residential care service 
        rates for elderly and community alternatives for disabled 
        individuals (CADI) waivers shall be made to the vendor as a 
        monthly rate negotiated with the county agency based on an 
        individualized service plan for each resident.  The rate shall 
        not exceed the nonfederal share of the greater of either the 
        statewide or any of the geographic groups' weighted average 
        monthly medical assistance nursing facility payment rate of the 
        case mix resident class to which the elderly or disabled client 
        would be assigned under Minnesota Rules, parts 9549.0050 to 
        9549.0059, unless the services are provided by a home care 
        provider licensed by the department of health and are provided 
        in a building that is registered as a housing with services 
        establishment under chapter 144D and that provides 24-hour 
        supervision.  For alternative care assisted living projects 
        established under Laws 1988, chapter 689, article 2, section 
        256, monthly rates may not exceed 65 percent of the greater of 
        either the statewide or any of the geographic groups' weighted 
        average monthly medical assistance nursing facility payment rate 
        for the case mix resident class to which the elderly or disabled 
        client would be assigned under Minnesota Rules, parts 9549.0050 
        to 9549.0059.  The rate may not cover direct rent or food costs. 
           (h) (g) The county shall negotiate individual rates with 
        vendors and may be reimbursed for actual costs up to the greater 
        of the county's current approved rate or 60 percent of the 
        maximum rate in fiscal year 1994 and 65 percent of the maximum 
        rate in fiscal year 1995 for each service within each program. 
           (i) (h) On July 1, 1993, the commissioner shall increase 
        the maximum rate for home-delivered meals to $4.50 per meal. 
           (j) (i) Reimbursement for the medical assistance recipients 
        under the approved waiver shall be made from the medical 
        assistance account through the invoice processing procedures of 
        the department's Medicaid Management Information System (MMIS), 
        only with the approval of the client's case manager.  The budget 
        for the state share of the Medicaid expenditures shall be 
        forecasted with the medical assistance budget, and shall be 
        consistent with the approved waiver.  
           (k) (j) Beginning July 1, 1991, the state shall reimburse 
        counties according to the payment schedule in section 256.025 
        for the county share of costs incurred under this subdivision on 
        or after January 1, 1991, for individuals who are receiving 
        medical assistance. 
           (l) (k) For the community alternatives for disabled 
        individuals waiver, and nursing facility disabled waivers, 
        county may use waiver funds for the cost of minor adaptations to 
        a client's residence or vehicle without prior approval from the 
        commissioner if there is no other source of funding and the 
        adaptation: 
           (1) is necessary to avoid institutionalization; 
           (2) has no utility apart from the needs of the client; and 
           (3) meets the criteria in Minnesota Rules, part 9505.0210, 
        items A and B.  
        For purposes of this subdivision, "residence" means the client's 
        own home, the client's family residence, or a family foster 
        home.  For purposes of this subdivision, "vehicle" means the 
        client's vehicle, the client's family vehicle, or the client's 
        family foster home vehicle. 
           (m) (l) The commissioner shall establish a maximum rate 
        unit for baths provided by an adult day care provider that are 
        not included in the provider's contractual daily or hourly rate. 
        This maximum rate must equal the home health aide extended rate 
        and shall be paid for baths provided to clients served under the 
        elderly and disabled waivers. 
           Sec. 39.  Minnesota Statutes 1996, section 256B.0916, is 
        amended to read: 
           256B.0916 [EXPANSION OF HOME AND COMMUNITY-BASED SERVICES; 
        MANAGEMENT AND ALLOCATION RESPONSIBILITIES.] 
           (a) The commissioner shall expand availability of home and 
        community-based services for persons with mental retardation and 
        related conditions to the extent allowed by federal law and 
        regulation and shall assist counties in transferring persons 
        from semi-independent living services to home and 
        community-based services.  The commissioner may transfer funds 
        from the state semi-independent living services account 
        available under section 252.275, subdivision 8, and state 
        community social services aids available under section 256E.15 
        to the medical assistance account to pay for the nonfederal 
        share of nonresidential and residential home and community-based 
        services authorized under section 256B.092 for persons 
        transferring from semi-independent living services. 
           (b) Upon federal approval, county boards are not 
        responsible for funding semi-independent living services as a 
        social service for those persons who have transferred to the 
        home and community-based waiver program as a result of the 
        expansion under this subdivision.  The county responsibility for 
        those persons transferred shall be assumed under section 
        256B.092.  Notwithstanding the provisions of section 252.275, 
        the commissioner shall continue to allocate funds under that 
        section for semi-independent living services and county boards 
        shall continue to fund services under sections 256E.06 and 
        256E.14 for those persons who cannot access home and 
        community-based services under section 256B.092. 
           (c) Eighty percent of the state funds made available to the 
        commissioner under section 252.275 as a result of persons 
        transferring from the semi-independent living services program 
        to the home and community-based services program shall be used 
        to fund additional persons in the semi-independent living 
        services program. 
           (d) Beginning August 1, 1998, the commissioner shall issue 
        an annual report on the home and community-based waiver for 
        persons with mental retardation or related conditions, that 
        includes a list of the counties in which less than 95 percent of 
        the allocation provided, excluding the county waivered services 
        reserve, has been committed for two or more quarters during the 
        previous state fiscal year.  For each listed county, the report 
        shall include the amount of funds allocated but not used, the 
        number and ages of individuals screened and waiting for 
        services, the services needed, a description of the technical 
        assistance provided by the commissioner to assist the counties 
        in jointly planning with other counties in order to serve more 
        persons, and additional actions which will be taken to serve 
        those screened and waiting for services. 
           (e) The commissioner shall make available to interested 
        parties, upon request, financial information by county including 
        the amount of resources allocated for the home and 
        community-based waiver for persons with mental retardation and 
        related conditions, the resources committed, the number of 
        persons screened and waiting for services, the type of services 
        requested by those waiting, and the amount of allocated 
        resources not committed. 
           Sec. 40.  Minnesota Statutes 1997 Supplement, section 
        256B.0951, is amended by adding a subdivision to read: 
           Subd. 7.  [WAIVER OF RULES.] The commissioner of health may 
        exempt residents of intermediate care facilities for persons 
        with mental retardation (ICFs/MR) who participate in the 
        three-year quality assurance pilot project established in 
        section 256B.095 from the requirements of Minnesota Rules, 
        chapter 4665, upon approval by the federal government of a 
        waiver of federal certification requirements for ICFs/MR.  The 
        commissioners of health and human services shall apply for any 
        necessary waivers as soon as practicable and shall submit the 
        concept paper to the federal government by June 1, 1998.  
           Sec. 41.  Minnesota Statutes 1996, section 256B.41, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY.] The commissioner shall 
        establish, by rule, procedures for determining rates for care of 
        residents of nursing facilities which qualify as vendors of 
        medical assistance, and for implementing the provisions of this 
        section and sections 256B.421, 256B.431, 256B.432, 256B.433, 
        256B.47, 256B.48, 256B.50, and 256B.502.  The procedures shall 
        be based on methods and standards that the commissioner finds 
        are adequate to provide for the costs that must be incurred for 
        the care of residents in efficiently and economically operated 
        nursing facilities and shall specify the costs that are 
        allowable for establishing payment rates through medical 
        assistance. 
           Sec. 42.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [OPERATING COSTS, AFTER JULY 1, 1985.] (a) For 
        rate years beginning on or after July 1, 1985, the commissioner 
        shall establish procedures for determining per diem 
        reimbursement for operating costs.  
           (b) The commissioner shall contract with an econometric 
        firm with recognized expertise in and access to national 
        economic change indices that can be applied to the appropriate 
        cost categories when determining the operating cost payment rate.
           (c) The commissioner shall analyze and evaluate each 
        nursing facility's cost report of allowable operating costs 
        incurred by the nursing facility during the reporting year 
        immediately preceding the rate year for which the payment rate 
        becomes effective.  
           (d) The commissioner shall establish limits on actual 
        allowable historical operating cost per diems based on cost 
        reports of allowable operating costs for the reporting year that 
        begins October 1, 1983, taking into consideration relevant 
        factors including resident needs, geographic location, and size 
        of the nursing facility, and the costs that must be incurred for 
        the care of residents in an efficiently and economically 
        operated nursing facility.  In developing the geographic groups 
        for purposes of reimbursement under this section, the 
        commissioner shall ensure that nursing facilities in any county 
        contiguous to the Minneapolis-St. Paul seven-county metropolitan 
        area are included in the same geographic group.  The limits 
        established by the commissioner shall not be less, in the 
        aggregate, than the 60th percentile of total actual allowable 
        historical operating cost per diems for each group of nursing 
        facilities established under subdivision 1 based on cost reports 
        of allowable operating costs in the previous reporting year.  
        For rate years beginning on or after July 1, 1989, facilities 
        located in geographic group I as described in Minnesota Rules, 
        part 9549.0052, on January 1, 1989, may choose to have the 
        commissioner apply either the care related limits or the other 
        operating cost limits calculated for facilities located in 
        geographic group II, or both, if either of the limits calculated 
        for the group II facilities is higher.  The efficiency incentive 
        for geographic group I nursing facilities must be calculated 
        based on geographic group I limits.  The phase-in must be 
        established utilizing the chosen limits.  For purposes of these 
        exceptions to the geographic grouping requirements, the 
        definitions in Minnesota Rules, parts 9549.0050 to 9549.0059 
        (Emergency), and 9549.0010 to 9549.0080, apply.  The limits 
        established under this paragraph remain in effect until the 
        commissioner establishes a new base period.  Until the new base 
        period is established, the commissioner shall adjust the limits 
        annually using the appropriate economic change indices 
        established in paragraph (e).  In determining allowable 
        historical operating cost per diems for purposes of setting 
        limits and nursing facility payment rates, the commissioner 
        shall divide the allowable historical operating costs by the 
        actual number of resident days, except that where a nursing 
        facility is occupied at less than 90 percent of licensed 
        capacity days, the commissioner may establish procedures to 
        adjust the computation of the per diem to an imputed occupancy 
        level at or below 90 percent.  The commissioner shall establish 
        efficiency incentives as appropriate.  The commissioner may 
        establish efficiency incentives for different operating cost 
        categories.  The commissioner shall consider establishing 
        efficiency incentives in care related cost categories.  The 
        commissioner may combine one or more operating cost categories 
        and may use different methods for calculating payment rates for 
        each operating cost category or combination of operating cost 
        categories.  For the rate year beginning on July 1, 1985, the 
        commissioner shall: 
           (1) allow nursing facilities that have an average length of 
        stay of 180 days or less in their skilled nursing level of care, 
        125 percent of the care related limit and 105 percent of the 
        other operating cost limit established by rule; and 
           (2) exempt nursing facilities licensed on July 1, 1983, by 
        the commissioner to provide residential services for the 
        physically handicapped under Minnesota Rules, parts 9570.2000 to 
        9570.3600, from the care related limits and allow 105 percent of 
        the other operating cost limit established by rule. 
           For the purpose of calculating the other operating cost 
        efficiency incentive for nursing facilities referred to in 
        clause (1)  or (2), the commissioner shall use the other 
        operating cost limit established by rule before application of 
        the 105 percent. 
           (e) The commissioner shall establish a composite index or 
        indices by determining the appropriate economic change 
        indicators to be applied to specific operating cost categories 
        or combination of operating cost categories.  
           (f) Each nursing facility shall receive an operating cost 
        payment rate equal to the sum of the nursing facility's 
        operating cost payment rates for each operating cost category.  
        The operating cost payment rate for an operating cost category 
        shall be the lesser of the nursing facility's historical 
        operating cost in the category increased by the appropriate 
        index established in paragraph (e) for the operating cost 
        category plus an efficiency incentive established pursuant to 
        paragraph (d) or the limit for the operating cost category 
        increased by the same index.  If a nursing facility's actual 
        historic operating costs are greater than the prospective 
        payment rate for that rate year, there shall be no retroactive 
        cost settle-up.  In establishing payment rates for one or more 
        operating cost categories, the commissioner may establish 
        separate rates for different classes of residents based on their 
        relative care needs.  
           (g) The commissioner shall include the reported actual real 
        estate tax liability or payments in lieu of real estate tax of 
        each nursing facility as an operating cost of that nursing 
        facility.  Allowable costs under this subdivision for payments 
        made by a nonprofit nursing facility that are in lieu of real 
        estate taxes shall not exceed the amount which the nursing 
        facility would have paid to a city or township and county for 
        fire, police, sanitation services, and road maintenance costs 
        had real estate taxes been levied on that property for those 
        purposes.  For rate years beginning on or after July 1, 1987, 
        the reported actual real estate tax liability or payments in 
        lieu of real estate tax of nursing facilities shall be adjusted 
        to include an amount equal to one-half of the dollar change in 
        real estate taxes from the prior year.  The commissioner shall 
        include a reported actual special assessment, and reported 
        actual license fees required by the Minnesota department of 
        health, for each nursing facility as an operating cost of that 
        nursing facility.  For rate years beginning on or after July 1, 
        1989, the commissioner shall include a nursing facility's 
        reported public employee retirement act contribution for the 
        reporting year as apportioned to the care-related operating cost 
        categories and other operating cost categories multiplied by the 
        appropriate composite index or indices established pursuant to 
        paragraph (e) as costs under this paragraph.  Total adjusted 
        real estate tax liability, payments in lieu of real estate tax, 
        actual special assessments paid, the indexed public employee 
        retirement act contribution, and license fees paid as required 
        by the Minnesota department of health, for each nursing facility 
        (1) shall be divided by actual resident days in order to compute 
        the operating cost payment rate for this operating cost 
        category, (2) shall not be used to compute the care-related 
        operating cost limits or other operating cost limits established 
        by the commissioner, and (3) shall not be increased by the 
        composite index or indices established pursuant to paragraph 
        (e), unless otherwise indicated in this paragraph. 
           (h) For rate years beginning on or after July 1, 1987, the 
        commissioner shall adjust the rates of a nursing facility that 
        meets the criteria for the special dietary needs of its 
        residents and the requirements in section 31.651.  The 
        adjustment for raw food cost shall be the difference between the 
        nursing facility's allowable historical raw food cost per diem 
        and 115 percent of the median historical allowable raw food cost 
        per diem of the corresponding geographic group. 
           The rate adjustment shall be reduced by the applicable 
        phase-in percentage as provided under subdivision 2h. 
           (i) For the cost report year ending September 30, 1996, and 
        for all subsequent reporting years, certified nursing facilities 
        must identify, differentiate, and record resident day statistics 
        for residents in case mix classification A who, on or after July 
        1, 1996, meet the modified level of care criteria in section 
        144.0721.  The resident day statistics shall be separated into 
        case mix classification A-1 for any resident day meeting the 
        high-function class A level of care criteria and case mix 
        classification A-2 for other case mix class A resident days. 
           Sec. 43.  Minnesota Statutes 1996, section 256B.501, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORITY.] The commissioner shall establish 
        procedures and rules for determining rates for care of residents 
        of intermediate care facilities for persons with mental 
        retardation or related conditions which qualify as providers of 
        medical assistance and waivered services.  Approved rates shall 
        be established on the basis of methods and standards that the 
        commissioner finds adequate to provide for the costs that must 
        be incurred for the quality care of residents in efficiently and 
        economically operated facilities and services.  The procedures 
        shall specify the costs that are allowable for payment through 
        medical assistance.  The commissioner may use experts from 
        outside the department in the establishment of the procedures. 
           Sec. 44.  Minnesota Statutes 1997 Supplement, section 
        256B.69, subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
        the following terms have the meanings given.  
           (a) "Commissioner" means the commissioner of human services.
        For the remainder of this section, the commissioner's 
        responsibilities for methods and policies for implementing the 
        project will be proposed by the project advisory committees and 
        approved by the commissioner.  
           (b) "Demonstration provider" means a health maintenance 
        organization or, community integrated service network, or 
        accountable provider network authorized and operating under 
        chapter 62D or, 62N, or 62T that participates in the 
        demonstration project according to criteria, standards, methods, 
        and other requirements established for the project and approved 
        by the commissioner.  Notwithstanding the above, Itasca county 
        may continue to participate as a demonstration provider until 
        July 1, 2000. 
           (c) "Eligible individuals" means those persons eligible for 
        medical assistance benefits as defined in sections 256B.055, 
        256B.056, and 256B.06. 
           (d) "Limitation of choice" means suspending freedom of 
        choice while allowing eligible individuals to choose among the 
        demonstration providers.  
           (e) This paragraph supersedes paragraph (c) as long as the 
        Minnesota health care reform waiver remains in effect.  When the 
        waiver expires, this paragraph expires and the commissioner of 
        human services shall publish a notice in the State Register and 
        notify the revisor of statutes.  "Eligible individuals" means 
        those persons eligible for medical assistance benefits as 
        defined in sections 256B.055, 256B.056, and 256B.06.  
        Notwithstanding sections 256B.055, 256B.056, and 256B.06, an 
        individual who becomes ineligible for the program because of 
        failure to submit income reports or recertification forms in a 
        timely manner, shall remain enrolled in the prepaid health plan 
        and shall remain eligible to receive medical assistance coverage 
        through the last day of the month following the month in which 
        the enrollee became ineligible for the medical assistance 
        program. 
           Sec. 45.  Minnesota Statutes 1997 Supplement, section 
        256B.69, subdivision 3a, is amended to read: 
           Subd. 3a.  [COUNTY AUTHORITY.] (a) The commissioner, when 
        implementing the general assistance medical care, or medical 
        assistance prepayment program within a county, must include the 
        county board in the process of development, approval, and 
        issuance of the request for proposals to provide services to 
        eligible individuals within the proposed county.  County boards 
        must be given reasonable opportunity to make recommendations 
        regarding the development, issuance, review of responses, and 
        changes needed in the request for proposals.  The commissioner 
        must provide county boards the opportunity to review each 
        proposal based on the identification of community needs under 
        chapters 145A and 256E and county advocacy activities.  If a 
        county board finds that a proposal does not address certain 
        community needs, the county board and commissioner shall 
        continue efforts for improving the proposal and network prior to 
        the approval of the contract.  The county board shall make 
        recommendations regarding the approval of local networks and 
        their operations to ensure adequate availability and access to 
        covered services.  The provider or health plan must respond 
        directly to county advocates and the state prepaid medical 
        assistance ombudsperson regarding service delivery and must be 
        accountable to the state regarding contracts with medical 
        assistance and general assistance medical care funds.  The 
        county board may recommend a maximum number of participating 
        health plans after considering the size of the enrolling 
        population; ensuring adequate access and capacity; considering 
        the client and county administrative complexity; and considering 
        the need to promote the viability of locally developed health 
        plans.  The county board or a single entity representing a group 
        of county boards and the commissioner shall mutually select 
        health plans for participation at the time of initial 
        implementation of the prepaid medical assistance program in that 
        county or group of counties and at the time of contract renewal. 
        The commissioner shall also seek input for contract requirements 
        from the county or single entity representing a group of county 
        boards at each contract renewal and incorporate those 
        recommendations into the contract negotiation process.  The 
        commissioner, in conjunction with the county board, shall 
        actively seek to develop a mutually agreeable timetable prior to 
        the development of the request for proposal, but counties must 
        agree to initial enrollment beginning on or before January 1, 
        1999, in either the prepaid medical assistance and general 
        assistance medical care programs or county-based purchasing 
        under section 256B.692.  At least 90 days before enrollment in 
        the medical assistance and general assistance medical care 
        prepaid programs begins in a county in which the prepaid 
        programs have not been established, the commissioner shall 
        provide a report to the chairs of senate and house committees 
        having jurisdiction over state health care programs which 
        verifies that the commissioner complied with the requirements 
        for county involvement that are specified in this subdivision. 
           (b) The commissioner shall seek a federal waiver to allow a 
        fee-for-service plan option to MinnesotaCare enrollees.  The 
        commissioner shall develop an increase of the premium fees 
        required under section 256L.06 up to 20 percent of the premium 
        fees for the enrollees who elect the fee-for-service option.  
        Prior to implementation, the commissioner shall submit this fee 
        schedule to the chair and ranking minority member of the senate 
        health care committee, the senate health care and family 
        services funding division, the house of representatives health 
        and human services committee, and the house of representatives 
        health and human services finance division. 
           (c) At the option of the county board, the board may 
        develop contract requirements related to the achievement of 
        local public health goals to meet the health needs of medical 
        assistance and general assistance medical care enrollees.  These 
        requirements must be reasonably related to the performance of 
        health plan functions and within the scope of the medical 
        assistance and general assistance medical care benefit sets.  If 
        the county board and the commissioner mutually agree to such 
        requirements, the department shall include such requirements in 
        all health plan contracts governing the prepaid medical 
        assistance and general assistance medical care programs in that 
        county at initial implementation of the program in that county 
        and at the time of contract renewal.  The county board may 
        participate in the enforcement of the contract provisions 
        related to local public health goals. 
           (d) For counties in which prepaid medical assistance and 
        general assistance medical care programs have not been 
        established, the commissioner shall not implement those programs 
        if a county board submits acceptable and timely preliminary and 
        final proposals under section 256B.692, until county-based 
        purchasing is no longer operational in that county.  For 
        counties in which prepaid medical assistance and general 
        assistance medical care programs are in existence on or after 
        September 1, 1997, the commissioner must terminate contracts 
        with health plans according to section 256B.692, subdivision 5, 
        if the county board submits and the commissioner accepts 
        preliminary and final proposals according to that subdivision.  
        The commissioner is not required to terminate contracts that 
        begin on or after September 1, 1997, according to section 
        256B.692 until two years have elapsed from the date of initial 
        enrollment. 
           (e) In the event that a county board or a single entity 
        representing a group of county boards and the commissioner 
        cannot reach agreement regarding:  (i) the selection of 
        participating health plans in that county; (ii) contract 
        requirements; or (iii) implementation and enforcement of county 
        requirements including provisions regarding local public health 
        goals, the commissioner shall resolve all disputes after taking 
        into account the recommendations of a three-person mediation 
        panel.  The panel shall be composed of one designee of the 
        president of the association of Minnesota counties, one designee 
        of the commissioner of human services, and one designee of the 
        commissioner of health. 
           (f) If a county which elects to implement county-based 
        purchasing ceases to implement county-based purchasing, it is 
        prohibited from assuming the responsibility of county-based 
        purchasing for a period of five years from the date it 
        discontinues purchasing. 
           (g) Notwithstanding the requirement in this subdivision 
        that a county must agree to initial enrollment on or before 
        January 1, 1999, the commissioner shall grant a delay of up to 
        nine months in the implementation of the county-based purchasing 
        authorized in section 256B.692 if the county or group of 
        counties has submitted a preliminary proposal for county-based 
        purchasing by September 1, 1997, has not already implemented the 
        prepaid medical assistance program before January 1, 1998, and 
        has submitted a written request for the delay to the 
        commissioner by July 1, 1998.  In order for the delay to be 
        continued, the county or group of counties must also submit to 
        the commissioner the following information by December 1, 1998.  
        The information must: 
           (1) identify the proposed date of implementation, not later 
        than October 1, 1999; 
           (2) include copies of the county board resolutions which 
        demonstrate the continued commitment to the implementation of 
        county-based purchasing by the proposed date.  County board 
        authorization may remain contingent on the submission of a final 
        proposal which meets the requirements of section 256B.692, 
        subdivision 5, paragraph (b); 
           (3) demonstrate actions taken for the establishment of a 
        governance structure between the participating counties and 
        describe how the fiduciary responsibilities of county-based 
        purchasing will be allocated between the counties, if more than 
        one county is involved in the proposal; 
           (4) describe how the risk of a deficit will be managed in 
        the event expenditures are greater than total capitation 
        payments.  This description must identify how any of the 
        following strategies will be used: 
           (i) risk contracts with licensed health plans; 
           (ii) risk arrangements with providers who are not licensed 
        health plans; 
           (iii) risk arrangements with other licensed insurance 
        entities; and 
           (iv) funding from other county resources; 
           (5) include, if county-based purchasing will not contract 
        with licensed health plans or provider networks, letters of 
        interest from local providers in at least the categories of 
        hospital, physician, mental health, and pharmacy which express 
        interest in contracting for services.  These letters must 
        recognize any risk transfer identified in clause (4), item (ii); 
        and 
           (6) describe the options being considered to obtain the 
        administrative services required in section 256B.692, 
        subdivision 3, clauses (3) and (5). 
           (h) For counties which receive a delay under this 
        subdivision, the final proposals required under section 
        256B.692, subdivision 5, paragraph (b), must be submitted at 
        least six months prior to the requested implementation date.  
        Authority to implement county-based purchasing remains 
        contingent on approval of the final proposal as required under 
        section 256B.692. 
           (i) If the commissioner is unable to provide 
        county-specific, individual-level fee-for-service claims to 
        counties by June 4, 1998, the commissioner shall grant a delay 
        under paragraph (g) of up to 12 months in the implementation of 
        county-based purchasing, and shall require implementation not 
        later than January 1, 2000.  In order to receive an extension of 
        the proposed date of implementation under this paragraph, a 
        county or group of counties must submit a written request for 
        the extension to the commissioner by August 1, 1998, must submit 
        the information required under paragraph (g) by December 1, 
        1998, and must submit a final proposal as provided under 
        paragraph (h). 
           Sec. 46.  Minnesota Statutes 1996, section 256B.69, 
        subdivision 22, is amended to read: 
           Subd. 22.  [IMPACT ON PUBLIC OR TEACHING HOSPITALS AND 
        COMMUNITY CLINICS.] (a) 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, provided 
        the terms of participation in the program are competitive with 
        the terms of other participants. 
           (b) Prepaid health plans serving counties with a nonprofit 
        community clinic or community health services agency must 
        contract with the clinic or agency to provide services to 
        clients who choose to receive services from the clinic or 
        agency, if the clinic or agency agrees to payment rates that are 
        competitive with rates paid to other health plan providers for 
        the same or similar services. 
           (c) For purposes of this subdivision, "nonprofit community 
        clinic" includes, but is not limited to, a community mental 
        health center as defined in sections 245.62 and 256B.0625, 
        subdivision 5. 
           Sec. 47.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 26.  [AMERICAN INDIAN RECIPIENTS.] (a) Beginning on 
        or after January 1, 1999, for American Indian recipients of 
        medical assistance who are required to enroll with a 
        demonstration provider under subdivision 4 or in a county-based 
        purchasing entity, if applicable, under section 256B.692, 
        medical assistance shall cover health care services provided at 
        American Indian health services facilities and facilities 
        operated by a tribe or tribal organization under funding 
        authorized by United States Code, title 25, sections 450f to 
        450n, or title III of the Indian Self-Determination and 
        Education Assistance Act, Public Law Number 93-638, if those 
        services would otherwise be covered under section 256B.0625.  
        Payments for services provided under this subdivision shall be 
        made on a fee-for-service basis, and may, at the option of the 
        tribe or tribal organization, be made according to rates 
        authorized under sections 256.969, subdivision 16, and 
        256B.0625, subdivision 34.  Implementation of this purchasing 
        model is contingent on federal approval. 
           (b) The commissioner of human services, in consultation 
        with the tribal governments, shall develop a plan for tribes to 
        assist in the enrollment process for American Indian recipients 
        enrolled in the prepaid medical assistance program under this 
        section or the prepaid general assistance medical care program 
        under section 256D.03, subdivision 4, paragraph (d).  This plan 
        also shall address how tribes will be included in ensuring the 
        coordination of care for American Indian recipients between 
        Indian health service or tribal providers and other providers. 
           (c) For purposes of this subdivision, "American Indian" has 
        the meaning given to persons to whom services will be provided 
        for in Code of Federal Regulations, title 42, section 36.12. 
           (d) This subdivision also applies to American Indian 
        recipients of general assistance medical care and to the prepaid 
        general assistance medical care program under section 256D.03, 
        subdivision 4, paragraph (d). 
           Sec. 48.  Minnesota Statutes 1996, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 27.  [INFORMATION FOR PERSONS WITH LIMITED 
        ENGLISH-LANGUAGE PROFICIENCY.] Managed care contracts entered 
        into under this section and sections 256D.03, subdivision 4, 
        paragraph (d), and 256L.12 must require demonstration providers 
        to inform enrollees that upon request the enrollee can obtain a 
        certificate of coverage in the following languages:  Spanish, 
        Hmong, Laotian, Russian, Somali, Vietnamese, or Cambodian.  Upon 
        request, the demonstration provider must provide the enrollee 
        with a certificate of coverage in the specified language of 
        preference. 
           Sec. 49.  Minnesota Statutes 1997 Supplement, section 
        256B.692, subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] 
        Notwithstanding chapters 62D and 62N, a county that elects to 
        purchase medical assistance and general assistance medical care 
        in return for a fixed sum without regard to the frequency or 
        extent of services furnished to any particular enrollee is not 
        required to obtain a certificate of authority under chapter 62D 
        or 62N.  A county that elects to purchase medical assistance and 
        general assistance medical care services under this section must 
        satisfy the commissioner of health that the requirements of 
        chapter 62D, applicable to health maintenance organizations, or 
        chapter 62N, applicable to community integrated service 
        networks, will be met.  A county must also assure the 
        commissioner of health that the requirements of section sections 
        62J.041; 62J.48; 62J.71 to 62J.73; 62M.01 to 62M.16; all 
        applicable provisions of chapter 62Q, including sections 62Q.07; 
        62Q.075; 62Q.105; 62Q.1055; 62Q.106; 62Q.11; 62Q.12; 62Q.135; 
        62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.30; 62Q.43; 
        62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; and 72A.201 
        will be met.  All enforcement and rulemaking powers available 
        under chapters 62D and, 62J, 62M, 62N, and 62Q are hereby 
        granted to the commissioner of health with respect to counties 
        that purchase medical assistance and general assistance medical 
        care services under this section. 
           Sec. 50.  Minnesota Statutes 1997 Supplement, section 
        256B.692, subdivision 5, is amended to read: 
           Subd. 5.  [COUNTY PROPOSALS.] (a) On or before September 1, 
        1997, a county board that wishes to purchase or provide health 
        care under this section must submit a preliminary proposal that 
        substantially demonstrates the county's ability to meet all the 
        requirements of this section in response to criteria for 
        proposals issued by the department on or before July 1, 1997.  
        Counties submitting preliminary proposals must establish a local 
        planning process that involves input from medical assistance and 
        general assistance medical care recipients, recipient advocates, 
        providers and representatives of local school districts, labor, 
        and tribal government to advise on the development of a final 
        proposal and its implementation.  
           (b) The county board must submit a final proposal on or 
        before July 1, 1998, that demonstrates the ability to meet all 
        the requirements of this section, including beginning enrollment 
        on January 1, 1999, unless a delay has been granted under 
        section 256B.69, subdivision 3a, paragraph (g).  
           (c) After January 1, 1999, for a county in which the 
        prepaid medical assistance program is in existence, the county 
        board must submit a preliminary proposal at least 15 months 
        prior to termination of health plan contracts in that county and 
        a final proposal six months prior to the health plan contract 
        termination date in order to begin enrollment after the 
        termination.  Nothing in this section shall impede or delay 
        implementation or continuation of the prepaid medical assistance 
        and general assistance medical care programs in counties for 
        which the board does not submit a proposal, or submits a 
        proposal that is not in compliance with this section. 
           (d) The commissioner is not required to terminate contracts 
        for the prepaid medical assistance and prepaid general 
        assistance medical care programs that begin on or after 
        September 1, 1997, in a county for which a county board has 
        submitted a proposal under this paragraph, until two years have 
        elapsed from the date of initial enrollment in the prepaid 
        medical assistance and prepaid general assistance medical care 
        programs. 
           Sec. 51.  Minnesota Statutes 1997 Supplement, section 
        256B.77, subdivision 3, is amended to read: 
           Subd. 3.  [ASSURANCES TO THE COMMISSIONER OF HEALTH.] A 
        county authority that elects to participate in a demonstration 
        project for people with disabilities under this section is not 
        required to obtain a certificate of authority under chapter 62D 
        or 62N.  A county authority that elects to participate in a 
        demonstration project for people with disabilities under this 
        section must assure the commissioner of health that the 
        requirements of chapters 62D and 62N, and section 256B.692, 
        subdivision 2, are met.  All enforcement and rulemaking powers 
        available under chapters 62D and, 62J, 62M, 62N, and 62Q are 
        granted to the commissioner of health with respect to the county 
        authorities that contract with the commissioner to purchase 
        services in a demonstration project for people with disabilities 
        under this section. 
           Sec. 52.  Minnesota Statutes 1997 Supplement, section 
        256B.77, subdivision 7a, is amended to read: 
           Subd. 7a.  [ELIGIBLE INDIVIDUALS.] (a) Persons are eligible 
        for the demonstration project as provided in this subdivision. 
           (b) "Eligible individuals" means those persons living in 
        the demonstration site who are eligible for medical assistance 
        and are disabled based on a disability determination under 
        section 256B.055, subdivisions 7 and 12, or who are eligible for 
        medical assistance and have been diagnosed as having: 
           (1) serious and persistent mental illness as defined in 
        section 245.462, subdivision 20; 
           (2) severe emotional disturbance as defined in section 
        245.487, subdivision 6; or 
           (3) mental retardation, or being a mentally retarded person 
        as defined in section 252A.02, or a related condition as defined 
        in section 252.27, subdivision 1a. 
        Other individuals may be included at the option of the county 
        authority based on agreement with the commissioner. 
           (c) Eligible individuals residing on a federally recognized 
        Indian reservation may be excluded from participation in the 
        demonstration project at the discretion of the tribal government 
        based on agreement with the commissioner, in consultation with 
        the county authority. 
           (d) Eligible individuals include individuals in excluded 
        time status, as defined in chapter 256G.  Enrollees in excluded 
        time at the time of enrollment shall remain in excluded time 
        status as long as they live in the demonstration site and shall 
        be eligible for 90 days after placement outside the 
        demonstration site if they move to excluded time status in a 
        county within Minnesota other than their county of financial 
        responsibility. 
           (e) A person who is a sexual psychopathic personality as 
        defined in section 253B.02, subdivision 18a, or a sexually 
        dangerous person as defined in section 253B.02, subdivision 18b, 
        is excluded from enrollment in the demonstration project. 
           Sec. 53.  Minnesota Statutes 1997 Supplement, section 
        256B.77, subdivision 10, is amended to read: 
           Subd. 10.  [CAPITATION PAYMENT.] (a) The commissioner shall 
        pay a capitation payment to the county authority and, when 
        applicable under subdivision 6, paragraph (a), to the service 
        delivery organization for each medical assistance eligible 
        enrollee.  The commissioner shall develop capitation payment 
        rates for the initial contract period for each demonstration 
        site in consultation with an independent actuary, to ensure that 
        the cost of services under the demonstration project does not 
        exceed the estimated cost for medical assistance services for 
        the covered population under the fee-for-service system for the 
        demonstration period.  For each year of the demonstration 
        project, the capitation payment rate shall be based on 96 
        percent of the projected per person costs that would otherwise 
        have been paid under medical assistance fee-for-service during 
        each of those years.  Rates shall be adjusted within the limits 
        of the available risk adjustment technology, as mandated by 
        section 62Q.03.  In addition, the commissioner shall implement 
        appropriate risk and savings sharing provisions with county 
        administrative entities and, when applicable under subdivision 
        6, paragraph (a), service delivery organizations within the 
        projected budget limits.  Capitation rates shall be adjusted, at 
        least annually, to include any rate increases and payments for 
        expanded or newly covered services for eligible individuals.  
        The initial demonstration project rate shall include an amount 
        in addition to the fee-for-service payments to adjust for 
        underutilization of dental services.  Any savings beyond those 
        allowed for the county authority, county administrative entity, 
        or service delivery organization shall be first used to meet the 
        unmet needs of eligible individuals.  Payments to providers 
        participating in the project are exempt from the requirements of 
        sections 256.966 and 256B.03, subdivision 2. 
           (b) The commissioner shall monitor and evaluate annually 
        the effect of the discount on consumers, the county authority, 
        and providers of disability services.  Findings shall be 
        reported and recommendations made, as appropriate, to ensure 
        that the discount effect does not adversely affect the ability 
        of the county administrative entity or providers of services to 
        provide appropriate services to eligible individuals, and does 
        not result in cost shifting of eligible individuals to the 
        county authority. 
           Sec. 54.  Minnesota Statutes 1997 Supplement, section 
        256B.77, subdivision 12, is amended to read: 
           Subd. 12.  [SERVICE COORDINATION.] (a) For purposes of this 
        section, "service coordinator" means an individual selected by 
        the enrollee or the enrollee's legal representative and 
        authorized by the county administrative entity or service 
        delivery organization to work in partnership with the enrollee 
        to develop, coordinate, and in some instances, provide supports 
        and services identified in the personal support plan.  Service 
        coordinators may only provide services and supports if the 
        enrollee is informed of potential conflicts of interest, is 
        given alternatives, and gives informed consent.  Eligible 
        service coordinators are individuals age 18 or older who meet 
        the qualifications as described in paragraph (b).  Enrollees, 
        their legal representatives, or their advocates are eligible to 
        be service coordinators if they have the capabilities to perform 
        the activities and functions outlined in paragraph (b).  
        Providers licensed under chapter 245A to provide residential 
        services, or providers who are providing residential services 
        covered under the group residential housing program may not act 
        as service coordinator for enrollees for whom they provide 
        residential services.  This does not apply to providers of 
        short-term detoxification services.  Each county administrative 
        entity or service delivery organization may develop further 
        criteria for eligible vendors of service coordination during the 
        demonstration period and shall determine whom it contracts with 
        or employs to provide service coordination.  County 
        administrative entities and service delivery organizations may 
        pay enrollees or their advocates or legal representatives for 
        service coordination activities. 
           (b) The service coordinator shall act as a facilitator, 
        working in partnership with the enrollee to ensure that their 
        needs are identified and addressed.  The level of involvement of 
        the service coordinator shall depend on the needs and desires of 
        the enrollee.  The service coordinator shall have the knowledge, 
        skills, and abilities to, and is responsible for: 
           (1) arranging for an initial assessment, and periodic 
        reassessment as necessary, of supports and services based on the 
        enrollee's strengths, needs, choices, and preferences in life 
        domain areas; 
           (2) developing and updating the personal support plan based 
        on relevant ongoing assessment; 
           (3) arranging for and coordinating the provisions of 
        supports and services, including knowledgeable and skilled 
        specialty services and prevention and early intervention 
        services, within the limitations negotiated with the county 
        administrative entity or service delivery organization; 
           (4) assisting the enrollee and the enrollee's legal 
        representative, if any, to maximize informed choice of and 
        control over services and supports and to exercise the 
        enrollee's rights and advocate on behalf of the enrollee; 
           (5) monitoring the progress toward achieving the enrollee's 
        outcomes in order to evaluate and adjust the timeliness and 
        adequacy of the implementation of the personal support plan; 
           (6) facilitating meetings and effectively collaborating 
        with a variety of agencies and persons, including attending 
        individual family service plan and individual education plan 
        meetings when requested by the enrollee or the enrollee's legal 
        representative; 
           (7) soliciting and analyzing relevant information; 
           (8) communicating effectively with the enrollee and with 
        other individuals participating in the enrollee's plan; 
           (9) educating and communicating effectively with the 
        enrollee about good health care practices and risk to the 
        enrollee's health with certain behaviors; 
           (10) having knowledge of basic enrollee protection 
        requirements, including data privacy; 
           (11) informing, educating, and assisting the enrollee in 
        identifying available service providers and accessing needed 
        resources and services beyond the limitations of the medical 
        assistance benefit set covered services; and 
           (12) providing other services as identified in the personal 
        support plan.  
           (c) For the demonstration project, the qualifications and 
        standards for service coordination in this section shall replace 
        comparable existing provisions of existing statutes and rules 
        governing case management for eligible individuals. 
           (d) The provisions of this subdivision apply only to the 
        demonstration sites that begin implementation on July 1, 
        1998 designated by the commissioner under subdivision 5.  All 
        other demonstration sites must comply with laws and rules 
        governing case management services for eligible individuals in 
        effect when the site begins the demonstration project. 
           Sec. 55.  Minnesota Statutes 1996, section 256D.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
        For a person who is eligible under subdivision 3, paragraph (a), 
        clause (3), general assistance medical care covers, except as 
        provided in paragraph (c): 
           (1) inpatient hospital services; 
           (2) outpatient hospital services; 
           (3) services provided by Medicare certified rehabilitation 
        agencies; 
           (4) prescription drugs and other products recommended 
        through the process established in section 256B.0625, 
        subdivision 13; 
           (5) equipment necessary to administer insulin and 
        diagnostic supplies and equipment for diabetics to monitor blood 
        sugar level; 
           (6) eyeglasses and eye examinations provided by a physician 
        or optometrist; 
           (7) hearing aids; 
           (8) prosthetic devices; 
           (9) laboratory and X-ray services; 
           (10) physician's services; 
           (11) medical transportation; 
           (12) chiropractic services as covered under the medical 
        assistance program; 
           (13) podiatric services; 
           (14) dental services; 
           (15) outpatient services provided by a mental health center 
        or clinic that is under contract with the county board and is 
        established under section 245.62; 
           (16) day treatment services for mental illness provided 
        under contract with the county board; 
           (17) prescribed medications for persons who have been 
        diagnosed as mentally ill as necessary to prevent more 
        restrictive institutionalization; 
           (18) case management services for a person with serious and 
        persistent mental illness who would be eligible for medical 
        assistance except that the person resides in an institution for 
        mental diseases; 
           (19) psychological services, medical supplies and 
        equipment, and Medicare premiums, coinsurance and deductible 
        payments; 
           (20) (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; 
           (21) (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, or a certified geriatric nurse practitioner 
        in independent practice, if the services are otherwise covered 
        under this chapter as a physician service, and if the service is 
        within the scope of practice of the nurse practitioner's license 
        as a registered nurse, as defined in section 148.171; and 
           (22) (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.  
           (b) Except as provided in paragraph (c), for a recipient 
        who is eligible under subdivision 3, paragraph (a), clause (1) 
        or (2), general assistance medical care covers the services 
        listed in paragraph (a) with the exception of special 
        transportation services. 
           (c) Gender reassignment surgery and related services are 
        not covered services under this subdivision unless the 
        individual began receiving gender reassignment services prior to 
        July 1, 1995.  
           (d) In order to contain costs, the commissioner of human 
        services shall select vendors of medical care who can provide 
        the most economical care consistent with high medical standards 
        and shall where possible contract with organizations on a 
        prepaid capitation basis to provide these services.  The 
        commissioner shall consider proposals by counties and vendors 
        for prepaid health plans, competitive bidding programs, block 
        grants, or other vendor payment mechanisms designed to provide 
        services in an economical manner or to control utilization, with 
        safeguards to ensure that necessary services are provided.  
        Before implementing prepaid programs in counties with a county 
        operated or affiliated public teaching hospital or a hospital or 
        clinic operated by the University of Minnesota, the commissioner 
        shall consider the risks the prepaid program creates for the 
        hospital and allow the county or hospital the opportunity to 
        participate in the program in a manner that reflects the risk of 
        adverse selection and the nature of the patients served by the 
        hospital, provided the terms of participation in the program are 
        competitive with the terms of other participants considering the 
        nature of the population served.  Payment for services provided 
        pursuant to this subdivision shall be as provided to medical 
        assistance vendors of these services under sections 256B.02, 
        subdivision 8, and 256B.0625.  For payments made during fiscal 
        year 1990 and later years, the commissioner shall consult with 
        an independent actuary in establishing prepayment rates, but 
        shall retain final control over the rate methodology.  
        Notwithstanding the provisions of subdivision 3, an individual 
        who becomes ineligible for general assistance medical care 
        because of failure to submit income reports or recertification 
        forms in a timely manner, shall remain enrolled in the prepaid 
        health plan and shall remain eligible for general assistance 
        medical care coverage through the last day of the month in which 
        the enrollee became ineligible for general assistance medical 
        care. 
           (e) The commissioner of human services may reduce payments 
        provided under sections 256D.01 to 256D.21 and 261.23 in order 
        to remain within the amount appropriated for general assistance 
        medical care, within the following restrictions.: 
           (i) For the period July 1, 1985 to December 31, 1985, 
        reductions below the cost per service unit allowable under 
        section 256.966, are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 30 percent; payments for all other 
        inpatient hospital care may be reduced no more than 20 percent.  
        Reductions below the payments allowable under general assistance 
        medical care for the remaining general assistance medical care 
        services allowable under this subdivision may be reduced no more 
        than ten percent. 
           (ii) For the period January 1, 1986 to December 31, 1986, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 20 percent; payments for all other 
        inpatient hospital care may be reduced no more than 15 percent.  
        Reductions below the payments allowable under general assistance 
        medical care for the remaining general assistance medical care 
        services allowable under this subdivision may be reduced no more 
        than five percent. 
           (iii) For the period January 1, 1987 to June 30, 1987, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 15 percent; payments for all other 
        inpatient hospital care may be reduced no more than ten 
        percent.  Reductions below the payments allowable under medical 
        assistance for the remaining general assistance medical care 
        services allowable under this subdivision may be reduced no more 
        than five percent.  
           (iv) For the period July 1, 1987 to June 30, 1988, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 15 percent; payments for all other 
        inpatient hospital care may be reduced no more than five percent.
        Reductions below the payments allowable under medical assistance 
        for the remaining general assistance medical care services 
        allowable under this subdivision may be reduced no more than 
        five percent. 
           (v) For the period July 1, 1988 to June 30, 1989, 
        reductions below the cost per service unit allowable under 
        section 256.966 are permitted only as follows:  payments for 
        inpatient and outpatient hospital care provided in response to a 
        primary diagnosis of chemical dependency or mental illness may 
        be reduced no more than 15 percent; payments for all other 
        inpatient hospital care may not be reduced.  Reductions below 
        the payments allowable under medical assistance for the 
        remaining general assistance medical care services allowable 
        under this subdivision may be reduced no more than five percent. 
           (f) There shall be no copayment required of any recipient 
        of benefits for any services provided under this subdivision.  A 
        hospital receiving a reduced payment as a result of this section 
        may apply the unpaid balance toward satisfaction of the 
        hospital's bad debts. 
           (f) (g) Any county may, from its own resources, provide 
        medical payments for which state payments are not made. 
           (g) (h) Chemical dependency services that are reimbursed 
        under chapter 254B must not be reimbursed under general 
        assistance medical care. 
           (h) (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. 
           (i) (j) The conditions of payment for services under this 
        subdivision are the same as the conditions specified in rules 
        adopted under chapter 256B governing the medical assistance 
        program, unless otherwise provided by statute or rule. 
           Sec. 56.  Minnesota Statutes 1996, section 256D.03, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [PAYMENT FOR AMBULANCE SERVICES.] Effective for 
        services rendered on or after July 1, 1999, general assistance 
        medical care payments for ambulance services shall be increased 
        by five percent. 
           Sec. 57.  Laws 1997, chapter 195, section 5, is amended to 
        read: 
           Sec. 5.  [PERSONAL CARE ASSISTANT PROVIDERS.] 
           The commissioner of health shall create a unique category 
        of licensure as appropriate for providers offering, providing, 
        or arranging personal care assistant services to more than one 
        individual.  The commissioner shall work with the department of 
        human services, providers, consumers, and advocates in 
        developing the licensure standards.  The licensure standards 
        must include requirements for providers to provide consumers 
        advance written notice of service termination, a service 
        transition plan, and an appeal process.  If the commissioner 
        determines there are costs related to rulemaking under this 
        section, the commissioner shall include a budget request for 
        this item in the 2000-2001 biennial budget.  Prior to 
        promulgating the rule, the commissioner shall submit the 
        proposed rule to the legislature by January 15, 1999.  
           Sec. 58.  Laws 1997, chapter 203, article 4, section 64, is 
        amended to read:  
           Sec. 64.  [STUDY OF ELDERLY WAIVER EXPANSION.] 
           The commissioner of human services shall appoint a task 
        force that includes representatives of counties, health plans, 
        consumers, and legislators to study the impact of the expansion 
        of the elderly waiver program under section 4 and to make 
        recommendations for any changes in law necessary to facilitate 
        an efficient and equitable relationship between the elderly 
        waiver program and the Minnesota senior health options project.  
        Based on the results of the task force study, the commissioner 
        may seek any federal waivers needed to improve the relationship 
        between the elderly waiver and the Minnesota senior health 
        options project.  The commissioner shall report the results of 
        the task force study to the legislature by January 15, 1998 July 
        1, 2000. 
           Sec. 59.  [OFFSET OF HMO SURCHARGE.] 
           Beginning October 1, 1998, and ending December 31, 1998, 
        the commissioner of human services shall offset monthly charges 
        for the health maintenance organization surcharge by the monthly 
        amount the health maintenance organization overpaid from August 
        1, 1997, to September 30, 1998, due to taxation of Medicare 
        revenues prohibited by Minnesota Statutes, section 256.9657, 
        subdivision 3. 
           Sec. 60.  [MR/RC WAIVER PROPOSAL.] 
           By November 15, 1998, the commissioner of human services 
        shall provide to the chairs of the house health and human 
        services finance division and the senate health and family 
        security finance division a detailed budget proposal for 
        providing services under the home and community-based waiver for 
        persons with mental retardation or related conditions to those 
        individuals who are screened and waiting for services. 
           Sec. 61.  [HIV HEALTH CARE ACCESS STUDY.] 
           The commissioner of human services shall study, in 
        consultation with the commissioner of health and a task force of 
        affected community stakeholders, the impact of positive patient 
        responses to new HIV treatment on re-entry to the workplace, 
        including, but not limited to, addressing continued access to 
        health care and disability benefits.  The commissioner shall 
        submit a report on the study with recommendations to the 
        legislature by January 15, 1999. 
           Sec. 62.  [MENTAL HEALTH REPORT.] 
           (a) By December 1, 1998, the commissioner of human services 
        shall report to the legislature on recommendations to maximize 
        federal funding for mental health services for children and 
        adults.  In developing the recommendations, the commissioner 
        shall seek advice from a children's and adults' mental health 
        services stakeholders advisory group including representatives 
        of state and county government, private and state-operated 
        mental health providers, mental health consumers, family 
        members, and advocates. 
           (b) The report shall include a proposal developed in 
        conjunction with the counties that does not shift caseload 
        growth to counties after July 1, 1999, and recommendations on 
        whether the state should directly participate in medical 
        assistance mental health case management by funding a portion of 
        the nonfederal share of Medicaid. 
           Sec. 63.  [CONSUMER PRICE INDEX REPORT.] 
           By January 15, 1999, and each year thereafter, the 
        commissioner of human services shall report to the chair of the 
        senate health and family security budget division and the chair 
        of the house health and human services budget division on the 
        cost of increasing the income standard under Minnesota Statutes, 
        section 256B.056, subdivision 4, and the provider rates under 
        Minnesota Statutes, section 256B.038, by an amount equal to the 
        percent change in the Consumer Price Index for all urban 
        consumers for the previous October compared to one year earlier. 
           Sec. 64.  [TRANSLATING AND INTERPRETING INFORMATION FOR 
        PERSONS WITH LIMITED ENGLISH-LANGUAGE PROFICIENCY.] 
           (a) The commissioner shall develop a plan to serve public 
        assistance applicants and recipients who have limited 
        English-language proficiency that ensures that the state is in 
        compliance with title VI of the Civil Rights Act and Minnesota 
        Statutes, section 363.073, and any other laws or regulations 
        that prohibit discrimination. 
           (b) The commissioner shall convene an advisory committee 
        that consists of members of bilingual community groups, county 
        human service agencies, health plans, health care providers, 
        advocacy groups, and other state agencies to assist in 
        developing the plan. 
           (c) The commissioner shall submit the plan and any fiscal 
        estimates necessary to implement the plan to the chairs of the 
        health and human services policy and finance divisions by 
        December 15, 1998. 
           (d) Until the plan under paragraph (c) is implemented, the 
        commissioner is required to include a language block on notices 
        from county agencies that deny, reduce, or terminate benefits 
        which states: 
           "IMPORTANT! This notice affects your rights and should be 
           translated immediately.  If you need help translating this 
           notice, call your county worker." 
           Notices from MinnesotaCare that deny, reduce, or terminate 
        benefits must include a language block which states: 
           "IMPORTANT! This notice affects your rights and should be 
           translated immediately.  If you need help translating this 
           notice, call your enrollment representative." 
        The notice must include a telephone number for the MinnesotaCare 
        enrollment representative. 
           (e) Until the plan under paragraph (c) is implemented, the 
        commissioner shall require a managed care plan under contract 
        with the commissioner of human services that issues a notice 
        that denies, reduces, or terminates coverage to include a 
        language block, which states: 
           "IMPORTANT! This notice affects your rights and should be 
           translated immediately."  
        The notice shall include the telephone number of a person to 
        contact who can assist the enrollee in translating the notice. 
           Sec. 65.  [UNCOMPENSATED CARE STUDY.] 
           The commissioner of health, in consultation with the 
        commissioner of human services, associations representing 
        Minnesota counties, consumer advocates, associations 
        representing health care providers and institutions, and 
        representatives of institutions providing a disproportionate 
        share of uncompensated medical care shall submit to the 
        legislature by January 15, 1999, a report and recommendations on 
        the provision and financing of uncompensated care in Minnesota.  
        The report must: 
           (1) document the extent of uncompensated care provided in 
        Minnesota; 
           (2) discuss the feasibility of and evaluate options for 
        financing uncompensated care, including but not limited to: 
           (i) modifying the eligibility standards for the 
        MinnesotaCare and general assistance medical care programs; and 
           (ii) allowing providers to bill other counties for 
        uncompensated care provided to residents of those counties; 
           (3) evaluate approaches used by other states to monitor and 
        finance uncompensated care; and 
           (4) describe alternative approaches to encourage health 
        care coverage. 
           Sec. 66.  [COVERAGE OF REHABILITATIVE AND THERAPEUTIC 
        SERVICES.] 
           (a) The threshold limits for fee-for-service medical 
        assistance rehabilitative and therapeutic services for January 
        1, 1998 through June 30, 1999, shall be the limits prescribed in 
        the department of human services health care programs provider 
        manual for calendar year 1997.  Rehabilitative and therapeutic 
        services are:  occupational therapy services provided to medical 
        assistance recipients pursuant to Minnesota Statutes, section 
        256B.0625, subdivision 8a; physical therapy services provided to 
        medical assistance recipients pursuant to Minnesota Statutes, 
        section 256B.0625, subdivision 8; and speech language pathology 
        services provided to medical assistance recipients pursuant to 
        Minnesota Rules, part 9505.0390. 
           (b) The commissioner of human services, in consultation 
        with the department of human services rehabilitative work group, 
        shall report to the chair of the senate health and family 
        security committee and the chair of the house health and human 
        services committee by January 15, 1999, recommendations and 
        proposed legislation for the appropriate level of rehabilitative 
        services delivered to medical assistance recipients before prior 
        authorization.  The recommendations shall also include proposed 
        legislation to clarify the rehabilitative and therapeutic 
        benefit set for medical assistance, as well as the appropriate 
        response time for requests for prior authorization.  
           Sec. 67.  [DENTAL SERVICES REIMBURSEMENT AND ACCESS STUDY.] 
           (a) The commissioner of human services, in consultation 
        with the commissioner of health, shall report to the legislature 
        by December 15, 1998, on the costs of providing dental care 
        services to recipients of the medical assistance, general 
        assistance medical care and MinnesotaCare programs and the 
        reimbursement level of those programs under fee-for-service and 
        under managed care plans.  Costs shall include both base level 
        and incremental costs of providing services to public program 
        recipients.  In completing the study, the commissioner shall 
        review existing dental practice literature on dental practice 
        expenses, and conduct a random survey of dental practices in the 
        state to establish usual and customary fees for a subset of 
        common dental procedures.  The commissioner shall compare 
        private insurance reimbursement for a subset of common dental 
        procedures with reimbursement levels for public programs.  In 
        determining private insurance reimbursement, the commissioner 
        may obtain reimbursement data from health plans insuring or 
        providing dental care services.  Data obtained by the 
        commissioner shall be nonpublic and subject to Minnesota 
        Statutes, section 62J.321.  The commissioner may include in the 
        report related information on the costs of other health care 
        professionals and reimbursement levels by public and private 
        payers. 
           (b) The commissioner of human services shall present 
        recommendations to the legislature by February 1, 1999, on how 
        access to dental services for medical assistance, general 
        assistance medical care, and MinnesotaCare recipients can be 
        expanded.  The commissioner shall also determine which areas of 
        the state are experiencing a significant access problem.  In 
        developing recommendations, the commissioner shall evaluate the 
        feasibility of a disproportionate share adjustment for dental 
        services. 
           Sec. 68.  [RECYCLING PILOT PROJECT.] 
           The commissioner of human services, in cooperation with the 
        system of technology to achieve results (STAR) program, shall 
        award a grant on a competitive basis to a qualified agency for 
        the establishment of a pilot project to: 
           (1) obtain, refurbish, and recycle augmentative and 
        alternative communication systems in order to allow their reuse 
        for trials and short-term use by persons with severe expressive 
        communication limitations; and 
           (2) provide training related to the use of augmentative and 
        alternative communication systems. 
        The commissioner shall award the grant as soon as possible after 
        July 1, 1998, and shall report to the legislature by January 15, 
        1999, on the activities of the grantee. 
           Sec. 69.  [REPEALER.] 
           Minnesota Statutes 1996, section 144.0721, subdivision 3a; 
        and Minnesota Statutes 1997 Supplement, sections 144.0721, 
        subdivision 3; and 256B.0913, subdivision 15, are repealed. 
           Sec. 70.  [EFFECTIVE DATES.] 
           (a) Sections 5, 31, 40, 45, 50, and 66 are effective the 
        day following final enactment. 
           (b) Sections 10 and 48 are effective January 1, 1999. 
           (c) Sections 23, 25, 55, and 56 are effective July 1, 1999. 
           (d) Sections 14 and 19 are effective retroactive to July 1, 
        1997. 
           (e) Section 7 is effective retroactive to August 1, 1997. 
           (f) Sections 3 and 44 are effective 30 days following final 
        enactment. 
           (g) Section 32 is effective for changes in eligibility that 
        occur on or after July 1, 1998. 
                                   ARTICLE 5 
                                 MINNESOTACARE 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        60A.15, subdivision 1, is amended to read: 
           Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
        before April 1, June 1, and December 1 of each year, every 
        domestic and foreign company, including town and farmers' mutual 
        insurance companies, domestic mutual insurance companies, marine 
        insurance companies, health maintenance organizations, community 
        integrated service networks, and nonprofit health service plan 
        corporations, shall pay to the commissioner of revenue 
        installments equal to one-third of the insurer's total estimated 
        tax for the current year.  Except as provided in paragraphs (d), 
        (e), (h), and (i), installments must be based on a sum equal to 
        two percent of the premiums described in paragraph (b). 
           (b) Installments under paragraph (a), (d), or (e) are 
        percentages of gross premiums less return premiums on all direct 
        business received by the insurer in this state, or by its agents 
        for it, in cash or otherwise, during such year. 
           (c) Failure of a company to make payments of at least 
        one-third of either (1) the total tax paid during the previous 
        calendar year or (2) 80 percent of the actual tax for the 
        current calendar year shall subject the company to the penalty 
        and interest provided in this section, unless the total tax for 
        the current tax year is $500 or less. 
           (d) For health maintenance organizations, nonprofit health 
        service plan corporations, and community integrated service 
        networks, the installments must be based on an amount determined 
        under paragraph (h) or (i). 
           (e) For purposes of computing installments for town and 
        farmers' mutual insurance companies and for mutual property 
        casualty companies with total assets on December 31, 1989, of 
        $1,600,000,000 or less, the following rates apply: 
           (1) for all life insurance, two percent; 
           (2) for town and farmers' mutual insurance companies and 
        for mutual property and casualty companies with total assets of 
        $5,000,000 or less, on all other coverages, one percent; and 
           (3) for mutual property and casualty companies with total 
        assets on December 31, 1989, of $1,600,000,000 or less, on all 
        other coverages, 1.26 percent. 
           (f) If the aggregate amount of premium tax payments under 
        this section and the fire marshal tax payments under section 
        299F.21 made during a calendar year is equal to or exceeds 
        $120,000, all tax payments in the subsequent calendar year must 
        be paid by means of a funds transfer as defined in section 
        336.4A-104, paragraph (a).  The funds transfer payment date, as 
        defined in section 336.4A-401, must be on or before the date the 
        payment is due.  If the date the payment is due is not a funds 
        transfer business day, as defined in section 336.4A-105, 
        paragraph (a), clause (4), the payment date must be on or before 
        the funds transfer business day next following the date the 
        payment is due.  
           (g) Premiums under medical assistance, general assistance 
        medical care, the MinnesotaCare program, and the Minnesota 
        comprehensive health insurance plan and all payments, revenues, 
        and reimbursements received from the federal government for 
        Medicare-related coverage as defined in section 62A.31, 
        subdivision 3, paragraph (e), are not subject to tax under this 
        section. 
           (h) For calendar years 1998 and 1999, the installments for 
        health maintenance organizations, community integrated service 
        networks, and nonprofit health service plan corporations must be 
        based on an amount equal to one percent of premiums described 
        under paragraph (b).  Health maintenance organizations, 
        community integrated service networks, and nonprofit health 
        service plan corporations that have met the cost containment 
        goals established under section 62J.04 in the individual and 
        small employer market for calendar year 1996 are exempt from 
        payment of the tax imposed under this section for premiums paid 
        after March 30, 1997, and before April 1, 1998.  Health 
        maintenance organizations, community integrated service 
        networks, and nonprofit health service plan corporations that 
        have met the cost containment goals established under section 
        62J.04 in the individual and small employer market for calendar 
        year 1997 are exempt from payment of the tax imposed under this 
        section for premiums paid after March 30, 1998, and before April 
        1, 1999.  
           (i) For calendar years after 1999, the commissioner of 
        finance shall determine the balance of the health care access 
        fund on September 1 of each year beginning September 1, 1999.  
        If the commissioner determines that there is no structural 
        deficit for the next fiscal year, no tax shall be imposed under 
        paragraph (d) for the following calendar year.  If the 
        commissioner determines that there will be a structural deficit 
        in the fund for the following fiscal year, then the 
        commissioner, in consultation with the commissioner of revenue, 
        shall determine the amount needed to eliminate the structural 
        deficit and a tax shall be imposed under paragraph (d) for the 
        following calendar year.  The commissioner shall determine the 
        rate of the tax as either one-quarter of one percent, one-half 
        of one percent, three-quarters of one percent, or one percent of 
        premiums described in paragraph (b), whichever is the lowest of 
        those rates that the commissioner determines will produce 
        sufficient revenue to eliminate the projected structural 
        deficit.  The commissioner of finance shall publish in the State 
        Register by October 1 of each year the amount of tax to be 
        imposed for the following calendar year.  In determining the 
        structural balance of the health care access fund for fiscal 
        years 2000 and 2001, the commissioner shall disregard the 
        transfer amount from the health care access fund to the general 
        fund for expenditures associated with the services provided to 
        pregnant women and children under the age of two enrolled in the 
        MinnesotaCare program.  
           (j) In approving the premium rates as required in sections 
        62L.08, subdivision 8, and 62A.65, subdivision 3, the 
        commissioners of health and commerce shall ensure that any 
        exemption from the tax as described in paragraphs (h) and (i) is 
        reflected in the premium rate. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        256B.04, subdivision 18, is amended to read: 
           Subd. 18.  [APPLICATIONS FOR MEDICAL ASSISTANCE.] The state 
        agency may take applications for medical assistance and conduct 
        eligibility determinations for MinnesotaCare enrollees who are 
        required to apply for medical assistance according to section 
        256L.03, subdivision 3, paragraph (b). 
           Sec. 3.  Minnesota Statutes 1996, section 256B.057, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [NO ASSET TEST FOR PREGNANT WOMEN.] Beginning 
        September 30, 1998, eligibility for medical assistance for a 
        pregnant woman must be determined without regard to asset 
        standards established in section 256B.056, subdivision 3.  
           Sec. 4.  Minnesota Statutes 1996, section 256B.057, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [WAIVER OF MAINTENANCE OF EFFORT 
        REQUIREMENT.] Unless a federal waiver of the maintenance of 
        effort requirement of section 2105(d) of title XXI of the 
        Balanced Budget Act of 1997, Public Law Number 105-33, Statutes 
        at Large, volume 111, page 251, is granted by the federal 
        Department of Health and Human Services by September 30, 1998, 
        eligibility for children under age 21 must be determined without 
        regard to asset standards established in section 256B.056, 
        subdivision 3.  The commissioner of human services shall publish 
        a notice in the State Register upon receipt of a federal waiver. 
           Sec. 5.  Minnesota Statutes 1996, section 256B.057, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [CHILDREN UNDER AGE TWO.] Medical assistance may 
        be paid for a child under two years of age whose countable 
        family income is above 275 percent of the federal poverty 
        guidelines for the same size family but less than or equal to 
        280 percent of the federal poverty guidelines for the same size 
        family. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        256D.03, subdivision 3, is amended to read: 
           Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
        (a) General assistance medical care may be paid for any person 
        who is not eligible for medical assistance under chapter 256B, 
        including eligibility for medical assistance based on a 
        spenddown of excess income according to section 256B.056, 
        subdivision 5, or MinnesotaCare as defined in clause 
        (4) paragraph (b), except as provided in paragraph (b) (c); and: 
           (1) who is receiving assistance under section 256D.05, 
        except for families with children who are eligible under 
        Minnesota family investment program-statewide (MFIP-S), who is 
        having a payment made on the person's behalf under sections 
        256I.01 to 256I.06, or who resides in group residential housing 
        as defined in chapter 256I and can meet a spenddown using the 
        cost of remedial services received through group residential 
        housing; or 
           (2)(i) who is a resident of Minnesota; and whose equity in 
        assets is not in excess of $1,000 per assistance unit.  Exempt 
        assets, the reduction of excess assets, and the waiver of excess 
        assets must conform to the medical assistance program in chapter 
        256B, with the following exception:  the maximum amount of 
        undistributed funds in a trust that could be distributed to or 
        on behalf of the beneficiary by the trustee, assuming the full 
        exercise of the trustee's discretion under the terms of the 
        trust, must be applied toward the asset maximum; and 
           (ii) who has countable income not in excess of the 
        assistance standards established in section 256B.056, 
        subdivision 4, or whose excess income is spent down according to 
        section 256B.056, subdivision 5, using a six-month budget 
        period.  The method for calculating earned income disregards and 
        deductions for a person who resides with a dependent child under 
        age 21 shall follow section 256B.056, subdivision 1a.  However, 
        if a disregard of $30 and one-third of the remainder has been 
        applied to the wage earner's income, the disregard shall not be 
        applied again until the wage earner's income has not been 
        considered in an eligibility determination for general 
        assistance, general assistance medical care, medical assistance, 
        or MFIP-S for 12 consecutive months.  The earned income and work 
        expense deductions for a person who does not reside with a 
        dependent child under age 21 shall be the same as the method 
        used to determine eligibility for a person under section 
        256D.06, subdivision 1, except the disregard of the first $50 of 
        earned income is not allowed; or 
           (3) who would be eligible for medical assistance except 
        that the person resides in a facility that is determined by the 
        commissioner or the federal Health Care Financing Administration 
        to be an institution for mental diseases.; or 
           (4) who is ineligible for medical assistance under chapter 
        256B or general assistance medical care under any other 
        provision of this section, and is receiving care and 
        rehabilitation services from a nonprofit center established to 
        serve victims of torture.  These individuals are eligible for 
        general assistance medical care only for the period during which 
        they are receiving services from the center.  During this period 
        of eligibility, individuals eligible under this clause shall not 
        be required to participate in prepaid general assistance medical 
        care.  
           (4) (b) Beginning July 1, 1998 January 1, 2000, applicants 
        or recipients who meet all eligibility requirements of 
        MinnesotaCare as defined in sections 256L.01 to 256L.16, and are:
           (i) adults with dependent children under 21 whose gross 
        family income is equal to or less than 275 percent of the 
        federal poverty guidelines; or 
           (ii) adults without children with earned income and whose 
        family gross income is between 75 percent of the federal poverty 
        guidelines and the amount set by section 256L.04, subdivision 7, 
        shall be terminated from general assistance medical care upon 
        enrollment in MinnesotaCare. 
           (b) (c) For services rendered on or after July 1, 1997, 
        eligibility is limited to one month prior to application if the 
        person is determined eligible in the prior month.  A 
        redetermination of eligibility must occur every 12 months.  
        Beginning July 1, 1998 January 1, 2000, Minnesota health care 
        program applications completed by recipients and applicants who 
        are persons described in paragraph (a) (b), clause (4), may be 
        returned to the county agency to be forwarded to the department 
        of human services or sent directly to the department of human 
        services for enrollment in MinnesotaCare.  If all other 
        eligibility requirements of this subdivision are met, 
        eligibility for general assistance medical care shall be 
        available in any month during which a MinnesotaCare eligibility 
        determination and enrollment are pending.  Upon notification of 
        eligibility for MinnesotaCare, notice of termination for 
        eligibility for general assistance medical care shall be sent to 
        an applicant or recipient.  If all other eligibility 
        requirements of this subdivision are met, eligibility for 
        general assistance medical care shall be available until 
        enrollment in MinnesotaCare subject to the provisions of 
        paragraph (d) (e). 
           (c) (d) The date of an initial Minnesota health care 
        program application necessary to begin a determination of 
        eligibility shall be the date the applicant has provided a name, 
        address, and social security number, signed and dated, to the 
        county agency or the department of human services.  If the 
        applicant is unable to provide an initial application when 
        health care is delivered due to a medical condition or 
        disability, a health care provider may act on the person's 
        behalf to complete the initial application.  The applicant must 
        complete the remainder of the application and provide necessary 
        verification before eligibility can be determined.  The county 
        agency must assist the applicant in obtaining verification if 
        necessary. 
           (d) (e) County agencies are authorized to use all automated 
        databases containing information regarding recipients' or 
        applicants' income in order to determine eligibility for general 
        assistance medical care or MinnesotaCare.  Such use shall be 
        considered sufficient in order to determine eligibility and 
        premium payments by the county agency. 
           (e) (f) General assistance medical care is not available 
        for a person in a correctional facility unless the person is 
        detained by law for less than one year in a county correctional 
        or detention facility as a person accused or convicted of a 
        crime, or admitted as an inpatient to a hospital on a criminal 
        hold order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (f) (g) General assistance medical care is not available 
        for applicants or recipients who do not cooperate with the 
        county agency to meet the requirements of medical assistance.  
        General assistance medical care is limited to payment of 
        emergency services only for applicants or recipients as 
        described in paragraph (a) (b), clause (4), whose MinnesotaCare 
        coverage is denied or terminated for nonpayment of premiums as 
        required by sections 256L.06 to 256L.08 and 256L.07.  
           (g) (h) In determining the amount of assets of an 
        individual, there shall be included any asset or interest in an 
        asset, including an asset excluded under paragraph (a), that was 
        given away, sold, or disposed of for less than fair market value 
        within the 60 months preceding application for general 
        assistance medical care or during the period of eligibility.  
        Any transfer described in this paragraph shall be presumed to 
        have been for the purpose of establishing eligibility for 
        general assistance medical care, unless the individual furnishes 
        convincing evidence to establish that the transaction was 
        exclusively for another purpose.  For purposes of this 
        paragraph, the value of the asset or interest shall be the fair 
        market value at the time it was given away, sold, or disposed 
        of, less the amount of compensation received.  For any 
        uncompensated transfer, the number of months of ineligibility, 
        including partial months, shall be calculated by dividing the 
        uncompensated transfer amount by the average monthly per person 
        payment made by the medical assistance program to skilled 
        nursing facilities for the previous calendar year.  The 
        individual shall remain ineligible until this fixed period has 
        expired.  The period of ineligibility may exceed 30 months, and 
        a reapplication for benefits after 30 months from the date of 
        the transfer shall not result in eligibility unless and until 
        the period of ineligibility has expired.  The period of 
        ineligibility begins in the month the transfer was reported to 
        the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (h) (i) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        Number 104-193, sections 421 and 422, and subsequently set out 
        in federal rules. 
           (i) (j)(1) An undocumented noncitizen or a nonimmigrant is 
        ineligible for general assistance medical care other than 
        emergency services.  For purposes of this subdivision, a 
        nonimmigrant is an individual in one or more of the classes 
        listed in United States Code, title 8, section 1101(a)(15), and 
        an undocumented noncitizen is an individual who resides in the 
        United States without the approval or acquiescence of the 
        Immigration and Naturalization Service. 
           (j) (2) This paragraph does not apply to a child under age 
        18, to a Cuban or Haitian entrant as defined in Public Law 
        Number 96-422, section 501(e)(1) or (2)(a), or to a noncitizen 
        who is aged, blind, or disabled as defined in Code of Federal 
        Regulations, title 42, sections 435.520, 435.530, 435.531, 
        435.540, and 435.541, or effective October 1, 1998, to an 
        individual eligible for general assistance medical care under 
        paragraph (a), clause (4), who cooperates with the Immigration 
        and Naturalization Service to pursue any applicable immigration 
        status, including citizenship, that would qualify the individual 
        for medical assistance with federal financial participation. 
           (k) (3) For purposes of paragraphs (f) and (i) this 
        paragraph, "emergency services" has the meaning given in Code of 
        Federal Regulations, title 42, section 440.255(b)(1), except 
        that it also means services rendered because of suspected or 
        actual pesticide poisoning. 
           (l) (k) Notwithstanding any other provision of law, a 
        noncitizen who is ineligible for medical assistance due to the 
        deeming of a sponsor's income and resources, is ineligible for 
        general assistance medical care. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        256L.01, is amended to read: 
           256L.01 [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For purposes of sections 256L.01 
        to 256L.10 256L.18, the following terms shall have the meanings 
        given them. 
           Subd. 1a.  [CHILD.] "Child" means an individual under 21 
        years of age, including the unborn child of a pregnant woman, an 
        emancipated minor, and an emancipated minor's spouse. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of human services. 
           Subd. 3.  [ELIGIBLE PROVIDERS.] "Eligible providers" means 
        those health care providers who provide covered health services 
        to medical assistance recipients under rules established by the 
        commissioner for that program.  
           Subd. 3a.  [FAMILY WITH CHILDREN.] (a) "Family with 
        children" means: 
           (1) parents, their children, and dependent siblings 
        residing in the same household; or 
           (2) grandparents, foster parents, relative caretakers as 
        defined in the medical assistance program, or legal guardians; 
        their wards who are children; and dependent siblings residing in 
        the same household.  
           (b) The term includes children and dependent siblings who 
        are temporarily absent from the household in settings such as 
        schools, camps, or visitation with noncustodial parents.  
           (c) For purposes of this subdivision, a dependent sibling 
        means an unmarried child who is a full-time student under the 
        age of 25 years who is financially dependent upon a parent, 
        grandparent, foster parent, relative caretaker, or legal 
        guardian.  Proof of school enrollment is required. 
           Subd. 4.  [GROSS INDIVIDUAL OR GROSS FAMILY INCOME.] "Gross 
        individual or gross family income" for farm and nonfarm 
        self-employed means income calculated using as the baseline the 
        adjusted gross income reported on the applicant's federal income 
        tax form for the previous year and adding back in reported 
        depreciation, carryover loss, and net operating loss amounts 
        that apply to the business in which the family is currently 
        engaged.  Applicants shall report the most recent financial 
        situation of the family if it has changed from the period of 
        time covered by the federal income tax form.  The report may be 
        in the form of percentage increase or decrease. 
           Subd. 5.  [INCOME.] "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. 
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        256L.02, subdivision 3, is amended to read: 
           Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
        shall manage spending for the MinnesotaCare program in a manner 
        that maintains a minimum reserve in accordance with section 
        16A.76.  As part of each state revenue and expenditure forecast, 
        the commissioner must make a quarterly an assessment of the 
        expected expenditures for the covered services for the remainder 
        of the current biennium and for the following biennium.  The 
        estimated expenditure, including the reserve requirements 
        described in section 16A.76, shall be compared to an estimate of 
        the revenues that will be deposited available in the health care 
        access fund.  Based on this comparison, and after consulting 
        with the chairs of the house ways and means committee and the 
        senate finance committee, and the legislative commission on 
        health care access, the commissioner shall, as necessary, make 
        the adjustments specified in paragraph (b) to ensure that 
        expenditures remain within the limits of available revenues for 
        the remainder of the current biennium and for the following 
        biennium.  The commissioner shall not hire additional staff 
        using appropriations from the health care access fund until the 
        commissioner of finance makes a determination that the 
        adjustments implemented under paragraph (b) are sufficient to 
        allow MinnesotaCare expenditures to remain within the limits of 
        available revenues for the remainder of the current biennium and 
        for the following biennium. 
           (b) The adjustments the commissioner shall use must be 
        implemented in this order:  first, stop enrollment of single 
        adults and households without children; second, upon 45 days' 
        notice, stop coverage of single adults and households without 
        children already enrolled in the MinnesotaCare program; third, 
        upon 90 days' notice, decrease the premium subsidy amounts by 
        ten percent for families with gross annual income above 200 
        percent of the federal poverty guidelines; fourth, upon 90 days' 
        notice, decrease the premium subsidy amounts by ten percent for 
        families with gross annual income at or below 200 percent; and 
        fifth, require applicants to be uninsured for at least six 
        months prior to eligibility in the MinnesotaCare program.  If 
        these measures are insufficient to limit the expenditures to the 
        estimated amount of revenue, the commissioner shall further 
        limit enrollment or decrease premium subsidies. 
           Sec. 9.  Minnesota Statutes 1997 Supplement, section 
        256L.02, is amended by adding a subdivision to read: 
           Subd. 4.  [FUNDING FOR PREGNANT WOMEN AND CHILDREN UNDER 
        AGE TWO.] For fiscal years beginning on or after July 1, 1999, 
        the state cost of health care services provided to MinnesotaCare 
        enrollees who are pregnant women or children under age two shall 
        be paid out of the general fund rather than the health care 
        access fund.  If the commissioner of finance decides to pay for 
        these costs using a source other than the general fund, the 
        commissioner shall include the change as a budget initiative in 
        the biennial or supplemental budget, and shall not change the 
        funding source through a forecast modification. 
           Sec. 10.  Minnesota Statutes 1997 Supplement, section 
        256L.03, subdivision 1, is amended to read: 
           Subdivision 1.  [COVERED HEALTH SERVICES.] "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 preventive services, 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.  Effective July 1, 
        1998, adult dental care for nonpreventive services with the 
        exception of orthodontic services is available to persons who 
        qualify under section 256L.04, subdivisions 1 to 7, or 256L.13, 
        with family gross income equal to or less than 175 percent of 
        the federal poverty guidelines.  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. 
           Sec. 11.  Minnesota Statutes 1997 Supplement, section 
        256L.03, is amended by adding a subdivision to read: 
           Subd. 1a.  [COVERED SERVICES FOR PREGNANT WOMEN AND 
        CHILDREN UNDER MINNESOTACARE HEALTH CARE REFORM WAIVER.] 
        Beginning January 1, 1999, children and pregnant women are 
        eligible for coverage of all services that are eligible for 
        reimbursement under the medical assistance program according to 
        chapter 256B, except that abortion services under MinnesotaCare 
        shall be limited as provided under section 256L.03, subdivision 
        1.  Pregnant women and children are exempt from the provisions 
        of subdivision 5, regarding copayments.  Pregnant women and 
        children who are lawfully residing in the United States but who 
        are not "qualified noncitizens" under title IV of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        Public Law Number 104-193, Statutes at Large, volume 110, page 
        2105, are eligible for coverage of all services provided under 
        the medical assistance program according to chapter 256B. 
           Sec. 12.  Minnesota Statutes 1997 Supplement, section 
        256L.03, is amended by adding a subdivision to read: 
           Subd. 1b.  [PREGNANT WOMEN; ELIGIBILITY FOR FULL MEDICAL 
        ASSISTANCE SERVICES.] Beginning January 1, 1999, a 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.  Copayments totaling 
        $30 or more, paid after the date the pregnancy is diagnosed, 
        shall be refunded. 
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        256L.03, subdivision 3, is amended to read: 
           Subd. 3.  [INPATIENT HOSPITAL SERVICES.] (a) Beginning July 
        1, 1993, Covered health services shall include inpatient 
        hospital services, including inpatient hospital mental health 
        services and inpatient hospital and residential chemical 
        dependency treatment, subject to those limitations necessary to 
        coordinate the provision of these services with eligibility 
        under the medical assistance spenddown.  Prior to July 1, 1997, 
        the inpatient hospital benefit for adult enrollees is subject to 
        an annual benefit limit of $10,000.  Effective July 1, 1997, The 
        inpatient hospital benefit for adult enrollees who qualify under 
        section 256L.04, subdivision 7, or who qualify under section 
        256L.04, subdivisions 1 to 6 and 2, or 256L.13 with family gross 
        income that exceeds 175 percent of the federal poverty 
        guidelines and who are not pregnant, is subject to an annual 
        limit of $10,000.  
           (b) Enrollees who qualify under section 256L.04, 
        subdivision 7, or who qualify under section 256L.04, 
        subdivisions 1 to 6, or 256L.13 with family gross income that 
        exceeds 175 percent of the federal poverty guidelines and who 
        are not pregnant, and are determined by the commissioner to have 
        a basis of eligibility for medical assistance shall apply for 
        and cooperate with the requirements of medical assistance by the 
        last day of the third month following admission to an inpatient 
        hospital.  If an enrollee fails to apply for medical assistance 
        within this time period, the enrollee and the enrollee's family 
        shall be disenrolled from the plan and they may not reenroll 
        until 12 calendar months have elapsed.  Enrollees and enrollees' 
        families disenrolled for not applying for or not cooperating 
        with medical assistance may not reenroll. 
           (c) Admissions for inpatient hospital services paid for 
        under section 256L.11, subdivision 3, must be certified as 
        medically necessary in accordance with Minnesota Rules, parts 
        9505.0500 to 9505.0540, except as provided in clauses (1) and 
        (2): 
           (1) all admissions must be certified, except those 
        authorized under rules established under section 254A.03, 
        subdivision 3, or approved under Medicare; and 
           (2) payment under section 256L.11, subdivision 3, shall be 
        reduced by five percent for admissions for which certification 
        is requested more than 30 days after the day of admission.  The 
        hospital may not seek payment from the enrollee for the amount 
        of the payment reduction under this clause. 
           (d) Any enrollee or family member of an enrollee who has 
        previously been permanently disenrolled from MinnesotaCare for 
        not applying for and cooperating with medical assistance shall 
        be eligible to reenroll if 12 calendar months have elapsed since 
        the date of disenrollment. 
           Sec. 14.  Minnesota Statutes 1997 Supplement, section 
        256L.03, is amended by adding a subdivision to read: 
           Subd. 3a.  [INTERPRETER SERVICES.] Covered services include 
        sign and spoken language interpreter services that assist an 
        enrollee in obtaining covered health care services. 
           Sec. 15.  Minnesota Statutes 1997 Supplement, section 
        256L.03, subdivision 4, is amended to read: 
           Subd. 4.  [COORDINATION WITH MEDICAL ASSISTANCE.] The 
        commissioner shall coordinate the provision of hospital 
        inpatient services under the MinnesotaCare program with enrollee 
        eligibility under the medical assistance spenddown, and shall 
        apply to the secretary of health and human services for any 
        necessary federal waivers or approvals. 
           Sec. 16.  Minnesota Statutes 1997 Supplement, section 
        256L.03, subdivision 5, is amended to read: 
           Subd. 5.  [COPAYMENTS AND COINSURANCE.] The MinnesotaCare 
        benefit plan shall include the following copayments and 
        coinsurance requirements:  
           (1) ten percent of the paid charges for inpatient hospital 
        services for adult enrollees not eligible for medical 
        assistance, subject to an annual inpatient out-of-pocket maximum 
        of $1,000 per individual and $3,000 per family; 
           (2) $3 per prescription for adult enrollees; 
           (3) $25 for eyeglasses for adult enrollees; and 
           (4) effective July 1, 1998, 50 percent of the 
        fee-for-service rate for adult dental care services other than 
        preventive care services for persons eligible under section 
        256L.04, subdivisions 1 to 7, or 256L.13, with income equal to 
        or less than 175 percent of the federal poverty guidelines. 
           Prior to July 1, 1997, enrollees who are not eligible for 
        medical assistance with or without a spenddown shall be 
        financially responsible for the coinsurance amount and amounts 
        which exceed the $10,000 benefit limit.  Effective July 1, 1997, 
        adult enrollees who qualify under section 256L.04, subdivision 
        7, or who qualify under section 256L.04, subdivisions 1 to 6, or 
        256L.13 with family gross income that exceeds 175 percent of the 
        federal poverty guidelines and who are not pregnant, and who are 
        not eligible for medical assistance with or without a spenddown, 
        shall be financially responsible for the coinsurance amount and 
        amounts which exceed the $10,000 inpatient hospital benefit 
        limit. 
           When a MinnesotaCare enrollee becomes a member of a prepaid 
        health plan, or changes from one prepaid health plan to another 
        during a calendar year, any charges submitted towards the 
        $10,000 annual inpatient benefit limit, and any out-of-pocket 
        expenses incurred by the enrollee for inpatient services, that 
        were submitted or incurred prior to enrollment, or prior to the 
        change in health plans, shall be disregarded. 
           Sec. 17.  Minnesota Statutes 1997 Supplement, section 
        256L.04, subdivision 1, is amended to read: 
           Subdivision 1.  [CHILDREN; EXPANSION AND CONTINUATION OF 
        ELIGIBILITY FAMILIES WITH CHILDREN.] (a) [CHILDREN.] Prior to 
        October 1, 1992, "eligible persons" means children who are one 
        year of age or older but less than 18 years of age who have 
        gross family incomes that are equal to or less than 185 percent 
        of the federal poverty guidelines and who are not eligible for 
        medical assistance without a spenddown under chapter 256B and 
        who are not otherwise insured for the covered services.  The 
        period of eligibility extends from the first day of the month in 
        which the child's first birthday occurs to the last day of the 
        month in which the child becomes 18 years old.  Families with 
        children with family income equal to or less than 275 percent of 
        the federal poverty guidelines for the applicable family size 
        shall be eligible for MinnesotaCare according to this section.  
        All other provisions of sections 256L.01 to 256L.18, including 
        the insurance-related barriers to enrollment under section 
        256L.07, shall apply unless otherwise specified. 
           (b) [EXPANSION OF ELIGIBILITY.] Eligibility for 
        MinnesotaCare shall be expanded as provided in subdivisions 3 to 
        7, except children who meet the criteria in this subdivision 
        shall continue to be enrolled pursuant to this subdivision.  The 
        enrollment requirements in this paragraph apply to enrollment 
        under subdivisions 1 to 7.  Parents who enroll in the 
        MinnesotaCare program must also enroll their children and 
        dependent siblings, if the children and their dependent siblings 
        are eligible.  Children and dependent siblings may be enrolled 
        separately without enrollment by parents.  However, if one 
        parent in the household enrolls, both parents must enroll, 
        unless other insurance is available.  If one child from a family 
        is enrolled, all children must be enrolled, unless other 
        insurance is available.  If one spouse in a household enrolls, 
        the other spouse in the household must also enroll, unless other 
        insurance is available.  Families cannot choose to enroll only 
        certain uninsured members.  For purposes of this section, a 
        "dependent sibling" means an unmarried child who is a full-time 
        student under the age of 25 years who is financially dependent 
        upon a parent.  Proof of school enrollment will be required.  
           (c)  [CONTINUATION OF ELIGIBILITY.] Individuals who 
        initially enroll in the MinnesotaCare program under the 
        eligibility criteria in subdivisions 3 to 7 remain eligible for 
        the MinnesotaCare program, regardless of age, place of 
        residence, or the presence or absence of children in the same 
        household, as long as all other eligibility criteria are met and 
        residence in Minnesota and continuous enrollment in the 
        MinnesotaCare program or medical assistance are maintained.  In 
        order for either parent or either spouse in a household to 
        remain enrolled, both must remain enrolled, unless other 
        insurance is available. 
           Sec. 18.  Minnesota Statutes 1997 Supplement, section 
        256L.04, subdivision 2, is amended to read: 
           Subd. 2.  [COOPERATION IN ESTABLISHING THIRD PARTY 
        LIABILITY, PATERNITY, AND OTHER MEDICAL SUPPORT.] (a) To be 
        eligible for MinnesotaCare, individuals and families must 
        cooperate with the state agency to identify potentially liable 
        third party payers and assist the state in obtaining third party 
        payments.  "Cooperation" includes, but is not limited to, 
        identifying any third party who may be liable for care and 
        services provided under MinnesotaCare to the enrollee, providing 
        relevant information to assist the state in pursuing a 
        potentially liable third party, and completing forms necessary 
        to recover third party payments. 
           (b) A parent, guardian, 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 
        or guardian fails to cooperate in establishing paternity or 
        obtaining medical support. 
           Sec. 19.  Minnesota Statutes 1997 Supplement, section 
        256L.04, subdivision 7, is amended to read: 
           Subd. 7.  [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO 
        CHILDREN.] (a) Beginning October 1, 1994, the definition of 
        "eligible persons" is expanded to include all individuals and 
        households with no children who have gross family incomes that 
        are equal to or less than 125 percent of the federal poverty 
        guidelines and who are not eligible for medical assistance 
        without a spenddown under chapter 256B.  
           (b) Beginning July 1, 1997, The definition of eligible 
        persons is expanded to include includes all individuals and 
        households with no children who have gross family incomes that 
        are equal to or less than 175 percent of the federal poverty 
        guidelines and who are not eligible for medical assistance 
        without a spenddown under chapter 256B. 
           (c) All eligible persons under paragraphs (a) and (b) are 
        eligible for coverage through the MinnesotaCare program but must 
        pay a premium as determined under sections 256L.07 and 256L.08.  
        Individuals and families whose income is greater than the limits 
        established under section 256L.08 may not enroll in the 
        MinnesotaCare program. 
           Sec. 20.  Minnesota Statutes 1997 Supplement, section 
        256L.04, is amended by adding a subdivision to read: 
           Subd. 7a.  [INELIGIBILITY.] Applicants whose income is 
        greater than the limits established under this section may not 
        enroll in the MinnesotaCare program. 
           Sec. 21.  Minnesota Statutes 1997 Supplement, section 
        256L.04, subdivision 8, is amended to read: 
           Subd. 8.  [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL 
        ASSISTANCE.] (a) Individuals who apply for MinnesotaCare receive 
        supplemental security income or retirement, survivors, or 
        disability benefits due to a disability, or other 
        disability-based pension, who qualify under section 256L.04, 
        subdivision 7, but who are potentially eligible for medical 
        assistance without a spenddown shall be allowed to enroll in 
        MinnesotaCare for a period of 60 days, so long as the applicant 
        meets all other conditions of eligibility.  The commissioner 
        shall identify and refer the applications of such individuals to 
        their county social service agency.  The county and the 
        commissioner shall cooperate to ensure that the individuals 
        obtain medical assistance coverage for any months for which they 
        are eligible. 
           (b) The enrollee must cooperate with the county social 
        service agency in determining medical assistance eligibility 
        within the 60-day enrollment period.  Enrollees who do not apply 
        for and cooperate with medical assistance within the 60-day 
        enrollment period, and their other family members, shall be 
        disenrolled from the plan within one calendar month.  Persons 
        disenrolled for nonapplication for medical assistance may not 
        reenroll until they have obtained a medical assistance 
        eligibility determination for the family member or members who 
        were referred to the county agency.  Persons disenrolled for 
        noncooperation with medical assistance may not reenroll until 
        they have cooperated with the county agency and have obtained a 
        medical assistance eligibility determination. 
           (c) Beginning January 1, 2000, counties that choose to 
        become MinnesotaCare enrollment sites shall consider 
        MinnesotaCare applications of individuals described in paragraph 
        (a) to also be applications for medical assistance and shall 
        first determine whether medical assistance eligibility exists.  
        Adults with children with family income under 175 percent of the 
        federal poverty guidelines for the applicable family size, 
        pregnant women, and children who qualify under subdivision 1 who 
        are potentially eligible for medical assistance without a 
        spenddown may choose to enroll in either MinnesotaCare or 
        medical assistance. 
           (d) The commissioner shall redetermine provider payments 
        made under MinnesotaCare to the appropriate medical assistance 
        payments for those enrollees who subsequently become eligible 
        for medical assistance. 
           Sec. 22.  Minnesota Statutes 1997 Supplement, section 
        256L.04, subdivision 9, is amended to read: 
           Subd. 9.  [GENERAL ASSISTANCE MEDICAL CARE.] A person 
        cannot have coverage under both MinnesotaCare and general 
        assistance medical care in the same month.  Eligibility for 
        MinnesotaCare cannot be replaced by eligibility for general 
        assistance medical care, and eligibility for general assistance 
        medical care cannot be replaced by eligibility for MinnesotaCare.
           Sec. 23.  Minnesota Statutes 1997 Supplement, section 
        256L.04, subdivision 10, is amended to read: 
           Subd. 10.  [SPONSOR'S INCOME AND RESOURCES DEEMED 
        AVAILABLE; DOCUMENTATION.] When determining eligibility for any 
        federal or state benefits under sections 256L.01 to 256L.16 
        256L.18, the income and resources of all noncitizens whose 
        sponsor signed an affidavit of support as defined under United 
        States Code, title 8, section 1183a, shall be deemed to include 
        their sponsors' income and resources as defined in the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        title IV, Public Law Number 104-193, sections 421 and 422, and 
        subsequently set out in federal rules.  To be eligible for the 
        program, noncitizens must provide documentation of their 
        immigration status. 
           Sec. 24.  Minnesota Statutes 1997 Supplement, section 
        256L.04, is amended by adding a subdivision to read: 
           Subd. 12.  [PERSONS IN DETENTION.] Beginning January 1, 
        1999, an applicant residing in a correctional or detention 
        facility is not eligible for MinnesotaCare.  An enrollee 
        residing in a correctional or detention facility is not eligible 
        at renewal of eligibility under section 256L.05, subdivision 3b. 
           Sec. 25.  Minnesota Statutes 1997 Supplement, section 
        256L.04, is amended by adding a subdivision to read: 
           Subd. 13.  [FAMILIES WITH GRANDPARENTS, RELATIVE 
        CARETAKERS, FOSTER PARENTS, OR LEGAL GUARDIANS.] Beginning 
        January 1, 1999, in families that include a grandparent, 
        relative caretaker as defined in the medical assistance program, 
        foster parent, or legal guardian, the grandparent, relative 
        caretaker, foster parent, or legal guardian may apply as a 
        family or may apply separately for the children.  If the 
        caretaker applies separately for the children, only the 
        children's income is counted.  If the grandparent, relative 
        caretaker, foster parent, or legal guardian applies with the 
        children, their income is included in the gross family income 
        for determining eligibility and premium amount. 
           Sec. 26.  Minnesota Statutes 1997 Supplement, section 
        256L.05, is amended by adding a subdivision to read: 
           Subd. 1a.  [PERSON AUTHORIZED TO APPLY ON APPLICANT'S 
        BEHALF.] Beginning January 1, 1999, a family member who is age 
        18 or over or who is an authorized representative, as defined in 
        the medical assistance program, may apply on an applicant's 
        behalf. 
           Sec. 27.  Minnesota Statutes 1997 Supplement, section 
        256L.05, subdivision 2, is amended to read: 
           Subd. 2.  [COMMISSIONER'S DUTIES.] The commissioner shall 
        use individuals' social security numbers as identifiers for 
        purposes of administering the plan and conduct data matches to 
        verify income.  Applicants shall submit evidence of individual 
        and family income, earned and unearned, including such as the 
        most recent income tax return, wage slips, or other 
        documentation that is determined by the commissioner as 
        necessary to verify income eligibility.  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. 
           Sec. 28.  Minnesota Statutes 1997 Supplement, section 
        256L.05, subdivision 3, is amended to read: 
           Subd. 3.  [EFFECTIVE DATE OF COVERAGE.] 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 newborns or eligible newly adoptive 
        children added to a family receiving covered health services is 
        the date of entry into the family.  The effective date of 
        coverage for other new recipients added to the family receiving 
        covered health services is the first day of the month following 
        the month in which eligibility is approved and the first premium 
        payment has been received or at renewal, whichever the family 
        receiving covered health services prefers.  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.  The premium 
        must be received eight working days prior to the end of the 
        month for coverage to begin the following month.  Benefits are 
        not available until the day following discharge if an enrollee 
        is hospitalized on the first day of coverage.  Notwithstanding 
        any other law to the contrary, benefits under sections 256L.01 
        to 256L.10 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. 
           Sec. 29.  Minnesota Statutes 1997 Supplement, section 
        256L.05, is amended by adding a subdivision to read: 
           Subd. 3a.  [RENEWAL OF ELIGIBILITY.] 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.  
           Sec. 30.  Minnesota Statutes 1997 Supplement, section 
        256L.05, is amended by adding a subdivision to read: 
           Subd. 3b.  [REAPPLICATION.] Beginning January 1, 1999, 
        families and individuals must reapply after a lapse in coverage 
        of one calendar month or more and must meet all eligibility 
        criteria. 
           Sec. 31.  Minnesota Statutes 1997 Supplement, section 
        256L.05, subdivision 4, is amended to read: 
           Subd. 4.  [APPLICATION PROCESSING.] The commissioner of 
        human services shall determine an applicant's eligibility for 
        MinnesotaCare no more than 30 days from the date that the 
        application is received by the department of human services.  
        Beginning January 1, 2000, this requirement also applies to 
        local county human services agencies that determine eligibility 
        for MinnesotaCare.  To prevent processing delays, applicants 
        who, from the information provided on the application, appear to 
        meet eligibility requirements shall be enrolled.  The enrollee 
        must provide all required verifications within 30 days of 
        enrollment or coverage from the program shall be terminated.  
        Enrollees who are determined to be ineligible when verifications 
        are provided shall be disenrolled from the program. 
           Sec. 32.  Minnesota Statutes 1997 Supplement, section 
        256L.06, subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) 
        Premiums are dedicated to the commissioner for MinnesotaCare.  
        The commissioner shall make an annual redetermination of 
        continued eligibility and identify people who may become 
        eligible for medical assistance.  
           (b) The commissioner shall develop and implement procedures 
        to:  (1) require enrollees to report changes in income; (2) 
        adjust sliding scale premium payments, based upon changes in 
        enrollee income; and (3) disenroll enrollees from MinnesotaCare 
        for failure to pay required premiums.  Beginning July 1, 1998, 
        failure to pay includes payment with a dishonored check and the 
        commissioner may demand a guaranteed form of payment as the only 
        means to replace a dishonored check. 
           (c) Premiums are calculated on a calendar month basis and 
        may be paid on a monthly, quarterly, or annual basis, with the 
        first payment due upon notice from the commissioner of the 
        premium amount required.  The commissioner shall inform 
        applicants and enrollees of these premium payment options. 
        Premium payment is required before enrollment is complete and to 
        maintain eligibility in MinnesotaCare.  
           (d) Nonpayment of the premium will result in disenrollment 
        from the plan within one calendar month after the due date.  
        Persons disenrolled for nonpayment or who voluntarily terminate 
        coverage from the program may not reenroll until four calendar 
        months have elapsed.  Persons disenrolled for nonpayment or who 
        voluntarily terminate coverage from the program may not reenroll 
        for four calendar months unless the person demonstrates good 
        cause for nonpayment.  Good cause does not exist if a person 
        chooses to pay other family expenses instead of the premium.  
        The commissioner shall define good cause in rule. 
           Sec. 33.  Minnesota Statutes 1997 Supplement, section 
        256L.07, is amended to read: 
           256L.07 [ELIGIBILITY FOR SUBSIDIZED PREMIUMS BASED ON 
        SLIDING SCALE.] 
           Subdivision 1.  [GENERAL REQUIREMENTS.] Families and 
        individuals who enroll on or after October 1, 1992, are eligible 
        for subsidized premium payments based on a sliding scale under 
        section 256L.08 only if the family or individual meets the 
        requirements in subdivisions 2 and 3.  Children already enrolled 
        in the children's health plan as of September 30, 1992, eligible 
        under section 256L.04, subdivision 1, paragraph (a), children 
        who enroll in the MinnesotaCare program after September 30, 
        1992, pursuant to Laws 1992, chapter 549, article 4, section 17, 
        and children who enroll under section 256L.04, subdivision 6, 
        are eligible for subsidized premium payments without meeting 
        these requirements, as long as they maintain continuous coverage 
        in the MinnesotaCare plan or medical assistance. (a) Children 
        enrolled in the original children's health plan as of September 
        30, 1992, children who enrolled in the MinnesotaCare program 
        after September 30, 1992, pursuant to Laws 1992, chapter 549, 
        article 4, section 17, and children who have family gross 
        incomes that are equal to or less than 150 percent of the 
        federal poverty guidelines are eligible for subsidized premium 
        payments without meeting the requirements of subdivision 2, as 
        long as they maintain continuous coverage in the MinnesotaCare 
        program or medical assistance.  Children who apply for 
        MinnesotaCare on or after the implementation date of the 
        employer-subsidized health coverage program as described in 
        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 and individuals who initially enrolled in 
        MinnesotaCare under section 256L.04, and whose income increases 
        above the limits established in section 256L.08, may continue 
        enrollment and pay the full cost of coverage.  Families enrolled 
        in MinnesotaCare under section 256L.04, subdivision 1, whose 
        income increases above 275 percent of the federal poverty 
        guidelines, are no longer eligible for the program and shall be 
        disenrolled by the commissioner.  Individuals enrolled in 
        MinnesotaCare under section 256L.04, subdivision 7, whose income 
        increases above 175 percent of the federal poverty guidelines 
        are no longer eligible for the program and shall be disenrolled 
        by the commissioner.  For persons disenrolled under this 
        subdivision, MinnesotaCare coverage terminates the last day of 
        the calendar month following the month in which the commissioner 
        determines that the income of a family or individual, determined 
        over a four-month period as required by section 256L.15, 
        subdivision 2, exceeds program income limits.  
           (c) Notwithstanding paragraph (b), individuals and families 
        may remain enrolled in MinnesotaCare if ten percent of their 
        annual income is less than the annual premium for a policy with 
        a $500 deductible available through the Minnesota comprehensive 
        health association.  Individuals and families who are no longer 
        eligible for MinnesotaCare under this subdivision shall be given 
        an 18-month notice period from the date that ineligibility is 
        determined before disenrollment.  
           Subd. 2.  [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED 
        COVERAGE.] (a) To be eligible for subsidized premium payments 
        based on a sliding scale, a family or individual must not have 
        access to subsidized health coverage through an employer, and 
        must not have had access to subsidized health coverage through 
        an employer for the 18 months prior to application for 
        subsidized coverage under the MinnesotaCare program.  The 
        requirement that the family or individual must not have had 
        access to employer-subsidized coverage during the previous 18 
        months does not apply if:  (1) employer-subsidized coverage was 
        lost due to the death of an employee or divorce; (2) 
        employer-subsidized coverage was lost because an individual 
        became ineligible for coverage as a child or dependent; or (3) 
        employer-subsidized coverage was lost for reasons that would not 
        disqualify the individual for unemployment benefits under 
        section 268.09 and the family or individual has not had access 
        to employer-subsidized coverage since the loss of coverage.  If 
        employer-subsidized coverage was lost for reasons that 
        disqualify an individual for unemployment benefits under section 
        268.09, children of that individual are exempt from the 
        requirement of no access to employer subsidized coverage for the 
        18 months prior to application, as long as the children have not 
        had access to employer subsidized coverage since the 
        disqualifying event.  The requirement that the.  A family or 
        individual must not have had access to employer-subsidized 
        coverage during the previous 18 months does apply if whose 
        employer-subsidized coverage is lost due to an employer 
        terminating health care coverage as an employee benefit during 
        the previous 18 months is not eligible.  
           (b) For purposes of this requirement, subsidized health 
        coverage means health coverage for which the employer pays at 
        least 50 percent of the cost of coverage for the employee, 
        excluding dependent coverage or dependent, or a higher 
        percentage as specified by the commissioner.  Children are 
        eligible for employer-subsidized coverage through either parent, 
        including the noncustodial parent.  The commissioner must treat 
        employer contributions to Internal Revenue Code Section 125 
        plans and any other employer benefits intended to pay health 
        care costs as qualified employer subsidies toward the cost of 
        health coverage for employees for purposes of this subdivision. 
           Subd. 3.  [PERIOD UNINSURED OTHER HEALTH COVERAGE.] To be 
        eligible for subsidized premium payments based on a sliding 
        scale, (a) Families and individuals initially enrolled in the 
        MinnesotaCare program under section 256L.04, subdivisions 5 and 
        7, must have had no health coverage while enrolled or for at 
        least four months prior to application and renewal.  Children 
        enrolled in the original children's health plan and children in 
        families with income equal to or less than 150 percent of the 
        federal poverty guidelines, who have other health insurance, are 
        eligible if the other health coverage meets the requirements of 
        Minnesota Rules, part 9506.0020, subpart 3, item B.  The 
        commissioner may change this eligibility criterion for sliding 
        scale premiums in order to remain within the limits of available 
        appropriations.  The requirement of at least four months of no 
        health coverage prior to application for the MinnesotaCare 
        program does not apply to: newborns. 
           (1) families, children, and individuals who apply for the 
        MinnesotaCare program upon termination from or as required by 
        the medical assistance program, general assistance medical care 
        program, or coverage under a regional demonstration project for 
        the uninsured funded under section 256B.73, the Hennepin county 
        assured care program, or the Group Health, Inc., community 
        health plan; 
           (2) families and individuals initially enrolled under 
        section 256L.04, subdivisions 1, paragraph (a), and 3; 
           (3) children enrolled pursuant to Laws 1992, chapter 549, 
        article 4, section 17; or 
           (4) individuals currently serving or who have served in the 
        military reserves, and dependents of these individuals, if these 
        individuals:  (i) reapply for MinnesotaCare coverage after a 
        period of active military service during which they had been 
        covered by the Civilian Health and Medical Program of the 
        Uniformed Services (CHAMPUS); (ii) were covered under 
        MinnesotaCare immediately prior to obtaining coverage under 
        CHAMPUS; and (iii) have maintained continuous coverage. 
           (b) For purposes of this section, medical assistance, 
        general assistance medical care, and civilian health and medical 
        program of the uniformed service, CHAMPUS, are not considered 
        insurance or health coverage. 
           (c) For purposes of this section, Medicare part A or B 
        coverage under title XVIII of the Social Security Act, United 
        States Code, title 42, sections 1395c to 1395w-4, is considered 
        health coverage.  An applicant or enrollee may not refuse 
        Medicare coverage to establish eligibility for MinnesotaCare. 
           Sec. 34.  Minnesota Statutes 1997 Supplement, section 
        256L.09, subdivision 2, is amended to read: 
           Subd. 2.  [RESIDENCY REQUIREMENT.] (a) Prior to July 1, 
        1997, to be eligible for health coverage under the MinnesotaCare 
        program, families and individuals must be permanent residents of 
        Minnesota.  
           (b) Effective July 1, 1997, To be eligible for health 
        coverage under the MinnesotaCare program, adults without 
        children must be permanent residents of Minnesota. 
           (c) Effective July 1, 1997, (b) To be eligible for health 
        coverage under the MinnesotaCare program, pregnant women, 
        families, and children must meet the residency requirements as 
        provided by Code of Federal Regulations, title 42, section 
        435.403, except that the provisions of section 256B.056, 
        subdivision 1, shall apply upon receipt of federal approval. 
           Sec. 35.  Minnesota Statutes 1997 Supplement, section 
        256L.09, subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBILITY AS MINNESOTA RESIDENT.] (a) For 
        purposes of this section, a permanent Minnesota resident is a 
        person who has demonstrated, through persuasive and objective 
        evidence, that the person is domiciled in the state and intends 
        to live in the state permanently. 
           (b) To be eligible as a permanent resident, all applicants 
        an applicant must demonstrate the requisite intent to live in 
        the state permanently by: 
           (1) showing that the applicant maintains a residence at a 
        verified address other than a place of public accommodation, 
        through the use of evidence of residence described in section 
        256D.02, subdivision 12a, clause (1); 
           (2) demonstrating that the applicant has been continuously 
        domiciled in the state for no less than 180 days immediately 
        before the application; and 
           (3) signing an affidavit declaring that (A) the applicant 
        currently resides in the state and intends to reside in the 
        state permanently; and (B) the applicant did not come to the 
        state for the primary purpose of obtaining medical coverage or 
        treatment. 
           (c) A person who is temporarily absent from the state does 
        not lose eligibility for MinnesotaCare.  "Temporarily absent 
        from the state" means the person is out of the state for a 
        temporary purpose and intends to return when the purpose of the 
        absence has been accomplished.  A person is not temporarily 
        absent from the state if another state has determined that the 
        person is a resident for any purpose.  If temporarily absent 
        from the state, the person must follow the requirements of the 
        health plan in which he or she is enrolled to receive services. 
           Sec. 36.  Minnesota Statutes 1997 Supplement, section 
        256L.09, subdivision 6, is amended to read: 
           Subd. 6.  [12-MONTH PREEXISTING EXCLUSION.] If the 180-day 
        requirement in subdivision 4, paragraph (b), clause (2), is 
        determined by a court to be unconstitutional, the commissioner 
        of human services shall impose a 12-month preexisting condition 
        exclusion on coverage for persons who have been domiciled in the 
        state for less than 180 days.  
           Sec. 37.  Minnesota Statutes 1997 Supplement, section 
        256L.11, subdivision 6, is amended to read: 
           Subd. 6.  [ENROLLEES 18 OR OLDER.] Payment by the 
        MinnesotaCare program for inpatient hospital services provided 
        to MinnesotaCare enrollees eligible under section 256L.04, 
        subdivision 7, or who qualify under section 256L.04, 
        subdivisions 1 to 6 and 2, or 256L.13 with family gross income 
        that exceeds 175 percent of the federal poverty guidelines and 
        who are not pregnant, who are 18 years old or older on the date 
        of admission to the inpatient hospital must be in accordance 
        with paragraphs (a) and (b).  Payment for adults who are not 
        pregnant and are eligible under section 256L.04, subdivisions 
        1 to 6 and 2, or 256L.13, and whose incomes are equal to or less 
        than 175 percent of the federal poverty guidelines, shall be as 
        provided for under paragraph (c).  
           (a) If the medical assistance rate minus any copayment 
        required under section 256L.03, subdivision 4, is less than or 
        equal to the amount remaining in the enrollee's benefit limit 
        under section 256L.03, subdivision 3, payment must be the 
        medical assistance rate minus any copayment required under 
        section 256L.03, subdivision 4.  The hospital must not seek 
        payment from the enrollee in addition to the copayment.  The 
        MinnesotaCare payment plus the copayment must be treated as 
        payment in full. 
           (b) If the medical assistance rate minus any copayment 
        required under section 256L.03, subdivision 4, is greater than 
        the amount remaining in the enrollee's benefit limit under 
        section 256L.03, subdivision 3, payment must be the lesser of: 
           (1) the amount remaining in the enrollee's benefit limit; 
        or 
           (2) charges submitted for the inpatient hospital services 
        less any copayment established under section 256L.03, 
        subdivision 4. 
           The hospital may seek payment from the enrollee for the 
        amount by which usual and customary charges exceed the payment 
        under this paragraph.  If payment is reduced under section 
        256L.03, subdivision 3, paragraph (c) (b), the hospital may not 
        seek payment from the enrollee for the amount of the reduction. 
           (c) For admissions occurring during the period of July 1, 
        1997, through June 30, 1998, for adults who are not pregnant and 
        are eligible under section 256L.04, subdivisions 1 to 6 and 
        2, or 256L.13, and whose incomes are equal to or less than 175 
        percent of the federal poverty guidelines, the commissioner 
        shall pay hospitals directly, up to the medical assistance 
        payment rate, for inpatient hospital benefits in excess of the 
        $10,000 annual inpatient benefit limit. 
           Sec. 38.  Minnesota Statutes 1997 Supplement, section 
        256L.12, subdivision 5, is amended to read: 
           Subd. 5.  [ELIGIBILITY FOR OTHER STATE PROGRAMS.] 
        MinnesotaCare enrollees who become eligible for medical 
        assistance or general assistance medical care will remain in the 
        same managed care plan if the managed care plan has a contract 
        for that population.  Effective January 1, 1998, MinnesotaCare 
        enrollees who were formerly eligible for general assistance 
        medical care pursuant to section 256D.03, subdivision 3, within 
        six months of MinnesotaCare enrollment and were enrolled in a 
        prepaid health plan pursuant to section 256D.03, subdivision 4, 
        paragraph (d), must remain in the same managed care plan if the 
        managed care plan has a contract for that population.  Contracts 
        between the department of human services and managed care plans 
        must include MinnesotaCare, and medical assistance and may, at 
        the option of the commissioner of human services, also include 
        general assistance medical care.  Managed care plans must 
        participate in the MinnesotaCare and general assistance medical 
        care programs under a contract with the department of human 
        services in service areas where they participate in the medical 
        assistance program. 
           Sec. 39.  Minnesota Statutes 1997 Supplement, section 
        256L.15, is amended to read: 
           256L.15 [PREMIUMS.] 
           Subdivision 1.  [PREMIUM DETERMINATION.] Families and with 
        children enrolled according to sections 256L.13 to 256L.16 and 
        individuals shall pay a premium determined according to a 
        sliding fee based on the cost of coverage as a percentage of the 
        family's gross family income.  Pregnant women and children under 
        age two are exempt from the provisions of section 256L.06, 
        subdivision 3, paragraph (b), clause (3), requiring 
        disenrollment for failure to pay premiums.  For pregnant women, 
        this exemption continues until the first day of the month 
        following the 60th day postpartum.  Women who remain enrolled 
        during pregnancy or the postpartum period, despite nonpayment of 
        premiums, shall be disenrolled on the first of the month 
        following the 60th day postpartum for the penalty period that 
        otherwise applies under section 256L.06, unless they begin 
        paying premiums. 
           Subd. 1a.  [PAYMENT OPTIONS.] The commissioner may offer 
        the following payment options to an enrollee: 
           (1) payment by check; 
           (2) payment by credit card; 
           (3) payment by recurring automatic checking withdrawal; 
           (4) payment by one-time electronic transfer of funds; 
           (5) payment by wage withholding with the consent of the 
        employer and the employee; or 
           (6) payment by using state tax refund payments. 
           At application or reapplication, a MinnesotaCare applicant 
        or enrollee may authorize the commissioner to use the Revenue 
        Recapture Act in chapter 270A to collect funds from the 
        applicant's or enrollee's state income tax refund for the 
        purposes of meeting all or part of the applicant's or enrollee's 
        MinnesotaCare premium obligation for the forthcoming year.  The 
        applicant or enrollee may authorize the commissioner to apply 
        for the state working family tax credit on behalf of the 
        applicant or enrollee.  The setoff due under this subdivision 
        shall not be subject to the $10 fee under section 270A.07, 
        subdivision 1.  
           Subd. 1b.  [PAYMENTS NONREFUNDABLE.] MinnesotaCare premiums 
        are not refundable. 
           Subd. 2.  [SLIDING SCALE TO DETERMINE PERCENTAGE OF GROSS 
        INDIVIDUAL OR FAMILY INCOME.] The commissioner shall establish a 
        sliding fee scale to determine the percentage of 
        gross individual or family income that households at different 
        income levels must pay to obtain coverage through the 
        MinnesotaCare program.  The sliding fee scale must be based on 
        the enrollee's gross individual or family income during the 
        previous four months.  The sliding fee scale begins with a 
        premium of 1.5 percent of gross individual or family income for 
        individuals or families with incomes below the limits for the 
        medical assistance program for families and children and 
        proceeds through the following evenly spaced steps:  1.8, 2.3, 
        3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent.  These percentages are 
        matched to evenly spaced income steps ranging from the medical 
        assistance income limit for families and children to 275 percent 
        of the federal poverty guidelines for the applicable family 
        size.  The sliding fee scale and percentages are not subject to 
        the provisions of chapter 14.  If a family or individual reports 
        increased income after enrollment, premiums shall not be 
        adjusted until eligibility renewal.  
           Subd. 3.  [EXCEPTIONS TO SLIDING SCALE.] An annual premium 
        of $48 is required for all children who are eligible according 
        to section 256L.13, subdivision 4 in families with income at or 
        less than 150 percent of federal poverty guidelines. 
           Sec. 40.  Minnesota Statutes 1997 Supplement, section 
        256L.17, is amended by adding a subdivision to read: 
           Subd. 6.  [WAIVER OF MAINTENANCE OF EFFORT 
        REQUIREMENT.] Unless a federal waiver of the maintenance of 
        effort requirements of section 2105(d) of title XXI of the 
        Balanced Budget Act of 1997, Public Law Number 105-33, Statutes 
        at Large, volume 111, page 251, is granted by the federal 
        Department of Health and Human Services by September 30, 1998, 
        this section does not apply to children.  The commissioner shall 
        publish a notice in the State Register upon receipt of a federal 
        waiver. 
           Sec. 41.  Minnesota Statutes 1997 Supplement, section 
        270A.03, subdivision 5, is amended to read: 
           Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
        natural person to pay a fixed and certain amount of money, which 
        equals or exceeds $25 and which is due and payable to a claimant 
        agency.  The term includes criminal fines imposed under section 
        609.10 or 609.125 and restitution.  A debt may arise under a 
        contractual or statutory obligation, a court order, or other 
        legal obligation, but need not have been reduced to judgment.  
           A debt includes any legal obligation of a current recipient 
        of assistance which is based on overpayment of an assistance 
        grant where that payment is based on a client waiver or an 
        administrative or judicial finding of an intentional program 
        violation; or where the debt is owed to a program wherein the 
        debtor is not a client at the time notification is provided to 
        initiate recovery under this chapter and the debtor is not a 
        current recipient of food stamps, transitional child care, or 
        transitional medical assistance. 
           A debt does not include any legal obligation to pay a 
        claimant agency for medical care, including hospitalization if 
        the income of the debtor at the time when the medical care was 
        rendered does not exceed the following amount: 
           (1) for an unmarried debtor, an income of $6,400 or less; 
           (2) for a debtor with one dependent, an income of $8,200 or 
        less; 
           (3) for a debtor with two dependents, an income of $9,700 
        or less; 
           (4) for a debtor with three dependents, an income of 
        $11,000 or less; 
           (5) for a debtor with four dependents, an income of $11,600 
        or less; and 
           (6) for a debtor with five or more dependents, an income of 
        $12,100 or less.  
           The income amounts in this subdivision shall be adjusted 
        for inflation for debts incurred in calendar years 1991 and 
        thereafter.  The dollar amount of each income level that applied 
        to debts incurred in the prior year shall be increased in the 
        same manner as provided in section 290.06, subdivision 2d, for 
        the expansion of the tax rate brackets. 
           Debt also includes an agreement to pay a MinnesotaCare 
        premium, regardless of the dollar amount of the premium 
        authorized under section 256L.15, subdivision 1a. 
           Sec. 42.  Laws 1997, chapter 225, article 2, section 64, is 
        amended to read: 
           Sec. 64.  [EFFECTIVE DATE.] 
           Section 8 is effective for payments made for MinnesotaCare 
        services on or after July 1, 1996.  Section 23 is effective the 
        day following final enactment.  Section 46 is effective January 
        1, 1998, and applies to high deductible health plans issued or 
        renewed on or after that date. 
           Sec. 43.  [FEDERAL EARNED INCOME TAX CREDIT.] 
           The commissioner of human services shall seek a federal 
        waiver from the appropriate federal agency to allow the state to 
        use the federal earned income tax credit for payment of state 
        subsidized health care premiums. 
           Sec. 44.  [INPATIENT HOSPITAL COPAYMENT.] 
           If federal approval of a waiver to obtain federal Medicaid 
        funding for coverage provided to parents enrolled in the 
        MinnesotaCare program is contingent upon not applying the 
        inpatient hospital services copayment under Minnesota Statutes, 
        section 256L.03, subdivision 5, clause (1), then the inpatient 
        hospital services copayment shall not be applied to enrollees 
        for whom the state receives federal Medicaid funding.  
           Sec. 45.  [EMPLOYER-SUBSIDIZED HEALTH COVERAGE PROGRAM.] 
           Subdivision 1.  [PLAN SUBMITTAL.] The commissioner of human 
        services shall submit to the health care financing 
        administration a plan to obtain federal funding, according to 
        section 2105(c)(3) of the Balanced Budget Act of 1997, Public 
        Law Number 105-33, to subsidize health insurance coverage for 
        families who are ineligible for the MinnesotaCare program, due 
        to the availability of employer-subsidized insurance as defined 
        in Minnesota Statutes, section 256L.07, subdivision 2.  The 
        program shall pay the difference between: 
           (1) what the family would have paid under the sliding 
        premium scale specified in Minnesota Statutes, section 256L.15, 
        subdivision 2, up to a maximum of five percent of the family's 
        income, had the family been covered under MinnesotaCare; and 
           (2) the required employee contribution for 
        employer-subsidized health coverage.  
           Subd. 2.  [CONSULTATION AND PLAN SUBMITTAL.] In developing 
        the plan, the commissioner shall consult with the legislative 
        commission on health care access.  The commissioner shall submit 
        the plan and draft legislation to the legislature by December 
        15, 1998, and shall not implement the plan without legislative 
        approval.  
           Subd. 3.  [PHASE-OUT OF MINNESOTACARE ELIGIBILITY.] As part 
        of the plan submitted to the legislature under subdivision 2, 
        the commissioner shall include a process to phase out 
        MinnesotaCare eligibility for children who have access to 
        employer-subsidized health coverage as defined under Minnesota 
        Statutes, section 256L.07, subdivision 2, and who:  
           (1) enrolled in the original children's health plan as of 
        September 30, 1992; 
           (2) enrolled in the MinnesotaCare program after September 
        30, 1992, according to Laws 1992, chapter 549, article 4, 
        section 17; or 
           (3) have family gross incomes that are equal to or less 
        than 150 percent of the federal poverty guidelines. 
           Sec. 46.  [STATE CHILDREN'S HEALTH INSURANCE PROGRAM.] 
           Subdivision 1.  [AUTHORITY.] The commissioner is authorized 
        to claim enhanced federal matching funds under sections 
        2105(a)(2) and 2110 of the Balanced Budget Act of 1997, Public 
        Law Number 105-33, for any and all state or local expenditures 
        eligible as child health assistance for targeted low-income 
        children and health service initiatives for low-income 
        children.  If required by federal law or regulations, the 
        commissioner is authorized to establish accounts, make 
        appropriate payments, and receive reimbursement from state and 
        local entities providing child health assistance or health 
        services for low-income children, in order to obtain enhanced 
        federal matching funds.  Enhanced federal matching funds 
        received as a result of providing health care coverage 
        authorized under this section shall be deposited in the health 
        care access fund.  Enhanced federal matching funds received as a 
        result of outreach activities described in subdivision 2, clause 
        (2), shall be dedicated to the commissioner of human services to 
        be used for those outreach purposes.  
           Subd. 2.  [ENHANCED MATCHING FUNDS FOR CHILDREN'S HEALTH 
        CARE INITIATIVES.] The commissioner shall submit to the health 
        care financing administration all plans and waiver requests 
        necessary to obtain enhanced matching funds under the state 
        children's health insurance program established as Title 21 of 
        the Balanced Budget Act of 1997, Public Law Number 105-33, for:  
           (1) expenditures made under Minnesota Statutes, section 
        256B.057, subdivision 8; 
           (2) MinnesotaCare outreach activities authorized by Laws 
        1997, chapter 225, article 7, section 2, subdivision 1; and 
           (3) expenditures made under the MinnesotaCare program, the 
        medical assistance program, or any initiative authorized by the 
        legislature including an initiative to subsidize health 
        insurance coverage for families who are ineligible for 
        MinnesotaCare due to the availability of employer-subsidized 
        insurance. 
           The commissioner shall submit to the legislature, by 
        January 15, 1999, all statutory changes necessary to receive 
        enhanced federal matching funds.  
           Sec. 47.  [REVISOR'S INSTRUCTION.] 
           In each section of Minnesota Statutes referred to in column 
        A, the revisor of statutes shall delete the reference in column 
        B and insert the reference in column C. 
           Column A            Column B            Column C
           256B.057, subd. 1a  256L.08             256L.15
           256B.0645           256L.14             256L.03, subd. 1a
           256L.16             256L.14             256L.03, subd. 1a
           Sec. 48.  [REPEALER.] 
           Minnesota Statutes 1997 Supplement, sections 256B.057, 
        subdivision 1a; 256L.04, subdivisions 3, 4, 5, and 6; 256L.06, 
        subdivisions 1 and 2; 256L.08; 256L.09, subdivision 3; 256L.13; 
        and 256L.14, are repealed. 
           Sec. 49.  [EFFECTIVE DATES.] 
           (a) Sections 2, 7, 8, 10, 13, 15, 16, 17 to 23, 27, 28, 31 
        to 39, 41, 47, and 48 are effective January 1, 1999. 
           (b) Sections 4, 5, and 40 are effective September 30, 1998. 
           (c) Section 6 is effective July 1, 1998, except paragraph 
        (a), clause (4), which is effective October 1, 1998. 
           (d) Sections 14 and 42 to 46 are effective the day 
        following final enactment. 
                                   ARTICLE 6
                 WELFARE REFORM; WORK FIRST; ASSISTANCE PROGRAM 
                    AND CHILD SUPPORT CHANGES; AND LICENSING 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        119B.01, subdivision 16, is amended to read: 
           Subd. 16.  [TRANSITION YEAR FAMILIES.] "Transition year 
        families" means families who have received AFDC, or who were 
        eligible to receive AFDC after choosing to discontinue receipt 
        of the cash portion of MFIP-S assistance under section 256J.31, 
        subdivision 12, for at least three of the last six months before 
        losing eligibility for AFDC due to increased hours of 
        employment, or increased income from employment or child or 
        spousal support, or the loss of income disregards due to time 
        limitations. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        119B.02, is amended to read: 
           119B.02 [DUTIES OF COMMISSIONER.] 
           Subdivision 1.  [CHILD CARE SERVICES.] The commissioner 
        shall develop standards for county and human services boards to 
        provide child care services to enable eligible families to 
        participate in employment, training, or education programs.  
        Within the limits of available appropriations, the commissioner 
        shall distribute money to counties to reduce the costs of child 
        care for eligible families.  The commissioner shall adopt rules 
        to govern the program in accordance with this section.  The 
        rules must establish a sliding schedule of fees for parents 
        receiving child care services.  The rules shall provide that 
        funds received as a lump sum payment of child support arrearages 
        shall not be counted as income to a family in the month received 
        but shall be prorated over the 12 months following receipt and 
        added to the family income during those months.  In the rules 
        adopted under this section, county and human services boards 
        shall be authorized to establish policies for payment of child 
        care spaces for absent children, when the payment is required by 
        the child's regular provider.  The rules shall not set a maximum 
        number of days for which absence payments can be made, but 
        instead shall direct the county agency to set limits and pay for 
        absences according to the prevailing market practice in the 
        county.  County policies for payment of absences shall be 
        subject to the approval of the commissioner.  The commissioner 
        shall maximize the use of federal money in section 256.736 and 
        other programs that provide federal or state reimbursement for 
        child care services for low-income families who are in 
        education, training, job search, or other activities allowed 
        under those programs.  Money appropriated under this section 
        must be coordinated with the programs that provide federal 
        reimbursement for child care services to accomplish this 
        purpose.  Federal reimbursement obtained must be allocated to 
        the county that spent money for child care that is federally 
        reimbursable under programs that provide federal reimbursement 
        for child care services.  The counties shall use the federal 
        money to expand child care services.  The commissioner may adopt 
        rules under chapter 14 to implement and coordinate federal 
        program requirements. 
           Subd. 2.  [CONTRACTUAL AGREEMENTS WITH TRIBES.] The 
        commissioner may enter into contractual agreements with a 
        federally recognized Indian tribe with a reservation in 
        Minnesota to carry out the responsibilities of county human 
        service agencies to the extent necessary for the tribe to 
        operate child care assistance programs under sections 119B.03 
        and 119B.05.  An agreement may allow for the tribe to be 
        reimbursed for child care assistance services provided under 
        section 119B.05.  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 child care 
        services.  Funding to support services under section 119B.03 may 
        be transferred to the federally recognized Indian tribe with a 
        reservation in Minnesota from allocations available to counties 
        in which reservation boundaries lie.  When funding is 
        transferred under section 119B.03, the amount shall be 
        commensurate to estimates of the proportion of reservation 
        residents with characteristics identified in section 119B.03, 
        subdivision 6, to the total population of county residents with 
        those same characteristics.  
           Sec. 3.  Minnesota Statutes 1996, section 245A.03, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [EXCEPTION.] The provision in subdivision 2, 
        clause (2), does not apply to: 
           (1) a child care provider who as an applicant for licensure 
        or as a license holder has received a license denial under 
        section 245A.05, a fine under section 245A.06, or a sanction 
        under section 245A.07 from the commissioner that has not been 
        reversed on appeal; or 
           (2) a child care provider, or a child care provider who has 
        a household member who, as a result of a licensing process, has 
        a disqualification under this chapter that has not been set 
        aside by the commissioner. 
           Sec. 4.  Minnesota Statutes 1996, section 245A.03, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [EXCLUDED CHILD CARE PROGRAMS; RIGHT TO SEEK 
        LICENSURE.] Nothing in this section shall prohibit a child care 
        program that is excluded from licensure under subdivision 2, 
        clause (2), or under Laws 1997, chapter 248, section 46, as 
        amended by Laws 1997, First Special Session chapter 5, section 
        10, from seeking a license under this chapter.  The commissioner 
        shall ensure that any application received from such an excluded 
        provider is processed in the same manner as all other 
        applications for licensed family day care. 
           Sec. 5.  Minnesota Statutes 1996, section 245A.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SPECIAL FAMILY DAY CARE HOMES.] Nonresidential 
        child care programs serving 14 or fewer children that are 
        conducted at a location other than the license holder's own 
        residence shall be licensed under this section and the rules 
        governing family day care or group family day care if:  
           (a) the license holder is the primary provider of care; 
           (b) and the nonresidential child care program is conducted 
        in a dwelling that is located on a residential lot; and or 
           (c) the license holder complies with all other requirements 
        of sections 245A.01 to 245A.15 and the rules governing family 
        day care or group family day care. 
           (b) the license holder is an employer who may or may not be 
        the primary provider of care, and the purpose for the child care 
        program is to provide child care services to children of the 
        license holder's employees.  
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        245B.06, subdivision 2, is amended to read: 
           Subd. 2.  [RISK MANAGEMENT PLAN.] The license holder must 
        develop and document in writing a risk management plan that 
        incorporates the individual abuse prevention plan as required in 
        chapter 245C section 245A.65.  License holders jointly providing 
        services to a consumer shall coordinate and use the resulting 
        assessment of risk areas for the development of this plan.  Upon 
        initiation of services, the license holder will have in place an 
        initial risk management plan that identifies areas in which the 
        consumer is vulnerable, including health, safety, and 
        environmental issues and the supports the provider will have in 
        place to protect the consumer and to minimize these risks.  The 
        plan must be changed based on the needs of the individual 
        consumer and reviewed at least annually. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        256.01, subdivision 2, is amended to read: 
           Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
        section 241.021, subdivision 2, the commissioner of human 
        services shall: 
           (1) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (a) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (b) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (c) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (d) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (e) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; and 
           (f) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds; and 
           (g) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (2) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (3) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting handicapped, 
        dependent, neglected and delinquent children, and children born 
        to mothers who were not married to the children's fathers at the 
        times of the conception nor at the births of the children; 
        license and supervise child-caring and child-placing agencies 
        and institutions; supervise the care of children in boarding and 
        foster homes or in private institutions; and generally perform 
        all functions relating to the field of child welfare now vested 
        in the state board of control. 
           (4) Administer and supervise all noninstitutional service 
        to handicapped persons, including those who are visually 
        impaired, hearing impaired, or physically impaired or otherwise 
        handicapped.  The commissioner may provide and contract for the 
        care and treatment of qualified indigent children in facilities 
        other than those located and available at state hospitals when 
        it is not feasible to provide the service in state hospitals. 
           (5) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (6) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (7) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (8) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        mentally retarded.  For children under the guardianship of the 
        commissioner whose interests would be best served by adoptive 
        placement, the commissioner may contract with a licensed 
        child-placing agency to provide adoption services.  A contract 
        with a licensed child-placing agency must be designed to 
        supplement existing county efforts and may not replace existing 
        county programs, unless the replacement is agreed to by the 
        county board and the appropriate exclusive bargaining 
        representative or the commissioner has evidence that child 
        placements of the county continue to be substantially below that 
        of other counties. 
           (9) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (10) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (11) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (12) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (a) The secretary of health, education, and welfare of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity. 
           (b) A comprehensive plan, including estimated project 
        costs, shall be approved by the legislative advisory commission 
        and filed with the commissioner of administration.  
           (13) According to federal requirements, establish 
        procedures to be followed by local welfare boards in creating 
        citizen advisory committees, including procedures for selection 
        of committee members. 
           (14) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, medical assistance, or food stamp program in 
        the following manner:  
           (a) One-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance, MFIP-S, and AFDC 
        programs, disallowances shall be shared by each county board in 
        the same proportion as that county's expenditures for the 
        sanctioned program are to the total of all counties' 
        expenditures for the AFDC, MFIP-S, and medical assistance 
        programs.  For the food stamp program, sanctions shall be shared 
        by each county board, with 50 percent of the sanction being 
        distributed to each county in the same proportion as that 
        county's administrative costs for food stamps are to the total 
        of all food stamp administrative costs for all counties, and 50 
        percent of the sanctions being distributed to each county in the 
        same proportion as that county's value of food stamp benefits 
        issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due. 
           (b) Notwithstanding the provisions of paragraph (a), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in paragraph (a), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to paragraph (a).  
           (15) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (16) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (17) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (a) The commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced. 
           (b) The county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner.  
           (c) If the required reports are not received by the 
        deadlines established in clause (b), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received.  
           (d) A county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of noncompliance.
           (e) The final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period. 
           (f) The commissioner may not delay payments, withhold 
        funds, or require repayment under paragraph (c) or (e) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under paragraph (c) or (e), the county board may appeal the 
        action according to sections 14.57 to 14.69. 
           (g) Counties subject to withholding of funds under 
        paragraph (c) or forfeiture or repayment of funds under 
        paragraph (e) shall not reduce or withhold benefits or services 
        to clients to cover costs incurred due to actions taken by the 
        commissioner under paragraph (c) or (e). 
           (18) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (19) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (20) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (21) Have the authority to administer a drug rebate program 
        for drugs purchased pursuant to the senior citizen drug program 
        established under section 256.955 after the beneficiary's 
        satisfaction of any deductible established in the program.  The 
        commissioner shall require a rebate agreement from all 
        manufacturers of covered drugs as defined in section 256B.0625, 
        subdivision 13.  For each drug, the amount of the rebate shall 
        be equal to the basic rebate as defined for purposes of the 
        federal rebate program in United States Code, title 42, section 
        1396r-8(c)(1).  This basic rebate shall be applied to 
        single-source and multiple-source drugs.  The manufacturers must 
        provide full payment within 30 days of receipt of the state 
        invoice for the rebate within the terms and conditions used for 
        the federal rebate program established pursuant to section 1927 
        of title XIX of the Social Security Act.  The manufacturers must 
        provide the commissioner with any information necessary to 
        verify the rebate determined per drug.  The rebate program shall 
        utilize the terms and conditions used for the federal rebate 
        program established pursuant to section 1927 of title XIX of the 
        Social Security Act. 
           Sec. 8.  Minnesota Statutes 1996, section 256.014, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT OF SYSTEMS.] The 
        commissioner of human services shall establish and enhance 
        computer systems necessary for the efficient operation of the 
        programs the commissioner supervises, including: 
           (1) management and administration of the food stamp and 
        income maintenance programs, including the electronic 
        distribution of benefits; 
           (2) management and administration of the child support 
        enforcement program; and 
           (3) administration of medical assistance and general 
        assistance medical care. 
           The commissioner shall distribute the nonfederal share of 
        the costs of operating and maintaining the systems to the 
        commissioner and to the counties participating in the system in 
        a manner that reflects actual system usage, except that the 
        nonfederal share of the costs of the MAXIS computer system and 
        child support enforcement systems shall be borne entirely by the 
        commissioner.  Development costs must not be assessed against 
        county agencies. 
           The commissioner may enter into contractual agreements with 
        federally recognized Indian tribes with a reservation in 
        Minnesota to participate in state-operated computer systems 
        related to the management and administration of the food stamp, 
        income maintenance, child support enforcement, and medical 
        assistance and general assistance medical care programs 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. 
           Sec. 9.  Minnesota Statutes 1997 Supplement, section 
        256.031, subdivision 6, is amended to read: 
           Subd. 6.  [END OF FIELD TRIALS.] (a) Upon agreement with 
        the federal government, the field trials of the Minnesota family 
        investment plan will end June 30, 1998.  
           (b) Families in the comparison group under subdivision 3, 
        paragraph (d), clause (i), receiving aid to families with 
        dependent children under sections 256.72 to 256.87, and STRIDE 
        services under section 256.736 will continue in those programs 
        until June 30, 1998.  After June 30, 1998, families who cease 
        receiving assistance under the Minnesota family investment plan 
        and comparison group families who cease receiving assistance 
        under AFDC and STRIDE who are eligible for the Minnesota family 
        investment program-statewide (MFIP-S), medical assistance, 
        general assistance medical care, or the food stamp program shall 
        be placed with their consent on the programs for which they are 
        eligible. 
           (c) Families who cease receiving assistance under the MFIP 
        and comparison families who cease receiving assistance under 
        AFDC and STRIDE who are ineligible for MFIP-S due to increased 
        income from employment, or increased child or spousal support or 
        a combination of employment income and child or spousal support, 
        shall be eligible for transition year child care under section 
        119B.05, and extended medical assistance under section 
        256B.0635.  For the purpose of assistance for transition year 
        child care and determining receipt of extended medical 
        assistance, receipt of AFDC and MFIP shall be considered to be 
        the same as receipt of MFIP-S. 
           Sec. 10.  Minnesota Statutes 1997 Supplement, section 
        256.741, is amended by adding a subdivision to read: 
           Subd. 2a.  [FAMILIES-FIRST DISTRIBUTION OF CHILD SUPPORT 
        ARREARAGES.] When the public authority collects support 
        arrearages on behalf of an individual who is receiving 
        assistance provided under MFIP or MFIP-R under this chapter, 
        MFIP-S under chapter 256J, or work first under chapter 256K, and 
        the public authority has the option of applying the collection 
        to arrears permanently assigned to the state or to arrears 
        temporarily assigned to the state, the public authority shall 
        first apply the collection to satisfy those arrears that are 
        permanently assigned to the state.  
           Sec. 11.  Minnesota Statutes 1997 Supplement, section 
        256.9864, is amended to read: 
           256.9864 [REPORTS BY RECIPIENT.] 
           (a) An assistance unit with a recent work history or with 
        earned income shall report monthly to the county agency on 
        income received and other circumstances affecting eligibility or 
        assistance amounts.  All other assistance units shall report on 
        income and other circumstances affecting eligibility and 
        assistance amounts, as specified by the state agency. 
           (b) An assistance unit required to submit a report on the 
        form designated by the commissioner and within ten days of the 
        due date or the date of the significant change, whichever is 
        later, or otherwise report significant changes which would 
        affect eligibility or assistance amounts, is considered to have 
        continued its application for assistance effective the date the 
        required report is received by the county agency, if a complete 
        report is received within a calendar month in which assistance 
        was received, except that no assistance shall be paid for the 
        period beginning with the end of the month in which the report 
        was due and ending with the date the report was received by the 
        county agency. 
           Sec. 12.  Minnesota Statutes 1997 Supplement, section 
        256B.062, is amended to read: 
           256B.062 [CONTINUED ELIGIBILITY.] 
           Medical assistance may be paid for persons who received aid 
        to families with dependent children in at least three of the six 
        months preceding the month in which the person became ineligible 
        for aid to families with dependent children, if the 
        ineligibility was due to an increase in hours of employment or 
        employment income or due to the loss of an earned income 
        disregard.  A person who is eligible for extended medical 
        assistance is entitled to six months of assistance without 
        reapplication, unless the assistance unit ceases to include a 
        dependent child.  For a person under 21 years of age, medical 
        assistance may not be discontinued within the six-month period 
        of extended eligibility until it has been determined that the 
        person is not otherwise eligible for medical assistance.  
        Medical assistance may be continued for an additional six months 
        if the person meets all requirements for the additional six 
        months, according to Title XIX of the Social Security Act, as 
        amended by section 303 of the Family Support Act of 1988, Public 
        Law Number 100-485.  This section is repealed effective March 31 
        July 1, 1998.  
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        256B.0635, is amended by adding a subdivision to read: 
           Subd. 3.  [MEDICAL ASSISTANCE FOR MFIP-S PARTICIPANTS WHO 
        OPT TO DISCONTINUE MONTHLY CASH ASSISTANCE.] Upon federal 
        approval, medical assistance is available to persons who 
        received MFIP-S in at least three of the six months preceding 
        the month in which the person opted to discontinue receiving 
        MFIP-S cash assistance under section 256J.31, subdivision 12.  A 
        person who is eligible for medical assistance under this section 
        may receive medical assistance without reapplication as long as 
        the person meets MFIP-S eligibility requirements, unless the 
        assistance unit does not include a dependent child.  Medical 
        assistance may be paid pursuant to subdivisions 1 and 2 for 
        persons who are no longer eligible for MFIP-S due to increased 
        employment or child support.  A person may be eligible for 
        MinnesotaCare due to increased employment or child support, and 
        as such must be informed of the option to transition onto 
        MinnesotaCare. 
           Sec. 14.  Minnesota Statutes 1997 Supplement, section 
        256D.05, subdivision 8, is amended to read: 
           Subd. 8.  [CITIZENSHIP.] (a) Effective July 1, 1997, 
        citizenship requirements for applicants and recipients under 
        sections 256D.01 to 256D.03, subdivision 2, and 256D.04 to 
        256D.21 shall be determined the same as under section 256J.11, 
        except that legal noncitizens who are applicants or recipients 
        must have been residents of Minnesota on March 1, 1997.  Legal 
        noncitizens who arrive in Minnesota after March 1, 1997, and 
        become elderly or disabled after that date, and are otherwise 
        eligible for general assistance can receive benefits under this 
        section.  The income and assets of sponsors of noncitizens shall 
        be deemed available to general assistance applicants and 
        recipients according to the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, Public Law Number 
        104-193, title IV, sections 421 and 422, and subsequently set 
        out in federal rules. 
           (b) As a condition of eligibility, each legal adult 
        noncitizen in the assistance unit who has resided in the country 
        for four years or more and who is under 70 years of age must: 
           (1) be enrolled in a literacy class, English as a second 
        language class, or a citizen class; 
           (2) be applying for admission to a literacy class, English 
        as a second language class, and is on a waiting list; 
           (3) be in the process of applying for a waiver from the 
        Immigration and Naturalization Service of the English language 
        or civics requirements of the citizenship test; 
           (4) have submitted an application for citizenship to the 
        Immigration and Naturalization Service and is waiting for a 
        testing date or a subsequent swearing in ceremony; or 
           (5) have been denied citizenship due to a failure to pass 
        the test after two attempts or because of an inability to 
        understand the rights and responsibilities of becoming a United 
        States citizen, as documented by the Immigration and 
        Naturalization Service or the county. 
           If the county social service agency determines that a legal 
        noncitizen subject to the requirements of this subdivision will 
        require more than one year of English language training, then 
        the requirements of clause (1) or (2) shall be imposed after the 
        legal noncitizen has resided in the country for three years.  
        Individuals who reside in a facility licensed under chapter 
        144A, 144D, 245A, or 256I are exempt from the requirements of 
        this section. 
           Sec. 15.  Minnesota Statutes 1996, section 256D.051, is 
        amended by adding a subdivision to read: 
           Subd. 19.  [WAIVER OF SERVICE COST REIMBURSEMENT LIMIT FOR 
        PARTICIPANTS WITH SIGNIFICANT BARRIERS TO EMPLOYMENT.] 
           (a) To the extent of available resources, the commissioner 
        may waive the $400 service cost limit specified in subdivision 6 
        for county agencies who propose to provide enhanced services 
        under the food stamp employment and training program to 
        hard-to-employ individuals.  A "hard-to-employ individual" is 
        defined as: 
           (1) a recipient of general assistance under chapter 256D; 
        or 
           (2) an individual with at least one of the following three 
        barriers to employment: 
           (i) the individual has not completed secondary school or 
        obtained a general equivalency development diploma or an adult 
        diploma, and has low skills in reading or mathematics; 
           (ii) the individual requires substance abuse treatment for 
        employment; and 
           (iii) the individual has a poor work history. 
           (b) To obtain a waiver, the county agency must submit a 
        waiver request to the commissioner.  The request must specify:  
           (1) the number of hard-to-employ individuals the agency 
        plans to serve; 
           (2) the nature of the enhanced employment and training 
        services the agency will provide; and 
           (3) the agency's plan for providing referrals for substance 
        abuse assessment and treatment for hard-to-employ individuals 
        who require substance abuse treatment for employment. 
           Sec. 16.  [256D.053] [MINNESOTA FOOD ASSISTANCE PROGRAM.] 
           Subdivision 1.  [PROGRAM ESTABLISHED.] For the period of 
        July 1, 1998, to June 30, 1999, the Minnesota food assistance 
        program is established to provide food assistance to legal 
        noncitizens residing in this state who are ineligible to 
        participate in the federal Food Stamp Program solely due to the 
        provisions of section 402 or 403 of Public Law Number 104-193, 
        as authorized by Title VII of the 1997 Emergency Supplemental 
        Appropriations Act, Public Law Number 105-18. 
           Subd. 2.  [ELIGIBILITY REQUIREMENTS.] To be eligible for 
        the Minnesota food assistance program, all of the following 
        conditions must be met: 
           (1) the applicant must meet the initial and ongoing 
        eligibility requirements for the federal Food Stamp Program, 
        except for the applicant's ineligible immigration status; 
           (2) the applicant must be either a qualified noncitizen as 
        defined in section 256J.08, subdivision 73, or a noncitizen 
        otherwise residing lawfully in the United States; 
           (3) the applicant must be a resident of the state; and 
           (4) the applicant must not be receiving assistance under 
        the MFIP-S or the work first program. 
           Subd. 3.  [PROGRAM ADMINISTRATION.] (a) The rules for the 
        Minnesota food assistance program shall follow exactly the 
        regulations for the federal Food Stamp Program, except for the 
        provisions pertaining to immigration status under sections 402 
        or 403 of Public Law Number 104-193. 
           (b) The county agency shall use the income, budgeting, and 
        benefit allotment regulations of the federal Food Stamp Program 
        to calculate an eligible recipient's monthly Minnesota food 
        assistance program benefit.  Until September 30, 1998, eligible 
        recipients under this subdivision shall receive the average per 
        person food stamp issuance in Minnesota in the fiscal year 
        ending June 30, 1997.  Beginning October 1, 1998, eligible 
        recipients shall receive the same level of benefits as those 
        provided by the federal Food Stamp Program to similarly situated 
        citizen recipients.  The monthly Minnesota food assistance 
        program benefits shall not exceed an amount equal to the amount 
        of federal Food Stamp Program benefits the household would 
        receive if all members of the household were eligible for the 
        federal Food Stamp Program. 
           (c) Minnesota food assistance program benefits must be 
        disregarded as income in all programs that do not count food 
        stamps as income. 
           (d) The county agency must redetermine a Minnesota food 
        assistance program recipient's eligibility for the federal Food 
        Stamp Program when the agency receives information that the 
        recipient's legal immigration status has changed in such a way 
        that would make the recipient potentially eligible for the 
        federal Food Stamp Program. 
           (e) Until October 1, 1998, the commissioner may provide 
        benefits under this section in cash. 
           Subd. 4.  [STATE PLAN REQUIRED.] The commissioner shall 
        submit a state plan to the secretary of agriculture to allow the 
        commissioner to purchase federal Food Stamp Program benefits for 
        each Minnesota food assistance program recipient who is 
        ineligible to participate in the federal Food Stamp Program 
        solely due to the provisions of section 402 or 403 of Public Law 
        Number 104-193, as authorized by Title VII of the 1997 Emergency 
        Supplemental Appropriations Act, Public Law Number 105-18.  The 
        commissioner shall enter into a contract as necessary with the 
        secretary to use the existing federal Food Stamp Program 
        benefits delivery system for the purposes of administering the 
        Minnesota food assistance program under this section. 
           Sec. 17.  Minnesota Statutes 1996, section 256D.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INCOME AND RESOURCE TEST.] All income and 
        resources available to the recipient must be considered in 
        determining the recipient's ability to meet the emergency need.  
        Property that can be liquidated in time to resolve the emergency 
        and income, (excluding Minnesota supplemental aid issued for 
        current month's need) an amount equal to the Minnesota 
        supplemental aid standard of assistance, that is normally 
        disregarded or excluded under the Minnesota supplemental aid 
        program must be considered available to meet the emergency need. 
           Sec. 18.  Minnesota Statutes 1997 Supplement, section 
        256J.02, subdivision 4, is amended to read: 
           Subd. 4.  [AUTHORITY TO TRANSFER.] Subject to limitations 
        of title I of Public Law Number 104-193, the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 
        1996, as amended, the legislature may transfer money from the 
        TANF block grant to the child care fund under chapter 119B, or 
        the Title XX block grant under section 256E.07. 
           Sec. 19.  Minnesota Statutes 1997 Supplement, section 
        256J.03, is amended to read: 
           256J.03 [TANF RESERVE ACCOUNT.] 
           Subdivision 1.  The Minnesota family investment 
        program-statewide/TANF TANF reserve account is created in the 
        state treasury.  Funds retained or deposited in the TANF reserve 
        shall include:  (1) funds designated by the legislature and; (2) 
        unexpended state funds resulting from the acceleration of TANF 
        expenditures under subdivision 2; (3) earnings available from 
        the federal TANF block grant appropriated to the commissioner 
        but not expended in the biennium beginning July 1, 1997, shall 
        be retained; and (4) TANF funds available in fiscal years 1998, 
        1999, 2000, and 2001 that are not spent or not budgeted to be 
        spent in those years. 
           Funds deposited in the reserve account to must be expended 
        for the Minnesota family investment program-statewide in fiscal 
        year 2000 and subsequent fiscal years and directly related state 
        programs for the purposes in subdivision 3. 
           Subd. 2.  [AUTHORIZATION TO ACCELERATE EXPENDITURE OF TANF 
        FUNDS.] The commissioner may expend federal TANF block grant 
        funds in excess of appropriated levels for the purpose of 
        accelerating federal funding of the MFIP program.  By the end of 
        the fiscal year in which the additional federal expenditures are 
        made, the commissioner must deposit into the reserve account an 
        amount of unexpended state funds appropriated for assistance to 
        families grants, AFDC, and MFIP equal to the additional federal 
        expenditures.  Reserve funds may be spent as TANF appropriations 
        if insufficient TANF funds are available because of acceleration.
           Subd. 3.  [ALLOWED TRANSFER PURPOSE.] Funds from the 
        reserve account may be used for the following purposes: 
           (1) unanticipated TANF block grant maintenance of effort 
        shortfalls; 
           (2) MFIP cost increases due to reduced federal revenues and 
        federal law changes; 
           (3) one-half of the MFIP general fund cost increase in 
        fiscal year 2000 and subsequent fiscal years due to caseload 
        increases over fiscal year 1999; and 
           (4) transfers allowed under section 256J.02, subdivision 4. 
           Sec. 20.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 11, is amended to read: 
           Subd. 11.  [CAREGIVER.] "Caregiver" means a minor child's 
        natural or adoptive parent or parents and stepparent who live in 
        the home with the minor child.  For purposes of determining 
        eligibility for this program, caregiver also means any of the 
        following individuals, if adults, who live with and provide care 
        and support to a minor child when the minor child's natural or 
        adoptive parent or parents or stepparents do not reside in the 
        same home:  legal custodians custodian or guardian, grandfather, 
        grandmother, brother, sister, stepfather, stepmother, 
        stepbrother, stepsister, uncle, aunt, first cousin or first 
        cousin once removed, nephew, niece, person of preceding 
        generation as denoted by prefixes of "great," "great-great," or 
        "great-great-great," or a spouse of any person named in the 
        above groups even after the marriage ends by death or divorce. 
           Sec. 21.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 24a.  [DISQUALIFIED.] "Disqualified" means being 
        ineligible to receive MFIP-S due to noncooperation with program 
        requirements.  Except for persons whose disqualification is 
        based on fraud, a disqualified person can take action to correct 
        the reason for ineligibility.  
           Sec. 22.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 26, is amended to read: 
           Subd. 26.  [EARNED INCOME.] "Earned income" means cash or 
        in-kind income earned through the receipt of wages, salary, 
        commissions, profit from employment activities, net profit from 
        self-employment activities, payments made by an employer for 
        regularly accrued vacation or sick leave, and any other profit 
        from activity earned through effort or labor.  The income must 
        be in return for, or as a result of, legal activity.  
           Sec. 23.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 28, is amended to read: 
           Subd. 28.  [EMERGENCY.] "Emergency" means a situation or a 
        set of circumstances that causes or threatens to cause 
        destitution to a minor child family with a child under age 21.  
           Sec. 24.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 40, is amended to read: 
           Subd. 40.  [GROSS EARNED INCOME.] "Gross earned income" 
        means earned income from employment before mandatory and 
        voluntary payroll deductions.  Gross earned income includes 
        salaries, wages, tips, gratuities, commissions, incentive 
        payments from work or training programs, payments made by an 
        employer for regularly accrued vacation or sick leave, and 
        profits from other activity earned by an individual's effort or 
        labor.  Gross earned income includes uniform and meal allowances 
        if federal income tax is deducted from the allowance.  Gross 
        earned income includes flexible work benefits received from an 
        employer if the employee has the option of receiving the benefit 
        or benefits in cash.  For self-employment, gross earned income 
        is the nonexcluded income minus expenses for the business.  
           Sec. 25.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 50a.  [INTERSTATE TRANSITIONAL STANDARD.] "Interstate 
        transitional standard" means a combination of the cash 
        assistance a family with no other income would have received in 
        the state of previous residence and the Minnesota food portion 
        for the appropriate size family. 
           Sec. 26.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 51a.  [LEGAL CUSTODIAN.] "Legal custodian" means any 
        person who is under a legal obligation to provide care for a 
        minor and who is in fact providing care for a minor.  For an 
        Indian child, "custodian" means any Indian person who has legal 
        custody of an Indian child under tribal law or custom, under 
        state law, or to whom temporary physical care, custody, and 
        control has been transferred by the parent of the child, as 
        provided in section 257.351, subdivision 8. 
           Sec. 27.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 60, is amended to read: 
           Subd. 60.  [MINOR CHILD.] "Minor child" means a child who 
        is living in the same home of a parent or other caregiver, is 
        not the parent of a child in the home, and is either less than 
        18 years of age or is under the age of 19 years and is regularly 
        attending as a full-time student and is expected to complete a 
        high school or in a secondary school or pursuing a full-time 
        secondary level course of vocational or technical training 
        designed to fit students for gainful employment before reaching 
        age 19. 
           Sec. 28.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 61a.  [NONCUSTODIAL PARENT.] "Noncustodial parent" 
        means a minor child's parent who does not live in the same home 
        as the child.  
           Sec. 29.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 68, is amended to read: 
           Subd. 68.  [PERSONAL PROPERTY.] "Personal property" means 
        an item of value that is not real property, including the value 
        of a contract for deed held by a seller, assets held in trust on 
        behalf of members of an assistance unit, cash surrender value of 
        life insurance, value of a prepaid burial, savings account, 
        value of stocks and bonds, and value of retirement accounts. 
           Sec. 30.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 73, is amended to read: 
           Subd. 73.  [QUALIFIED NONCITIZEN.] "Qualified noncitizen" 
        means a person: 
           (1) who was lawfully admitted for permanent residence 
        pursuant to United States Code, title 8; 
           (2) who was admitted to the United States as a refugee 
        pursuant to United States Code, title 8; section 1157; 
           (3) whose deportation is being withheld pursuant to United 
        States Code, title 8, section 1253(h); 
           (4) who was paroled for a period of at least one year 
        pursuant to United States Code, title 8, section 1182(d)(5); 
           (5) who was granted conditional entry pursuant to United 
        State Code, title 8, section 1153(a)(7); 
           (6) who was granted asylum pursuant to United States Code, 
        title 8, section 1158; or 
           (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 Number 
        104-208; 
           (8) who is a child of a noncitizen determined to be a 
        battered noncitizen by the United States Attorney General 
        according to the Illegal Immigration Reform and Responsibility 
        Act of 1996, title V, Public Law Number 104-200; or 
           (9) who was admitted as a Cuban or Haitian entrant. 
           Sec. 31.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 82a.  [SHARED HOUSEHOLD STANDARD.] "Shared household 
        standard" means the basic standard used when the household 
        includes an unrelated member.  The cash portion of the shared 
        household standard is equal to 90 percent of the cash portion of 
        the transitional standard.  The cash portion of the shared 
        household standard plus the food portion equals the full shared 
        household standard. 
           Sec. 32.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 82b.  [SHELTER COSTS.] "Shelter costs" means rent, 
        manufactured home lot rental costs, or monthly principal, 
        interest, insurance premiums, and property taxes due for 
        mortgages or contracts for deed. 
           Sec. 33.  Minnesota Statutes 1997 Supplement, section 
        256J.08, subdivision 83, is amended to read: 
           Subd. 83.  [SIGNIFICANT CHANGE.] "Significant change" means 
        a decline in gross income of 35 36 percent or more from the 
        income used to determine the grant for the current month. 
           Sec. 34.  Minnesota Statutes 1997 Supplement, section 
        256J.08, is amended by adding a subdivision to read: 
           Subd. 86a.  [UNRELATED MEMBER.] "Unrelated member" means an 
        individual in the household who does not meet the definition of 
        an eligible caregiver, but does not include an individual who 
        provides child care to a child in the assistance unit. 
           Sec. 35.  Minnesota Statutes 1997 Supplement, section 
        256J.09, subdivision 6, is amended to read: 
           Subd. 6.  [INVALID REASON FOR DELAY.] A county agency must 
        not delay a decision on eligibility or delay issuing the 
        assistance payment except to establish state residence as 
        provided in section 256J.12 by: 
           (1) treating the 30-day processing period as a waiting 
        period; 
           (2) delaying approval or issuance of the assistance payment 
        pending the decision of the county board; or 
           (3) awaiting the result of a referral to a county agency in 
        another county when the county receiving the application does 
        not believe it is the county of financial responsibility. 
           Sec. 36.  Minnesota Statutes 1997 Supplement, section 
        256J.09, subdivision 9, is amended to read: 
           Subd. 9.  [ADDENDUM TO AN EXISTING APPLICATION.] (a) An 
        addendum to an existing application must be used to add persons 
        to an assistance unit regardless of whether the persons being 
        added are required to be in the assistance unit.  When a person 
        is added by addendum to an assistance unit, eligibility for that 
        person begins on the first of the month the addendum was filed 
        except as provided in section 256J.74, subdivision 2, clause (1).
           (b) An overpayment must be determined when a change in 
        household composition is not reported within the deadlines in 
        section 256J.30, subdivision 9.  Any overpayment must be 
        calculated from the month of the change including the needs, 
        income, and assets of any individual who is required to be 
        included in the assistance unit under section 256J.24, 
        subdivision 2.  Individuals not included in the assistance unit 
        who are identified in section 256J.37, subdivisions 1 to 2, must 
        have their income and assets considered when determining the 
        amount of the overpayment. 
           Sec. 37.  Minnesota Statutes 1997 Supplement, section 
        256J.11, subdivision 2, as amended by Laws 1997, Third Special 
        Session chapter 1, is amended to read: 
           Subd. 2.  [NONCITIZENS; FOOD PORTION.] (a) For the period 
        September 1, 1997, to October 31, 1997, noncitizens who do not 
        meet one of the exemptions in section 412 of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        but were residing in this state as of July 1, 1997, are eligible 
        for the 6/10 of the average value of food stamps for the same 
        family size and composition until MFIP-S is operative in the 
        noncitizen's county of financial responsibility and thereafter, 
        the 6/10 of the food portion of MFIP-S.  However, federal food 
        stamp dollars cannot be used to fund the food portion of MFIP-S 
        benefits for an individual under this subdivision. 
           (b) For the period November 1, 1997, to June 30, 1998 1999, 
        noncitizens who do not meet one of the exemptions in section 412 
        of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, but were residing in this state as 
        of July 1, 1997, and are receiving cash assistance under the 
        AFDC, family general assistance, MFIP or MFIP-S programs are 
        eligible for the average value of food stamps for the same 
        family size and composition until MFIP-S is operative in the 
        noncitizen's county of financial responsibility and thereafter, 
        the food portion of MFIP-S.  However, federal food stamp dollars 
        cannot be used to fund the food portion of MFIP-S benefits for 
        an individual under this subdivision.  The assistance provided 
        under this subdivision, which is designated as a supplement to 
        replace lost benefits under the federal food stamp program, must 
        be disregarded as income in all programs that do not count food 
        stamps as income where the commissioner has the authority to 
        make the income disregard determination for the program. 
           (c) The commissioner shall submit a state plan to the 
        secretary of agriculture to allow the commissioner to purchase 
        federal Food Stamp Program benefits in an amount equal to the 
        MFIP-S food portion for each legal noncitizen receiving MFIP-S 
        assistance who is ineligible to participate in the federal Food 
        Stamp Program solely due to the provisions of section 402 or 403 
        of Public Law Number 104-193, as authorized by Title VII of the 
        1997 Emergency Supplemental Appropriations Act, Public Law 
        Number 105-18.  The commissioner shall enter into a contract as 
        necessary with the secretary to use the existing federal Food 
        Stamp Program benefits delivery system for the purposes of 
        administering the food portion of MFIP-S under this subdivision. 
           Sec. 38.  Minnesota Statutes 1997 Supplement, section 
        256J.12, is amended to read: 
           256J.12 [MINNESOTA RESIDENCE.] 
           Subdivision 1.  [SIMPLE RESIDENCY.] To be eligible for AFDC 
        or MFIP-S, whichever is in effect, a family an assistance unit 
        must have established residency in this state which means 
        the family assistance unit is present in the state and intends 
        to remain here.  A person who lives in this state and who 
        entered this state with a job commitment or to seek employment 
        in this state, whether or not that person is currently employed, 
        meets the criteria in this subdivision.  
           Subd. 1a.  [30-DAY RESIDENCY REQUIREMENT.] A family An 
        assistance unit is considered to have established residency in 
        this state only when a child or caregiver has resided in this 
        state for at least 30 days with the intention of making the 
        person's home here and not for any temporary purpose.  The birth 
        of a child in Minnesota to a member of the assistance unit does 
        not automatically establish the residency in this state under 
        this subdivision of the other members of the assistance unit.  
        Time spent in a shelter for battered women shall count toward 
        satisfying the 30-day residency requirement. 
           Subd. 2.  [EXCEPTIONS.] (a) A county shall waive the 30-day 
        residency requirement where unusual hardship would result from 
        denial of assistance. 
           (b) For purposes of this section, unusual hardship means a 
        family an assistance unit: 
           (1) is without alternative shelter; or 
           (2) is without available resources for food. 
           (c) For purposes of this subdivision, the following 
        definitions apply (1) "metropolitan statistical area" is as 
        defined by the U.S. Census Bureau; (2) "alternative shelter" 
        includes any shelter that is located within the metropolitan 
        statistical area containing the county and for which the family 
        is eligible, provided the family assistance unit does not have 
        to travel more than 20 miles to reach the shelter and has access 
        to transportation to the shelter.  Clause (2) does not apply to 
        counties in the Minneapolis-St. Paul metropolitan statistical 
        area. 
           (d) Applicants are considered to meet the residency 
        requirement under subdivision 1a if they once resided in 
        Minnesota and: 
           (1) joined the United States armed services, returned to 
        Minnesota within 30 days of leaving the armed services, and 
        intend to remain in Minnesota; or 
           (2) left to attend school in another state, paid 
        nonresident tuition or Minnesota tuition rates under a 
        reciprocity agreement, and returned to Minnesota within 30 days 
        of graduation with the intent to remain in Minnesota. 
           (e) The 30-day residence requirement is met when: 
           (1) a minor child or a minor caregiver moves from another 
        state to the residence of a relative caregiver; 
           (2) the minor caregiver applies for and receives family 
        cash assistance; 
           (3) the relative caregiver chooses not to be part of the 
        MFIP-S assistance unit; and 
           (4) the relative caregiver has resided in Minnesota for at 
        least 30 days prior to the date the assistance unit applies for 
        cash assistance.  
           (f) Ineligible mandatory unit members who have resided in 
        Minnesota for 12 months immediately before the unit's date of 
        application establish the other assistance unit members' 
        eligibility for the MFIP-S transitional standard. 
           Subd. 2a.  [MIGRANT WORKERS.] Migrant workers, as defined 
        in section 256J.08, and their immediate families are exempt from 
        the requirements of subdivisions 1 and 1a, provided the migrant 
        worker provides verification that the migrant family worked in 
        this state within the last 12 months and earned at least $1,000 
        in gross wages during the time the migrant worker worked in this 
        state. 
           Subd. 3.  [PAYMENT PLAN FOR NEW RESIDENTS.] Assistance paid 
        to an eligible family assistance unit in which all members have 
        resided in this state for fewer than 12 consecutive calendar 
        months immediately preceding the date of application shall be at 
        the standard and in the form specified in section 256J.43. 
           Subd. 4.  [SEVERABILITY CLAUSE.] If any subdivision in this 
        section is enjoined from implementation or found 
        unconstitutional by any court of competent jurisdiction, the 
        remaining subdivisions shall remain valid and shall be given 
        full effect. 
           Sec. 39.  Minnesota Statutes 1997 Supplement, section 
        256J.14, is amended to read: 
           256J.14 [ELIGIBILITY FOR PARENTING OR PREGNANT MINORS.] 
           (a) The definitions in this paragraph only apply to this 
        subdivision. 
           (1) "Household of a parent, legal guardian, or other adult 
        relative" means the place of residence of: 
           (i) a natural or adoptive parent; 
           (ii) a legal guardian according to appointment or 
        acceptance under section 260.242, 525.615, or 525.6165, and 
        related laws; or 
           (iii) a caregiver as defined in section 256J.08, 
        subdivision 11; or 
           (iv) an appropriate adult relative designated by a county 
        agency. 
           (2) "Adult-supervised supportive living arrangement" means 
        a private family setting which assumes responsibility for the 
        care and control of the minor parent and minor child, or other 
        living arrangement, not including a public institution, licensed 
        by the commissioner of human services which ensures that the 
        minor parent receives adult supervision and supportive services, 
        such as counseling, guidance, independent living skills 
        training, or supervision. 
           (b) A minor parent and the minor child who is in the care 
        of the minor parent must reside in the household of a parent, 
        legal guardian, other appropriate adult relative, or other 
        caregiver, or in an adult-supervised supportive living 
        arrangement in order to receive MFIP-S unless: 
           (1) the minor parent has no living parent, other 
        appropriate adult relative, or legal guardian whose whereabouts 
        is known; 
           (2) no living parent, other appropriate adult relative, or 
        legal guardian of the minor parent allows the minor parent to 
        live in the parent's, appropriate other adult relative's, or 
        legal guardian's home; 
           (3) the minor parent lived apart from the minor parent's 
        own parent or legal guardian for a period of at least one year 
        before either the birth of the minor child or the minor parent's 
        application for MFIP-S; 
           (4) the physical or emotional health or safety of the minor 
        parent or minor child would be jeopardized if the minor parent 
        and the minor child resided in the same residence with the minor 
        parent's parent, other appropriate adult relative, or legal 
        guardian; or 
           (5) an adult supervised supportive living arrangement is 
        not available for the minor parent and the dependent child in 
        the county in which the minor parent and child currently resides 
        reside.  If an adult supervised supportive living arrangement 
        becomes available within the county, the minor parent and child 
        must reside in that arrangement. 
           (c) Minor applicants must be informed orally and in writing 
        about the eligibility requirements and their rights and 
        obligations under the MFIP-S program.  The county must advise 
        the minor of the possible exemptions and specifically ask 
        whether one or more of these exemptions is applicable.  If the 
        minor alleges one or more of these exemptions, then the county 
        must assist the minor in obtaining the necessary verifications 
        to determine whether or not these exemptions apply. 
           (d) If the county worker has reason to suspect that the 
        physical or emotional health or safety of the minor parent or 
        minor child would be jeopardized if they resided with the minor 
        parent's parent, other adult relative, or legal guardian, then 
        the county worker must make a referral to child protective 
        services to determine if paragraph (b), clause (4), applies.  A 
        new determination by the county worker is not necessary if one 
        has been made within the last six months, unless there has been 
        a significant change in circumstances which justifies a new 
        referral and determination. 
           (e) If a minor parent is not living with a parent or, legal 
        guardian, or other adult relative due to paragraph (b), clause 
        (1), (2), or (4), the minor parent must reside, when possible, 
        in a living arrangement that meets the standards of paragraph 
        (a), clause (2). 
           (f) When a minor parent and minor child live with another a 
        parent, other adult relative, legal guardian, or in an 
        adult-supervised supportive living arrangement, MFIP-S must be 
        paid, when possible, in the form of a protective payment on 
        behalf of the minor parent and minor child in accordance with 
        according to section 256J.39, subdivisions 2 to 4. 
           Sec. 40.  Minnesota Statutes 1997 Supplement, section 
        256J.15, subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY DURING LABOR DISPUTES.] To receive 
        assistance under MFIP-S, when a member of an assistance unit who 
        is on strike, or when an individual identified under section 
        256J.37, subdivisions 1 to 2, whose income and assets must be 
        considered when determining the unit's eligibility is on strike, 
        the assistance unit must have been an receiving MFIP-S 
        participant on the day before the strike, or have been eligible 
        for MFIP-S on the day before the strike. 
           The county agency must count the striker's prestrike 
        earnings as current earnings.  When A significant change cannot 
        be invoked when a member of an assistance unit, or an individual 
        identified under section 256J.37, subdivisions 1 to 2, is on 
        strike.  A member of an assistance unit who, or an individual 
        identified under section 256J.37, subdivisions 1 to 2, is not 
        considered a striker when that person is not in the bargaining 
        unit that voted for the strike and does not cross the picket 
        line for fear of personal injury, the assistance unit member is 
        not a striker.  Except for a member of an assistance unit who is 
        not in the bargaining unit that voted for the strike and who 
        does not cross the picket line for fear of personal injury, a 
        significant change cannot be invoked as a result of a labor 
        dispute. 
           Sec. 41.  Minnesota Statutes 1997 Supplement, section 
        256J.20, subdivision 2, is amended to read: 
           Subd. 2.  [REAL PROPERTY LIMITATIONS.] Ownership of real 
        property by an applicant or participant is subject to the 
        limitations in paragraphs (a) and (b). 
           (a) A county agency shall exclude the homestead of an 
        applicant or participant according to clauses (1) to (4) (5): 
           (1) an applicant or participant who is purchasing real 
        property through a contract for deed and using that property as 
        a home is considered the owner of real property; 
           (2) the total amount of land that can be excluded under 
        this subdivision is limited to surrounding property which is not 
        separated from the home by intervening property owned by 
        others.  Additional property must be assessed as to its legal 
        and actual availability according to subdivision 1; 
           (3) when real property that has been used as a home by a 
        participant is sold, the county agency must treat the cash 
        proceeds from the sale as excluded property for six months when 
        the participant intends to reinvest the proceeds in another home 
        and maintains those proceeds, unused for other purposes, in a 
        separate account; and 
           (4) when the homestead is jointly owned, but the client 
        does not reside in it because of legal separation, pending 
        divorce, or battering or abuse by the spouse or partner, the 
        homestead is excluded.; and 
           (5) the homestead shall continue to be excluded if it is 
        temporarily unoccupied due to employment, illness, or as the 
        result of compliance with a county-approved employability plan.  
        The education, training, or job search must be within the state, 
        but can be outside the immediate geographic area.  A homestead 
        temporarily unoccupied because it is not habitable due to a 
        casualty or natural disaster is excluded.  The homestead is 
        excluded during periods only if the client intends to return to 
        it. 
           (b) The equity value of real property that is not excluded 
        under paragraph (a) and which is legally available must be 
        applied against the limits in subdivision 3.  When the equity 
        value of the real property exceeds the limits under subdivision 
        3, the applicant or participant may qualify to receive 
        assistance when the applicant or participant continues to make a 
        good faith effort to sell the property and signs a legally 
        binding agreement to repay the amount of assistance, less child 
        support collected by the agency.  Repayment must be made within 
        five working days after the property is sold.  Repayment to the 
        county agency must be in the amount of assistance received or 
        the proceeds of the sale, whichever is less. 
           Sec. 42.  Minnesota Statutes 1997 Supplement, section 
        256J.20, subdivision 3, is amended to read: 
           Subd. 3.  [OTHER PROPERTY LIMITATIONS.] To be eligible for 
        MFIP-S, the equity value of all nonexcluded real and personal 
        property of the assistance unit must not exceed $2,000 for 
        applicants and $5,000 for ongoing recipients participants.  The 
        value of assets in clauses (1) to (18) (20) must be excluded 
        when determining the equity value of real and personal property: 
           (1) a licensed vehicles vehicle up to a total market loan 
        value of less than or equal to $7,500.  The county agency shall 
        apply any excess market loan value as if it were equity value to 
        the asset limit described in this section.  If the assistance 
        unit owns more than one licensed vehicle, the county agency 
        shall determine the vehicle with the highest market loan value 
        and count only the market loan value over $7,500.  The county 
        agency shall count the market loan value of all other vehicles 
        and apply this amount as if it were equity value to the asset 
        limit described in this section.  The value of special equipment 
        for a handicapped member of the assistance unit is excluded.  To 
        establish the market loan value of vehicles, a county agency 
        must use the N.A.D.A. Official Used Car Guide, Midwest Edition, 
        for newer model cars.  The N.A.D.A. Official Used Car Guide, 
        Midwest Edition, is incorporated by reference.  When a vehicle 
        is not listed in the guidebook, or when the applicant or 
        participant disputes the loan value listed in the guidebook as 
        unreasonable given the condition of the particular vehicle, the 
        county agency may require the applicant or participant to 
        document the loan value by securing a written statement from a 
        motor vehicle dealer licensed under section 168.27, stating the 
        amount that the dealer would pay to purchase the vehicle.  The 
        county agency shall reimburse the applicant or participant for 
        the cost of a written statement that documents a lower loan 
        value; 
           (2) the value of life insurance policies for members of the 
        assistance unit; 
           (3) one burial plot per member of an assistance unit; 
           (4) the value of personal property needed to produce earned 
        income, including tools, implements, farm animals, inventory, 
        business loans, business checking and savings accounts used at 
        least annually and used exclusively for the operation of a 
        self-employment business, and any motor vehicles if the vehicles 
        are essential for the self-employment business; 
           (5) the value of personal property not otherwise specified 
        which is commonly used by household members in day-to-day living 
        such as clothing, necessary household furniture, equipment, and 
        other basic maintenance items essential for daily living; 
           (6) the value of real and personal property owned by a 
        recipient of Supplemental Security Income or Minnesota 
        supplemental aid; 
           (7) the value of corrective payments, but only for the 
        month in which the payment is received and for the following 
        month; 
           (8) a mobile home used by an applicant or participant as 
        the applicant's or participant's home; 
           (9) money in a separate escrow account that is needed to 
        pay real estate taxes or insurance and that is used for this 
        purpose; 
           (10) money held in escrow to cover employee FICA, employee 
        tax withholding, sales tax withholding, employee worker 
        compensation, business insurance, property rental, property 
        taxes, and other costs that are paid at least annually, but less 
        often than monthly; 
           (11) monthly assistance and, emergency assistance, and 
        diversionary payments for the current month's needs; 
           (12) the value of school loans, grants, or scholarships for 
        the period they are intended to cover; 
           (13) payments listed in section 256J.21, subdivision 2, 
        clause (9), which are held in escrow for a period not to exceed 
        three months to replace or repair personal or real property; 
           (14) income received in a budget month through the end of 
        the budget payment month; 
           (15) savings from earned income of a minor child or a minor 
        parent that are set aside in a separate account designated 
        specifically for future education or employment costs; 
           (16) the federal earned income tax credit and, Minnesota 
        working family credit, state and federal income tax refunds, 
        state homeowners and renters credits under chapter 290A, 
        property tax rebates under Laws 1997, chapter 231, article 1, 
        section 16, and other federal or state tax rebates in the month 
        received and the following month; 
           (17) payments excluded under federal law as long as those 
        payments are held in a separate account from any nonexcluded 
        funds; and 
           (18) money received by a participant of the corps to career 
        program under section 84.0887, subdivision 2, paragraph (b), as 
        a postservice benefit under the federal Americorps Act; 
           (19) the assets of children ineligible to receive MFIP-S 
        benefits because foster care or adoption assistance payments are 
        made on their behalf; and 
           (20) the assets of persons whose income is excluded under 
        section 256J.21, subdivision 2, clause 43. 
           Sec. 43.  Minnesota Statutes 1997 Supplement, section 
        256J.21, is amended to read: 
           256J.21 [INCOME LIMITATIONS.] 
           Subdivision 1.  [INCOME INCLUSIONS.] To determine MFIP-S 
        eligibility, the county agency must evaluate income received by 
        members of an assistance unit, or by other persons whose income 
        is considered available to the assistance unit, and only count 
        income that is available to the member of the assistance unit.  
        Income is available if the individual has legal access to the 
        income.  All payments, unless specifically excluded in 
        subdivision 2, must be counted as income. 
           Subd. 2.  [INCOME EXCLUSIONS.] (a) The following must be 
        excluded in determining a family's available income: 
           (1) payments for basic care, difficulty of care, and 
        clothing allowances received for providing family foster care to 
        children or adults under Minnesota Rules, parts 9545.0010 to 
        9545.0260 and 9555.5050 to 9555.6265, and payments received and 
        used for care and maintenance of a third-party beneficiary who 
        is not a household member; 
           (2) reimbursements for employment training received through 
        the Job Training Partnership Act, United States Code, title 29, 
        chapter 19, sections 1501 to 1792b; 
           (3) reimbursement for out-of-pocket expenses incurred while 
        performing volunteer services, jury duty, or employment; 
           (4) all educational assistance, except the county agency 
        must count graduate student teaching assistantships, 
        fellowships, and other similar paid work as earned income and, 
        after allowing deductions for any unmet and necessary 
        educational expenses, shall count scholarships or grants awarded 
        to graduate students that do not require teaching or research as 
        unearned income; 
           (5) loans, regardless of purpose, from public or private 
        lending institutions, governmental lending institutions, or 
        governmental agencies; 
           (6) loans from private individuals, regardless of purpose, 
        provided an applicant or participant documents that the lender 
        expects repayment; 
           (7)(i) state and federal income tax refunds; and 
           (ii) federal income tax refunds; 
           (8)(i) state and federal earned income credits; 
           (ii) Minnesota working family credits; 
           (iii) state homeowners and renters credits under chapter 
        290A; 
           (iv) property tax rebates under Laws 1997, chapter 231, 
        article 1, section 16; and 
           (v) other federal or state tax rebates; 
           (9) funds received for reimbursement, replacement, or 
        rebate of personal or real property when these payments are made 
        by public agencies, awarded by a court, solicited through public 
        appeal, or made as a grant by a federal agency, state or local 
        government, or disaster assistance organizations, subsequent to 
        a presidential declaration of disaster; 
           (10) the portion of an insurance settlement that is used to 
        pay medical, funeral, and burial expenses, or to repair or 
        replace insured property; 
           (11) reimbursements for medical expenses that cannot be 
        paid by medical assistance; 
           (12) payments by a vocational rehabilitation program 
        administered by the state under chapter 268A, except those 
        payments that are for current living expenses; 
           (13) in-kind income, including any payments directly made 
        by a third party to a provider of goods and services; 
           (14) assistance payments to correct underpayments, but only 
        for the month in which the payment is received; 
           (15) emergency assistance payments; 
           (16) funeral and cemetery payments as provided by section 
        256.935; 
           (17) nonrecurring cash gifts of $30 or less, not exceeding 
        $30 per participant in a calendar month; 
           (18) any form of energy assistance payment made through 
        Public Law Number 97-35, Low-Income Home Energy Assistance Act 
        of 1981, payments made directly to energy providers by other 
        public and private agencies, and any form of credit or rebate 
        payment issued by energy providers; 
           (19) Supplemental Security Income, including retroactive 
        payments; 
           (20) Minnesota supplemental aid, including retroactive 
        payments; 
           (21) proceeds from the sale of real or personal property; 
           (22) adoption assistance payments under section 259.67; 
           (23) state-funded family subsidy program payments made 
        under section 252.32 to help families care for children with 
        mental retardation or related conditions; 
           (24) interest payments and dividends from property that is 
        not excluded from and that does not exceed the asset limit; 
           (25) rent rebates; 
           (26) income earned by a minor caregiver or minor child who 
        is at least a half-time student in an approved secondary 
        education program; 
           (27) income earned by a caregiver under age 20 who is at 
        least a half-time student in an approved secondary education 
        program; 
           (28) MFIP-S child care payments under section 119B.05; 
           (29) all other payments made through MFIP-S to support a 
        caregiver's pursuit of greater self-support; 
           (30) income a participant receives related to shared living 
        expenses; 
           (31) reverse mortgages; 
           (32) benefits provided by the Child Nutrition Act of 1966, 
        United States Code, title 42, chapter 13A, sections 1771 to 
        1790; 
           (33) benefits provided by the women, infants, and children 
        (WIC) nutrition program, United States Code, title 42, chapter 
        13A, section 1786; 
           (34) benefits from the National School Lunch Act, United 
        States Code, title 42, chapter 13, sections 1751 to 1769e; 
           (35) relocation assistance for displaced persons under the 
        Uniform Relocation Assistance and Real Property Acquisition 
        Policies Act of 1970, United States Code, title 42, chapter 61, 
        subchapter II, section 4636, or the National Housing Act, United 
        States Code, title 12, chapter 13, sections 1701 to 1750jj; 
           (36) benefits from the Trade Act of 1974, United States 
        Code, title 19, chapter 12, part 2, sections 2271 to 2322; 
           (37) war reparations payments to Japanese Americans and 
        Aleuts under United States Code, title 50, sections 1989 to 
        1989d; 
           (38) payments to veterans or their dependents as a result 
        of legal settlements regarding Agent Orange or other chemical 
        exposure under Public Law Number 101-239, section 10405, 
        paragraph (a)(2)(E); 
           (39) income that is otherwise specifically excluded from 
        the MFIP-S program consideration in federal law, state law, or 
        federal regulation; 
           (40) security and utility deposit refunds; 
           (41) American Indian tribal land settlements excluded under 
        Public Law Numbers 98-123, 98-124, and 99-377 to the Mississippi 
        Band Chippewa Indians of White Earth, Leech Lake, and Mille Lacs 
        reservations and payments to members of the White Earth Band, 
        under United States Code, title 25, chapter 9, section 331, and 
        chapter 16, section 1407; 
           (42) all income of the minor parent's parent and stepparent 
        when determining the grant for the minor parent in households 
        that include a minor parent living with a parent or stepparent 
        on MFIP-S with other dependent children; and 
           (43) income of the minor parent's parent and stepparent 
        equal to 200 percent of the federal poverty guideline for a 
        family size not including the minor parent and the minor 
        parent's child in households that include a minor parent living 
        with a parent or stepparent not on MFIP-S when determining the 
        grant for the minor parent.  The remainder of income is deemed 
        as specified in section 256J.37, subdivision 1 1b; 
           (44) payments made to children eligible for relative 
        custody assistance under section 257.85; 
           (45) vendor payments for goods and services made on behalf 
        of a client unless the client has the option of receiving the 
        payment in cash; and 
           (46) the principal portion of a contract for deed payment. 
           Subd. 3.  [INITIAL INCOME TEST.] The county agency shall 
        determine initial eligibility by considering all earned and 
        unearned income that is not excluded under subdivision 2.  To be 
        eligible for MFIP-S, the assistance unit's countable income 
        minus the disregards in paragraphs (a) and (b) must be below the 
        transitional standard of assistance according to section 256J.24 
        for that size assistance unit. 
           (a) The initial eligibility determination must disregard 
        the following items: 
           (1) the employment disregard is 18 percent of the gross 
        earned income whether or not the member is working full time or 
        part time; 
           (2) dependent care costs must be deducted from gross earned 
        income for the actual amount paid for dependent care up to the a 
        maximum disregard allowed of $200 per month for each child less 
        than two years of age, and $175 per month for each child two 
        years of age and older under this chapter and chapter 119B; and 
           (3) all payments made according to a court order 
        for spousal support or the support of children not living in the 
        assistance unit's household shall be disregarded from the income 
        of the person with the legal obligation to pay support, provided 
        that, if there has been a change in the financial circumstances 
        of the person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the support 
        order; and 
           (4) an allocation for the unmet need of an ineligible 
        spouse or an ineligible child under the age of 21 for whom the 
        caregiver is financially responsible and who lives with the 
        caregiver according to section 256J.36. 
           (b) Notwithstanding paragraph (a), when determining initial 
        eligibility for applicants who have applicant units when at 
        least one member has received AFDC, family general assistance, 
        MFIP, MFIP-R, work first, or MFIP-S in this state within four 
        months of the most recent application for MFIP-S, the employment 
        disregard for all unit members is 36 percent of the gross earned 
        income. 
           After initial eligibility is established, the assistance 
        payment calculation is based on the monthly income test. 
           Subd. 4.  [MONTHLY INCOME TEST AND DETERMINATION OF 
        ASSISTANCE PAYMENT.] The county agency shall determine ongoing 
        eligibility and the assistance payment amount according to the 
        monthly income test.  To be eligible for MFIP-S, the result of 
        the computations in paragraphs (a) to (e) must be at least $1. 
           (a) Apply a 36 percent income disregard to gross earnings 
        and subtract this amount from the family wage level.  If the 
        difference is equal to or greater than the transitional 
        standard, the assistance payment is equal to the transitional 
        standard.  If the difference is less than the transitional 
        standard, the assistance payment is equal to the difference.  
        The employment disregard in this paragraph must be deducted 
        every month there is earned income. 
           (b) All payments made according to a court order 
        for spousal support or the support of children not living in the 
        assistance unit's household must be disregarded from the income 
        of the person with the legal obligation to pay support, provided 
        that, if there has been a change in the financial circumstances 
        of the person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the court 
        order. 
           (c) An allocation for the unmet need of an ineligible 
        spouse or an ineligible child under the age of 21 for whom the 
        caregiver is financially responsible and who lives with the 
        caregiver must be made according to section 256J.36. 
           (d) Subtract unearned income dollar for dollar from the 
        transitional standard to determine the assistance payment amount.
           (d) (e) When income is both earned and unearned, the amount 
        of the assistance payment must be determined by first treating 
        gross earned income as specified in paragraph (a).  After 
        determining the amount of the assistance payment under paragraph 
        (a), unearned income must be subtracted from that amount dollar 
        for dollar to determine the assistance payment amount. 
           (e) (f) When the monthly income is greater than the 
        transitional or family wage level standard after applicable 
        deductions and the income will only exceed the standard for one 
        month, the county agency must suspend the assistance payment for 
        the payment month. 
           Subd. 5.  [DISTRIBUTION OF INCOME.] The income of all 
        members of the assistance unit must be counted.  Income may also 
        be deemed from ineligible persons to the assistance unit.  
        Income must be attributed to the person who earns it or to the 
        assistance unit according to paragraphs (a) to (c). 
           (a) Funds distributed from a trust, whether from the 
        principal holdings or sale of trust property or from the 
        interest and other earnings of the trust holdings, must be 
        considered income when the income is legally available to an 
        applicant or participant.  Trusts are presumed legally available 
        unless an applicant or participant can document that the trust 
        is not legally available. 
           (b) Income from jointly owned property must be divided 
        equally among property owners unless the terms of ownership 
        provide for a different distribution. 
           (c) Deductions are not allowed from the gross income of a 
        financially responsible household member or by the members of an 
        assistance unit to meet a current or prior debt. 
           Sec. 44.  Minnesota Statutes 1997 Supplement, section 
        256J.24, subdivision 1, is amended to read: 
           Subdivision 1.  [MFIP-S ASSISTANCE UNIT.] An MFIP-S 
        assistance unit is either a group of individuals with at least 
        one minor child who live together whose needs, assets, and 
        income are considered together and who receive MFIP-S 
        assistance, or a pregnant woman and her spouse who receives 
        receive MFIP-S assistance.  
           Individuals identified in subdivision 2 must be included in 
        the MFIP-S assistance unit.  Individuals identified in 
        subdivision 3 must be excluded from the assistance unit are 
        ineligible to receive MFIP-S.  Individuals identified in 
        subdivision 4 may be included in the assistance unit at their 
        option.  Individuals not included in the assistance unit who are 
        identified in section 256J.37, subdivision subdivisions 1 or to 
        2, must have their income and assets considered when determining 
        eligibility and benefits for an MFIP-S assistance unit.  All 
        assistance unit members, whether mandatory or elective, who live 
        together and for whom one caregiver or two caregivers apply must 
        be included in a single assistance unit. 
           Sec. 45.  Minnesota Statutes 1997 Supplement, section 
        256J.24, subdivision 2, is amended to read: 
           Subd. 2.  [MANDATORY ASSISTANCE UNIT COMPOSITION.] Except 
        for minor caregivers and their children who are must be in a 
        separate assistance unit from the other persons in the 
        household, when the following individuals live together, they 
        must be included in the assistance unit: 
           (1) a minor child, including a pregnant minor; 
           (2) the minor child's siblings, half-siblings, and 
        step-siblings; and 
           (3) the minor child's natural, adoptive parents, and 
        stepparents; and 
           (4) the spouse of a pregnant woman.  
           Sec. 46.  Minnesota Statutes 1997 Supplement, section 
        256J.24, subdivision 3, is amended to read: 
           Subd. 3.  [INDIVIDUALS WHO MUST BE EXCLUDED FROM AN 
        ASSISTANCE UNIT.] (a) The following individuals must be excluded 
        from an assistance unit who are part of the assistance unit 
        determined under subdivision 2 are ineligible to receive MFIP-S: 
           (1) individuals receiving Supplemental Security Income or 
        Minnesota supplemental aid; 
           (2) individuals living at home while performing 
        court-imposed, unpaid community service work due to a criminal 
        conviction; 
           (3) individuals disqualified from the food stamp program or 
        MFIP-S, until the disqualification ends; 
           (4) children on whose behalf federal, state or local foster 
        care payments under title IV-E of the Social Security Act are 
        made, except as provided in section sections 256J.13, 
        subdivision 2, and 256J.74, subdivision 2; and 
           (5) children receiving ongoing monthly adoption assistance 
        payments under section 269.67 259.67.  
           (b) The exclusion of a person under this subdivision does 
        not alter the mandatory assistance unit composition. 
           Sec. 47.  Minnesota Statutes 1997 Supplement, section 
        256J.24, subdivision 4, is amended to read: 
           Subd. 4.  [INDIVIDUALS WHO MAY ELECT TO BE INCLUDED IN THE 
        ASSISTANCE UNIT.] (a) The minor child's eligible caregiver may 
        choose to be in the assistance unit, if the caregiver is not 
        required to be in the assistance unit under subdivision 2.  If 
        the relative eligible caregiver chooses to be in the assistance 
        unit, that person's spouse must also be in the unit. 
           (b) Any minor child not related as a sibling, stepsibling, 
        or adopted sibling to the minor child in the unit, but for whom 
        there is an eligible caregiver may elect to be in the unit. 
           (c) A foster care provider of a minor child who is 
        receiving federal, state, or local foster care maintenance 
        payments may elect to receive MFIP-S if the provider meets the 
        definition of caregiver under section 256J.08, subdivision 11.  
        If the provider chooses to receive MFIP-S, the spouse of the 
        provider must also be included in the assistance unit with the 
        provider.  The provider and spouse are eligible for assistance 
        even if the only minor child living in the provider's home is 
        receiving foster care maintenance payments. 
           (d) The adult caregiver or caregivers of a minor parent are 
        eligible to be a separate assistance unit from the minor parent 
        and the minor parent's child when: 
           (1) the adult caregiver or caregivers have no other minor 
        children in the household; 
           (2) the minor parent and the minor parent's child are 
        living together with the adult caregiver or caregivers; and 
           (3) the minor parent and the minor parent's child receive 
        MFIP-S, or would be eligible to receive MFIP-S, if they were not 
        receiving SSI benefits. 
           Sec. 48.  Minnesota Statutes 1997 Supplement, section 
        256J.24, is amended by adding a subdivision to read: 
           Subd. 5a.  [FOOD PORTION OF MFIP-S TRANSITIONAL 
        STANDARD.] The commissioner shall adjust the food portion of the 
        MFIP-S transitional standard by October 1 each year beginning 
        October 1998 to reflect the cost-of-living adjustments to the 
        Food Stamp Program.  The commissioner shall annually publish in 
        the State Register the transitional standard for an assistance 
        unit of sizes 1 to 10. 
           Sec. 49.  Minnesota Statutes 1997 Supplement, section 
        256J.24, subdivision 7, is amended to read: 
           Subd. 7.  [FAMILY WAGE LEVEL STANDARD.] The family wage 
        level standard is 110 percent of the transitional standard under 
        subdivision 5 and is the standard used when there is earned 
        income in the assistance unit.  As specified in section 256J.21, 
        earned income is subtracted from the family wage level to 
        determine the amount of the assistance payment.  Assistance 
        payments may not exceed the shared household standard or the 
        transitional standard for the assistance unit, whichever is less.
           Sec. 50.  Minnesota Statutes 1997 Supplement, section 
        256J.24, is amended by adding a subdivision to read: 
           Subd. 8.  [ASSISTANCE PAID TO ELIGIBLE ASSISTANCE 
        UNITS.] Payments for shelter up to the amount of the cash 
        portion of MFIP-S benefits for which the assistance unit is 
        eligible shall be vendor paid for as many months as the 
        assistance unit is eligible or six months, whichever comes 
        first.  The residual amount of the grant after vendor payment, 
        if any, must be paid to the MFIP-S caregiver. 
           Sec. 51.  Minnesota Statutes 1997 Supplement, section 
        256J.24, is amended by adding a subdivision to read: 
           Subd. 9.  [SHARED HOUSEHOLD STANDARD; MFIP-S.] (a) Except 
        as prohibited in paragraph (b), the county agency must use the 
        shared household standard when the household includes one or 
        more unrelated members, as that term is defined in section 
        256J.08, subdivision 86a.  The county agency must use the shared 
        household standard, unless a member of the assistance unit is a 
        victim of domestic violence and has an approved safety plan, 
        regardless of the number of unrelated members in the household. 
           (b) The county agency must not use the shared household 
        standard when all unrelated members are one of the following: 
           (1) a recipient of public assistance benefits, including 
        food stamps, Supplemental Security Income, adoption assistance, 
        relative custody assistance, or foster care payments; 
           (2) a roomer or boarder, or a person to whom the assistance 
        unit is paying room or board; 
           (3) a minor; 
           (4) a minor caregiver living with the minor caregiver's 
        parents or in an approved supervised living arrangement; or 
           (5) a caregiver who is not the parent of the minor child in 
        the assistance unit. 
           (c) The shared household standard must be discontinued if 
        it is not approved by the United States Department of 
        Agriculture under the MFIP-S waiver. 
           Sec. 52.  Minnesota Statutes 1997 Supplement, section 
        256J.26, subdivision 1, is amended to read: 
           Subdivision 1.  [PERSON CONVICTED OF DRUG OFFENSES.] (a) 
        Applicants or recipients participants who have been convicted of 
        a drug offense after July 1, 1997, may, if otherwise eligible, 
        receive AFDC or MFIP-S benefits subject to the following 
        conditions: 
           (1) Benefits for the entire assistance unit must be paid in 
        vendor form for shelter and utilities during any time the 
        applicant is part of the assistance unit;. 
           (2) The convicted applicant or recipient participant shall 
        be subject to random drug testing as a condition of continued 
        eligibility and is subject to sanctions under section 256J.46 
        following any positive test for an illegal controlled substance, 
        except that the grant must continue to be vendor paid under 
        clause (1).  
           For purposes of this subdivision, section 256J.46 is 
        effective July 1, 1997. 
           This subdivision also applies to persons who receive food 
        stamps under section 115 of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996. is subject to the 
        following sanctions: 
           (i) for failing a drug test the first time, the 
        participant's grant shall be reduced by ten percent of the 
        MFIP-S transitional standard, the shared household standard, or 
        the interstate transitional standard, whichever is applicable 
        prior to making vendor payments for shelter and utility costs; 
        or 
           (ii) for failing a drug test two or more times, the 
        residual amount of the participant's grant after making vendor 
        payments for shelter and utility costs, if any, must be reduced 
        by an amount equal to 30 percent of the MFIP-S transitional 
        standard, the shared household standard, or the interstate 
        transitional standard, whichever is applicable. 
           (b) Applicants or participants who have been convicted of a 
        drug offense after July 1, 1997, may, if otherwise eligible, 
        receive food stamps if the convicted applicant or participant is 
        subject to random drug testing as a condition of continued 
        eligibility.  Following a positive test for an illegal 
        controlled substance, the applicant is subject to the following 
        sanctions: 
           (1) for failing a drug test the first time, food stamps 
        shall be reduced by ten percent of the applicable food stamp 
        allotment; and 
           (2) for failing a drug test two or more times, food stamps 
        shall be reduced by an amount equal to 30 percent of the 
        applicable food stamp allotment.  
           (b) (c) For the purposes of this subdivision, "drug offense"
        means a conviction that occurred after July 1, 1997, of sections 
        152.021 to 152.025, 152.0261, or 152.096.  Drug offense also 
        means a conviction in another jurisdiction of the possession, 
        use, or distribution of a controlled substance, or conspiracy to 
        commit any of these offenses, if the offense occurred after July 
        1, 1997, and the conviction is a felony offense in that 
        jurisdiction, or in the case of New Jersey, a high misdemeanor. 
           Sec. 53.  Minnesota Statutes 1997 Supplement, section 
        256J.26, subdivision 2, is amended to read: 
           Subd. 2.  [PAROLE VIOLATORS.] An individual violating a 
        condition of probation or parole or supervised release imposed 
        under federal law or the law of any state is ineligible to 
        receive disqualified from receiving AFDC or MFIP-S. 
           Sec. 54.  Minnesota Statutes 1997 Supplement, section 
        256J.26, subdivision 3, is amended to read: 
           Subd. 3.  [FLEEING FELONS.] An individual who is fleeing to 
        avoid prosecution, or custody, or confinement after conviction 
        for a crime that is a felony under the laws of the jurisdiction 
        from which the individual flees, or in the case of New Jersey, 
        is a high misdemeanor, is ineligible to receive disqualified 
        from receiving AFDC or MFIP-S. 
           Sec. 55.  Minnesota Statutes 1997 Supplement, section 
        256J.26, subdivision 4, is amended to read: 
           Subd. 4.  [DENIAL OF ASSISTANCE FOR TEN YEARS TO A PERSON 
        FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESIDENCY.] An 
        individual who is convicted in federal or state court of having 
        made a fraudulent statement or representation with respect to 
        the place of residence of the individual in order to receive 
        assistance simultaneously from two or more states is ineligible 
        to receive disqualified from receiving AFDC or MFIP-S for ten 
        years beginning on the date of the conviction. 
           Sec. 56.  Minnesota Statutes 1997 Supplement, section 
        256J.28, subdivision 1, is amended to read: 
           Subdivision 1.  [EXPEDITED ISSUANCE OF FOOD STAMP 
        ASSISTANCE.] The following households are entitled to expedited 
        issuance of food stamp assistance: 
           (1) households with less than $150 in monthly gross income 
        provided their liquid assets do not exceed $100; 
           (2) migrant or seasonal farm worker households who are 
        destitute as defined in Code of Federal Regulations, title 7, 
        subtitle B, chapter 2, subchapter C, part 273, section 273.10, 
        paragraph (e)(3), provided their liquid assets do not exceed 
        $100; and 
           (3) eligible households whose combined monthly gross income 
        and liquid resources are less than the household's monthly rent 
        or mortgage and utilities. 
           The benefits issued through expedited issuance of food 
        stamp assistance must be deducted from the amount of the full 
        monthly MFIP-S assistance payment and a supplemental payment for 
        the difference must be issued. For any month an individual 
        receives expedited Food Stamp Program benefits, the individual 
        is not eligible for the MFIP-S food portion of assistance. 
           Sec. 57.  Minnesota Statutes 1997 Supplement, section 
        256J.28, subdivision 2, is amended to read: 
           Subd. 2.  [FOOD STAMPS FOR HOUSEHOLD MEMBERS NOT IN THE 
        ASSISTANCE UNIT.] (a) For household members who purchase and 
        prepare food with the MFIP-S assistance unit but are not part of 
        the assistance unit, the county agency must determine a separate 
        food stamp benefit based on regulations agreed upon with the 
        United States Department of Agriculture. 
           (b) This subdivision does not apply to optional members who 
        have chosen not to be in the assistance unit. 
           (c) (b) Fair hearing requirements for persons who receive 
        food stamps under this subdivision are governed by section 
        256.045, and Code of Federal Regulations, title 7, subtitle B, 
        chapter II, part 273, section 273.15. 
           Sec. 58.  Minnesota Statutes 1997 Supplement, section 
        256J.28, is amended by adding a subdivision to read: 
           Subd. 5.  [FOOD STAMPS FOR PERSONS RESIDING IN A BATTERED 
        WOMAN'S SHELTER.] Members of an MFIP-S assistance unit residing 
        in a battered woman's shelter may receive food stamps or the 
        food portion twice in a month if the unit that initially 
        received the food stamps or food portion included the alleged 
        abuser. 
           Sec. 59.  Minnesota Statutes 1997 Supplement, section 
        256J.30, subdivision 10, is amended to read: 
           Subd. 10.  [COOPERATION WITH HEALTH CARE BENEFITS.] (a) The 
        caregiver of a minor child must cooperate with the county agency 
        to identify and provide information to assist the county agency 
        in pursuing third-party liability for medical services. 
           (b) A caregiver must assign to the department any rights to 
        health insurance policy benefits the caregiver has during the 
        period of MFIP-S eligibility. 
           (c) A caregiver must identify any third party who may be 
        liable for care and services available under the medical 
        assistance program on behalf of the applicant or participant and 
        all other assistance unit members. 
           (d) When a participant refuses to identify any third party 
        who may be liable for care and services, the recipient must be 
        sanctioned as provided in section 256J.46, subdivision 1.  The 
        recipient is also ineligible for medical assistance for a 
        minimum of one month and until the recipient cooperates with the 
        requirements of this subdivision. 
           Sec. 60.  Minnesota Statutes 1997 Supplement, section 
        256J.30, subdivision 11, is amended to read: 
           Subd. 11.  [REQUIREMENT TO ASSIGN SUPPORT AND MAINTENANCE 
        RIGHTS.] To be eligible An assistance unit is ineligible for 
        MFIP-S, unless the caregiver must assign assigns all rights to 
        child support and spousal maintenance benefits according 
        to sections 256.74, subdivision 5, and section 256.741, if 
        enacted. 
           Sec. 61.  Minnesota Statutes 1997 Supplement, section 
        256J.31, subdivision 5, is amended to read: 
           Subd. 5.  [MAILING OF NOTICE.] The notice of adverse action 
        shall be issued according to paragraphs (a) to (c). 
           (a) A county agency shall mail a notice of adverse action 
        at least ten days before the effective date of the adverse 
        action, except as provided in paragraphs (b) and (c). 
           (b) A county agency must mail a notice of adverse action at 
        least five days before the effective date of the adverse action 
        when the county agency has factual information that requires an 
        action to reduce, suspend, or terminate assistance based on 
        probable fraud. 
           (c) A county agency shall mail a notice of adverse action 
        before or on the effective date of the adverse action when the 
        county agency: 
           (1) receives the caregiver's signed monthly MFIP-S 
        household report form that includes information that requires 
        payment reduction, suspension, or termination; 
           (2) is informed of the death of a participant or the payee; 
           (3) receives a signed statement from the caregiver that 
        assistance is no longer wanted; 
           (4) receives a signed statement from the caregiver that 
        provides information that requires the termination or reduction 
        of assistance; 
           (5) verifies that a member of the assistance unit is absent 
        from the home and does not meet temporary absence provisions in 
        section 256J.13; 
           (6) verifies that a member of the assistance unit has 
        entered a regional treatment center or a licensed residential 
        facility for medical or psychological treatment or 
        rehabilitation; 
           (7) verifies that a member of an assistance unit has been 
        placed in foster care, and the provisions of section 256J.13, 
        subdivision 2, paragraph (b) (c), clause (2), do not apply; 
           (8) verifies that a member of an assistance unit has been 
        approved to receive assistance by another state; or 
           (9) cannot locate a caregiver. 
           Sec. 62.  Minnesota Statutes 1997 Supplement, section 
        256J.31, subdivision 10, is amended to read: 
           Subd. 10.  [PROTECTION FROM GARNISHMENT.] MFIP-S grants or 
        earnings of a caregiver while participating in full or part-time 
        employment or training shall be protected from garnishment.  
        This protection for earnings shall extend for a period of six 
        months from the date of termination from MFIP-S. 
           Sec. 63.  Minnesota Statutes 1997 Supplement, section 
        256J.31, is amended by adding a subdivision to read: 
           Subd. 12.  [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A 
        participant may discontinue receipt of the cash assistance 
        portion of MFIP-S assistance and retain eligibility for child 
        care assistance under section 119B.05 and for medical assistance 
        under sections 256B.055, subdivision 3a, and 256B.0635. 
           Sec. 64.  Minnesota Statutes 1997 Supplement, section 
        256J.32, subdivision 4, is amended to read: 
           Subd. 4.  [FACTORS TO BE VERIFIED.] The county agency shall 
        verify the following at application: 
           (1) identity of adults; 
           (2) presence of the minor child in the home, if 
        questionable; 
           (3) relationship of a minor child to caregivers in the 
        assistance unit; 
           (4) age, if necessary to determine MFIP-S eligibility; 
           (5) immigration status; 
           (6) social security number in accordance with according to 
        the requirements of section 256J.30, subdivision 12; 
           (7) income; 
           (8) self-employment expenses used as a deduction; 
           (9) source and purpose of deposits and withdrawals from 
        business accounts; 
           (10) spousal support and child support payments made to 
        persons outside the household; 
           (11) real property; 
           (12) vehicles; 
           (13) checking and savings accounts; 
           (14) savings certificates, savings bonds, stocks, and 
        individual retirement accounts; 
           (15) pregnancy, if related to eligibility; 
           (16) inconsistent information, if related to eligibility; 
           (17) medical insurance; 
           (18) anticipated graduation date of an 18-year-old; 
           (19) burial accounts; 
           (20) school attendance, if related to eligibility; and 
           (21) residence; 
           (22) a claim of domestic violence if used as a basis for a 
        deferral or exemption from the 60-month time limit in section 
        256J.42 or employment and training services requirements in 
        section 256J.56; and 
           (23) disability if used as an exemption from employment and 
        training services requirements under section 256J.56. 
           Sec. 65.  Minnesota Statutes 1997 Supplement, section 
        256J.32, subdivision 6, is amended to read: 
           Subd. 6.  [RECERTIFICATION.] The county agency shall 
        recertify eligibility in an annual face-to-face interview with 
        the participant and verify the following: 
           (1) presence of the minor child in the home, if 
        questionable; 
           (2) income, unless excluded, including self-employment 
        expenses used as a deduction or deposits or withdrawals from 
        business accounts; 
           (3) assets when the value is within $200 of the asset 
        limit; and 
           (4) inconsistent information, if related to eligibility.  
           Sec. 66.  Minnesota Statutes 1997 Supplement, section 
        256J.32, is amended by adding a subdivision to read: 
           Subd. 7.  [NOTICE TO UNDOCUMENTED PERSONS; RELEASE OF 
        PRIVATE DATA.] County agencies in consultation with the 
        commissioner of human services shall provide notification to 
        undocumented persons regarding the release of personal data to 
        the Immigration and Naturalization Service and develop protocol 
        regarding the release or sharing of data about undocumented 
        persons with the Immigration and Naturalization Service as 
        required under sections 404, 434, and 411A of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996.  
           Sec. 67.  Minnesota Statutes 1997 Supplement, section 
        256J.33, subdivision 1, is amended to read: 
           Subdivision 1.  [DETERMINATION OF ELIGIBILITY.] A county 
        agency must determine MFIP-S eligibility prospectively for a 
        payment month based on retrospectively assessing income and the 
        county agency's best estimate of the circumstances that will 
        exist in the payment month. 
           Except as described in section 256J.34, subdivision 1, when 
        prospective eligibility exists, a county agency must calculate 
        the amount of the assistance payment using retrospective 
        budgeting.  To determine MFIP-S eligibility and the assistance 
        payment amount, a county agency must apply countable income, 
        described in section 256J.37, subdivisions 3 to 10, received by 
        members of an assistance unit or by other persons whose income 
        is counted for the assistance unit, described under sections 
        256J.21 and 256J.37, subdivisions 1 and to 2. 
           This income must be applied to the transitional standard, 
        shared household standard, or family wage standard subject to 
        this section and sections 256J.34 to 256J.36.  Income received 
        in a calendar month and not otherwise excluded under section 
        256J.21, subdivision 2, must be applied to the needs of an 
        assistance unit. 
           Sec. 68.  Minnesota Statutes 1997 Supplement, section 
        256J.33, subdivision 4, is amended to read: 
           Subd. 4.  [MONTHLY INCOME TEST.] A county agency must apply 
        the monthly income test retrospectively for each month of MFIP-S 
        eligibility.  An assistance unit is not eligible when the 
        countable income equals or exceeds the transitional standard, 
        the shared household standard, or the family wage level for the 
        assistance unit.  The income applied against the monthly income 
        test must include: 
           (1) gross earned income from employment, prior to mandatory 
        payroll deductions, voluntary payroll deductions, wage 
        authorizations, and after the disregards in section 256J.21, 
        subdivision 3 4, and the allocations in section 256J.36, unless 
        the employment income is specifically excluded under section 
        256J.21, subdivision 2; 
           (2) gross earned income from self-employment less 
        deductions for self-employment expenses in section 256J.37, 
        subdivision 5, but prior to any reductions for personal or 
        business state and federal income taxes, personal FICA, personal 
        health and life insurance, and after the disregards in section 
        256J.21, subdivision 3 4, and the allocations in section 
        256J.36; 
           (3) unearned income after deductions for allowable expenses 
        in section 256J.37, subdivision 9, and allocations in section 
        256J.36, unless the income has been specifically excluded in 
        section 256J.21, subdivision 2; 
           (4) gross earned income from employment as determined under 
        clause (1) which is received by a member of an assistance unit 
        who is a minor child or minor caregiver and less than a 
        half-time student; 
           (5) child support and spousal support received or 
        anticipated to be received by an assistance unit; 
           (6) the income of a parent when that parent is not included 
        in the assistance unit; 
           (7) the income of an eligible relative and spouse who seek 
        to be included in the assistance unit; and 
           (8) the unearned income of a minor child included in the 
        assistance unit. 
           Sec. 69.  Minnesota Statutes 1997 Supplement, section 
        256J.35, is amended to read: 
           256J.35 [AMOUNT OF ASSISTANCE PAYMENT.] 
           Except as provided in paragraphs (a) to (c) (d), the amount 
        of an assistance payment is equal to the difference between the 
        transitional standard, shared household standard, or the 
        Minnesota family wage level in section 256J.24, whichever is 
        less, and countable income. 
           (a) When MFIP-S eligibility exists for the month of 
        application, the amount of the assistance payment for the month 
        of application must be prorated from the date of application or 
        the date all other eligibility factors are met for that 
        applicant, whichever is later.  This provision applies when an 
        applicant loses at least one day of MFIP-S eligibility. 
           (b) MFIP-S overpayments to an assistance unit must be 
        recouped according to section 256J.38, subdivision 4. 
           (c) An initial assistance payment must not be made to an 
        applicant who is not eligible on the date payment is made. 
           (d) An individual whose needs have been otherwise provided 
        for in another state, in whole or in part by county, state, or 
        federal dollars during a month, is ineligible to receive MFIP-S 
        for the month. 
           Sec. 70.  Minnesota Statutes 1997 Supplement, section 
        256J.36, is amended to read: 
           256J.36 [ALLOCATION FOR UNMET NEED OF OTHER HOUSEHOLD 
        MEMBERS.] 
           Except as prohibited in paragraphs (a) and (b), an 
        allocation of income is allowed from the caregiver's income to 
        meet the unmet need of an ineligible spouse or an ineligible 
        child under the age of 21 for whom the caregiver is financially 
        responsible who also lives with the caregiver.  An allocation is 
        allowed from the caregiver's income to meet the need of an 
        ineligible or excluded person.  That allocation is allowed in an 
        amount up to the difference between the MFIP-S family allowance 
        transitional standard for the assistance unit when that excluded 
        or ineligible person is included in the assistance unit and the 
        MFIP-S family allowance for the assistance unit when 
        the excluded or ineligible person is not included in the 
        assistance unit.  These allocations must be deducted from the 
        caregiver's counted earnings and from unearned income subject to 
        paragraphs (a) and (b). 
           (a) Income of a minor child in the assistance unit must not 
        be allocated to meet the need of a an ineligible person who is 
        not a member of the assistance unit, including the child's 
        parent, even when that parent is the payee of the child's income.
           (b) Income of an assistance unit a caregiver must not be 
        allocated to meet the needs of a disqualified person ineligible 
        for failure to cooperate with program requirements including 
        child support requirements, a person ineligible due to fraud, or 
        a relative caregiver and the caregiver's spouse who opt out of 
        the assistance unit. 
           Sec. 71.  Minnesota Statutes 1997 Supplement, section 
        256J.37, subdivision 1, is amended to read: 
           Subdivision 1.  [DEEMED INCOME FROM INELIGIBLE HOUSEHOLD 
        MEMBERS.] Unless otherwise provided under subdivision 1a or 1b, 
        the income of ineligible household members must be deemed after 
        allowing the following disregards: 
           (1) the first 18 percent of the excluded ineligible family 
        member's gross earned income; 
           (2) amounts the ineligible person actually paid to 
        individuals not living in the same household but whom the 
        ineligible person claims or could claim as dependents for 
        determining federal personal income tax liability; 
           (3) child or spousal support paid to a person who lives 
        outside of the household all payments made by the ineligible 
        person according to a court order for spousal support or the 
        support of children not living in the assistance unit's 
        household, provided that, if there has been a change in the 
        financial circumstances of the ineligible person since the 
        support order was entered, the ineligible person has petitioned 
        for a modification of the support order; and 
           (4) an amount for the needs of the ineligible person and 
        other persons who live in the household but are not included in 
        the assistance unit and are or could be claimed by an ineligible 
        person as dependents for determining federal personal income tax 
        liability.  This amount is equal to the difference between the 
        MFIP-S need transitional standard when the excluded ineligible 
        person is included in the assistance unit and the MFIP-S need 
        transitional standard when the excluded ineligible person is not 
        included in the assistance unit. 
           Sec. 72.  Minnesota Statutes 1997 Supplement, section 
        256J.37, is amended by adding a subdivision to read: 
           Subd. 1a.  [DEEMED INCOME FROM DISQUALIFIED MEMBERS.] The 
        income of disqualified members must be deemed after allowing the 
        following disregards: 
           (1) the first 18 percent of the disqualified member's gross 
        earned income; 
           (2) amounts the disqualified member actually paid to 
        individuals not living in the same household but whom the 
        disqualified member claims or could claim as dependents for 
        determining federal personal income tax liability; 
           (3) all payments made by the disqualified member according 
        to a court order for spousal support or the support of children 
        not living in the assistance unit's household, provided that, if 
        there has been a change in the financial circumstances of the 
        disqualified member's legal obligation to pay support since the 
        support order was entered, the disqualified member has 
        petitioned for a modification of the support order; and 
           (4) an amount for the needs of other persons who live in 
        the household but are not included in the assistance unit and 
        are or could be claimed by the disqualified member as dependents 
        for determining federal personal income tax liability.  This 
        amount is equal to the difference between the MFIP-S 
        transitional standard when the ineligible person is included in 
        the assistance unit and the MFIP-S transitional standard when 
        the ineligible person is not included in the assistance unit.  
        An amount shall not be allowed for the needs of a disqualified 
        member.  
           Sec. 73.  Minnesota Statutes 1997 Supplement, section 
        256J.37, is amended by adding a subdivision to read: 
           Subd. 1b.  [DEEMED INCOME FROM PARENTS OF MINOR 
        CAREGIVERS.] In households where minor caregivers live with a 
        parent or parents who do not receive MFIP-S, the income of the 
        parents must be deemed after allowing the following disregards: 
           (1) income of the parents equal to 200 percent of the 
        federal poverty guideline for a family size not including the 
        minor parent and the minor parent's child in the household 
        according to section 256J.21, subdivision 2, clause (43); 
           (2) 18 percent of the parents' gross earned income; 
           (3) amounts the parents actually paid to individuals not 
        living in the same household but whom the parents claim or could 
        claim as dependents for determining federal personal income tax 
        liability; and 
           (4) all payments made by parents according to a court order 
        for spousal support or the support of children not living in the 
        parent's household, provided that, if there has been a change in 
        the financial circumstances of the parent's legal obligation to 
        pay support since the support order was entered, the parents 
        have petitioned for a modification of the support order.  
           Sec. 74.  Minnesota Statutes 1997 Supplement, section 
        256J.37, subdivision 2, is amended to read: 
           Subd. 2.  [DEEMED INCOME AND ASSETS OF SPONSOR OF 
        NONCITIZENS.] All income and assets of a sponsor, or sponsor's 
        spouse, who executed an affidavit of support for a noncitizen 
        must be deemed to be unearned income of the noncitizen as 
        specified in the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, title IV, Public Law Number 104-193, 
        sections 421 and 422, and subsequently set out in federal 
        rules.  If a noncitizen applies for or receives MFIP-S, the 
        county must deem the income and assets of the noncitizen's 
        sponsor and the sponsor's spouse who have signed an affidavit of 
        support for the noncitizen as specified in Public Law Number 
        104-193, title IV, sections 421 and 422, the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996.  
        The income of a sponsor and the sponsor's spouse is considered 
        unearned income of the noncitizen.  The assets of a sponsor and 
        the sponsor's spouse are considered available assets of the 
        noncitizen.  
           Sec. 75.  Minnesota Statutes 1997 Supplement, section 
        256J.37, subdivision 9, is amended to read: 
           Subd. 9.  [UNEARNED INCOME.] (a) The county agency must 
        apply unearned income, including housing subsidies as in 
        paragraph (b), to the transitional standard.  When determining 
        the amount of unearned income, the county agency must deduct the 
        costs necessary to secure payments of unearned income.  These 
        costs include legal fees, medical fees, and mandatory deductions 
        such as federal and state income taxes. 
           (b) Effective July 1, 1998 1999, the county agency shall 
        count $100 of the value of public and assisted rental subsidies 
        provided through the Department of Housing and Urban Development 
        (HUD) as unearned income.  The full amount of the subsidy must 
        be counted as unearned income when the subsidy is less than $100.
           Sec. 76.  Minnesota Statutes 1997 Supplement, section 
        256J.38, subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE OF OVERPAYMENT.] When a participant 
        or former participant receives an overpayment due to agency, 
        client, or ATM error, or due to assistance received while an 
        appeal is pending and the participant or former participant is 
        determined ineligible for assistance or for less assistance than 
        was received, the county agency must recoup or recover the 
        overpayment under using the conditions of this 
        section. following methods:  
           (1) reconstruct each affected budget month and 
        corresponding payment month; 
           (2) use the policies and procedures that were in effect for 
        the payment month; and 
           (3) do not allow employment disregards in section 256J.21, 
        subdivision 3 or 4, in the calculation of the overpayment when 
        the unit has not reported within two calendar months following 
        the end of the month in which the income was received. 
           Sec. 77.  Minnesota Statutes 1997 Supplement, section 
        256J.39, subdivision 2, is amended to read: 
           Subd. 2.  [PROTECTIVE AND VENDOR PAYMENTS.] Alternatives to 
        paying assistance directly to a participant may be used when: 
           (1) a county agency determines that a vendor payment is the 
        most effective way to resolve an emergency situation pertaining 
        to basic needs; 
           (2) a caregiver makes a written request to the county 
        agency asking that part or all of the assistance payment be 
        issued by protective or vendor payments for shelter and utility 
        service only.  The caregiver may withdraw this request in 
        writing at any time; 
           (3) a caregiver has exhibited a continuing pattern of 
        mismanaging funds as determined by the county agency; 
           (4) the vendor payment is part of a sanction under section 
        256J.46, subdivision 2; or 
           (5) (4) the vendor payment is required under section 
        256J.24, subdivision 8, 256J.26, or 256J.43; 
           (5) protective payments are required for minor parents 
        under section 256J.14; or 
           (6) a caregiver has exhibited a continuing pattern of 
        mismanaging funds as determined by the county agency. 
           The director of a county agency must approve a proposal for 
        protective or vendor payment for money mismanagement when there 
        is a pattern of mismanagement under clause (6).  During the time 
        a protective or vendor payment is being made, the county agency 
        must provide services designed to alleviate the causes of the 
        mismanagement. 
           The continuing need for and method of payment must be 
        documented and reviewed every 12 months.  The director of a 
        county agency must approve the continuation of protective or 
        vendor payments. when it appears that the need for protective or 
        vendor payments will continue or is likely to continue beyond 
        two years because the county agency's efforts have not resulted 
        in sufficiently improved use of assistance on behalf of the 
        minor child, judicial appointment of a legal guardian or other 
        legal representative must be sought by the county agency.  
           Sec. 78.  Minnesota Statutes 1997 Supplement, section 
        256J.395, is amended to read: 
           256J.395 [VENDOR PAYMENT OF RENT SHELTER COSTS AND 
        UTILITIES.] 
           Subdivision 1.  [VENDOR PAYMENT.] (a) Effective July 1, 
        1997, when a county is required to provide assistance to 
        a recipient participant in vendor form for rent shelter costs 
        and utilities under this chapter, or chapter 256, 256D, or 256K, 
        the cost of utilities for a given family may be assumed to be: 
           (1) the average of the actual monthly cost of utilities for 
        that family for the prior 12 months at the family's current 
        residence, if applicable; 
           (2) the monthly plan amount, if any, set by the local 
        utilities for that family at the family's current residence; or 
           (3) the estimated monthly utility costs for the dwelling in 
        which the family currently resides. 
           (b) For purposes of this section, "utility" means any of 
        the following:  municipal water and sewer service; electric, 
        gas, or heating fuel service; or wood, if that is the heating 
        source. 
           (c) In any instance where a vendor payment for rent is 
        directed to a landlord not legally entitled to the payment, the 
        county social services agency shall immediately institute 
        proceedings to collect the amount of the vendored rent payment, 
        which shall be considered a debt under section 270A.03, 
        subdivision 5. 
           Subd. 2.  [VENDOR PAYMENT NOTIFICATION.] (a) When a county 
        agency is required to provide assistance to a participant in 
        vendor payment form for shelter costs or utilities under 
        subdivision 1, and the participant does not give the agency the 
        information needed to pay the vendor, the county agency shall 
        notify the participant of the intent to terminate assistance by 
        mail at least ten days before the effective date of the adverse 
        action. 
           (b) The notice of action shall include a request for 
        information about: 
           (1) the amount of the participant's shelter costs or 
        utilities; 
           (2) the due date of the shelter costs or utilities; and 
           (3) the name and address of the landlord, contract for deed 
        holder, mortgage company, and utility vendor. 
           (c) If the participant fails to provide the requested 
        information by the effective date of the adverse action, the 
        county must terminate the MFIP-S grant.  If the applicant or 
        participant verifies they do not have shelter costs or utility 
        obligations, the county shall not terminate assistance if the 
        assistance unit is otherwise eligible. 
           Subd. 3.  [DISCONTINUING VENDOR PAYMENTS DUE TO DISPUTE 
        WITH LANDLORD.] The county agency shall discontinue vendor 
        payments for shelter costs imposed under this chapter when the 
        vendor payment interferes with the participant's right to 
        withhold rent due to a dispute with the participant's landlord 
        in accordance with federal, state, or local housing laws. 
           Sec. 79.  Minnesota Statutes 1997 Supplement, section 
        256J.42, is amended to read: 
           256J.42 [60-MONTH TIME LIMIT.] 
           Subdivision 1.  [TIME LIMIT.] (a) Except for the exemptions 
        in this section and in section 256J.11, subdivision 2, an 
        assistance unit in which any adult caregiver has received 60 
        months of cash assistance funded in whole or in part by the TANF 
        block grant in this or any other state or United States 
        territory, MFIP-S, AFDC, or family general assistance, funded in 
        whole or in part by state appropriations, is ineligible to 
        receive MFIP-S.  Any cash assistance funded with TANF dollars in 
        this or any other state or United States territory, or MFIP-S 
        assistance funded in whole or in part by state appropriations, 
        that was received by the unit on or after the date TANF was 
        implemented, including any assistance received in states or 
        United States territories of prior residence, counts toward the 
        60-month limitation.  The 60-month limit applies to a minor who 
        is the head of a household or who is married to the head of a 
        household except under subdivision 5.  The 60-month time period 
        does not need to be consecutive months for this provision to 
        apply.  
           (b) Months before July 1998 in which individuals receive 
        assistance as part of an MFIP, MFIP-R, or MFIP or MFIP-R 
        comparison group family under sections 256.031 to 256.0361 or 
        sections 256.047 to 256.048 are not included in the 60-month 
        time limit. 
           Subd. 2.  [ASSISTANCE FROM ANOTHER STATE.] An individual 
        whose needs have been otherwise provided for in another state, 
        in whole or in part by the TANF block grant during a month, is 
        ineligible to receive MFIP-S for the month. 
           Subd. 3.  [ADULTS LIVING ON AN INDIAN RESERVATION.] In 
        determining the number of months for which an adult has received 
        assistance under MFIP-S, the county agency must disregard any 
        month during which the adult lived on an Indian reservation if, 
        during the month:  
           (1) at least 1,000 individuals were living on the 
        reservation; and 
           (2) at least 50 percent of the adults living on the 
        reservation were unemployed not employed. 
           Subd. 4.  [VICTIMS OF DOMESTIC VIOLENCE.] Any cash 
        assistance received by an assistance unit in a month when a 
        caregiver is complying with a safety plan under the MFIP-S 
        employment and training component does not count toward the 
        60-month limitation on assistance. 
           Subd. 5.  [EXEMPTION FOR CERTAIN FAMILIES.] (a) Any cash 
        assistance received by an assistance unit does not count toward 
        the 60-month limit on assistance during a month in which 
        the parental caregiver is in the category in section 256J.56, 
        clause (1).  The exemption applies for the period of time the 
        caregiver belongs to one of the categories specified in this 
        subdivision. 
           (b) From July 1, 1997, until the date MFIP-S is operative 
        in the caregiver's county of financial responsibility, any cash 
        assistance received by a caregiver who is complying with 
        sections 256.73, subdivision 5a, and 256.736, if applicable, 
        does not count toward the 60-month limit on assistance.  
        Thereafter, any cash assistance received by a minor caregiver 
        who is complying with the requirements of sections 256J.14 and 
        256J.54, if applicable, does not count towards the 60-month 
        limit on assistance. 
           (c) Any diversionary assistance or emergency assistance 
        received does not count toward the 60-month limit. 
           (d) Any cash assistance received by an 18- or 19-year-old 
        caregiver who is complying with the requirements of section 
        256J.54 does not count toward the 60-month limit. 
           Sec. 80.  Minnesota Statutes 1997 Supplement, section 
        256J.43, is amended to read: 
           256J.43 [INTERSTATE PAYMENT STANDARDS.] 
           Subdivision 1.  [PAYMENT.] (a) Effective July 1, 1997, the 
        amount of assistance paid to an eligible family unit in which 
        all members have resided in this state for fewer than 12 
        consecutive calendar months immediately preceding the date of 
        application shall be the lesser of either the payment interstate 
        transitional standard that would have been received by 
        the family assistance unit from the state of immediate prior 
        residence, or the amount calculated in accordance with AFDC or 
        MFIP-S standards.  The lesser payment must continue until 
        the family assistance unit meets the 12-month requirement.  An 
        assistance unit that has not resided in Minnesota for 12 months 
        from the date of application is not exempt from the interstate 
        payment provisions solely because a child is born in Minnesota 
        to a member of the assistance unit.  Payment must be calculated 
        by applying this state's budgeting policies, and the unit's net 
        income must be deducted from the payment standard in the other 
        state or in this state, whichever is lower.  Payment shall be 
        made in vendor form for rent shelter and utilities, up to the 
        limit of the grant amount, and residual amounts, if any, shall 
        be paid directly to the assistance unit. 
           (b) During the first 12 months a family an assistance unit 
        resides in this state, the number of months that a family unit 
        is eligible to receive AFDC or MFIP-S benefits is limited to the 
        number of months the family assistance unit would have been 
        eligible to receive similar benefits in the state of immediate 
        prior residence. 
           (c) This policy applies whether or not the family 
        assistance unit received similar benefits while residing in the 
        state of previous residence. 
           (d) When a family an assistance unit moves to this state 
        from another state where the family assistance unit has 
        exhausted that state's time limit for receiving benefits under 
        that state's TANF program, the family unit will not be eligible 
        to receive any AFDC or MFIP-S benefits in this state for 12 
        months from the date the family assistance unit moves here. 
           (e) For the purposes of this section, "state of immediate 
        prior residence" means: 
           (1) the state in which the applicant declares the applicant 
        spent the most time in the 30 days prior to moving to this 
        state; or 
           (2) the state in which an applicant who is a migrant worker 
        maintains a home. 
           (f) The commissioner shall annually verify and update all 
        other states' payment standards as they are to be in effect in 
        July of each year. 
           (g) Applicants must provide verification of their state of 
        immediate prior residence, in the form of tax statements, a 
        driver's license, automobile registration, rent receipts, or 
        other forms of verification approved by the commissioner. 
           (h) Migrant workers, as defined in section 256J.08, and 
        their immediate families are exempt from this section, provided 
        the migrant worker provides verification that the migrant family 
        worked in this state within the last 12 months and earned at 
        least $1,000 in gross wages during the time the migrant worker 
        worked in this state. 
           Subd. 2.  [TEMPORARY ABSENCE FROM MINNESOTA.] (a) For an 
        assistance unit that has met the requirements of section 
        256J.12, the number of months that the assistance unit receives 
        benefits under the interstate payment standards in this section 
        is not affected by an absence from Minnesota for fewer than 30 
        consecutive days. 
           (b) For an assistance unit that has met the requirements of 
        section 256J.12, the number of months that the assistance unit 
        receives benefits under the interstate payment standards in this 
        section is not affected by an absence from Minnesota for more 
        than 30 consecutive days but fewer than 90 consecutive days, 
        provided the assistance unit continues to maintain a residence 
        in Minnesota during the period of absence. 
           Subd. 3.  [EXCEPTIONS TO THE INTERSTATE PAYMENT 
        POLICY.] Applicants who lived in another state in the 12 months 
        prior to applying for assistance are exempt from the interstate 
        payment policy for the months that a member of the unit: 
           (1) served in the United States armed services, provided 
        the person returned to Minnesota within 30 days of leaving the 
        armed forces, and intends to remain in Minnesota; 
           (2) attended school in another state, paid nonresident 
        tuition or Minnesota tuition rates under a reciprocity 
        agreement, provided the person left Minnesota specifically to 
        attend school and returned to Minnesota within 30 days of 
        graduation with the intent to remain in Minnesota; or 
           (3) meets the following criteria: 
           (i) a minor child or a minor caregiver moves from another 
        state to the residence of a relative caregiver; 
           (ii) the minor caregiver applies for and receives family 
        cash assistance; 
           (iii) the relative caregiver chooses not to be part of the 
        MFIP-S assistance unit; and 
           (iv) the relative caregiver has resided in Minnesota for at 
        least 12 months from the date the assistance unit applies for 
        cash assistance. 
           Subd. 4.  [INELIGIBLE MANDATORY UNIT MEMBERS.] Ineligible 
        mandatory unit members who have resided in Minnesota for 12 
        months immediately before the unit's date of application 
        establish the other assistance unit members' eligibility for the 
        MFIP-S transitional standard.  
           Sec. 81.  Minnesota Statutes 1997 Supplement, section 
        256J.45, subdivision 1, is amended to read: 
           Subdivision 1.  [COUNTY AGENCY TO PROVIDE ORIENTATION.] A 
        county agency must provide each MFIP-S caregiver with a 
        face-to-face orientation.  The caregiver must attend the 
        orientation.  The county agency must inform the caregiver that 
        failure to attend the orientation is considered a first an 
        occurrence of noncompliance with program requirements, and will 
        result in the imposition of a sanction under section 
        256J.46.  If the client complies with the orientation 
        requirement prior to the first day of the month in which the 
        grant reduction is proposed to occur, the orientation sanction 
        shall be lifted.  
           Sec. 82.  Minnesota Statutes 1997 Supplement, section 
        256J.45, subdivision 2, is amended to read: 
           Subd. 2.  [GENERAL INFORMATION.] The MFIP-S orientation 
        must consist of a presentation that informs caregivers of: 
           (1) the necessity to obtain immediate employment; 
           (2) the work incentives under MFIP-S; 
           (3) the requirement to comply with the employment plan and 
        other requirements of the employment and training services 
        component of MFIP-S, including a description of the range of 
        work and training activities that are allowable under MFIP-S to 
        meet the individual needs of participants; 
           (4) the consequences for failing to comply with the 
        employment plan and other program requirements, and that the 
        county agency may not impose a sanction when failure to comply 
        is due to the unavailability of child care or other 
        circumstances where the participant has good cause under section 
        256J.45, subdivision 3; 
           (5) the rights, responsibilities, and obligations of 
        participants; 
           (6) the types and locations of child care services 
        available through the county agency; 
           (7) the availability and the benefits of the early 
        childhood health and developmental screening under sections 
        123.701 to 123.74; 
           (8) the caregiver's eligibility for transition year child 
        care assistance under section 119B.05; 
           (9) the caregiver's eligibility for extended medical 
        assistance when the caregiver loses eligibility for MFIP-S due 
        to increased earnings or increased child or spousal support; and 
           (10) the caregiver's option to choose an employment and 
        training provider and information about each provider, including 
        but not limited to, services offered, program components, job 
        placement rates, job placement wages, and job retention rates; 
           (11) the caregiver's option to request approval of an 
        education and training plan according to section 256J.52; and 
           (12) the work study programs available under the higher 
        educational system. 
           Sec. 83.  Minnesota Statutes 1997 Supplement, section 
        256J.45, is amended by adding a subdivision to read: 
           Subd. 3.  [GOOD CAUSE EXEMPTIONS FOR NOT ATTENDING 
        ORIENTATION.] (a) The county agency shall not impose the 
        sanction under section 256J.46 if it determines that the 
        participant has good cause for failing to attend orientation.  
        Good cause exists when: 
           (1) appropriate child care is not available; 
           (2) the participant is ill or injured; 
           (3) a family member is ill and needs care by the 
        participant that prevents the participant from attending 
        orientation; 
           (4) the caregiver is unable to secure necessary 
        transportation; 
           (5) the caregiver is in an emergency situation that 
        prevents orientation attendance; 
           (6) the orientation conflicts with the caregiver's work, 
        training, or school schedule; or 
           (7) the caregiver documents other verifiable impediments to 
        orientation attendance beyond the caregiver's control.  
           (b) Counties must work with clients to provide child care 
        and transportation necessary to ensure a caregiver has every 
        opportunity to attend orientation. 
           Sec. 84.  Minnesota Statutes 1997 Supplement, section 
        256J.46, subdivision 1, is amended to read: 
           Subdivision 1.  [SANCTIONS FOR PARTICIPANTS NOT COMPLYING 
        WITH PROGRAM REQUIREMENTS.] (a) A participant who fails without 
        good cause to comply with the requirements of this chapter, and 
        who is not subject to a sanction under subdivision 2, shall be 
        subject to a sanction as provided in this subdivision. 
           A sanction under this subdivision becomes effective ten 
        days after the month following the month in which a required 
        notice is given.  A sanction must not be imposed when a 
        participant comes into compliance with the requirements for 
        orientation under section 256J.45 or third party liability for 
        medical services under section 256J.30, subdivision 10, prior to 
        the effective date of the sanction.  A sanction must not be 
        imposed when a participant comes into compliance with the 
        requirements for employment and training services under sections 
        256J.49 to 256J.72 ten days prior to the effective date of the 
        sanction.  For purposes of this subdivision, each month that a 
        participant fails to comply with a requirement of this chapter 
        shall be considered a separate occurrence of noncompliance.  A 
        participant who has had one or more sanctions imposed must 
        remain in compliance with the provisions of this chapter for six 
        months in order for a subsequent occurrence of noncompliance to 
        be considered a first occurrence.  
           (b) Sanctions for noncompliance shall be imposed as follows:
           (1) For the first occurrence of noncompliance by a 
        participant in a single-parent household or by one participant 
        in a two-parent household, the participant's assistance unit's 
        grant shall be reduced by ten percent of the applicable MFIP-S 
        transitional standard, the shared household standard, or the 
        interstate transitional standard for an assistance unit of the 
        same size, whichever is applicable, with the residual paid to 
        the participant.  The reduction in the grant amount must be in 
        effect for a minimum of one month and shall be removed in the 
        month following the month that the participant returns to 
        compliance.  
           (2) For a second or subsequent occurrence of noncompliance, 
        or when both participants in a two-parent household are out of 
        compliance at the same time, the participant's rent assistance 
        unit's shelter costs shall be vendor paid up to the amount of 
        the cash portion of the MFIP-S grant for which the participant's 
        assistance unit is eligible.  At county option, 
        the participant's assistance unit's utilities may also be vendor 
        paid up to the amount of the cash portion of the MFIP-S grant 
        remaining after vendor payment of the participant's rent 
        assistance unit's shelter costs.  The vendor payment of rent 
        and, if in effect, utilities, must be in effect for six months 
        from the date that a sanction is imposed under this clause.  The 
        residual amount of the grant after vendor payment, if any, must 
        be reduced by an amount equal to 30 percent of the applicable 
        MFIP-S transitional standard, the shared household standard, or 
        the interstate transitional standard for an assistance unit of 
        the same size, whichever is applicable, before the residual is 
        paid to the participant assistance unit.  The reduction in the 
        grant amount must be in effect for a minimum of one month and 
        shall be removed in the month following the month that the a 
        participant in a one-parent household returns to compliance.  In 
        a two-parent household, the grant reduction must be in effect 
        for a minimum of one month and shall be removed in the month 
        following the month both participants return to compliance.  The 
        vendor payment of rent shelter costs and, if applicable, 
        utilities shall be removed six months after the month in which 
        the participant returns or participants return to compliance. 
           (c) No later than during the second month that a sanction 
        under paragraph (b), clause (2), is in effect due to 
        noncompliance with employment services, the participant's case 
        file must be reviewed to determine if: 
           (i) the continued noncompliance can be explained and 
        mitigated by providing a needed preemployment activity, as 
        defined in section 256J.49, subdivision 13, clause (16); 
           (ii) the participant qualifies for a good cause exception 
        under section 256J.57; or 
           (iii) the participant qualifies for an exemption under 
        section 256J.56. 
           If the lack of an identified activity can explain the 
        noncompliance, the county must work with the participant to 
        provide the identified activity, and the county must restore the 
        participant's grant amount to the full amount for which the 
        assistance unit is eligible.  The grant must be restored 
        retroactively to the first day of the month in which the 
        participant was found to lack preemployment activities or to 
        qualify for an exemption or good cause exception. 
           If the participant is found to qualify for a good cause 
        exception or an exemption, the county must restore the 
        participant's grant to the full amount for which the assistance 
        unit is eligible.  If the participant's grant is restored under 
        this paragraph, the vendor payment of rent and if applicable, 
        utilities, shall be removed six months after the month in which 
        the sanction was imposed and the county must consider a 
        subsequent occurrence of noncompliance to be a first occurrence. 
           Sec. 85.  Minnesota Statutes 1997 Supplement, section 
        256J.46, subdivision 2, is amended to read: 
           Subd. 2.  [SANCTIONS FOR REFUSAL TO COOPERATE WITH SUPPORT 
        REQUIREMENTS.] The grant of an MFIP-S caregiver who refuses to 
        cooperate, as determined by the child support enforcement 
        agency, with support requirements under section 256.741, if 
        enacted, shall be subject to sanction as specified in this 
        subdivision.  The assistance unit's grant must be reduced by 25 
        percent of the applicable transitional standard.  The residual 
        amount of the grant, if any, must be paid to the caregiver.  A 
        sanction under this subdivision becomes effective ten days after 
        the first month following the month in which a required notice 
        is given.  A sanction must not be imposed when a caregiver comes 
        into compliance with the requirements under section 256.741 
        prior to the effective date of the sanction.  The sanction must 
        be in effect for a minimum of one month and shall be removed 
        only when in the month following the month that the caregiver 
        cooperates with the support requirements.  Each month that an 
        MFIP-S caregiver fails to comply with the requirements of 
        section 256.741 must be considered a separate occurrence of 
        noncompliance.  An MFIP-S caregiver who has had one or more 
        sanctions imposed must remain in compliance with the 
        requirements of section 256.741 for six months in order for a 
        subsequent sanction to be considered a first occurrence. 
           Sec. 86.  Minnesota Statutes 1997 Supplement, section 
        256J.46, subdivision 2a, is amended to read: 
           Subd. 2a.  [DUAL SANCTIONS.] (a) Notwithstanding the 
        provisions of subdivisions 1 and 2, for a participant subject to 
        a sanction for refusal to comply with child support requirements 
        under subdivision 2 and subject to a concurrent sanction for 
        refusal to cooperate with other program requirements under 
        subdivision 1, sanctions shall be imposed in the manner 
        prescribed in this subdivision. 
           A participant who has had one or more sanctions imposed 
        under this subdivision must remain in compliance with the 
        provisions of this chapter for six months in order for a 
        subsequent occurrence of noncompliance to be considered a first 
        occurrence.  Any vendor payment of rent shelter costs or 
        utilities under this subdivision must remain in effect for six 
        months after the month in which the participant is no longer 
        subject to sanction under subdivision 1. 
           (b) If the participant was subject to sanction for: 
           (i) noncompliance under subdivision 1 before being subject 
        to sanction for noncooperation under subdivision 2; or 
           (ii) noncooperation under subdivision 2 before being 
        subject to sanction for noncompliance under subdivision 1; 
        the participant shall be sanctioned as provided in subdivision 
        1, paragraph (b), clause (2), and the requirement that the 
        county conduct a review as specified in subdivision 1, paragraph 
        (c), remains in effect. 
           (c) A participant who first becomes subject to sanction 
        under both subdivisions 1 and 2 in the same month is subject to 
        sanction as follows: 
           (i) in the first month of noncompliance and noncooperation, 
        the participant's grant must be reduced by 25 percent of the 
        applicable transitional standard, with any residual amount paid 
        to the participant; 
           (ii) in the second and subsequent months of noncompliance 
        and noncooperation, the participant shall be sanctioned as 
        provided in subdivision 1, paragraph (b), clause (2). 
           The requirement that the county conduct a review as 
        specified in subdivision 1, paragraph (c), remains in effect. 
           (d) A participant remains subject to sanction under 
        subdivision 2 if the participant: 
           (i) returns to compliance and is no longer subject to 
        sanction under subdivision 1; or 
           (ii) has the sanction under subdivision 1, paragraph (b), 
        removed upon completion of the review under subdivision 1, 
        paragraph (c). 
           A participant remains subject to sanction under subdivision 
        1, paragraph (b), if the participant cooperates and is no longer 
        subject to sanction under subdivision 2. 
           Sec. 87.  Minnesota Statutes 1997 Supplement, section 
        256J.47, subdivision 4, is amended to read: 
           Subd. 4.  [INELIGIBILITY FOR MFIP-S; EMERGENCY ASSISTANCE; 
        AND EMERGENCY GENERAL ASSISTANCE.] Upon receipt of diversionary 
        assistance, the family is ineligible for MFIP-S, emergency 
        assistance, and emergency general assistance for a period of 
        time.  To determine the period of ineligibility, the county 
        shall use the following formula:  regardless of household 
        changes, the county agency must calculate the number of days of 
        ineligibility by dividing the diversionary assistance issued by 
        the transitional standard a family of the same size and 
        composition would have received under MFIP-S, or if applicable 
        the interstate transitional standard, multiplied by 30, 
        truncating the result.  The ineligibility period begins the date 
        the diversionary assistance is issued. 
           Sec. 88.  Minnesota Statutes 1997 Supplement, section 
        256J.48, subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY.] Notwithstanding other eligibility 
        provisions of this chapter, any family without resources 
        immediately available to meet emergency needs identified in 
        subdivision 3 shall be eligible for an emergency grant under the 
        following conditions: 
           (1) a family member has resided in this state for at least 
        30 days; 
           (2) the family is without resources immediately available 
        to meet emergency needs; 
           (3) assistance is necessary to avoid destitution or provide 
        emergency shelter arrangements; and 
           (4) the family's destitution or need for shelter or 
        utilities did not arise because the child or relative caregiver 
        refused without good cause under section 256J.57 to accept 
        employment or training for employment in this state or another 
        state; and 
           (5) at least one child or pregnant woman in the emergency 
        assistance unit meets MFIP-S citizenship requirements in section 
        256J.11. 
           Sec. 89.  Minnesota Statutes 1997 Supplement, section 
        256J.48, subdivision 3, is amended to read: 
           Subd. 3.  [EMERGENCY NEEDS.] Emergency needs are limited to 
        the following: 
           (a)  [RENT.] A county agency may deny assistance to prevent 
        eviction from rented or leased shelter of an otherwise eligible 
        applicant when the county agency determines that an applicant's 
        anticipated income will not cover continued payment for shelter, 
        subject to conditions in clauses (1) to (3): 
           (1) a county agency must not deny assistance when an 
        applicant can document that the applicant is unable to locate 
        habitable shelter, unless the county agency can document that 
        one or more habitable shelters are available in the community 
        that will result in at least a 20 percent reduction in monthly 
        expense for shelter and that this shelter will be cost-effective 
        for the applicant; 
           (2) when no alternative shelter can be identified by either 
        the applicant or the county agency, the county agency shall not 
        deny assistance because anticipated income will not cover rental 
        obligation; and 
           (3) when cost-effective alternative shelter is identified, 
        the county agency shall issue assistance for moving expenses as 
        provided in paragraph (d) (e). 
           (b)  [DEFINITIONS.] For purposes of paragraph (a), the 
        following definitions apply (1) "metropolitan statistical area" 
        is as defined by the United States Census Bureau; (2) 
        "alternative shelter" includes any shelter that is located 
        within the metropolitan statistical area containing the county 
        and for which the applicant is eligible, provided the applicant 
        does not have to travel more than 20 miles to reach the shelter 
        and has access to transportation to the shelter.  Clause (2) 
        does not apply to counties in the Minneapolis-St. Paul 
        metropolitan statistical area. 
           (c)  [MORTGAGE AND CONTRACT FOR DEED ARREARAGES.] A county 
        agency shall issue assistance for mortgage or contract for deed 
        arrearages on behalf of an otherwise eligible applicant 
        according to clauses (1) to (4): 
           (1) assistance for arrearages must be issued only when a 
        home is owned, occupied, and maintained by the applicant; 
           (2) assistance for arrearages must be issued only when no 
        subsequent foreclosure action is expected within the 12 months 
        following the issuance; 
           (3) assistance for arrearages must be issued only when an 
        applicant has been refused refinancing through a bank or other 
        lending institution and the amount payable, when combined with 
        any payments made by the applicant, will be accepted by the 
        creditor as full payment of the arrearage; 
           (4) costs paid by a family which are counted toward the 
        payment requirements in this clause are:  principal and interest 
        payments on mortgages or contracts for deed, balloon payments, 
        homeowner's insurance payments, manufactured home lot rental 
        payments, and tax or special assessment payments related to the 
        homestead.  Costs which are not counted include closing costs 
        related to the sale or purchase of real property. 
           To be eligible for assistance for costs specified in clause 
        (4) which are outstanding at the time of foreclosure, an 
        applicant must have paid at least 40 percent of the family's 
        gross income toward these costs in the month of application and 
        the 11-month period immediately preceding the month of 
        application. 
           When an applicant is eligible under clause (4), a county 
        agency shall issue assistance up to a maximum of four times the 
        MFIP-S transitional standard for a comparable assistance unit. 
           (d)  [DAMAGE OR UTILITY DEPOSITS.] A county agency shall 
        issue assistance for damage or utility deposits when necessary 
        to alleviate the emergency.  The county may require that 
        assistance paid in the form of a damage deposit or a utility 
        deposit, less any amount retained by the landlord to remedy a 
        tenant's default in payment of rent or other funds due to the 
        landlord under a rental agreement, or to restore the premises to 
        the condition at the commencement of the tenancy, ordinary wear 
        and tear excepted, be returned to the county when the individual 
        vacates the premises or be paid to the recipient's new landlord 
        as a vendor payment.  The county may require that assistance 
        paid in the form of a utility deposit less any amount retained 
        to satisfy outstanding utility costs be returned to the county 
        when the person vacates the premises, or be paid for the 
        person's new housing unit as a vendor payment.  The vendor 
        payment of returned funds shall not be considered a new use of 
        emergency assistance. 
           (e)  [MOVING EXPENSES.] A county agency shall issue 
        assistance for expenses incurred when a family must move to a 
        different shelter according to clauses (1) to (4): 
           (1) moving expenses include the cost to transport personal 
        property belonging to a family, the cost for utility connection, 
        and the cost for securing different shelter; 
           (2) moving expenses must be paid only when the county 
        agency determines that a move is cost-effective; 
           (3) moving expenses must be paid at the request of an 
        applicant, but only when destitution or threatened destitution 
        exists; and 
           (4) moving expenses must be paid when a county agency 
        denies assistance to prevent an eviction because the county 
        agency has determined that an applicant's anticipated income 
        will not cover continued shelter obligation in paragraph (a). 
           (f)  [HOME REPAIRS.] A county agency shall pay for repairs 
        to the roof, foundation, wiring, heating system, chimney, and 
        water and sewer system of a home that is owned and lived in by 
        an applicant. 
           The applicant shall document, and the county agency shall 
        verify the need for and method of repair. 
           The payment must be cost-effective in relation to the 
        overall condition of the home and in relation to the cost and 
        availability of alternative housing. 
           (g)  [UTILITY COSTS.] Assistance for utility costs must be 
        made when an otherwise eligible family has had a termination or 
        is threatened with a termination of municipal water and sewer 
        service, electric, gas or heating fuel service, or lacks wood 
        when that is the heating source, subject to the conditions in 
        clauses (1) and (2): 
           (1) a county agency must not issue assistance unless the 
        county agency receives confirmation from the utility provider 
        that assistance combined with payment by the applicant will 
        continue or restore the utility; and 
           (2) a county agency shall not issue assistance for utility 
        costs unless a family paid at least eight percent of the 
        family's gross income toward utility costs due during the 
        preceding 12 months. 
           Clauses (1) and (2) must not be construed to prevent the 
        issuance of assistance when a county agency must take immediate 
        and temporary action necessary to protect the life or health of 
        a child. 
           (h)  [SPECIAL DIETS.] Effective January 1, 1998, a county 
        shall pay for special diets or dietary items for MFIP-S 
        participants.  Persons receiving emergency assistance funds for 
        special diets or dietary items are also eligible to receive 
        emergency assistance for shelter and utility emergencies, if 
        otherwise eligible.  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. 
           Sec. 90.  Minnesota Statutes 1997 Supplement, section 
        256J.49, subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYMENT AND TRAINING SERVICE PROVIDER.] 
        "Employment and training service provider" means: 
           (1) a public, private, or nonprofit employment and training 
        agency certified by the commissioner of economic security under 
        sections 268.0122, subdivision 3, and 268.871, subdivision 1, or 
        is approved under section 256J.51 and is included in the county 
        plan submitted under section 256J.50, subdivision 7; or 
           (2) a public, private, or nonprofit agency that is not 
        certified by the commissioner under clause (1), but with which a 
        county has contracted to provide employment and training 
        services and which is included in the county's plan submitted 
        under section 256J.50, subdivision 7; or 
           (3) a county agency, if the county is certified under 
        clause (1) has opted to provide employment and training services 
        and the county has indicated that fact in the plan submitted 
        under section 256J.50, subdivision 7. 
           Notwithstanding section 268.871, an employment and training 
        services provider meeting this definition may deliver employment 
        and training services under this chapter. 
           Sec. 91.  Minnesota Statutes 1997 Supplement, section 
        256J.50, subdivision 5, is amended to read: 
           Subd. 5.  [PARTICIPATION REQUIREMENTS FOR SINGLE-PARENT AND 
        TWO-PARENT CASES.] (a) A county must establish a uniform 
        schedule for requiring participation by single parents.  
        Mandatory participation must be required within six months of 
        eligibility for cash assistance.  For two-parent cases, 
        participation is required concurrent with the receipt of MFIP-S 
        cash assistance. 
           (b) Beginning January 1, 1998, with the exception of 
        caregivers required to attend high school under the provisions 
        of section 256J.54, subdivision 5, MFIP caregivers, upon 
        completion of the secondary assessment, must develop an 
        employment plan and participate in work activities. 
           (c) Upon completion of the secondary assessment: 
           (1) In single-parent families with no children under six 
        years of age, the job counselor and the caregiver must develop 
        an employment plan that includes 20 to 35 hours per week of work 
        activities for the period January 1, 1998, to September 30, 
        1998; 25 to 35 hours of work activities per week in federal 
        fiscal year 1999; and 30 to 35 hours per week of work activities 
        in federal fiscal year 2000 and thereafter. 
           (2) In single-parent families with a child under six years 
        of age, the job counselor and the caregiver must develop an 
        employment plan that includes 20 to 35 hours per week of work 
        activities. 
           (3) In two-parent families, the job counselor and the 
        caregivers must develop employment plans which result in a 
        combined total of at least 55 hours per week of work activities. 
           Sec. 92.  Minnesota Statutes 1997 Supplement, section 
        256J.50, is amended by adding a subdivision to read: 
           Subd. 10.  [REQUIRED NOTIFICATION TO VICTIMS OF DOMESTIC 
        VIOLENCE.] County agencies and their contractors must provide 
        universal notification to all applicants and recipients of 
        MFIP-S that: 
           (1) referrals to counseling and supportive services are 
        available for victims of domestic violence; 
           (2) nonpermanent resident battered individuals married to 
        United States citizens or permanent residents may be eligible to 
        petition for permanent residency under the federal Violence 
        Against Women Act, and that referrals to appropriate legal 
        services are available; 
           (3) victims of domestic violence are exempt from the 
        60-month limit on assistance while the individual is complying 
        with an approved safety plan, as defined in section 256J.49, 
        subdivision 11; and 
           (4) victims of domestic violence may choose to be exempt or 
        deferred from work requirements for up to 12 months while the 
        individual is complying with an approved safety plan as defined 
        in section 256J.49, subdivision 11.  
           Notification must be in writing and orally at the time of 
        application and recertification, when the individual is referred 
        to the title IV-D child support agency, and at the beginning of 
        any job training or work placement assistance program. 
           Sec. 93.  Minnesota Statutes 1997 Supplement, section 
        256J.50, is amended by adding a subdivision to read: 
           Subd. 11.  [COORDINATION.] The county agency and the county 
        agency's employment and training providers must consult and 
        coordinate with other providers of employment and training 
        services to identify existing resources, in order to prevent 
        duplication of services, to assure that other programs' services 
        are available to enable participants to achieve 
        self-sufficiency, and to assure that costs for these other 
        services for which participants are eligible are not incurred by 
        MFIP-S.  At a minimum, the county agency and its providers must 
        coordinate with Jobs Training and Partnership Act providers and 
        with any other relevant employment, training, and education 
        programs in the county. 
           Sec. 94.  Minnesota Statutes 1997 Supplement, section 
        256J.515, is amended to read: 
           256J.515 [OVERVIEW OF EMPLOYMENT AND TRAINING SERVICES.] 
           During the first meeting with participants, job counselors 
        must ensure that an overview of employment and training services 
        is provided that:  (1) stresses the necessity and opportunity of 
        immediate employment,; (2) outlines the job search resources 
        offered,; (3) outlines education or training opportunities 
        available; (4) describes the range of work activities, including 
        activities under section 256J.49, subdivision 13, clause (18), 
        that are allowable under MFIP-S to meet the individual needs of 
        participants; (5) explains the requirements to comply with an 
        employment plan and; (6) explains the consequences for failing 
        to comply,; and (7) explains the services that are available to 
        support job search and work and education. 
           Sec. 95.  Minnesota Statutes 1997 Supplement, section 
        256J.52, subdivision 4, is amended to read: 
           Subd. 4.  [SECONDARY ASSESSMENT.] (a) The job counselor 
        must conduct a secondary assessment for those participants who: 
           (1) in the judgment of the job counselor, have barriers to 
        obtaining employment that will not be overcome with a job search 
        support plan under subdivision 3; 
           (2) have completed eight weeks of job search under 
        subdivision 3 without obtaining suitable employment; or 
           (3) have not received a secondary assessment, are working 
        at least 20 hours per week, and the participant, job counselor, 
        or county agency requests a secondary assessment; or 
           (4) have an existing job search plan or employment plan 
        developed for another program or are already involved in 
        training or education activities under section 256J.55, 
        subdivision 5. 
           (b) In the secondary assessment the job counselor must 
        evaluate the participant's skills and prior work experience, 
        family circumstances, interests and abilities, need for 
        preemployment activities, supportive or educational services, 
        and the extent of any barriers to employment.  The job counselor 
        must use the information gathered through the secondary 
        assessment to develop an employment plan under subdivision 5. 
           (c) The provider shall make available to participants 
        information regarding additional vendors or resources which 
        provide employment and training services that may be available 
        to the participant under a plan developed under this section.  
        The information must include a brief summary of services 
        provided and related performance indicators.  Performance 
        indicators must include, but are not limited to, the average 
        time to complete program offerings, placement rates, entry and 
        average wages, and retention rates.  To be included in the 
        information given to participants, a vendor or resource must 
        provide counties with relevant information in the format 
        required by the county. 
           Sec. 96.  Minnesota Statutes 1997 Supplement, section 
        256J.52, is amended by adding a subdivision to read: 
           Subd. 8.  [ADMINISTRATIVE SUPPORT FOR POSTEMPLOYMENT 
        EDUCATION AND TRAINING.] After a caregiver receiving MFIP-S has 
        been employed for six consecutive months, during which time the 
        caregiver works on average more than 20 hours per week, the 
        caregiver's job counselor shall inform the caregiver that the 
        caregiver may request a secondary assessment described in 
        subdivision 4 and shall provide information about: 
           (1) part-time education and training options available to 
        the caregiver; and 
           (2) child care and transportation resources available to 
        support postemployment education and training. 
           Sec. 97.  Minnesota Statutes 1997 Supplement, section 
        256J.52, is amended by adding a subdivision to read: 
           Subd. 9.  [TRAINING CONCURRENT WITH EMPLOYMENT.] An MFIP 
        caregiver who is meeting the minimum hourly work participation 
        requirements under the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 through employment must 
        be allowed to meet any additional MFIP-S hourly work 
        participation requirements through training or education that 
        meets the requirements of section 256J.53. 
           Sec. 98.  Minnesota Statutes 1997 Supplement, section 
        256J.54, subdivision 2, is amended to read: 
           Subd. 2.  [RESPONSIBILITY FOR ASSESSMENT AND EMPLOYMENT 
        PLAN.] For caregivers who are under age 18 without a high school 
        diploma or its equivalent, the assessment under subdivision 1 
        and the employment plan under subdivision 3 must be completed by 
        the social services agency under section 257.33.  For caregivers 
        who are age 18 or 19 without a high school diploma or its 
        equivalent, the assessment under subdivision 1 and the 
        employment plan under subdivision 3 must be completed by the job 
        counselor.  The social services agency or the job counselor 
        shall consult with representatives of educational agencies that 
        are required to assist in developing educational plans under 
        section 126.235. 
           Sec. 99.  Minnesota Statutes 1997 Supplement, section 
        256J.54, subdivision 3, is amended to read: 
           Subd. 3.  [EDUCATIONAL OPTION DEVELOPED.] If the job 
        counselor or county social services agency identifies an 
        appropriate educational option for a caregiver under the age of 
        20 without a high school diploma or its equivalent, it the job 
        counselor or agency must develop an employment plan which 
        reflects the identified option.  The plan must specify that 
        participation in an educational activity is required, what 
        school or educational program is most appropriate, the services 
        that will be provided, the activities the caregiver will take 
        part in, including child care and supportive services, the 
        consequences to the caregiver for failing to participate or 
        comply with the specified requirements, and the right to appeal 
        any adverse action.  The employment plan must, to the extent 
        possible, reflect the preferences of the caregiver. 
           Sec. 100.  Minnesota Statutes 1997 Supplement, section 
        256J.54, subdivision 4, is amended to read: 
           Subd. 4.  [NO APPROPRIATE EDUCATIONAL OPTION.] If the job 
        counselor determines that there is no appropriate educational 
        option for a caregiver who is age 18 or 19 without a high school 
        diploma or its equivalent, the job counselor must develop an 
        employment plan, as defined in section 256J.49, subdivision 5, 
        for the caregiver.  If the county social services agency 
        determines that school attendance is not appropriate for a 
        caregiver under age 18 without a high school diploma or its 
        equivalent, the county agency shall refer the caregiver to 
        social services for services as provided in section 257.33. 
           Sec. 101.  Minnesota Statutes 1997 Supplement, section 
        256J.54, subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL ATTENDANCE REQUIRED.] (a) Notwithstanding 
        the provisions of section 256J.56, minor parents, or 18- or 
        19-year-old parents without a high school diploma or its 
        equivalent must attend school unless: 
           (1) transportation services needed to enable the caregiver 
        to attend school are not available; 
           (2) appropriate child care services needed to enable the 
        caregiver to attend school are not available; 
           (3) the caregiver is ill or incapacitated seriously enough 
        to prevent attendance at school; or 
           (4) the caregiver is needed in the home because of the 
        illness or incapacity of another member of the household.  This 
        includes a caregiver of a child who is younger than six weeks of 
        age. 
           (b) The caregiver must be enrolled in a secondary school 
        and meeting the school's attendance requirements.  The county, 
        social service agency, or job counselor must verify at least 
        once per quarter that the caregiver is meeting the school's 
        attendance requirements.  An enrolled caregiver is considered to 
        be meeting the attendance requirements when the school is not in 
        regular session, including during holiday and summer breaks. 
           Sec. 102.  Minnesota Statutes 1997 Supplement, section 
        256J.55, subdivision 5, is amended to read: 
           Subd. 5.  [OPTION TO UTILIZE EXISTING PLAN.] With job 
        counselor approval, if a participant is already complying with a 
        job search support or employment plan that was developed for a 
        different program or is already involved in education or 
        training activities, the participant may utilize continue that 
        plan and that program's services, subject to the requirements of 
        subdivision 3, to be in compliance with sections 256J.52 to 
        256J.57 so long as or activity if the plan meets, or is modified 
        to meet, the requirements of those sections 256J.52 to 256J.57, 
        and if the participant is concurrently employed and the 
        combination of the hours spent in education or training and 
        employment meets the hourly participation requirements.  The 
        participant is not required to be employed if the number of 
        hours per week the participant is in education or training meets 
        the hourly work participation requirements. 
           Sec. 103.  Minnesota Statutes 1997 Supplement, section 
        256J.56, is amended to read: 
           256J.56 [EMPLOYMENT AND TRAINING SERVICES COMPONENT; 
        EXEMPTIONS.] 
           (a) An MFIP-S caregiver is exempt from the requirements of 
        sections 256J.52 to 256J.55 if the caregiver belongs to any of 
        the following groups: 
           (1) individuals who are age 60 or older; 
           (2) individuals who are suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which is expected to continue for more than 30 days and which 
        prevents the person from obtaining or retaining employment.  
        Persons in this category with a temporary illness, injury, or 
        incapacity must be reevaluated at least quarterly; 
           (3) caregivers whose presence in the home is required 
        because of the professionally certified illness or incapacity of 
        another member in the assistance unit, a relative in the 
        household, or a foster child in the household; 
           (4) women who are pregnant, if the pregnancy has resulted 
        in a professionally certified incapacity that prevents the woman 
        from obtaining or retaining employment; 
           (5) caregivers of a child under the age of one year who 
        personally provide full-time care for the child.  This exemption 
        may be used for only 12 months in a lifetime.  In two-parent 
        households, only one parent or other relative may qualify for 
        this exemption; 
           (6) individuals who are single parents, or one parent in a 
        two-parent family, employed at least 40 hours per week or at 
        least 30 hours per week and engaged in job search for at least 
        an additional ten 35 hours per week; 
           (7) individuals experiencing a personal or family crisis 
        that makes them incapable of participating in the program, as 
        determined by the county agency.  If the participant does not 
        agree with the county agency's determination, the participant 
        may seek professional certification, as defined in section 
        256J.08, that the participant is incapable of participating in 
        the program. 
           Persons in this exemption category must be reevaluated 
        every 60 days; or 
           (8) second parents in two-parent families, provided the 
        second parent is employed for 20 or more hours per week, 
        provided the first parent is employed at least 35 hours per week.
           A caregiver who is exempt under clause (5) must enroll in 
        and attend an early childhood and family education class, a 
        parenting class, or some similar activity, if available, during 
        the period of time the caregiver is exempt under this section.  
        Notwithstanding section 256J.46, failure to attend the required 
        activity shall not result in the imposition of a sanction. 
           (b) The county agency must provide employment and training 
        services to MFIP-S caregivers who are exempt under this section, 
        but who volunteer to participate.  Exempt volunteers may request 
        approval for any work activity under section 256J.49, 
        subdivision 13.  The hourly participation requirements for 
        nonexempt caregivers under section 256J.50, subdivision 5, do 
        not apply to exempt caregivers who volunteer to participate. 
           Sec. 104.  Minnesota Statutes 1997 Supplement, section 
        256J.57, subdivision 1, is amended to read: 
           Subdivision 1.  [GOOD CAUSE FOR FAILURE TO COMPLY.] The 
        county agency shall not impose the sanction under section 
        256J.46 if it determines that the participant has good cause for 
        failing to comply with the requirements of section 256J.45 or 
        sections 256J.52 to 256J.55.  Good cause exists when: 
           (1) appropriate child care is not available; 
           (2) the job does not meet the definition of suitable 
        employment; 
           (3) the participant is ill or injured; 
           (4) a family member of the assistance unit, a relative in 
        the household, or a foster child in the household is ill and 
        needs care by the participant that prevents the participant from 
        complying with the job search support plan or employment plan; 
           (5) the parental caregiver is unable to secure necessary 
        transportation; 
           (6) the parental caregiver is in an emergency situation 
        that prevents compliance with the job search support plan or 
        employment plan; 
           (7) the schedule of compliance with the job search support 
        plan or employment plan conflicts with judicial proceedings; 
           (8) the parental caregiver is already participating in 
        acceptable work activities; 
           (9) the employment plan requires an educational program for 
        a caregiver under age 20, but the educational program is not 
        available; 
           (10) activities identified in the job search support plan 
        or employment plan are not available; 
           (11) the parental caregiver is willing to accept suitable 
        employment, but suitable employment is not available; or 
           (12) the parental caregiver documents other verifiable 
        impediments to compliance with the job search support plan or 
        employment plan beyond the parental caregiver's control. 
           Sec. 105.  Minnesota Statutes 1997 Supplement, section 
        256J.645, subdivision 3, is amended to read: 
           Subd. 3.  [FUNDING.] If the commissioner and an Indian 
        tribe are parties to an agreement under this subdivision, the 
        agreement may annually provide to the Indian tribe the funding 
        amount in clause (1) or (2): 
           (1) if the Indian tribe operated a tribal STRIDE program 
        during state fiscal year 1997, the amount to be provided is the 
        amount the Indian tribe received from the state for operation of 
        its tribal STRIDE program in state fiscal year 1997, except that 
        the amount provided for a fiscal year may increase or decrease 
        in the same proportion that the total amount of state and 
        federal funds available for MFIP-S employment and training 
        services increased or decreased that fiscal year; or 
           (2) if the Indian tribe did not operate a tribal STRIDE 
        program during state fiscal year 1997, the commissioner may 
        provide to the Indian tribe for the first year of operations the 
        amount determined by multiplying the state allocation for MFIP-S 
        employment and training services to each county agency in the 
        Indian tribe's service delivery area by the percentage of MFIP-S 
        recipients in that county who were members of the Indian tribe 
        during the previous state fiscal year.  The resulting amount 
        shall also be the amount that the commissioner may provide to 
        the Indian tribe annually thereafter through an agreement under 
        this subdivision, except that the amount provided for a fiscal 
        year may increase or decrease in the same proportion that the 
        total amount of state and federal funds available for MFIP-S 
        employment and training services increased or decreased that 
        fiscal year. 
           Sec. 106.  Minnesota Statutes 1997 Supplement, section 
        256J.74, subdivision 2, is amended to read: 
           Subd. 2.  [CONCURRENT ELIGIBILITY, LIMITATIONS.] A county 
        agency must not count an applicant or participant as a member of 
        more than one assistance unit in a given payment month, except 
        as provided in clauses (1) and (2). 
           (1) A participant who is a member of an assistance unit in 
        this state is eligible to be included in a second assistance 
        unit in the first full month that after the month the 
        participant leaves the first assistance unit and lives with 
        a joins the second assistance unit. 
           (2) An applicant whose needs are met through foster care 
        that is reimbursed under title IV-E of the Social Security Act 
        for the first part of an application month is eligible to 
        receive assistance for the remaining part of the month in which 
        the applicant returns home.  Title IV-E payments and adoption 
        assistance payments must be considered prorated payments rather 
        than a duplication of MFIP-S need. 
           Sec. 107.  Minnesota Statutes 1997 Supplement, section 
        256J.74, is amended by adding a subdivision to read: 
           Subd. 5.  [FOOD STAMPS.] For any month an individual 
        receives Food Stamp Program benefits, the individual is not 
        eligible for the MFIP-S food portion of assistance, except as 
        provided under section 256J.28, subdivision 5. 
           Sec. 108.  [256J.77] [AGING OF CASH BENEFITS.] 
           Cash benefits under chapters 256D, 256J, and 256K by 
        warrants or electronic benefit transfer that have not been 
        accessed within 90 days of issuance shall be canceled.  Cash 
        benefits may be replaced after they are canceled, for up to one 
        year after the date of issuance, if failure to do so would place 
        the client or family at risk.  For purposes of this section, 
        "accessed" means cashing a warrant or making at least one 
        withdrawal from benefits deposited in an electronic benefit 
        account. 
           Sec. 109.  Minnesota Statutes 1997 Supplement, section 
        256K.03, subdivision 5, is amended to read: 
           Subd. 5.  [EXEMPTION CATEGORIES.] (a) The applicant will be 
        exempt from the job search requirements and development of a job 
        search plan and an employability development plan under 
        subdivisions 3, 4, and 8 if the applicant belongs to any of the 
        following groups: 
           (1) caregivers under age 20 who have not completed a high 
        school education and are attending high school on a full-time 
        basis; 
           (2) individuals who are age 60 or older; 
           (3) (2) individuals who are suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which is expected to continue for more than 30 days and which 
        prevents the person from obtaining or retaining employment.  
        Persons in this category with a temporary illness, injury, or 
        incapacity must be reevaluated at least quarterly; 
           (4) (3) caregivers whose presence in the home is needed 
        because of the professionally certified illness or incapacity of 
        another member in the assistance unit, a relative in the 
        household, or a foster child in the household; 
           (5) (4) women who are pregnant, if it the pregnancy has 
        been medically verified resulted in a professionally certified 
        incapacity that the child is expected to be born within the next 
        six months prevents the woman from obtaining and retaining 
        employment; 
           (6) (5) caregivers or other caregiver relatives of a child 
        under the age of three one year who personally provide full-time 
        care for the child.  This exemption may be used for only 12 
        months in a lifetime.  In two-parent households, only one parent 
        or other relative may qualify for this exemption; 
           (7) (6) individuals who are single parents or one parent in 
        a two-parent family employed at least 30 35 hours per week; 
           (8) individuals for whom participation would require a 
        round trip commuting time by available transportation of more 
        than two hours, excluding transporting of children for child 
        care; 
           (9) individuals for whom lack of proficiency in English is 
        a barrier to employment, provided such individuals are 
        participating in an intensive program which lasts no longer than 
        six months and is designed to remedy their language deficiency; 
           (10) individuals who, because of advanced age or lack of 
        ability, are incapable of gaining proficiency in English, as 
        determined by the county social worker, shall continue to be 
        exempt under this subdivision and are not subject to the 
        requirement that they be participating in a language program; 
           (11) (7) individuals under such duress that they are 
        incapable of participating in the program, as determined by the 
        county social worker experiencing a personal or family crisis 
        that makes them incapable of participating in the program, as 
        determined by the county agency.  If the participant does not 
        agree with the county agency's determination, the participant 
        may seek professional certification, as defined in section 
        256J.08, that the participant is incapable of participating in 
        the program.  Persons in this exemption category must be 
        reevaluated every 60 days; or 
           (12) individuals in need of refresher courses for purposes 
        of obtaining professional certification or licensure. 
           (b) In a two-parent family, only one caregiver may be 
        exempted under paragraph (a), clauses (4) and (6). 
           (8) second parents in two-parent families employed for 20 
        or more hours per week provided the first parent is employed at 
        least 35 hours per week. 
           (b) A caregiver who is exempt under clause (5) must enroll 
        in and attend an early childhood and family education class, a 
        parenting class, or some similar activity, if available, during 
        the period of time the caregiver is exempt under this section.  
        Notwithstanding section 256J.46, failure to attend the required 
        activity shall not result in the imposition of a sanction. 
           Sec. 110.  Minnesota Statutes 1996, section 268.88, is 
        amended to read: 
           268.88 [LOCAL SERVICE UNIT PLANS.] 
           (a) By April 15, 1991 1999, and by April 15 of each second 
        year thereafter, local service units shall prepare and submit to 
        the commissioner a plan that covers the next two state fiscal 
        years.  At least 30 days prior to submission of the plan, the 
        local service unit shall solicit comments from the public on the 
        contents of the proposed plan.  The commissioner shall notify 
        each local service unit within 60 days of receipt of its plan 
        that the plan has been approved or disapproved.  The plan must 
        include: 
           (1) a statement of objectives for the employment and 
        training services the local service unit administers; 
           (2) the establishment of job placement and job retention 
        goals, the establishment of public assistance caseload reduction 
        goals, and the strategies and programs that will be used to 
        achieve these goals; 
           (3) a statement of whether the goals from the preceding 
        year were met and an explanation if the local service unit 
        failed to meet the goals; 
           (4) the amount proposed to be allocated to each employment 
        and training service; 
           (5) the proposed types of employment and training services 
        the local service unit plans to utilize; 
           (6) a description of how the local service unit will use 
        funds provided under section 256.736 to meet the requirements of 
        that section.  The description must include the two work 
        programs required by section 256.736, subdivision 10, paragraph 
        (a), clause (13), what services will be provided, number of 
        clients served, per service expenditures, type of clients 
        served, and projected outcomes chapter 256J to meet the 
        requirements of that chapter.  The description must include what 
        services will be provided, per service expenditures, an estimate 
        of how many employment and training slots the local service unit 
        will provide, how many dollars the local service unit will 
        provide per slot per provider, how many participants per slot, 
        an estimate of the ratio of participants per job counselor, and 
        proposed uses for any residual funds not included in slot 
        allocations to providers; 
           (7) a report on the use of wage subsidies, grant 
        diversions, community investment programs, and other services 
        administered under this chapter; 
           (8) a performance review of the employment and training 
        service providers delivering employment and training services 
        for the local service unit; 
           (9) a copy of any contract between the local service unit 
        and an employment and training service provider including 
        expected outcomes and service levels for public assistance 
        clients; and 
           (10) a copy of any other agreements between educational 
        institutions, family support services, and child care providers; 
        and 
           (11) a description of how the local service unit ensures 
        compliance with section 256J.06, requiring community involvement 
        in the administration of MFIP-S. 
           (b) In counties with a city of the first class, the county 
        and the city shall develop and submit a joint plan.  The plan 
        may not be submitted until agreed to by both the city and the 
        county.  The plan must provide for the direct allocation of 
        employment and training money to the city and the county unless 
        waived by either.  If the county and the city cannot concur on a 
        plan, the commissioner shall resolve their dispute.  In counties 
        in which a federally recognized Indian tribe is operating an 
        employment and training program under an agreement with the 
        commissioner of human services, the plan must provide that the 
        county will coordinate its employment and training programs, 
        including developing a system for referrals, sanctions, and the 
        provision of supporting services such as access to child care 
        funds and transportation with programs operated by the Indian 
        tribe.  The plan may not be given final approval by the 
        commissioner until the tribal unit and county have submitted 
        written agreement on these provisions in the plan.  If the 
        county and Indian tribe cannot agree on these provisions, the 
        local service unit shall notify the commissioner of economic 
        security and the commissioners of economic security and human 
        services shall resolve the dispute.  
           (c) The commissioner may withhold the distribution of 
        employment and training money from a local service unit that 
        does not submit a plan to the commissioner by the date set by 
        this section, and shall withhold the distribution of employment 
        and training money from a local service unit whose plan has been 
        disapproved by the commissioner until an acceptable amended plan 
        has been submitted.  
           (d) Beginning April 15, 1992, and by April 15 of each 
        second year thereafter, local service units must prepare and 
        submit to the commissioner an interim year plan update that 
        deals with performance in that state fiscal year and changes 
        anticipated for the second year of the biennium.  The update 
        must include information about employment and training programs 
        addressed in the local service unit's two-year plan and shall be 
        completed in accordance with criteria established by the 
        commissioner. 
           Sec. 111.  Laws 1997, chapter 203, article 9, section 21, 
        is amended to read: 
           Sec. 21.  [INELIGIBILITY FOR STATE FUNDED PROGRAMS.] 
           (a) Beginning July 1, 1999 2000, the following persons will 
        be ineligible for general assistance and general assistance 
        medical care under Minnesota Statutes, chapter 256D, group 
        residential housing under Minnesota Statutes, chapter 256I, and 
        MFIP-S assistance under Minnesota Statutes, chapter 256J, funded 
        with state money: 
           (1) persons who are terminated from or denied Supplemental 
        Security Income due to the 1996 changes in the federal law 
        making persons whose alcohol or drug addiction is a material 
        factor contributing to the person's disability ineligible for 
        Supplemental Security Income, and are eligible for general 
        assistance under Minnesota Statutes, section 256D.05, 
        subdivision 1, paragraph (a), clause (17), general assistance 
        medical care under Minnesota Statutes, chapter 256D, or group 
        residential housing under Minnesota Statutes, chapter 256I; 
           (2) legal noncitizens who are ineligible for Supplemental 
        Security Income due to the 1996 changes in federal law making 
        certain noncitizens ineligible for these programs due to their 
        noncitizen status; and 
           (3) legal noncitizens who are eligible for MFIP-S 
        assistance, either the cash assistance portion or the food 
        assistance portion, funded entirely with state money. 
           (b) State money that remains unspent on June 30, 1999, due 
        to changes in federal law enacted after May 12, 1997, that 
        reduce state spending for legal noncitizens or for persons whose 
        alcohol or drug addiction is a material factor contributing to 
        the person's disability, or enacted after February 1, 1998, that 
        reduce state spending for food benefits for legal noncitizens 
        shall not cancel and shall be deposited in the TANF reserve 
        account. 
           Sec. 112.  Laws 1997, chapter 248, section 46, as amended 
        by Laws 1997, First Special Session chapter 5, section 10, is 
        amended to read: 
           Sec. 46.  [UNLICENSED CHILD CARE PROVIDERS; INTERIM 
        EXPANSION.] 
           (a) Notwithstanding Minnesota Statutes, section 245A.03, 
        subdivision 2, clause (2), until June 30, 1999, nonresidential 
        child care programs or services that are provided by an 
        unrelated individual to persons from two or three other 
        unrelated families are excluded from the licensure provisions of 
        Minnesota Statutes, chapter 245A, provided that: 
           (1) the individual provides services at any one time to no 
        more than four children who are unrelated to the individual; 
           (2) no more than two of the children are under two years of 
        age; and 
           (3) the total number of children being cared for at any one 
        time does not exceed five. 
           (b) Paragraph (a), clauses (1) to (3), do not apply to: 
           (1) nonresidential programs that are provided by an 
        unrelated individual to persons from a single related family.; 
           (2) a child care provider whose child care services meet 
        the criteria in paragraph (a), clauses (1) to (3), but who 
        chooses to apply for licensure; 
           (3) a child care provider who, as an applicant for 
        licensure or as a license holder, has received a license denial 
        under Minnesota Statutes, section 245A.05, a fine under 
        Minnesota Statutes, section 245A.06, or a sanction under 
        Minnesota Statutes, section 245A.07, from the commissioner that 
        has not been reversed on appeal; or 
           (4) a child care provider, or a child care provider who has 
        a household member who, as a result of a licensing process, has 
        a disqualification under Minnesota Statutes, chapter 245A, that 
        has not been set aside by the commissioner. 
           Sec. 113.  [REPORT REQUIRED.] 
           Beginning January 1, 1999, the commissioner shall report 
        annually to the legislature on January 15 on the percent, for 
        each of the four quarters of the immediate preceding year, of 
        the MFIP-S caseload participants who are exempt from work under 
        the provisions of Minnesota Statutes, section 256J.56, clause 
        (2) or (3). 
           Sec. 114.  [REPORT; NONCERTIFIED PROVIDERS.] 
           Beginning January 15, 1999, the commissioner of economic 
        security, in conjunction with the commissioner of human 
        services, shall report annually on the use in MFIP-S of 
        employment and training providers.  The report shall include 
        information on the number and types of noncertified providers. 
           Sec. 115.  [SCREENING AND REFERRAL GUIDELINES FOR 
        PARTICIPANTS WITH DRUG AND ALCOHOL PROBLEMS.] 
           The commissioner of human services shall develop guidelines 
        for county agencies and their contractors to identify 
        participants who have alcohol or drug problems that require 
        treatment.  The guidelines must provide for: 
           (1) the use of simplified written and verbal screening 
        tools as part of the intake process; 
           (2) referral for clinical assessment and appropriate 
        treatment, if needed; and 
           (3) training for caseworkers to administer the screening 
        protocols and refer participants to services. 
           Sec. 116.  [EBT TRANSACTION COSTS; APPROVAL FROM 
        LEGISLATURE.] 
           The commissioner of human services shall request and 
        receive approval from the legislature before adjusting the 
        payment to retailers for electronic benefit transfer transaction 
        costs. 
           Sec. 117.  [STUDY; MFIP-S EXIT LEVEL; ELIMINATION OF 
        SHELTER EXPENSE DEDUCTION.] 
           The commissioner shall consider recommending to the 1999 
        legislature: 
           (1) adjustments to the MFIP-S earned income disregard, 
        family wage level, or transitional standard, which will ensure 
        that participants do not lose eligibility for MFIP-S until their 
        income reaches at least 120 percent of the 1999 federal poverty 
        level; and 
           (2) proposals responding to the effect of the elimination 
        of the food stamp shelter expense deduction on food spending and 
        food sufficiency of MFIP-S families paying greater than 50 
        percent of their income toward housing costs.  The 
        commissioner's recommendations should include information on the 
        number of families losing greater than 20 percent of their food 
        benefits, the number losing between ten percent and 20 percent 
        and the number losing zero percent to ten percent, and the 
        characteristics of families receiving less food assistance under 
        MFIP-S.  The commissioner may collaborate with private or 
        nonprofit entities, if necessary, to provide this information. 
           Sec. 118.  [REPEALER.] 
           (a) Minnesota Statutes 1997 Supplement, section 256J.28, 
        subdivision 4, is repealed effective January 1, 1998.  
           (b) Minnesota Statutes 1997 Supplement, section 256J.25; 
        and Laws 1997, chapter 85, article 1, sections 61 and 71, and 
        article 3, section 55, are repealed. 
           (c) Minnesota Statutes 1996, sections 256.031, subdivisions 
        1, 2, 3, and 4; 256.032; 256.033, subdivisions 2, 3, 4, 5, and 
        6; 256.034; 256.035; 256.036; 256.0361; 256.047; 256.0475; 
        256.048; and 256.049; and Minnesota Statutes 1997 Supplement, 
        sections 256.031, subdivisions 5 and 6; 256.033, subdivisions 1 
        and 1a; 256B.062; 256J.32, subdivision 5; and 256J.34, 
        subdivision 5, are repealed effective July 1, 1998. 
           (d) Minnesota Rules (Exempt), parts 9500.9100; 9500.9110; 
        9500.9120; 9500.9130; 9500.9140; 9500.9150; 9500.9160; 
        9500.9170; 9500.9180; 9500.9190; 9500.9200; 9500.9210; and 
        9500.9220, are repealed effective July 1, 1998. 
           Sec. 119.  [EFFECTIVE DATES.] 
           (a) Sections 2, 4, 7, 8, 19, 90, 95, and 102 are effective 
        the day following final enactment. 
           (b) Section 9 is effective June 1, 1998. 
           (c) Section 10 is effective October 1, 1998. 
           (d) Section 50 is effective for all applications for MFIP-S 
        made on or after July 1, 1998. 
           (e) Section 12 is effective March 30, 1998. 
           (f) Section 51 is effective for MFIP-S applications 
        received on or after January 1, 1999, and for all MFIP-S 
        recertifications occurring on or after January 1, 1999. 
                                   ARTICLE 7 
                           REGIONAL TREATMENT CENTERS 
           Section 1.  [CONVEYANCE OF STATE LAND; ANOKA COUNTY.] 
           Subdivision 1.  [CONVEYANCE AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, sections 92.45, 94.09, 94.10, and 103F.335, 
        subdivision 3, or any other law to the contrary, the 
        commissioner of administration may convey all, or any part of, 
        the land and associated buildings described in subdivision 3 to 
        Anoka county after the commissioner of human services declares 
        said property surplus to its needs. 
           Subd. 2.  [FORM.] (a) The conveyance shall be in a form 
        approved by the attorney general. 
           (b) The conveyance is subject to a scenic easement, as 
        defined in Minnesota Statutes, section 103F.311, subdivision 6, 
        to be under the custodial control of the commissioner of natural 
        resources, on that portion of the conveyed land that is 
        designated for inclusion in the wild and scenic river system 
        under Minnesota Statutes, section 103F.325.  The scenic easement 
        shall allow for continued use of the structures located within 
        the easement and for development of a walking path within the 
        easement. 
           (c) The conveyance shall restrict use of the land to 
        governmental, including recreational, purposes and shall provide 
        that ownership of any portion of the land that ceases to be used 
        for such purposes shall revert to the state of Minnesota. 
           (d) The commissioner of administration may convey any part 
        of the property described in subdivision 3 any time after the 
        land is declared surplus by the commissioner of human services 
        and the execution and recording of the scenic easement under 
        paragraph (b) has been completed. 
           (e) Notwithstanding any law, regulation, or ordinance to 
        the contrary, the instrument of conveyance to Anoka county may 
        be recorded in the office of the Anoka county recorder without 
        compliance with any subdivision requirement. 
           Subd. 3.  [LAND DESCRIPTION.] Subject to right-of-way for 
        Grant Street, Northview Lane, Garfield Street, 5th Avenue, and 
        state trunk highway No. 288, also known as 4th Avenue, the land 
        to be conveyed may include all, or part of, that which is 
        described as follows: 
           (1) all that part of Government Lots 3 and 4 and that part 
        of the Southeast Quarter of the Southwest Quarter, all in 
        Section 31, Township 32 North, Range 24 West, Anoka county, 
        Minnesota, described as follows: 
           Beginning at the southwest corner of said Southeast Quarter 
           of the Southwest Quarter of Section 31; thence North 13 
           degrees 16 minutes 11 seconds East, assumed bearing, 473.34 
           feet; thence North 07 degrees 54 minutes 43 seconds East 
           186.87 feet; thence North 14 degrees 08 minutes 33 seconds 
           West 154.77 feet; thence North 62 degrees 46 minutes 44 
           seconds West 526.92 feet; thence North 25 degrees 45 
           minutes 30 seconds East 74.43 feet; thence northerly 88.30 
           feet along a tangential curve concave to the west having a 
           radius of 186.15 feet and a central angle of 27 degrees 10 
           minutes 50 seconds; thence North 01 degrees 25 minutes 20 
           seconds West, tangent to said curve, 140.53 feet; thence 
           North 71 degrees 56 minutes 34 seconds West to the 
           southeasterly shoreline of the Rum river; thence 
           southwesterly along said shoreline to the south line of 
           said Government Lot 4; thence easterly along said south 
           line to the point of beginning.  For the purpose of this 
           description the south line of said Southeast Quarter of the 
           Southwest Quarter of Section 31 has an assumed bearing of 
           North 89 degrees 08 minutes 19 seconds East; 
           (2) Government Lot 1, Section 6, Township 31 North, Range 
        24 West, Anoka county, Minnesota; EXCEPT that part platted as 
        Grant Properties, Anoka county, Minnesota; ALSO EXCEPT that part 
        lying southerly of the westerly extension of the south line of 
        Block 6, Woodbury's Addition to the city of Anoka, Anoka county, 
        Minnesota, and lying westerly of the west line of said plat of 
        Grant Properties, said line also being the centerline of 4th 
        Avenue; 
           (3) all that part of said Block 6, Woodbury's Addition to 
        the city of Anoka lying westerly of Northview 1st Addition, 
        Anoka county, Minnesota; 
           (4) all that part of said Northview 1st Addition lying 
        westerly of the east line of Lots 11 through 20, Block 1, 
        inclusive, thereof; and 
           (5) all that part of the Northeast Quarter of the Northwest 
        Quarter of said Section 6, Township 31 North, Range 24 West, 
        Anoka county, Minnesota, lying northerly of the centerline of 
        Grant Street as defined by said plat of Grant Properties and 
        lying westerly of said east line of Lots 11 through 20, Block 1, 
        inclusive, Northview 1st Addition and said line's extension 
        north and south. 
           Subd. 4.  [DETERMINATION.] The commissioner of human 
        services has determined that the land described in subdivision 3 
        will no longer be needed for the Anoka metro regional treatment 
        center upon the completion of the state facilities currently 
        under construction and the completion of renovation work to 
        state buildings that are not located on the land described in 
        subdivision 3.  The state's land and building management 
        interests may best be served by conveying all, or part of, the 
        land and associated buildings located on the land described in 
        subdivision 3. 
           Sec. 2.  [CONVEYANCE OF STATE LAND; CROW WING COUNTY.] 
           Subdivision 1.  [CONVEYANCE AUTHORIZED.] Notwithstanding 
        Minnesota Statutes, sections 92.45, 94.09, 94.10, and 103F.335, 
        subdivision 3, or any other law to the contrary, the 
        commissioner of administration may convey all, or any part of, 
        the land and the state building located on the land described in 
        subdivision 3, to Crow Wing county after the commissioner of 
        human services declares the property surplus to its needs. 
           Subd. 2.  [FORM.] (a) The conveyance shall be in a form 
        approved by the attorney general. 
           (b) The conveyance shall restrict use of the land to county 
        governmental purposes, including community corrections programs, 
        and shall provide that ownership of any portion of the land or 
        building that ceases to be used for such purposes shall revert 
        to the state of Minnesota. 
           Subd. 3.  [LAND DESCRIPTION.] That part of the Northeast 
        Quarter (NE l/4) of Section 30, Township 45 North, Range 30 
        West, Crow Wing county, Minnesota, described as follows: 
           Commencing at the southeast corner of said Northeast 
           quarter; thence North 00 degrees 46 minutes 05 seconds 
           West, bearing based on the Crow Wing county Coordinate 
           Database NAD 83/94, 1520.06 feet along the east line of 
           said Northeast quarter to the point of beginning; thence 
           continue North 00 degrees 46 minutes 05 seconds West 634.14 
           feet along said east line of the Northeast quarter; thence 
           South 89 degrees 13 minutes 20 seconds West 550.00 feet; 
           thence South 18 degrees 57 minutes 23 seconds East 115.59 
           feet; thence South 42 degrees 44 minutes 39 seconds East 
           692.37 feet; thence South 62 degrees 46 minutes 19 seconds 
           East 20.24 feet; thence North 89 degrees 13 minutes 55 
           seconds East 33.00 feet to the point of beginning.  
           Containing 4.69 acres, more or less.  Subject to the 
           right-of-way of the Township road along the east side 
           thereof, subject to other easements, reservations, and 
           restrictions of record, if any. 
           Subd. 4.  [DETERMINATION.] The commissioner of human 
        services has determined that the land described in subdivision 3 
        and the building on the land will not be needed for future 
        operations of the Brainerd regional human services center.  The 
        state's land management interests would best be served by 
        conveying the land to Crow Wing county for governmental use. 
                                   ARTICLE 8
                     COMPULSIVE GAMBLING AND MISCELLANEOUS
           Section 1.  Minnesota Statutes 1996, section 62A.65, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PORTABILITY OF COVERAGE.] (a) No individual 
        health plan may be offered, sold, issued, or with respect to 
        children age 18 or under renewed, to a Minnesota resident that 
        contains a preexisting condition limitation, preexisting 
        condition exclusion, or exclusionary rider, unless the 
        limitation or exclusion is permitted under this subdivision, 
        provided that, except for children age 18 or under, underwriting 
        restrictions may be retained on individual contracts that are 
        issued without evidence of insurability as a replacement for 
        prior individual coverage that was sold before May 17, 1993.  
        The individual may be subjected to an 18-month preexisting 
        condition limitation, unless the individual has maintained 
        continuous coverage as defined in section 62L.02.  The 
        individual must not be subjected to an exclusionary rider.  An 
        individual who has maintained continuous coverage may be 
        subjected to a one-time preexisting condition limitation of up 
        to 12 months, with credit for time covered under qualifying 
        coverage as defined in section 62L.02, at the time that the 
        individual first is covered under an individual health plan by 
        any health carrier.  Credit must be given for all qualifying 
        coverage with respect to all preexisting conditions, regardless 
        of whether the conditions were preexisting with respect to any 
        previous qualifying coverage.  The individual must not be 
        subjected to an exclusionary rider.  Thereafter, the individual 
        must not be subject to any preexisting condition limitation, 
        preexisting condition exclusion, or exclusionary rider under an 
        individual health plan by any health carrier, except an 
        unexpired portion of a limitation under prior coverage, so long 
        as the individual maintains continuous coverage as defined in 
        section 62L.02. 
           (b) A health carrier must offer an individual health plan 
        to any individual previously covered under a group health plan 
        issued by that health carrier, regardless of the size of the 
        group, so long as the individual maintained continuous coverage 
        as defined in section 62L.02.  Beginning January 1, 1999, if the 
        individual has available any continuation coverage provided 
        under sections 62A.146; 62A.148; 62A.17, subdivisions 1 and 2; 
        62A.20; 62A.21; 62C.142; 62D.101; or 62D.105, or continuation 
        coverage provided under federal law, the health carrier need not 
        offer coverage under this paragraph until the individual has 
        exhausted the continuation coverage.  The offer must not be 
        subject to underwriting, except as permitted under this 
        paragraph.  A health plan issued under this paragraph must be a 
        qualified plan as defined in section 62E.02 and must not contain 
        any preexisting condition limitation, preexisting condition 
        exclusion, or exclusionary rider, except for any unexpired 
        limitation or exclusion under the previous coverage.  The 
        individual health plan must cover pregnancy on the same basis as 
        any other covered illness under the individual health plan.  The 
        initial premium rate for the individual health plan must comply 
        with subdivision 3.  The premium rate upon renewal must comply 
        with subdivision 2.  In no event shall the premium rate exceed 
        90 percent of the premium charged for comparable individual 
        coverage by the Minnesota comprehensive health association, and 
        the premium rate must be less than that amount if necessary to 
        otherwise comply with this section.  An individual health plan 
        offered under this paragraph to a person satisfies the health 
        carrier's obligation to offer conversion coverage under section 
        62E.16, with respect to that person.  Coverage issued under this 
        paragraph must provide that it cannot be canceled or nonrenewed 
        as a result of the health carrier's subsequent decision to leave 
        the individual, small employer, or other group market.  Section 
        72A.20, subdivision 28, applies to this paragraph. 
           Sec. 2.  Minnesota Statutes 1996, section 62D.042, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BEGINNING ORGANIZATIONS NET WORTH REQUIREMENTS.] 
        (a) Beginning organizations shall maintain net worth of at least 
        8-1/3 percent of the sum of all expenses expected to be incurred 
        in the 12 months following the date the certificate of authority 
        is granted, or $1,500,000, whichever is greater. 
           (b) After the first full calendar year of operation, 
        organizations shall maintain net worth of at least 8-1/3 percent 
        and at most 16-2/3 25 percent of the sum of all expenses 
        incurred during the most recent calendar year, but in no case 
        shall net worth fall below $1,000,000. 
           (c) Notwithstanding paragraphs (a) and (b), any health 
        maintenance organization owned by a political subdivision of 
        this state, which has a higher than average percentage of 
        enrollees who are enrolled in medical assistance or general 
        assistance medical care, may exceed the maximum net worth limits 
        provided in paragraphs (a) and (b), with the advance approval of 
        the commissioner. 
           Sec. 3.  Minnesota Statutes 1996, section 62E.16, is 
        amended to read: 
           62E.16 [POLICY CONVERSION RIGHTS.] 
           Every program of self-insurance, policy of group accident 
        and health insurance or contract of coverage by a health 
        maintenance organization written or renewed in this state, shall 
        include, in addition to the provisions required by section 
        62A.17, the right to convert to an individual coverage qualified 
        plan without the addition of underwriting restrictions if after 
        the individual insured has exhausted any continuation coverage 
        provided under section 62A.146; 62A.148; 62A.17, subdivisions 1 
        and 2; 62A.20; 62A.21; 62C.142; 62D.101; or 62D.105, or 
        continuation coverage provided under federal law, if any 
        continuation coverage is available to the individual, and then 
        leaves the group regardless of the reason for leaving the group 
        or if an employer member of a group ceases to remit payment so 
        as to terminate coverage for its employees, or upon cancellation 
        or termination of the coverage for the group except where 
        uninterrupted and continuous group coverage is otherwise 
        provided to the group.  If the health maintenance organization 
        has canceled coverage for the group because of a loss of 
        providers in a service area, the health maintenance organization 
        shall arrange for other health maintenance or indemnity 
        conversion options that shall be offered to enrollees without 
        the addition of underwriting restrictions.  The required 
        conversion contract must treat pregnancy the same as any other 
        covered illness under the conversion contract.  The person may 
        exercise this right to conversion within 30 days of exhausting 
        any continuation coverage provided under section 62A.146; 
        62A.148; 62A.17, subdivisions 1 and 2; 62A.20; or 62A.21, or 
        continuation coverage provided under federal law, and then 
        leaving the group or within 30 days following receipt of due 
        notice of cancellation or termination of coverage of the group 
        or of the employer member of the group and upon payment of 
        premiums from the date of termination or cancellation.  Due 
        notice of cancellation or termination of coverage for a group or 
        of the employer member of the group shall be provided to each 
        employee having coverage in the group by the insurer, 
        self-insurer or health maintenance organization canceling or 
        terminating the coverage except where reasonable evidence 
        indicates that uninterrupted and continuous group coverage is 
        otherwise provided to the group.  Every employer having a policy 
        of group accident and health insurance, group subscriber or 
        contract of coverage by a health maintenance organization shall, 
        upon request, provide the insurer or health maintenance 
        organization a list of the names and addresses of covered 
        employees.  Plans of health coverage shall also include a 
        provision which, upon the death of the individual in whose name 
        the contract was issued, permits every other individual then 
        covered under the contract to elect, within the period specified 
        in the contract, to continue coverage under the same or a 
        different contract without the addition of underwriting 
        restrictions until the individual would have ceased to have been 
        entitled to coverage had the individual in whose name the 
        contract was issued lived.  An individual conversion contract 
        issued by a health maintenance organization shall not be deemed 
        to be an individual enrollment contract for the purposes of 
        section 62D.10.  An individual health plan offered under section 
        62A.65, subdivision 5, paragraph (b), to a person satisfies the 
        health carrier's obligation to offer conversion coverage under 
        this section with respect to that person. 
           Sec. 4.  [62Q.096] [CREDENTIALING OF PROVIDERS.] 
           If a health plan company has initially credentialed, as 
        providers in its provider network, individual providers employed 
        by or under contract with an entity that:  (1) is authorized to 
        bill under section 256B.0625, subdivision 5; (2) meets the 
        requirements of Minnesota Rules, parts 9520.0750 to 9520.0870; 
        (3) is designated an essential community provider under section 
        62Q.19; and (4) is under contract with the health plan company 
        to provide mental health services, the health plan company must 
        continue to credential at least the same number of providers 
        from that entity, as long as those providers meet the health 
        plan company's credentialing standards.  A health plan company 
        shall not refuse to credential these providers on the grounds 
        that their provider network has a sufficient number of providers 
        of that type. 
           Sec. 5.  [245.982] [PROGRAM SUPPORT.] 
           In order to address the problem of gambling in this state, 
        the compulsive gambling fund should attempt to assess the 
        beneficiaries of gambling, on a percentage basis according to 
        the revenue they receive from gambling, for the costs of 
        programs to help problem gamblers and their families.  In that 
        light, the governor is requested to contact the chairs of the 11 
        tribal governments in this state and request a contribution of 
        funds for the compulsive gambling program.  The governor should 
        seek a total supplemental contribution of $643,000.  Funds 
        received from the tribal governments in this state shall be 
        deposited in the Indian gaming revolving account. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        256F.05, subdivision 8, is amended to read: 
           Subd. 8.  [USES OF FAMILY PRESERVATION FUND GRANTS.] (a) A 
        county which has not demonstrated that year that its family 
        preservation core services are developed as provided in 
        subdivision 1a, must use its family preservation fund grant 
        exclusively for family preservation services defined in section 
        256F.03, subdivision 5, paragraphs (a), (b), (c), and (e). 
           (b) A county which has demonstrated that year that its 
        family preservation core services are developed becomes eligible 
        either to continue using its family preservation fund grant as 
        provided in paragraph (a), or to exercise the expanded service 
        option under paragraph (c). 
           (c) The expanded service option permits an eligible county 
        to use its family preservation fund grant for child welfare 
        preventive services.  For purposes of this section, child 
        welfare preventive services are those services directed toward a 
        specific child or family that further the goals of section 
        256F.01 and include assessments, family preservation services, 
        service coordination, community-based treatment, crisis nursery 
        services when the parents retain custody and there is no 
        voluntary placement agreement with a child-placing agency, 
        respite care except when it is provided under a medical 
        assistance waiver, home-based services, and other related 
        services.  For purposes of this section, child welfare 
        preventive services shall not include shelter care or other 
        placement services under the authority of the court or public 
        agency to address an emergency.  To exercise this option, an 
        eligible county must notify the commissioner in writing of its 
        intention to do so no later than 30 days into the quarter during 
        which it intends to begin or in its county plan, as provided in 
        section 256F.04, subdivision 2.  Effective with the first day of 
        that quarter, the county must maintain its base level of 
        expenditures for child welfare preventive services and use the 
        family preservation fund to expand them.  The base level of 
        expenditures for a county shall be that established under 
        section 256F.10, subdivision 7.  For counties which have no such 
        base established, a comparable base shall be established with 
        the base year being the calendar year ending at least two 
        calendar quarters before the first calendar quarter in which the 
        county exercises its expanded service option.  The commissioner 
        shall, at the request of the counties, reduce, suspend, or 
        eliminate either or both of a county's obligations to continue 
        the base level of expenditures and to expand child welfare 
        preventive services under extraordinary circumstances.  
           (d) Notwithstanding paragraph (a), a county that is 
        participating in the child protection assessments or 
        investigations community collaboration pilot program under 
        section 626.5560, or in the concurrent permanency planning pilot 
        program under section 257.0711, may use its family preservation 
        fund grant for those programs. 
           Sec. 7.  Minnesota Statutes 1996, section 609.115, 
        subdivision 9, is amended to read: 
           Subd. 9.  [COMPULSIVE GAMBLING ASSESSMENT REQUIRED.] (a) If 
        a person is convicted of a felony for theft under section 
        609.52, embezzlement of public funds under section 609.54, or 
        forgery under section 609.625, 609.63, or 609.631, the probation 
        officer shall determine in the report prepared under subdivision 
        1 whether or not compulsive gambling contributed to the 
        commission of the offense.  If so, the report shall contain the 
        results of a compulsive gambling assessment conducted in 
        accordance with this subdivision.  The probation officer shall 
        make an appointment for the offender to undergo the assessment 
        if so indicated. 
           (b) The compulsive gambling assessment report must include 
        a recommended level of treatment for the offender if the 
        assessor concludes that the offender is in need of compulsive 
        gambling treatment.  The assessment must be conducted by an 
        assessor qualified under section 245.98, subdivision 2a, to 
        perform these assessments or to provide compulsive gambling 
        treatment.  An assessor providing a compulsive gambling 
        assessment may not have any direct or shared financial interest 
        or referral relationship resulting in shared financial gain with 
        a treatment provider.  If an independent assessor is not 
        available, the probation officer may use the services of an 
        assessor with a financial interest or referral relationship as 
        authorized under rules adopted by the commissioner of human 
        services under section 245.98, subdivision 2a. 
           (c) The commissioner of human services shall reimburse the 
        assessor for the costs associated with a compulsive gambling 
        assessment at a rate established by the commissioner up to a 
        maximum of $100 for each assessment.  The commissioner shall 
        reimburse these costs after receiving written verification from 
        the probation officer that the assessment was performed and 
        found acceptable. 
           Sec. 8.  Laws 1994, chapter 633, article 7, section 3, is 
        amended to read: 
           Sec. 3.  [INDIAN GAMING REVOLVING ACCOUNT.] 
           Funds received from the attorney general Indian tribal 
        governments and the Minnesota state lottery shall deposit be 
        deposited in a separate account in the state treasury all money 
        received from Indian tribal governments for the purpose of 
        defraying the attorney general's costs in providing legal 
        services with respect to Indian gaming.  Money in the account is 
        appropriated to the attorney general for that 
        purpose contributing to the compulsive gambling program. 
           Sec. 9.  [PREVALENCE STUDY.] 
           If funding is available, the compulsive gambling program 
        shall provide baseline prevalence studies to identify those at 
        highest risk of developing a compulsive gambling problem, 
        including a replication in 1999 of the 1994 adult prevalence 
        survey.  
           Sec. 10.  [EXTENDING ASSESSMENTS TO BANKRUPTCY AND FAMILY 
        COURT PROCEEDINGS.] 
           If funding is available, the commissioner of human services 
        shall study whether problem gambling assessments should be 
        provided or required for individuals involved in bankruptcy or 
        family court proceedings, and report to the legislature by 
        December 15, 1998. 
           Sec. 11.  [COMPULSIVE GAMBLING APPROPRIATION.] 
           (a) In addition to any other appropriations, $340,000 is 
        appropriated annually from the Minnesota lottery prize fund to 
        the Indian gaming revolving account in Laws 1994, chapter 633, 
        article 7, section 3, and transferred to the commissioner of 
        human services for the compulsive gambling program.  The funds 
        provided under Minnesota Statutes, section 245.982, are to be 
        transferred from the Indian gaming revolving account to the 
        commissioner of human services for purposes of paragraph (d). 
           (b) Of the funds appropriated under this section, $290,000 
        in fiscal year 1999 is appropriated for the establishment of 
        fee-for-service projects.  Fee-for-service funds under this 
        appropriation may be awarded on a per-client basis to existing 
        treatment centers and may be in addition to grants the centers 
        currently receive.  Baseline grants based on the last fiscal 
        year client numbers and units of services provided constitute 
        minimum appropriations to existing treatment centers, and upon 
        meeting the contracted level of services, the treatment centers 
        are eligible for fee-for-service funds on a per-client basis in 
        addition to grants.  
           (c) Of the funds appropriated under this section, $50,000 
        in fiscal year 1999 is appropriated for the operation of 
        prevention and education programs aimed at helping adult and 
        adolescent gamblers. 
           (d) Of the funds provided under Minnesota Statutes, section 
        245.982, up to $30,000 in fiscal year 1999 may be used for the 
        completion of the prevalence study in section 9, up to $10,000 
        in fiscal year 1999 may be used for the study in section 10 
        related to extending assessments to bankruptcy and family court 
        proceedings, and up to $50,000 in fiscal year 1999 may be used 
        for the operation of the hotline.  The commissioner may 
        prioritize the initiatives under this paragraph as the 
        commissioner deems appropriate.  Any funding remaining must be 
        used for purposes of treatment under paragraph (b) and 
        prevention under paragraph (c), and the funds must be 
        appropriated at a two-to-one ratio, respectively. 
           Sec. 12.  [TOWN OF WHITE, ST. LOUIS COUNTY.] 
           Subdivision 1.  [TRANSFER.] Notwithstanding any provision 
        of Minnesota Statutes to the contrary, the town of White is 
        hereby authorized to transfer the following property and any 
        buildings, equipment, and other improvements located thereon to 
        the White community hospital corporation, a nonprofit 
        corporation organized and existing under Minnesota Statutes, 
        chapter 317: 
           That part of the southeast quarter of southwest quarter (SE 
        1/4 of SW 1/4), section 10, township 58 north of range 15 west 
        of the fourth principal meridian, according to the United States 
        government survey thereof, St. Louis county, Minnesota, 
        described as follows: 
           Commencing at the southeast corner of said SE 1/4 of SW 
        1/4, section 10, township 58, range 15, thence proceeding north 
        along the east line thereof for a distance of 550 feet; thence 
        west and parallel to the south line thereof for a distance of 
        800 feet; thence south and parallel to the east line thereof, 
        for a distance of 550 feet to the south line; thence east along 
        said south line thereof, for a distance of 800 feet to the point 
        of beginning. 
           Subd. 2.  [NO CONSIDERATION OR ELECTION REQUIRED.] The 
        transfer authorized by subdivision 1 shall be without 
        consideration and no vote of the electors of the town of White 
        or city of Aurora shall be required. 
           Subd. 3.  [USE; PUBLIC PROPERTY.] The property legally 
        described in subdivision 1 shall be used for health care and 
        related purposes and shall be considered public property for 
        purposes of Minnesota Statutes, section 16A.695.  The activities 
        conducted on the property described in subdivision 1 by the 
        White community hospital corporation, its successors and assigns 
        shall be considered a governmental program as authorized by 
        Minnesota Statutes, chapter 447. 
           Subd. 4.  [NAME.] The public name of the buildings and 
        improvements located on the real property legally described in 
        subdivision 1 shall always include the words "White community." 
           Sec. 13.  [CITY OF EVELETH; LOAN FORGIVENESS.] 
           Notwithstanding the provisions of any other law or charter, 
        the city of Eveleth may, by resolution of its city council, 
        forgive all or any portion of the principal and interest due or 
        to become due to the city, pursuant to any loan or loans made by 
        the city, in an amount not exceeding $100,000, prior to January 
        1, 1998, to any hospital, nursing home, other health care 
        facility or corporation, partnership, or limited liability 
        company operating such a facility within the city of Eveleth. 
           Sec. 14.  [REPEALER.] 
           (a) Minnesota Rules, part 2740.1600, subpart 1, is repealed.
           (b) Minnesota Statutes 1997 Supplement, section 62D.042, 
        subdivision 3, is repealed. 
           Sec. 15.  [EFFECTIVE DATES.] 
           (a) Sections 2 and 4 are effective January 1, 1999. 
           (b) Section 3 is effective January 1, 1999, and applies to 
        any individual who has continuation coverage available on or 
        after that date. 
           (c) Section 12 is effective upon compliance with Minnesota 
        Statutes, section 645.021, subdivision 2.  
           (d) Section 13 is effective the day following final 
        enactment without local approval according to Minnesota 
        Statutes, section 645.023, subdivision 1, clause (a). 
           (e) Section 14, paragraph (a), is effective January 1, 1999.
           (f) Section 14, paragraph (b), is effective the day 
        following final enactment. 
                                   ARTICLE 9 
                          CHILD WELFARE MODIFICATIONS 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        144.218, subdivision 2, is amended to read: 
           Subd. 2.  [ADOPTION OF FOREIGN PERSONS.] In proceedings for 
        the adoption of a person who was born in a foreign country, the 
        court, upon evidence presented by the commissioner of human 
        services from information secured at the port of entry, or upon 
        evidence from other reliable sources, may make findings of fact 
        as to the date and place of birth and parentage.  Upon receipt 
        of certified copies of the court findings and the order or 
        decree of adoption or a certified copy of a decree issued under 
        section 259.60, the state registrar shall register a birth 
        certificate in the new name of the adopted person.  The 
        certified copies of the court findings and the order or, decree 
        of adoption, or decree issued under section 259.60 are 
        confidential, pursuant to section 13.02, subdivision 3, and 
        shall not be disclosed except pursuant to court order or section 
        144.1761.  The birth certificate shall state the place of birth 
        as specifically as possible, and that the certificate is not 
        evidence of United States citizenship. 
           Sec. 2.  Minnesota Statutes 1996, section 144.226, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BIRTH CERTIFICATE COPY SURCHARGE.] In addition 
        to any fee prescribed under subdivision 1, there shall be a 
        surcharge of $3 for each certified copy of a birth certificate, 
        and for a certification that the record cannot be found.  The 
        local or state registrar shall forward this amount to the 
        commissioner of finance for deposit into the account for the 
        children's trust fund for the prevention of child abuse 
        established under section 119A.12.  This surcharge shall not be 
        charged under those circumstances in which no fee for a 
        certified copy of a birth certificate is permitted under 
        subdivision 1, paragraph (a).  Upon certification by the 
        commissioner of finance that the assets in that fund exceed 
        $20,000,000, this surcharge shall be discontinued. 
           Sec. 3.  Minnesota Statutes 1997 Supplement, section 
        144.226, subdivision 4, is amended to read: 
           Subd. 4.  [VITAL RECORDS SURCHARGE.] In addition to any fee 
        prescribed under subdivision 1, there is a nonrefundable 
        surcharge of $3 for each certified and noncertified birth or 
        death record, and for a certification that the record cannot be 
        found.  The local or state registrar shall forward this amount 
        to the state treasurer 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 or death record 
        is permitted under subdivision 1, paragraph (a).  This surcharge 
        requirement expires June 30, 2002. 
           Sec. 4.  Minnesota Statutes 1997 Supplement, section 
        245A.03, subdivision 2, is amended to read: 
           Subd. 2.  [EXCLUSION FROM LICENSURE.] Sections 245A.01 to 
        245A.16 do not apply to: 
           (1) residential or nonresidential programs that are 
        provided to a person by an individual who is related 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 for children enrolled in kindergarten to the 
        12th grade and prekindergarten special education in a school as 
        defined in section 120.101, subdivision 4, and programs serving 
        children in combined special education and regular 
        prekindergarten programs that are operated or assisted by the 
        commissioner of children, families, and learning; 
           (6) nonresidential programs primarily for children that 
        provide care or supervision, without charge for ten or fewer 
        days a year, and for periods of less than three hours a day 
        while the child's parent or legal guardian is in the same 
        building as the nonresidential program or present within another 
        building that is directly contiguous to the building in which 
        the nonresidential program is located; 
           (7) nursing homes or hospitals licensed by the commissioner 
        of health except as specified under section 245A.02; 
           (8) board and lodge facilities licensed by the commissioner 
        of health that provide services for five or more persons whose 
        primary diagnosis is mental illness who have refused an 
        appropriate residential program offered by a county agency.  
        This exclusion expires on July 1, 1990; 
           (9) homes providing programs for persons placed there by a 
        licensed agency for legal adoption, unless the adoption is not 
        completed within two years; 
           (10) programs licensed by the commissioner of corrections; 
           (11) recreation programs for children or adults that 
        operate for fewer than 40 calendar days in a calendar year or 
        programs operated by a park and recreation board of a city of 
        the first class whose primary purpose is to provide social and 
        recreational activities to school age children, provided the 
        program is approved by the park and recreation board; 
           (12) programs operated by a school as defined in section 
        120.101, subdivision 4, whose primary purpose is to provide 
        child care to school-age children, provided the program is 
        approved by the district's school board; 
           (13) Head Start nonresidential programs which operate for 
        less than 31 days in each calendar year; 
           (14) noncertified boarding care homes unless they provide 
        services for five or more persons whose primary diagnosis is 
        mental illness or mental retardation; 
           (15) nonresidential programs for nonhandicapped children 
        provided for a cumulative total of less than 30 days in any 
        12-month period; 
           (16) residential programs for persons with mental illness, 
        that are located in hospitals, until the commissioner adopts 
        appropriate rules; 
           (17) the religious instruction of school-age children; 
        Sabbath or Sunday schools; or the congregate care of children by 
        a church, congregation, or religious society during the period 
        used by the church, congregation, or religious society for its 
        regular worship; 
           (18) camps licensed by the commissioner of health under 
        Minnesota Rules, chapter 4630; 
           (19) mental health outpatient services for adults with 
        mental illness or children with emotional disturbance; 
           (20) residential programs serving school-age children whose 
        sole purpose is cultural or educational exchange, until the 
        commissioner adopts appropriate rules; 
           (21) unrelated individuals who provide out-of-home respite 
        care services to persons with mental retardation or related 
        conditions from a single related family for no more than 90 days 
        in a 12-month period and the respite care services are for the 
        temporary relief of the person's family or legal representative; 
           (22) respite care services provided as a home and 
        community-based service to a person with mental retardation or a 
        related condition, in the person's primary residence; 
           (23) community support services programs as defined in 
        section 245.462, subdivision 6, and family community support 
        services as defined in section 245.4871, subdivision 17; 
           (24) the placement of a child by a birth parent or legal 
        guardian in a preadoptive home for purposes of adoption as 
        authorized by section 259.47; or 
           (25) settings registered under chapter 144D which provide 
        home care services licensed by the commissioner of health to 
        fewer than seven adults. 
           For purposes of 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. 
           Sec. 5.  Minnesota Statutes 1996, section 245A.035, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPLICANT STUDY.] When the county agency has 
        received the information required by section 245A.04, 
        subdivision 3, paragraph (b), the county agency shall begin an 
        applicant study according to the procedures in section 245A.04, 
        subdivision 3.  The commissioner may issue an emergency license 
        upon recommendation of the county agency once the initial 
        inspection has been successfully completed and the information 
        necessary to begin the applicant background study has been 
        provided.  If the county agency does not recommend that the 
        emergency license be granted, the agency shall notify the 
        relative in writing that the agency is recommending denial to 
        the commissioner; shall remove any child who has been placed in 
        the home prior to licensure; and shall inform the relative in 
        writing of the procedure to request review pursuant to 
        subdivision 6.  An emergency license shall be effective until a 
        child foster care license is granted or denied, but shall in no 
        case remain in effect more than 90 120 days from the date of 
        placement. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        245A.04, subdivision 3b, is amended to read: 
           Subd. 3b.  [RECONSIDERATION OF DISQUALIFICATION.] (a) The 
        individual who is the subject of the disqualification may 
        request a reconsideration of the disqualification.  
           The individual must submit the request for reconsideration 
        to the commissioner in writing.  A request for reconsideration 
        for an individual who has been sent a notice of disqualification 
        under subdivision 3a, paragraph (b), clause (1) or (2), must be 
        submitted within 30 calendar days of the disqualified 
        individual's receipt of the notice of disqualification.  A 
        request for reconsideration for an individual who has been sent 
        a notice of disqualification under subdivision 3a, paragraph 
        (b), clause (3), must be submitted within 15 calendar days of 
        the disqualified individual's receipt of the notice of 
        disqualification.  Removal of a disqualified individual from 
        direct contact shall be ordered if the individual does not 
        request reconsideration within the prescribed time, and for an 
        individual who submits a timely request for reconsideration, if 
        the disqualification is not set aside.  The individual must 
        present information showing that: 
           (1) the information the commissioner relied upon is 
        incorrect or inaccurate.  If the basis of a reconsideration 
        request is that a maltreatment determination or disposition 
        under section 626.556 or 626.557 is incorrect, and the 
        commissioner has issued a final order in an appeal of that 
        determination or disposition under section 256.045, the 
        commissioner's order is conclusive on the issue of maltreatment; 
        or 
           (2) the subject of the study does not pose a risk of harm 
        to any person served by the applicant or license holder. 
           (b) The commissioner may set aside the disqualification 
        under this section if the commissioner finds that the 
        information the commissioner relied upon is incorrect or the 
        individual does not pose a risk of harm to any person served by 
        the applicant or license holder.  In determining that an 
        individual does not pose a risk of harm, the commissioner shall 
        consider the consequences of the event or events that lead to 
        disqualification, whether there is more than one disqualifying 
        event, the vulnerability of the victim at the time of the event, 
        the time elapsed without a repeat of the same or similar event, 
        documentation of successful completion by the individual studied 
        of training or rehabilitation pertinent to the event, and any 
        other information relevant to reconsideration.  In reviewing a 
        disqualification under this section, the commissioner shall give 
        preeminent weight to the safety of each person to be served by 
        the license holder or applicant over the interests of the 
        license holder or applicant. 
           (c) Unless the information the commissioner relied on in 
        disqualifying an individual is incorrect, the commissioner may 
        not set aside the disqualification of an individual in 
        connection with a license to provide family day 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 if: 
           (1) less than ten years have passed since the discharge of 
        the sentence imposed for the offense; and the individual has 
        been convicted of a violation of any offense listed in sections 
        609.20 (manslaughter in the first degree), 609.205 (manslaughter 
        in the second degree), criminal vehicular homicide under 609.21 
        (criminal vehicular homicide and injury), 609.215 (aiding 
        suicide or aiding attempted suicide), felony violations under 
        609.221 to 609.2231 (assault in the first, second, third, or 
        fourth degree), 609.713 (terroristic threats), 609.235 (use of 
        drugs to injure or to facilitate crime), 609.24 (simple 
        robbery), 609.245 (aggravated robbery), 609.25 (kidnapping), 
        609.255 (false imprisonment), 609.561 or 609.562 (arson in the 
        first or second degree), 609.71 (riot), 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 (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), 609.228 (great bodily 
        harm caused by distribution of drugs), 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), 609.378 (neglect or 
        endangerment of a child), a gross misdemeanor offense under 
        609.377 (malicious punishment of a child), 609.72, subdivision 3 
        (disorderly conduct against a vulnerable adult); or an attempt 
        or conspiracy to commit any of these offenses, as each of these 
        offenses is defined in Minnesota Statutes; or an offense in any 
        other state, the elements of which are substantially similar to 
        the elements of any of the foregoing offenses; 
           (2) regardless of how much time has passed since the 
        discharge of the sentence imposed for the offense, the 
        individual was convicted of a violation of any offense listed in 
        sections 609.185 to 609.195 (murder in the first, second, or 
        third degree), 609.2661 to 609.2663 (murder of an unborn child 
        in the first, second, or third degree), a felony offense under 
        609.377 (malicious punishment of a child), 609.322 
        (solicitation, inducement, and promotion of prostitution), 
        609.323 (receiving profit derived from prostitution), 609.342 to 
        609.345 (criminal sexual conduct in the first, second, third, or 
        fourth degree), 609.352 (solicitation of children to engage in 
        sexual conduct), 617.246 (use of minors in a sexual 
        performance), 617.247 (possession of pictorial representations 
        of a minor), 609.365 (incest), a felony offense under 609.2242 
        and 609.2243 (domestic assault), a felony offense of spousal 
        abuse, a felony offense of child abuse or neglect, a felony 
        offense of a crime against children, or an attempt or conspiracy 
        to commit any of these offenses as defined in Minnesota 
        Statutes, or an offense in any other state, the elements of 
        which are substantially similar to any of the foregoing 
        offenses; 
           (3) within the seven years preceding the study, the 
        individual committed an act that constitutes maltreatment of a 
        child under section 626.556, subdivision 10e, and that resulted 
        in substantial bodily harm as defined in section 609.02, 
        subdivision 7a, or substantial mental or emotional harm as 
        supported by competent psychological or psychiatric evidence; or 
           (4) within the seven years preceding the study, the 
        individual was determined under section 626.557 to be the 
        perpetrator of a substantiated incident of maltreatment of a 
        vulnerable adult that resulted in substantial bodily harm as 
        defined in section 609.02, subdivision 7a, or substantial mental 
        or emotional harm as supported by competent psychological or 
        psychiatric evidence. 
           In the case of any ground for disqualification under 
        clauses (1) to (4), if the act was committed by an individual 
        other than the applicant or license holder residing in the 
        applicant's or license holder's home, the applicant or license 
        holder may seek reconsideration when the individual who 
        committed the act no longer resides in the home.  
           The disqualification periods provided under clauses (1), 
        (3), and (4) are the minimum applicable disqualification 
        periods.  The commissioner may determine that an individual 
        should continue to be disqualified from licensure because the 
        license holder or applicant poses a risk of harm to a person 
        served by that individual after the minimum disqualification 
        period has passed. 
           (d) The commissioner shall respond in writing or by 
        electronic transmission to all reconsideration requests for 
        which the basis for the request is that the information relied 
        upon by the commissioner to disqualify is incorrect or 
        inaccurate within 30 working days of receipt of a request and 
        all relevant information.  If the basis for the request is that 
        the individual does not pose a risk of harm, the commissioner 
        shall respond to the request within 15 working days after 
        receiving the request for reconsideration and all relevant 
        information.  If the disqualification is set aside, the 
        commissioner shall notify the applicant or license holder in 
        writing or by electronic transmission of the decision. 
           (e) Except as provided in subdivision 3c, the 
        commissioner's decision to disqualify an individual, including 
        the decision to grant or deny a rescission or set aside a 
        disqualification under this section, is the final administrative 
        agency action and shall not be subject to further review in a 
        contested case under chapter 14 involving a negative licensing 
        appeal taken in response to the disqualification or involving an 
        accuracy and completeness appeal under section 13.04. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        245A.04, subdivision 3d, is amended to read: 
           Subd. 3d.  [DISQUALIFICATION.] When a background study 
        completed under subdivision 3 shows any of the following:  a 
        conviction of one or more crimes listed in clauses (1) to (4); 
        the individual has admitted to or a preponderance of the 
        evidence indicates the individual has committed an act or acts 
        that meet the definition of any of the crimes listed in clauses 
        (1) to (4); or an administrative determination listed under 
        clause (4), the individual shall be disqualified from any 
        position allowing direct contact with persons receiving services 
        from the license holder: 
           (1) regardless of how much time has passed since the 
        discharge of the sentence imposed for the offense, and unless 
        otherwise specified, regardless of the level of the conviction, 
        the individual was convicted of 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); 
        609.2661 (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); 609.323 (receiving profit derived from 
        prostitution); 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); 609.352 
        (solicitation of children to engage in sexual conduct); 609.365 
        (incest); felony offense under 609.377 (malicious punishment of 
        a child); 617.246 (use of minors in sexual performance 
        prohibited); 617.247 (possession of pictorial representations of 
        minors); a felony offense under 609.2242 and 609.2243 (domestic 
        assault), a felony offense of spousal abuse, a felony offense of 
        child abuse or neglect, a felony offense of a crime against 
        children; or attempt or conspiracy to commit any of these 
        offenses as defined in Minnesota Statutes, or an offense in any 
        other state or country, where the elements are substantially 
        similar to any of the offenses listed in this clause; 
           (2) if less than 15 years have passed since the discharge 
        of the sentence imposed for the offense; and the individual has 
        received a felony conviction for a violation of any of these 
        offenses:  sections 609.20 (manslaughter in the first degree); 
        609.205 (manslaughter in the second degree); 609.21 (criminal 
        vehicular homicide and injury); 609.215 (suicide); 609.221 to 
        609.2231 (assault in the first, second, third, or fourth 
        degree); repeat offenses under 609.224 (assault in the fifth 
        degree); 609.2242 and 609.2243 (domestic assault; sentencing; 
        repeat domestic assault); repeat offenses under 609.3451 
        (criminal sexual conduct in the fifth degree); 609.713 
        (terroristic threats); 609.235 (use of drugs to injure or 
        facilitate crime); 609.24 (simple robbery); 609.245 (aggravated 
        robbery); 609.25 (kidnapping); 609.255 (false imprisonment); 
        609.561 (arson in the first degree); 609.562 (arson in the 
        second degree); 609.563 (arson in the third degree); repeat 
        offenses under 617.23 (indecent exposure; penalties); repeat 
        offenses under 617.241 (obscene materials and performances; 
        distribution and exhibition prohibited; penalty); 609.71 (riot); 
        609.66 (dangerous weapons); 609.67 (machine guns and 
        short-barreled shotguns); 609.749 (harassment; stalking; 
        penalties); 609.228 (great bodily harm caused by distribution of 
        drugs); 609.2325 (criminal abuse of a vulnerable adult); 
        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); 609.378 (neglect or endangerment of a child); 609.324, 
        subdivision 1 (other prohibited acts); 609.52 (theft); 609.2335 
        (financial exploitation of a vulnerable adult); 609.521 
        (possession of shoplifting gear); 609.582 (burglary); 609.625 
        (aggravated forgery); 609.63 (forgery); 609.631 (check forgery; 
        offering a forged check); 609.635 (obtaining signature by false 
        pretense); 609.27 (coercion); 609.275 (attempt to coerce); 
        609.687 (adulteration); 260.221 (grounds for termination of 
        parental rights); and chapter 152 (drugs; controlled 
        substance).  An attempt or conspiracy to commit any of these 
        offenses, as each of these offenses is defined in Minnesota 
        Statutes; or an offense in any other state or country, the 
        elements of which are substantially similar to the elements of 
        the offenses in this clause.  If the individual studied is 
        convicted of one of the felonies listed in this clause, but the 
        sentence is a gross misdemeanor or misdemeanor disposition, the 
        look-back period for the conviction is the period applicable to 
        the disposition, that is the period for gross misdemeanors or 
        misdemeanors; 
           (3) if less than ten years have passed since the discharge 
        of the sentence imposed for the offense; and the individual has 
        received a gross misdemeanor conviction for a violation of any 
        of the following offenses:  sections 609.224 (assault in the 
        fifth degree); 609.2242 and 609.2243 (domestic assault); 
        violation of an order for protection under 518B.01, subdivision 
        14; 609.3451 (criminal sexual conduct in the fifth degree); 
        repeat offenses under 609.746 (interference with privacy); 
        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); 609.71 (riot); 
        609.66 (dangerous weapons); 609.749 (harassment; stalking; 
        penalties); 609.224, subdivision 2, paragraph (c) (assault in 
        the fifth degree 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 maltreatment of a vulnerable adult); 
        609.72, subdivision 3 (disorderly conduct against a vulnerable 
        adult); 609.265 (abduction); 609.378 (neglect or endangerment of 
        a child); 609.377 (malicious punishment of a child); 609.324, 
        subdivision 1a (other prohibited acts; minor engaged in 
        prostitution); 609.33 (disorderly house); 609.52 (theft); 
        609.582 (burglary); 609.631 (check forgery; offering a forged 
        check); 609.275 (attempt to coerce); or an attempt or conspiracy 
        to commit any of these offenses, as each of these offenses is 
        defined in Minnesota Statutes; or 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 this clause.  If 
        the defendant is convicted of one of the gross misdemeanors 
        listed in this clause, but the sentence is a misdemeanor 
        disposition, the look-back period for the conviction is the 
        period applicable to misdemeanors; or 
           (4) if less than seven years have passed since the 
        discharge of the sentence imposed for the offense; and the 
        individual has received a misdemeanor conviction for a violation 
        of any of the following offenses:  sections 609.224 (assault in 
        the fifth degree); 609.2242 (domestic assault); violation of an 
        order for protection under 518B.01 (Domestic Abuse Act); 
        violation of an order for protection under 609.3232 (protective 
        order authorized; procedures; penalties); 609.746 (interference 
        with privacy); 609.79 (obscene or harassing phone calls); 
        609.795 (letter, telegram, or package; opening; harassment); 
        617.23 (indecent exposure; penalties); 609.2672 (assault of an 
        unborn child in the third degree); 617.293 (harmful materials; 
        dissemination and display to minors prohibited); 609.66 
        (dangerous weapons); 609.665 (spring guns); 609.2335 (financial 
        exploitation of a vulnerable adult); 609.234 (failure to report 
        maltreatment of a vulnerable adult); 609.52 (theft); 609.27 
        (coercion); or an attempt or conspiracy to commit any of these 
        offenses, as each of these offenses is defined in Minnesota 
        Statutes; or 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 this clause; 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 substantiated serious or recurring maltreatment of a 
        minor under section 626.556 or of a vulnerable adult under 
        section 626.557 for which there is a preponderance of evidence 
        that the maltreatment occurred, and that the subject was 
        responsible for the maltreatment.  For the purposes of this 
        section, serious maltreatment means sexual abuse; maltreatment 
        resulting in death; or maltreatment resulting in serious injury 
        or harm which reasonably requires the care of a physician 
        whether or not the care of a physician was sought, including:; 
        or abuse resulting in serious injury.  For purposes of this 
        section, abuse resulting in serious injury means:  bruises, 
        bites, skin laceration or tissue damage; fractures; 
        dislocations; evidence of internal injuries; head injuries with 
        loss of consciousness; extensive second-degree or third-degree 
        burns and other burns for which complications are 
        present; extensive second-degree or third-degree frostbite, and 
        others for which complications are present; irreversible 
        mobility or avulsion of teeth; injuries to the eyeball; 
        ingestion of foreign substances and objects that are harmful; 
        near drowning; and heat exhaustion or sunstroke.  For purposes 
        of this section, "care of a physician" is treatment received or 
        ordered by a physician, but does not include diagnostic testing, 
        assessment, or observation.  For the purposes of this section, 
        recurring maltreatment means more than one incident of 
        maltreatment for which there is a preponderance of evidence that 
        the maltreatment occurred, and that the subject was responsible 
        for the maltreatment. 
           Sec. 8.  Minnesota Statutes 1996, section 256.01, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CHILD MORTALITY REVIEW PANEL.] (a) The 
        commissioner shall establish a child mortality review panel for 
        reviewing to review deaths of children in Minnesota, including 
        deaths attributed to maltreatment or in which maltreatment may 
        be a contributing cause and to review near fatalities as defined 
        in section 626.556, subdivision 11d.  The commissioners of 
        health, children, families, and learning, and public safety and 
        the attorney general shall each designate a representative to 
        the child mortality review panel.  Other panel members shall be 
        appointed by the commissioner, including a board-certified 
        pathologist and a physician who is a coroner or a medical 
        examiner.  The purpose of the panel shall be to make 
        recommendations to the state and to county agencies for 
        improving the child protection system, including modifications 
        in statute, rule, policy, and procedure. 
           (b) The commissioner may require a county agency to 
        establish a local child mortality review panel.  The 
        commissioner may establish procedures for conducting local 
        reviews and may require that all professionals with knowledge of 
        a child mortality case participate in the local review.  In this 
        section, "professional" means a person licensed to perform or a 
        person performing a specific service in the child protective 
        service system.  "Professional" includes law enforcement 
        personnel, social service agency attorneys, educators, and 
        social service, health care, and mental health care providers. 
           (c) If the commissioner of human services has reason to 
        believe that a child's death was caused by maltreatment or that 
        maltreatment was a contributing cause, the commissioner has 
        access to not public data under chapter 13 maintained by state 
        agencies, statewide systems, or political subdivisions that are 
        related to the child's death or circumstances surrounding the 
        care of the child.  The commissioner shall also have access to 
        records of private hospitals as necessary to carry out the 
        duties prescribed by this section.  Access to data under this 
        paragraph is limited to police investigative data; autopsy 
        records and coroner or medical examiner investigative data; 
        hospital, public health, or other medical records of the child; 
        hospital and other medical records of the child's parent that 
        relate to prenatal care; and records created by social service 
        agencies that provided services to the child or family within 
        three years preceding the child's death.  A state agency, 
        statewide system, or political subdivision shall provide the 
        data upon request of the commissioner.  Not public data may be 
        shared with members of the state or local child mortality review 
        panel in connection with an individual case. 
           (d) Notwithstanding the data's classification in the 
        possession of any other agency, data acquired by a local or 
        state child mortality review panel in the exercise of its duties 
        is protected nonpublic or confidential data as defined in 
        section 13.02, but may be disclosed as necessary to carry out 
        the purposes of the review panel.  The data is not subject to 
        subpoena or discovery.  The commissioner may disclose 
        conclusions of the review panel, but shall not disclose data 
        that was classified as confidential or private data on 
        decedents, under section 13.10, or private, confidential, or 
        protected nonpublic data in the disseminating agency, except 
        that the commissioner may disclose local social service agency 
        data as provided in section 626.556, subdivision 11d, on 
        individual cases involving a fatality or near fatality of a 
        person served by the local social service agency prior to the 
        date of death. 
           (e) A person attending a child mortality review panel 
        meeting shall not disclose what transpired at the meeting, 
        except to carry out the purposes of the mortality review panel.  
        The proceedings and records of the mortality review panel are 
        protected nonpublic data as defined in section 13.02, 
        subdivision 13, and are not subject to discovery or introduction 
        into evidence in a civil or criminal action against a 
        professional, the state or a county agency, arising out of the 
        matters the panel is reviewing.  Information, documents, and 
        records otherwise available from other sources are not immune 
        from discovery or use in a civil or criminal action solely 
        because they were presented during proceedings of the review 
        panel.  A person who presented information before the review 
        panel or who is a member of the panel shall not be prevented 
        from testifying about matters within the person's knowledge.  
        However, in a civil or criminal proceeding a person shall not be 
        questioned about the person's presentation of information to the 
        review panel or opinions formed by the person as a result of the 
        review meetings.  
           Sec. 9.  Minnesota Statutes 1996, section 256.01, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [CITIZEN REVIEW PANELS.] (a) The commissioner 
        shall establish a minimum of three citizen review panels to 
        examine the policies and procedures of state and local welfare 
        agencies to evaluate the extent to which the agencies are 
        effectively discharging their child protection 
        responsibilities.  Local social service agencies shall cooperate 
        and work with the citizen review panels.  Where appropriate, the 
        panels may examine specific cases to evaluate the effectiveness 
        of child protection activities.  The panels must examine the 
        extent to which the state and local agencies are meeting the 
        requirements of the federal Child Abuse Prevention and Treatment 
        Act and the Reporting of Maltreatment of Minors Act.  The 
        commissioner may authorize mortality review panels or child 
        protection teams to carry out the duties of a citizen review 
        panel if membership meets or is expanded to meet the 
        requirements of this section. 
           (b) The panel membership must include volunteers who 
        broadly represent the community in which the panel is 
        established, including members who have expertise in the 
        prevention and treatment of child abuse and neglect, child 
        protection advocates, and representatives of the councils of 
        color and ombudsperson for families. 
           (c) A citizen review panel has access to the following data 
        for specific case review under this paragraph:  police 
        investigative data; autopsy records and coroner or medical 
        examiner investigative data; hospital, public health, or other 
        medical records of the child; hospital and other medical records 
        of the child's parent that relate to prenatal care; records 
        created by social service agencies that provided services to the 
        child or family; and personnel data related to an employee's 
        performance in discharging child protection responsibilities.  A 
        state agency, statewide system, or political subdivision shall 
        provide the data upon request of the commissioner.  Not public 
        data may be shared with members of the state or local citizen 
        review panel in connection with an individual case. 
           (d) Notwithstanding the data's classification in the 
        possession of any other agency, data acquired by a local or 
        state citizen review panel in the exercise of its duties are 
        protected nonpublic or confidential data as defined in section 
        13.02, but may be disclosed as necessary to carry out the 
        purposes of the review panel.  The data are not subject to 
        subpoena or discovery.  The commissioner may disclose 
        conclusions of the review panel, but may not disclose data on 
        individuals that were classified as confidential or private data 
        on individuals in the possession of the state agency, statewide 
        system, or political subdivision from which the data were 
        received, except that the commissioner may disclose local social 
        service agency data as provided in section 626.556, subdivision 
        11d, on individual cases involving a fatality or near fatality 
        of a person served by the local social service agency prior to 
        the date of death.  
           (e) A person attending a citizen review panel meeting may 
        not disclose what transpired at the meeting, except to carry out 
        the purposes of the review panel.  The proceedings and records 
        of the review panel are protected nonpublic data as defined in 
        section 13.02, subdivision 13, and are not subject to discovery 
        or introduction into evidence in a civil or criminal action 
        against a professional, the state, or county agency arising out 
        of the matters the panel is reviewing.  Information, documents, 
        and records otherwise available from other sources are not 
        immune from discovery or use in a civil or criminal action 
        solely because they were presented during proceedings of the 
        review panel.  A person who presented information before the 
        review panel or who is a member of the panel is not prevented 
        from testifying about matters within the person's knowledge.  
        However, in a civil or criminal proceeding, a person must not be 
        questioned about the person's presentation of information to the 
        review panel or opinions formed by the person as a result of the 
        review panel meetings. 
           Sec. 10.  Minnesota Statutes 1997 Supplement, section 
        256.82, subdivision 2, is amended to read: 
           Subd. 2.  [FOSTER CARE MAINTENANCE PAYMENTS.] 
        Notwithstanding subdivision 1, for the purposes of foster care 
        maintenance payments under title IV-E of the federal Social 
        Security Act, United States Code, title 42, sections 670 to 676, 
        during the period beginning July 1, 1985, and ending December 
        31, 1985, the county paying the maintenance costs shall be 
        reimbursed for the costs from those federal funds available for 
        that purpose together with an amount of state funds equal to a 
        percentage of the difference between the total cost and the 
        federal funds made available for payment.  This percentage shall 
        not exceed the percentage specified in subdivision 1 for the aid 
        to families with dependent children program.  In the event that 
        the state appropriation for this purpose is less than the state 
        percentage set in subdivision 1, the reimbursement shall be 
        ratably reduced to the county.  Beginning January 1, 1986, for 
        the purpose of foster care maintenance payments under title IV-E 
        of the Social Security Act, United States Code, title 42, 
        sections 670 to 676, the county paying the maintenance costs 
        must be reimbursed for the costs from the federal money 
        available for the purpose.  Beginning July 1, 1997, for the 
        purposes of determining a child's eligibility under title IV-E 
        of the Social Security Act, the placing agency shall use AFDC 
        requirements in effect on June 1, 1995 July 16, 1996. 
           Sec. 11.  Minnesota Statutes 1997 Supplement, section 
        257.071, subdivision 1d, is amended to read: 
           Subd. 1d.  [RELATIVE SEARCH; NATURE.] (a) Within six months 
        after a child is initially placed in a residential facility, the 
        local social service agency shall identify any relatives of the 
        child and notify them of the need for a foster care home for the 
        child and of the possibility of the need for a permanent 
        out-of-home placement of the child, and.  Relatives should also 
        be notified that a decision not to be a placement resource at 
        the beginning of the case may affect the relative's right to 
        have relative being considered for placement of the child placed 
        with that relative later.  The relatives must be notified that 
        they must keep the local social service agency informed of their 
        current address in order to receive notice of any that a 
        permanent placement hearing is being sought for the child.  A 
        relative who fails to provide a current address to the local 
        social service agency forfeits the right to notice of the 
        possibility of permanent placement. 
           (b) Unless relieved of this duty by the court because the 
        child is placed with an appropriate relative who wishes to 
        provide a permanent home for the child, when the agency 
        determines that it is necessary to prepare for the permanent 
        placement determination hearing, or in anticipation of filing a 
        termination of parental rights petition, the agency shall send 
        notice to the relatives, any adult with whom the child is 
        currently residing, any adult with whom the child has resided 
        for one year or longer in the past, and any adults who have 
        maintained a relationship or exercised visitation with the child 
        as identified in the agency case plan.  The notice must state 
        that a permanent home is sought for the child and that the 
        individuals receiving the notice may indicate to the agency 
        their interest in providing a permanent home.  The notice must 
        contain an advisory that if the relative chooses not to be a 
        placement resource at the beginning of the case, this may affect 
        the relative's rights to have the child placed with that 
        relative permanently later on.  The notice must state that 
        within 30 days of receipt of the notice an individual receiving 
        the notice must indicate to the agency the individual's interest 
        in providing a permanent home for the child or that the 
        individual may lose the opportunity to be considered for a 
        permanent placement.  This notice need not be sent if the child 
        is placed with an appropriate relative who wishes to provide a 
        permanent home for the child. 
           Sec. 12.  Minnesota Statutes 1996, section 257.42, is 
        amended to read: 
           257.42 [APPROPRIATE PUBLIC AUTHORITY DEFINED.] 
           The "appropriate public authorities" as used in article 3 
        of the interstate compact on the placement of children shall, 
        with reference to this state, mean the Minnesota department 
        commissioner of human services and said department.  The 
        commissioner of human services or the commissioner's delegate 
        shall receive and act with reference to notices required by said 
        article 3.  
           Sec. 13.  Minnesota Statutes 1996, section 257.43, is 
        amended to read: 
           257.43 [APPROPRIATE AUTHORITY IN RECEIVING STATE DEFINED.] 
           As used in paragraph (a) of article 5 of the interstate 
        compact on the placement of children, the phrase "appropriate 
        authority in the receiving state" with reference to this state 
        shall mean the commissioner of human services or the 
        commissioner's delegate.  
           Sec. 14.  Minnesota Statutes 1997 Supplement, section 
        257.85, subdivision 5, is amended to read: 
           Subd. 5.  [RELATIVE CUSTODY ASSISTANCE AGREEMENT.] (a) A 
        relative custody assistance agreement will not be effective, 
        unless it is signed by the local agency and the relative 
        custodian no later than 30 days after the date of the order 
        establishing permanent legal and physical custody with the 
        relative, except that a local agency may enter into a relative 
        custody assistance agreement with a relative custodian more than 
        30 days after the date of the order if it certifies that the 
        delay in entering the agreement was through no fault of the 
        relative custodian.  There must be a separate agreement for each 
        child for whom the relative custodian is receiving relative 
        custody assistance. 
           (b) Regardless of when the relative custody assistance 
        agreement is signed by the local agency and relative custodian, 
        the effective date of the agreement shall be the first day of 
        the month following the date of the order establishing permanent 
        legal and physical custody or the date that the last party signs 
        the agreement, whichever occurs later. 
           (c) If MFIP-S is not the applicable program for a child at 
        the time that a relative custody assistance agreement is entered 
        on behalf of the child, when MFIP-S becomes the applicable 
        program, if the relative custodian had been receiving custody 
        assistance payments calculated based upon a different program, 
        the amount of relative custody assistance payment under 
        subdivision 7 shall be recalculated under the MFIP-S program. 
           (d) The relative custody assistance agreement shall be in a 
        form specified by the commissioner and shall include provisions 
        relating to the following: 
           (1) the responsibilities of all parties to the agreement; 
           (2) the payment terms, including the financial 
        circumstances of the relative custodian, the needs of the child, 
        the amount and calculation of the relative custody assistance 
        payments, and that the amount of the payments shall be 
        reevaluated annually; 
           (3) the effective date of the agreement, which shall also 
        be the anniversary date for the purpose of submitting the annual 
        affidavit under subdivision 8; 
           (4) that failure to submit the affidavit as required by 
        subdivision 8 will be grounds for terminating the agreement; 
           (5) the agreement's expected duration, which shall not 
        extend beyond