1.1                          A bill for an act 
  1.2             relating to health; abolishing the health care access 
  1.3             fund; repealing the insurance premiums tax on health 
  1.4             maintenance organizations and nonprofit health service 
  1.5             plan corporations; phasing out health care taxes; 
  1.6             amending Minnesota Statutes 1998, sections 60A.15, 
  1.7             subdivision 1; 62J.041, subdivision 1; 62Q.095, 
  1.8             subdivision 6; 62R.24; 214.16, subdivisions 2 and 3; 
  1.9             256L.02, subdivision 3; 270B.01, subdivision 8; 
  1.10            270B.14, subdivision 1; and 295.52, subdivision 7; 
  1.11            repealing Minnesota Statutes 1998, sections 13.99, 
  1.12            subdivision 86b; 16A.724; 16A.76; 144.1484, 
  1.13            subdivision 2; 256L.02, subdivision 4; 295.50; 295.51; 
  1.14            295.52; 295.53; 295.54; 295.55; 295.56; 295.57; 
  1.15            295.58; 295.581; 295.582; and 295.59; 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 1998, section 60A.15, 
  1.18  subdivision 1, is amended to read: 
  1.19     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
  1.20  before April 1, June 1, and December 1 of each year, every 
  1.21  domestic and foreign company, including town and farmers' mutual 
  1.22  insurance companies, domestic mutual insurance companies, and 
  1.23  marine insurance companies, health maintenance organizations, 
  1.24  community integrated service networks, and nonprofit health 
  1.25  service plan corporations, shall pay to the commissioner of 
  1.26  revenue installments equal to one-third of the insurer's total 
  1.27  estimated tax for the current year.  Except as provided 
  1.28  in paragraphs paragraph (d), (e), (h), and (i), installments 
  1.29  must be based on a sum equal to two percent of the premiums 
  1.30  described in paragraph (b). 
  2.1      (b) Installments under paragraph (a), or (d), or (e) are 
  2.2   percentages of gross premiums less return premiums on all direct 
  2.3   business received by the insurer in this state, or by its agents 
  2.4   for it, in cash or otherwise, during such year. 
  2.5      (c) Failure of a company to make payments of at least 
  2.6   one-third of either (1) the total tax paid during the previous 
  2.7   calendar year or (2) 80 percent of the actual tax for the 
  2.8   current calendar year shall subject the company to the penalty 
  2.9   and interest provided in this section, unless the total tax for 
  2.10  the current tax year is $500 or less. 
  2.11     (d) For health maintenance organizations, nonprofit health 
  2.12  service plan corporations, and community integrated service 
  2.13  networks, the installments must be based on an amount determined 
  2.14  under paragraph (h) or (i). 
  2.15     (e) For purposes of computing installments for town and 
  2.16  farmers' mutual insurance companies and for mutual property 
  2.17  casualty companies with total assets on December 31, 1989, of 
  2.18  $1,600,000,000 or less, the following rates apply: 
  2.19     (1) for all life insurance, two percent; 
  2.20     (2) for town and farmers' mutual insurance companies and 
  2.21  for mutual property and casualty companies with total assets of 
  2.22  $5,000,000 or less, on all other coverages, one percent; and 
  2.23     (3) for mutual property and casualty companies with total 
  2.24  assets on December 31, 1989, of $1,600,000,000 or less, on all 
  2.25  other coverages, 1.26 percent. 
  2.26     (f) (e) If the aggregate amount of premium tax payments 
  2.27  under this section and the fire marshal tax payments under 
  2.28  section 299F.21 made during a calendar year is equal to or 
  2.29  exceeds $120,000, all tax payments in the subsequent calendar 
  2.30  year must be paid by means of a funds transfer as defined in 
  2.31  section 336.4A-104, paragraph (a).  The funds transfer payment 
  2.32  date, as defined in section 336.4A-401, must be on or before the 
  2.33  date the payment is due.  If the date the payment is due is not 
  2.34  a funds transfer business day, as defined in section 336.4A-105, 
  2.35  paragraph (a), clause (4), the payment date must be on or before 
  2.36  the funds transfer business day next following the date the 
  3.1   payment is due.  
  3.2      (g) (f) Premiums under medical assistance, general 
  3.3   assistance medical care, the MinnesotaCare program, and the 
  3.4   Minnesota comprehensive health insurance plan and all payments, 
  3.5   revenues, and reimbursements received from the federal 
  3.6   government for Medicare-related coverage as defined in section 
  3.7   62A.31, subdivision 3, paragraph (e), are not subject to tax 
  3.8   under this section. 
  3.9      (h) For calendar years 1997, 1998, and 1999, the 
  3.10  installments for health maintenance organizations, community 
  3.11  integrated service networks, and nonprofit health service plan 
  3.12  corporations must be based on an amount equal to one percent of 
  3.13  premiums described under paragraph (b).  Health maintenance 
  3.14  organizations, community integrated service networks, and 
  3.15  nonprofit health service plan corporations that have met the 
  3.16  cost containment goals established under section 62J.04 in the 
  3.17  individual and small employer market for calendar year 1996 are 
  3.18  exempt from payment of the tax imposed under this section for 
  3.19  premiums paid after March 30, 1997, and before April 1, 1998.  
  3.20  Health maintenance organizations, community integrated service 
  3.21  networks, and nonprofit health service plan corporations that 
  3.22  have met the cost containment goals established under section 
  3.23  62J.04 in the individual and small employer market for calendar 
  3.24  year 1997 are exempt from payment of the tax imposed under this 
  3.25  section for premiums paid after March 30, 1998, and before April 
  3.26  1, 1999.  Health maintenance organizations, community integrated 
  3.27  service networks, and nonprofit health service plan corporations 
  3.28  that have met the cost containment goals established under 
  3.29  section 62J.04 in the individual and small employer market for 
  3.30  calendar year 1998 are exempt from payment of the tax imposed 
  3.31  under this section for premiums paid after March 30, 1999, and 
  3.32  before January 1, 2000.  
  3.33     (i) For calendar years after 1999, the commissioner of 
  3.34  finance shall determine the balance of the health care access 
  3.35  fund on September 1 of each year beginning September 1, 1999.  
  3.36  If the commissioner determines that there is no structural 
  4.1   deficit for the next fiscal year, no tax shall be imposed under 
  4.2   paragraph (d) for the following calendar year.  If the 
  4.3   commissioner determines that there will be a structural deficit 
  4.4   in the fund for the following fiscal year, then the 
  4.5   commissioner, in consultation with the commissioner of revenue, 
  4.6   shall determine the amount needed to eliminate the structural 
  4.7   deficit and a tax shall be imposed under paragraph (d) for the 
  4.8   following calendar year.  The commissioner shall determine the 
  4.9   rate of the tax as either one-quarter of one percent, one-half 
  4.10  of one percent, three-quarters of one percent, or one percent of 
  4.11  premiums described in paragraph (b), whichever is the lowest of 
  4.12  those rates that the commissioner determines will produce 
  4.13  sufficient revenue to eliminate the projected structural 
  4.14  deficit.  The commissioner of finance shall publish in the State 
  4.15  Register by October 1 of each year the amount of tax to be 
  4.16  imposed for the following calendar year.  In determining the 
  4.17  structural balance of the health care access fund for fiscal 
  4.18  years 2000 and 2001, the commissioner shall disregard the 
  4.19  transfer amount from the health care access fund to the general 
  4.20  fund for expenditures associated with the services provided to 
  4.21  pregnant women and children under the age of two enrolled in the 
  4.22  MinnesotaCare program.  
  4.23     (j) In approving the premium rates as required in sections 
  4.24  62L.08, subdivision 8, and 62A.65, subdivision 3, the 
  4.25  commissioners of health and commerce shall ensure that any 
  4.26  exemption from the tax as described in paragraphs (h) and (i) is 
  4.27  reflected in the premium rate. 
  4.28     Sec. 2.  Minnesota Statutes 1998, section 62J.041, 
  4.29  subdivision 1, is amended to read: 
  4.30     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  4.31  section, the following definitions apply. 
  4.32     (b) "Health plan company" has the definition provided in 
  4.33  section 62Q.01. 
  4.34     (c) "Total expenditures" means incurred claims or 
  4.35  expenditures on health care services, administrative expenses, 
  4.36  charitable contributions, and all other payments made by health 
  5.1   plan companies out of premium revenues. 
  5.2      (d) "Net expenditures" means total expenditures minus 
  5.3   exempted taxes and assessments and payments or allocations made 
  5.4   to establish or maintain reserves.  
  5.5      (e) "Exempted taxes and assessments" means direct payments 
  5.6   for taxes to government agencies, contributions to the Minnesota 
  5.7   comprehensive health association, the medical assistance 
  5.8   provider's surcharge under section 256.9657, the MinnesotaCare 
  5.9   provider tax under Minnesota Statutes 1998, section 295.52, 
  5.10  assessments by the health coverage reinsurance association, 
  5.11  assessments by the Minnesota life and health insurance guaranty 
  5.12  association, assessments by the Minnesota risk adjustment 
  5.13  association, and any new assessments imposed by federal or state 
  5.14  law. 
  5.15     (f) "Consumer cost-sharing or subscriber liability" means 
  5.16  enrollee coinsurance, copayment, deductible payments, and 
  5.17  amounts in excess of benefit plan maximums. 
  5.18     Sec. 3.  Minnesota Statutes 1998, section 62Q.095, 
  5.19  subdivision 6, is amended to read: 
  5.20     Subd. 6.  [EXEMPTION.] A health plan company, to the extent 
  5.21  that it operates as a staff model health plan company as defined 
  5.22  in section 295.50, subdivision 12b, by employing allied 
  5.23  independent health care providers to deliver health care 
  5.24  services to enrollees, is exempt from this section.  For 
  5.25  purposes of this subdivision, "staff model health plan company" 
  5.26  means a health plan company as defined in section 62Q.01, 
  5.27  subdivision 4, which employs one or more types of health care 
  5.28  providers to deliver health care services to the health plan 
  5.29  company's enrollees. 
  5.30     Sec. 4.  Minnesota Statutes 1998, section 62R.24, is 
  5.31  amended to read: 
  5.32     62R.24 [TAXES AND ASSESSMENTS.] 
  5.33     Effective January 1, 1998, as a condition to entering a 
  5.34  contract described in section 62R.17, a self-insured employer 
  5.35  plan or the qualified employer must voluntarily pay the one 
  5.36  percent premium tax imposed in section 60A.15, subdivision 1, 
  6.1   paragraph (d), and assessments by the Minnesota Comprehensive 
  6.2   Health Association. 
  6.3      Sec. 5.  Minnesota Statutes 1998, section 214.16, 
  6.4   subdivision 2, is amended to read: 
  6.5      Subd. 2.  [BOARD COOPERATION REQUIRED.] The board shall 
  6.6   assist the commissioner of health in data collection activities 
  6.7   required under Laws 1992, chapter 549, article 7, and shall 
  6.8   assist the commissioner of revenue in activities related to 
  6.9   collection of the health care provider tax required under Laws 
  6.10  1992, chapter 549, article 9.  Upon the request of the 
  6.11  commissioner or the commissioner of revenue, the board shall 
  6.12  make available names and addresses of current licensees and 
  6.13  provide other information or assistance as needed. 
  6.14     Sec. 6.  Minnesota Statutes 1998, section 214.16, 
  6.15  subdivision 3, is amended to read: 
  6.16     Subd. 3.  [GROUNDS FOR DISCIPLINARY ACTION.] The board 
  6.17  shall take disciplinary action, which may include license 
  6.18  revocation, against a regulated person for: 
  6.19     (1) intentional failure to provide the commissioner of 
  6.20  health with the data required under chapter 62J; 
  6.21     (2) intentional failure to provide the commissioner of 
  6.22  revenue with data on gross revenue and other information 
  6.23  required for the commissioner to implement sections 295.50 to 
  6.24  295.58; 
  6.25     (3) intentional failure to pay the health care provider tax 
  6.26  required under section 295.52; and 
  6.27     (4) (2) entering into a contract or arrangement that is 
  6.28  prohibited under sections 62J.70 to 62J.73. 
  6.29     Sec. 7.  Minnesota Statutes 1998, section 256L.02, 
  6.30  subdivision 3, is amended to read: 
  6.31     Subd. 3.  [FINANCIAL MANAGEMENT.] (a) The commissioner 
  6.32  shall manage spending for the MinnesotaCare program in a manner 
  6.33  that maintains a minimum reserve in accordance with section 
  6.34  16A.76.  As part of each state revenue and expenditure forecast, 
  6.35  the commissioner must make an assessment of the expected 
  6.36  expenditures for the covered services for the remainder of the 
  7.1   current biennium and for the following biennium.  The estimated 
  7.2   expenditure, including the reserve requirements described in 
  7.3   section 16A.76, shall be compared to an estimate of the revenues 
  7.4   that will be available in the health care access fund the 
  7.5   appropriations for the MinnesotaCare program.  In making the 
  7.6   comparison for the following biennium, the commissioner shall 
  7.7   assume that the appropriations for the current biennium will be 
  7.8   increased by the projected increase in the consumer price index. 
  7.9   Based on this comparison, and after consulting with the chairs 
  7.10  of the house ways and means committee and the senate finance 
  7.11  committee, and the legislative commission on health care access, 
  7.12  the commissioner shall, as necessary, make the adjustments 
  7.13  specified in paragraph (b) to ensure that expenditures remain 
  7.14  within the limits of available revenues for the remainder of the 
  7.15  current biennium and for the following biennium actual and 
  7.16  projected appropriations for the MinnesotaCare program.  The 
  7.17  commissioner shall not hire additional staff using 
  7.18  appropriations from the health care access fund for 
  7.19  MinnesotaCare until the commissioner of finance makes a 
  7.20  determination that the adjustments implemented under paragraph 
  7.21  (b) are sufficient to allow MinnesotaCare expenditures to remain 
  7.22  within the limits of available revenues actual and projected 
  7.23  appropriations for the remainder of the current biennium and for 
  7.24  the following biennium. 
  7.25     (b) The adjustments the commissioner shall use must be 
  7.26  implemented in this order:  first, stop enrollment of single 
  7.27  adults and households without children; second, upon 45 days' 
  7.28  notice, stop coverage of single adults and households without 
  7.29  children already enrolled in the MinnesotaCare program; third, 
  7.30  upon 90 days' notice, decrease the premium subsidy amounts by 
  7.31  ten percent for families with gross annual income above 200 
  7.32  percent of the federal poverty guidelines; fourth, upon 90 days' 
  7.33  notice, decrease the premium subsidy amounts by ten percent for 
  7.34  families with gross annual income at or below 200 percent; and 
  7.35  fifth, require applicants to be uninsured for at least six 
  7.36  months prior to eligibility in the MinnesotaCare program.  If 
  8.1   these measures are insufficient to limit the expenditures to the 
  8.2   estimated amount of revenue, the commissioner shall further 
  8.3   limit enrollment or decrease premium subsidies. 
  8.4      Sec. 8.  Minnesota Statutes 1998, section 270B.01, 
  8.5   subdivision 8, is amended to read: 
  8.6      Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
  8.7   chapter only, unless expressly stated otherwise, "Minnesota tax 
  8.8   laws" means the taxes, refunds, and fees administered by or paid 
  8.9   to the commissioner under chapters 115B (except taxes imposed 
  8.10  under sections 115B.21 to 115B.24), 289A (except taxes imposed 
  8.11  under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 
  8.12  297A, and 297H and sections 295.50 to 295.59, or any similar 
  8.13  Indian tribal tax administered by the commissioner pursuant to 
  8.14  any tax agreement between the state and the Indian tribal 
  8.15  government, and includes any laws for the assessment, 
  8.16  collection, and enforcement of those taxes, refunds, and fees. 
  8.17     Sec. 9.  Minnesota Statutes 1998, section 270B.14, 
  8.18  subdivision 1, is amended to read: 
  8.19     Subdivision 1.  [DISCLOSURE TO COMMISSIONER OF HUMAN 
  8.20  SERVICES.] (a) On the request of the commissioner of human 
  8.21  services, the commissioner shall disclose return information 
  8.22  regarding taxes imposed by chapter 290, and claims for refunds 
  8.23  under chapter 290A, to the extent provided in paragraph (b) and 
  8.24  for the purposes set forth in paragraph (c). 
  8.25     (b) Data that may be disclosed are limited to data relating 
  8.26  to the identity, whereabouts, employment, income, and property 
  8.27  of a person owing or alleged to be owing an obligation of child 
  8.28  support. 
  8.29     (c) The commissioner of human services may request data 
  8.30  only for the purposes of carrying out the child support 
  8.31  enforcement program and to assist in the location of parents who 
  8.32  have, or appear to have, deserted their children.  Data received 
  8.33  may be used only as set forth in section 256.978. 
  8.34     (d) The commissioner shall provide the records and 
  8.35  information necessary to administer the supplemental housing 
  8.36  allowance to the commissioner of human services.  
  9.1      (e) At the request of the commissioner of human services, 
  9.2   the commissioner of revenue shall electronically match the 
  9.3   social security numbers and names of participants in the 
  9.4   telephone assistance plan operated under sections 237.69 to 
  9.5   237.711, with those of property tax refund filers, and determine 
  9.6   whether each participant's household income is within the 
  9.7   eligibility standards for the telephone assistance plan. 
  9.8      (f) The commissioner may provide records and information 
  9.9   collected under Minnesota Statutes 1998, sections 295.50 to 
  9.10  295.59, to the commissioner of human services for purposes of 
  9.11  the Medicaid Voluntary Contribution and Provider-Specific Tax 
  9.12  Amendments of 1991, Public Law Number 102-234.  Upon the written 
  9.13  agreement by the United States Department of Health and Human 
  9.14  Services to maintain the confidentiality of the data, the 
  9.15  commissioner may provide records and information collected under 
  9.16  Minnesota Statutes 1998, sections 295.50 to 295.59, to the 
  9.17  Health Care Financing Administration section of the United 
  9.18  States Department of Health and Human Services for purposes of 
  9.19  meeting federal reporting requirements.  
  9.20     (g) The commissioner may provide records and information to 
  9.21  the commissioner of human services as necessary to administer 
  9.22  the early refund of refundable tax credits. 
  9.23     (h) The commissioner may disclose information to the 
  9.24  commissioner of human services necessary to verify income for 
  9.25  eligibility and premium payment under the MinnesotaCare program, 
  9.26  under section 256L.05, subdivision 2. 
  9.27     Sec. 10.  Minnesota Statutes 1998, section 295.52, 
  9.28  subdivision 7, is amended to read: 
  9.29     Subd. 7.  [TAX REDUCTION.] Notwithstanding subdivisions 1, 
  9.30  1a, 2, 3, and 4, the tax imposed under this section equals for 
  9.31  calendar years year: 
  9.32     (1) 1998 and 1999 shall be equal to, 1.5 percent of the 
  9.33  gross revenues received on or after January 1, 1998, and before 
  9.34  January 1, 2000.  The commissioner shall extend the reduced tax 
  9.35  rate of 1.5 percent for gross revenues received on or after 
  9.36  January 1, 2000, and before January 1, 2002, if the commissioner 
 10.1   of finance determines that the health care access fund 
 10.2   structural balance projected for fiscal year 2001 will remain 
 10.3   positive, prior to any increase of the one percent premium tax 
 10.4   under section 60A.15, subdivision 1, paragraph (h), and prior to 
 10.5   any tax expenditures related to the increase in the maximum tax 
 10.6   credit for research expenses under section 295.53, subdivision 
 10.7   4a, as amended by Laws 1997, chapter 225 1999; 
 10.8      (2) 1999, one percent of the gross revenues received on or 
 10.9   after January 1, 1999, and before January 1, 2000; 
 10.10     (3) 2000, 0.5 percent of the gross revenues received on or 
 10.11  after January 1, 2000, and before January 1, 2001; and 
 10.12     (4) 2001 and later for gross revenues received on or after 
 10.13  January 1, 2001, zero. 
 10.14     Sec. 11.  [REPEAL OF HEALTH CARE ACCESS FUND.] 
 10.15     Subdivision 1.  [TRANSFER TO GENERAL FUND.] Upon the repeal 
 10.16  of the health care access fund under section 12, paragraph (c), 
 10.17  the commissioner of finance shall transfer any funds in the 
 10.18  health care access fund to the general fund and the health care 
 10.19  access fund is combined with and becomes part of the general 
 10.20  fund. 
 10.21     Subd. 2.  [REVISOR'S INSTRUCTION.] In the next edition of 
 10.22  Minnesota Statutes, the revisor of statutes shall substitute 
 10.23  "general fund" for "health care access fund" each place health 
 10.24  care access fund appears. 
 10.25     Sec. 12.  [REPEALER.] 
 10.26     (a) Minnesota Statutes 1998, sections 295.50; 295.51; 
 10.27  295.52; 295.53; 295.54; 295.55; 295.56; 295.57; 295.58; 295.581; 
 10.28  295.582; and 295.59, are repealed. 
 10.29     (b) Minnesota Statutes 1998, sections 13.99, subdivision 
 10.30  86b; and 144.1484, subdivision 2, are repealed. 
 10.31     (c) Minnesota Statutes 1998, sections 16A.724; 16A.76; and 
 10.32  256L.02, subdivision 4, are repealed. 
 10.33     Sec. 13.  [EFFECTIVE DATE.] 
 10.34     Sections 1, 7, 11, and 12, paragraph (c), are effective 
 10.35  July 1, 1999. 
 10.36     Sections 2, 3, 4, 5, 6, 8, 9, and 12, paragraph (b), are 
 11.1   effective January 1, 2001. 
 11.2      Section 10 is effective for gross revenues received after 
 11.3   December 30, 1998. 
 11.4      Section 12, paragraph (a), is effective for gross revenues 
 11.5   received after December 31, 2000.