1.1                          A bill for an act 
  1.2             relating to health; creating a medical education and 
  1.3             research endowment fund, the Minnesota families 
  1.4             foundation, a tobacco prevention endowment fund, 
  1.5             senior prescription drug endowment fund, and a health 
  1.6             care fund; appropriating money; amending Minnesota 
  1.7             Statutes 1998, section 62J.69; proposing coding for 
  1.8             new law in Minnesota Statutes, chapters 10; 62J; 137; 
  1.9             144; and 256. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [10.57] [MINNESOTA FAMILIES FOUNDATION.] 
  1.12     Subdivision 1.  [ESTABLISHMENT.] The legislature finds that 
  1.13  the Minnesota families foundation will foster a public-private 
  1.14  partnership that will provide improved services to clients, a 
  1.15  more effective coordination of services, and a more efficient 
  1.16  allocation of resources.  The Minnesota families foundation is a 
  1.17  nonprofit foundation established to support self-sufficiency and 
  1.18  reduce long-term dependency on government.  The foundation shall 
  1.19  operate as a supporting organization under the Internal Revenue 
  1.20  Code, section 509(a), and chapter 317A.  The foundation is not 
  1.21  subject to chapters 13, 14, 16A, 16B, 16C, 43A, and 179A. 
  1.22     Subd. 2.  [BOARD MEMBERSHIP.] The foundation shall be 
  1.23  governed by a 15-member board of directors consisting of: 
  1.24     (1) four members, who are not state employees, appointed by 
  1.25  the governor; 
  1.26     (2) four members, who are not members of the legislature, 
  1.27  two of whom are appointed by the senate and two of whom are 
  2.1   appointed by the house of representatives; and 
  2.2      (3) seven members appointed by the board itself. 
  2.3      Subd. 3.  [TERMS; COMPENSATION; REMOVAL.] (a) Board members 
  2.4   appointed by the governor and the legislature shall serve during 
  2.5   the term of the appointing authority.  The governor and the 
  2.6   legislature shall make initial appointments of board members, as 
  2.7   specified in subdivision 2, as soon as possible after the 
  2.8   effective date of this section.  Initially appointed board 
  2.9   members' terms shall begin on July 1, 1999.  Two of the 
  2.10  governor's initial appointments shall be for two-year terms.  
  2.11  Subsequent appointments shall be made at the beginning of each 
  2.12  regular session of the legislature.  The board members appointed 
  2.13  by the governor and the legislature shall appoint seven board 
  2.14  members no later than January 1, 2000.  Board members appointed 
  2.15  by the board shall serve four-year terms.  A vacancy on the 
  2.16  board shall be filled for the unexpired portion of the term in 
  2.17  the same manner as the original appointment. 
  2.18     (b) Board members shall be reimbursed for reasonable 
  2.19  out-of-pocket expenses actually incurred. 
  2.20     (c) Board members must disclose fully to the board of 
  2.21  directors whenever they may have a conflict of interest within 
  2.22  the meaning of section 317A.255, subdivision 2.  Liability of 
  2.23  board members shall be governed by section 317A.257. 
  2.24     Subd. 4.  [ORGANIZATION.] The board of directors shall 
  2.25  adopt bylaws necessary for the conduct of the business of the 
  2.26  foundation.  The board shall select a chairperson from its 
  2.27  members, and any other officers the board deems necessary.  
  2.28  Board meetings shall be open to the public, and all grants, 
  2.29  contracts, and meeting minutes of the foundation shall be 
  2.30  available to the public. 
  2.31     Subd. 5.  [EXECUTIVE DIRECTOR; EMPLOYEES OF THE 
  2.32  FOUNDATION.] (a) The board members appointed by the governor and 
  2.33  the legislature shall convene prior to January 1, 2000, and hire 
  2.34  an executive director.  The executive director shall serve at 
  2.35  the pleasure of the board of directors.  The executive director 
  2.36  shall serve as a nonvoting member of the board.  The executive 
  3.1   director's compensation shall be capped at 95 percent of the 
  3.2   governor's salary. 
  3.3      (b) The executive director shall oversee the daily 
  3.4   operations of the foundation, including the hiring of necessary 
  3.5   staff.  Employees of the foundation are not state employees. 
  3.6      (c) The executive director shall prepare an annual budget 
  3.7   for the foundation for review and approval by the board of 
  3.8   directors. 
  3.9      (d) To the extent that the board of directors makes funds 
  3.10  available, the commissioner of finance shall provide 
  3.11  administrative support to the foundation until June 30, 2000, 
  3.12  including but not limited to processing of payroll for the 
  3.13  executive director and foundation staff, payment of expenses to 
  3.14  board members, and payment of rent.  The board of directors 
  3.15  shall make up to $200,000 available to the commissioner of 
  3.16  finance to cover payroll, expenses of board members, rent, and 
  3.17  other administrative expenses incurred to support the foundation 
  3.18  in fiscal year 2000. 
  3.19     Subd. 6.  [FOUNDATION FUNDS.] (a) The board of directors 
  3.20  shall be responsible for managing the investment of the 
  3.21  foundation funds as follows: 
  3.22     (1) the foundation funds shall be audited annually by an 
  3.23  independent certified public accountant in accordance with 
  3.24  generally accepted accounting principles; 
  3.25     (2) the foundation funds shall be invested and managed 
  3.26  according to rules applicable to trust investments, as provided 
  3.27  in the Minnesota Prudent Investor Act, sections 501B.151 and 
  3.28  501B.152; 
  3.29     (3) reasonable and necessary administrative and investment 
  3.30  expenses directly associated with the management and investment 
  3.31  of the foundation funds may be paid from the foundation trusts; 
  3.32  and 
  3.33     (4) according to limits established by the board and 
  3.34  consistent with the limitations in the Uniform Management of 
  3.35  Institutional Funds Act, sections 309.62 to 309.71, earnings on 
  3.36  foundation funds shall be expended to cover administrative 
  4.1   expenses of the foundation and grant awards under subdivision 7. 
  4.2      (b) The board may contract with a third party, including 
  4.3   the state board of investment, to carry out the provisions of 
  4.4   paragraph (a). 
  4.5      (c) The foundation may accept gifts from private donors.  
  4.6   Such gifts to the foundation must be accounted for and expended 
  4.7   in a manner consistent with this section. 
  4.8      Subd. 7.  [FOUNDATION GRANTS.] (a) Beginning July 1, 2000, 
  4.9   the foundation shall provide grants to nonprofit, 
  4.10  community-based organizations for activities that: 
  4.11     (1) are flexible and innovative and that close the gap 
  4.12  between dependence on government and independence from 
  4.13  government programs; 
  4.14     (2) support the efforts of working families and working 
  4.15  individuals to remain self-sufficient by building assets that 
  4.16  promote healthy family functioning and stability; 
  4.17     (3) will ensure that core public sector efforts to 
  4.18  encourage self-sufficiency have every opportunity to succeed; 
  4.19     (4) focus resources in a way that can demonstrate impact on 
  4.20  a single goal or a single set of goals; 
  4.21     (5) have demonstrated success in reducing future government 
  4.22  expenditures; 
  4.23     (6) contribute to increasing the understanding of the 
  4.24  development of young children's brains or to developing new 
  4.25  methods to increase the effectiveness of stimulation and 
  4.26  educational activities that will improve brain development in 
  4.27  young children; or 
  4.28     (7) enhance public education, awareness, and understanding 
  4.29  necessary for the promotion and encouragement of activities and 
  4.30  decisions that protect and stimulate young children's 
  4.31  development. 
  4.32     (b) All grantees must match funds received from the 
  4.33  foundation, dollar for dollar.  The match may include up to 25 
  4.34  percent in-kind.  The match cannot be made with federal, state, 
  4.35  or local government funds except in collaborative projects 
  4.36  between governmental entities and the private sector. 
  5.1      (c) The foundation grants must not be used as a substitute 
  5.2   for traditional state or local sources of funding activities for 
  5.3   families and young children, but the endowment fund may be used 
  5.4   to supplement traditional state or local sources, including 
  5.5   sources used to support the activities described in this 
  5.6   subdivision. 
  5.7      Subd. 8.  [REPORTS TO THE LEGISLATURE.] (a) The foundation 
  5.8   shall annually report to the governor and the legislature on 
  5.9   January 15th of each year.  The report must include: 
  5.10     (1) a financial report that details the foundation's 
  5.11  earnings; 
  5.12     (2) an expense report detailing the amounts and purposes 
  5.13  for which funds were expended; 
  5.14     (3) a list of grant awards; 
  5.15     (4) a report on the performance results of these grants; 
  5.16  and 
  5.17     (5) a copy of the independent audit reports for the two 
  5.18  previous years. 
  5.19     (b) The foundation shall also report to the governor and 
  5.20  the legislature on January 15, 2000.  This report shall include 
  5.21  a copy of the foundation's mission statement, bylaws, and 
  5.22  policies adopted by the board of directors; and a financial 
  5.23  report that details the foundation's returns and the amounts and 
  5.24  purposes for which funds were expended. 
  5.25     Subd. 9.  [DISSOLUTION OF THE FOUNDATION.] By June 30, 
  5.26  2009, the foundation shall transfer all foundation assets to the 
  5.27  commissioner of finance, who shall record them as assets of the 
  5.28  general fund and cause them to be liquidated or invested, as 
  5.29  appropriate, by the state board of investment.  On June 30, 
  5.30  2009, the foundation is dissolved.  If the legal status of the 
  5.31  foundation or the foundation funds is successfully challenged in 
  5.32  state or federal court, the foundation must be dissolved and the 
  5.33  assets likewise returned to commissioner of finance for credit 
  5.34  to the general fund and investment by the state board of 
  5.35  investment. 
  5.36     Sec. 2.  Minnesota Statutes 1998, section 62J.69, is 
  6.1   amended to read: 
  6.2      62J.69 [MEDICAL EDUCATION AND RESEARCH TRUST FUND.] 
  6.3      Subdivision 1.  [DEFINITIONS.] For purposes of this 
  6.4   section, the following definitions apply: 
  6.5      (a) "Medical education" means the accredited clinical 
  6.6   training of physicians (medical students and residents), doctor 
  6.7   of pharmacy practitioners, doctors of chiropractic, dentists, 
  6.8   advanced practice nurses (clinical nurse specialist, certified 
  6.9   registered nurse anesthetists, nurse practitioners, and 
  6.10  certified nurse midwives), and physician assistants. 
  6.11     (b) "Clinical training" means accredited training for the 
  6.12  health care practitioners listed in paragraph (a) that is funded 
  6.13  in part by patient care revenues and that occurs in either an 
  6.14  inpatient or ambulatory patient care training site. 
  6.15     (c) "Trainee" means students involved in an accredited 
  6.16  clinical training program for medical education as defined in 
  6.17  paragraph (a). 
  6.18     (d) "Eligible trainee" means a student involved in an 
  6.19  accredited training program for medical education as defined in 
  6.20  paragraph (a), which meets the definition of clinical training 
  6.21  in paragraph (b), who is in a training site that is located in 
  6.22  Minnesota and which has a medical assistance provider number. 
  6.23     (e) "Health care research" means approved clinical, 
  6.24  outcomes, and health services investigations that are funded by 
  6.25  patient out-of-pocket expenses or a third-party payer. 
  6.26     (f) "Commissioner" means the commissioner of health. 
  6.27     (g) (f) "Teaching institutions" means any hospital, medical 
  6.28  center, clinic, or other organization that currently sponsors or 
  6.29  conducts accredited medical education programs or clinical 
  6.30  research in Minnesota. 
  6.31     (h) (g) "Accredited training" means training provided by a 
  6.32  program that is accredited through an organization recognized by 
  6.33  the department of education or the health care financing 
  6.34  administration as the official accrediting body for that program.
  6.35     (i) (h) "Sponsoring institution" means a hospital, school, 
  6.36  or consortium located in Minnesota that sponsors and maintains 
  7.1   primary organizational and financial responsibility for an 
  7.2   accredited medical education program in Minnesota and which is 
  7.3   accountable to the accrediting body. 
  7.4      Subd. 1a.  [ADVISORY COMMITTEE.] The commissioner shall 
  7.5   appoint an advisory committee to provide advice and oversight on 
  7.6   the distribution of funds from the medical education and 
  7.7   research endowment fund.  If a committee is appointed, the 
  7.8   commissioner shall:  
  7.9      (1) consider the interest of all stakeholders when 
  7.10  selecting committee members; 
  7.11     (2) select members that represent both urban and rural 
  7.12  interest; and 
  7.13     (3) select members that include ambulatory care as well as 
  7.14  inpatient perspectives.  
  7.15  The commissioner shall appoint to the advisory committee 
  7.16  representatives of the following groups:  medical researchers, 
  7.17  public and private academic medical centers, including a 
  7.18  representative from each academic center offering an accredited 
  7.19  training program for physicians, pharmacists, chiropractors, 
  7.20  dentists, and nurses, managed care organizations, Blue Cross and 
  7.21  Blue Shield of Minnesota, commercial carriers, Minnesota Medical 
  7.22  Association, Minnesota Nurses Association, Minnesota 
  7.23  Chiropractic Association, medical product manufacturers, 
  7.24  employers, and other relevant stakeholders, including 
  7.25  consumers.  The advisory committee is governed by section 
  7.26  15.059, for membership terms and removal of members and expires 
  7.27  on June 30, 2001. 
  7.28     Subd. 2.  [ALLOCATION AND FUNDING FOR MEDICAL EDUCATION AND 
  7.29  RESEARCH.] (a) The commissioner may establish a trust fund for 
  7.30  the purposes of funding medical education and research 
  7.31  activities in the state of Minnesota. 
  7.32     (b) By January 1, 1997, the commissioner may appoint an 
  7.33  advisory committee to provide advice and oversight on the 
  7.34  distribution of funds from the medical education and research 
  7.35  trust fund.  If a committee is appointed, the commissioner 
  7.36  shall:  (1) consider the interest of all stakeholders when 
  8.1   selecting committee members; (2) select members that represent 
  8.2   both urban and rural interest; and (3) select members that 
  8.3   include ambulatory care as well as inpatient perspectives.  The 
  8.4   commissioner shall appoint to the advisory committee 
  8.5   representatives of the following groups:  medical researchers, 
  8.6   public and private academic medical centers, managed care 
  8.7   organizations, Blue Cross and Blue Shield of Minnesota, 
  8.8   commercial carriers, Minnesota Medical Association, Minnesota 
  8.9   Nurses Association, medical product manufacturers, employers, 
  8.10  and other relevant stakeholders, including consumers.  The 
  8.11  advisory committee is governed by section 15.059, for membership 
  8.12  terms and removal of members and will sunset on June 30, 1999. 
  8.13     (c) Eligible applicants for funds are accredited medical 
  8.14  education teaching institutions, consortia, and programs 
  8.15  operating in Minnesota.  Applications must be submitted by the 
  8.16  sponsoring institution on behalf of the teaching program, and 
  8.17  must be received by September 30 of each year for distribution 
  8.18  in January of the following year.  An application for funds must 
  8.19  include the following: 
  8.20     (1) the official name and address of the sponsoring 
  8.21  institution and the official name and address of the facility or 
  8.22  programs on whose behalf the institution is applying for 
  8.23  funding; 
  8.24     (2) the name, title, and business address of those persons 
  8.25  responsible for administering the funds; 
  8.26     (3) for each accredited medical education program for which 
  8.27  funds are being sought the type and specialty orientation of 
  8.28  trainees in the program, the name, address, and medical 
  8.29  assistance provider number of each training site used in the 
  8.30  program, the total number of trainees at each site, and the 
  8.31  total number of eligible trainees at each training site; 
  8.32     (4) audited clinical training costs per trainee for each 
  8.33  medical education program where available or estimates of 
  8.34  clinical training costs based on audited financial data; 
  8.35     (5) a description of current sources of funding for medical 
  8.36  education costs including a description and dollar amount of all 
  9.1   state and federal financial support, including Medicare direct 
  9.2   and indirect payments; 
  9.3      (6) other revenue received for the purposes of clinical 
  9.4   training; and 
  9.5      (7) other supporting information the commissioner, with 
  9.6   advice from the advisory committee, determines is necessary for 
  9.7   the equitable distribution of funds. 
  9.8      (d) (b) The commissioner shall distribute medical education 
  9.9   funds to all qualifying applicants based on the following basic 
  9.10  criteria:  (1) total medical education funds available; (2) 
  9.11  total eligible trainees in each eligible education program; and 
  9.12  (3) the statewide average cost per trainee, by type of trainee, 
  9.13  in each medical education program; (4) the degree to which the 
  9.14  applicant's training programs are funded with patient care 
  9.15  revenues; (5) the degree to which the training of eligible 
  9.16  trainees takes place in patient care settings that face 
  9.17  increased financial pressure as a result of competition with 
  9.18  nonteaching patient care entities; and (6) whether the eligible 
  9.19  education program emphasizes primary care or specialties that 
  9.20  are in undersupply in Minnesota.  Funds distributed shall not be 
  9.21  used to displace current funding appropriations from federal or 
  9.22  state sources.  Funds shall be distributed to the sponsoring 
  9.23  institutions indicating the amount to be paid to each of the 
  9.24  sponsor's medical education programs based on the criteria in 
  9.25  this paragraph.  Sponsoring institutions which receive funds 
  9.26  from the trust fund must distribute approved funds to the 
  9.27  medical education program according to the commissioner's 
  9.28  approval letter.  Further, programs must distribute funds among 
  9.29  the sites of training as specified in the commissioner's 
  9.30  approval letter.  Any funds not distributed as directed by the 
  9.31  commissioner's approval letter shall be returned to the medical 
  9.32  education and research trust fund within 30 days of a notice 
  9.33  from the commissioner.  The commissioner shall distribute 
  9.34  returned funds to the appropriate entities in accordance with 
  9.35  the commissioner's approval letter. 
  9.36     (e) (c) Medical education programs receiving funds from the 
 10.1   trust fund must submit a medical education and research grant 
 10.2   verification report (GVR) through the sponsoring institution 
 10.3   based on criteria established by the commissioner.  If the 
 10.4   sponsoring institution fails to submit the GVR by the stated 
 10.5   deadline, or to request and meet the deadline for an extension, 
 10.6   the sponsoring institution is required to return the full amount 
 10.7   of the medical education and research trust fund grant to the 
 10.8   medical education and research trust fund within 30 days of a 
 10.9   notice from the commissioner.  The commissioner shall distribute 
 10.10  returned funds to the appropriate entities in accordance with 
 10.11  the commissioner's approval letter.  The reports must include:  
 10.12     (1) the total number of eligible trainees in the program; 
 10.13     (2) the programs and residencies funded, the amounts of 
 10.14  trust fund payments to each program, and within each program, 
 10.15  the dollar amount distributed to each training site; and 
 10.16     (3) other information the commissioner, with advice from 
 10.17  the advisory committee, deems appropriate to evaluate the 
 10.18  effectiveness of the use of funds for clinical training.  
 10.19     The commissioner, with advice from the advisory committee, 
 10.20  will provide an annual summary report to the legislature on 
 10.21  program implementation due February 15 of each year. 
 10.22     (f) (d) The commissioner is authorized to distribute funds 
 10.23  made available through: 
 10.24     (1) voluntary contributions by employers or other entities; 
 10.25     (2) allocations for the department of human services to 
 10.26  support medical education and research; and 
 10.27     (3) other sources as identified and deemed appropriate by 
 10.28  the legislature for inclusion in the trust fund. 
 10.29     (g) The advisory committee shall continue to study and make 
 10.30  recommendations on:  
 10.31     (1) the funding of medical research consistent with work 
 10.32  currently mandated by the legislature and under way at the 
 10.33  department of health; and 
 10.34     (2) the costs and benefits associated with medical 
 10.35  education and research. 
 10.36     Subd. 3.  [MEDICAL ASSISTANCE AND GENERAL ASSISTANCE 
 11.1   SERVICE.] The commissioner of health, in consultation with the 
 11.2   medical education and research costs advisory committee, shall 
 11.3   develop a system to recognize those teaching programs which 
 11.4   serve higher numbers or high proportions of public program 
 11.5   recipients and shall report to the legislative commission on 
 11.6   health care access by January 15, 1998, on an allocation formula 
 11.7   to implement this system. 
 11.8      Subd. 4.  [TRANSFERS FROM THE COMMISSIONER OF HUMAN 
 11.9   SERVICES.] (a) The amount transferred according to section 
 11.10  256B.69, subdivision 5c, shall be distributed by the 
 11.11  commissioner to qualifying applicants based on a distribution 
 11.12  formula that reflects a summation of two factors: 
 11.13     (1) an education factor, which is determined by the total 
 11.14  number of eligible trainees and the total statewide average 
 11.15  costs per trainee, by type of trainee, in each program; and 
 11.16     (2) a public program volume factor, which is determined by 
 11.17  the total volume of public program revenue received by each 
 11.18  training site as a percentage of all public program revenue 
 11.19  received by all training sites in the trust fund pool.  
 11.20     In this formula, the education factor shall be weighted at 
 11.21  50 percent and the public program volume factor shall be 
 11.22  weighted at 50 percent. 
 11.23     (b) Public program revenue for the formula in paragraph (a) 
 11.24  shall include revenue from medical assistance, prepaid medical 
 11.25  assistance, general assistance medical care, and prepaid general 
 11.26  assistance medical care. 
 11.27     (c) Training sites that receive no public program revenue 
 11.28  shall be ineligible for payments from the prepaid medical 
 11.29  assistance program transfer pool. 
 11.30     Subd. 5.  [REVIEW OF ELIGIBLE PROVIDERS.] (a) Provider 
 11.31  groups added after January 1, 1998, to the list of providers 
 11.32  eligible for the trust fund shall not receive funding from the 
 11.33  trust fund without prior evaluation by the commissioner and the 
 11.34  medical education and research costs advisory committee.  The 
 11.35  evaluation shall consider the degree to which the training of 
 11.36  the provider group: 
 12.1      (1) takes place in patient care settings, which are 
 12.2   consistent with the purposes of this section; 
 12.3      (2) is funded with patient care revenues; 
 12.4      (3) takes place in patient care settings, which face 
 12.5   increased financial pressure as a result of competition with 
 12.6   nonteaching patient care entities; and 
 12.7      (4) emphasizes primary care or specialties, which are in 
 12.8   undersupply in Minnesota. 
 12.9      Results of this evaluation shall be reported to the 
 12.10  legislative commission on health care access.  The legislative 
 12.11  commission on health care access must approve funding for the 
 12.12  provider group prior to their receiving any funding from the 
 12.13  trust fund.  In the event that a reviewed provider group is not 
 12.14  approved by the legislative commission on health care access, 
 12.15  trainees in that provider group shall be considered ineligible 
 12.16  trainees for the trust fund distribution. 
 12.17     (b) The commissioner and the medical education and research 
 12.18  costs advisory committee may also review the eligible list of 
 12.19  provider groups, which were added to the eligible list of 
 12.20  provider groups prior to January 1, 1998, to assure that the 
 12.21  trust fund money continues to be is distributed consistent with 
 12.22  the purpose of this section. The results of any such reviews 
 12.23  must be reported to the legislative commission on health care 
 12.24  access.  Trainees in provider groups, which were added prior to 
 12.25  January 1, 1998, and which are reviewed by the commissioner and 
 12.26  the medical education and research costs advisory committee, 
 12.27  shall be considered eligible trainees for purposes of the trust 
 12.28  fund distribution unless and until the legislative commission on 
 12.29  health care access disapproves their eligibility, in which case 
 12.30  they shall be considered ineligible trainees. 
 12.31     Sec. 3.  [62J.691] [MEDICAL EDUCATION AND RESEARCH 
 12.32  ENDOWMENT FUND.] 
 12.33     Subdivision 1.  [CREATION.] The medical education and 
 12.34  research endowment fund is created as an account in the state 
 12.35  treasury.  The commissioner of finance shall credit to the fund 
 12.36  20.25 percent of the tobacco settlement payments received by the 
 13.1   state on January 3, 2000, January 2, 2001, January 2, 2002, and 
 13.2   January 2, 2003, as a result of the settlement of the lawsuit 
 13.3   styled as State v. Philip Morris Incorporated, No. C1-94-8565.  
 13.4   The state board of investment shall invest the fund under 
 13.5   section 11A.24.  All earnings of the fund must be credited to 
 13.6   the fund.  The principle of the fund must be maintained 
 13.7   inviolate.  
 13.8      Subd. 2.  [ENDOWMENT FUND EXPENDITURES.] (a) Up to five 
 13.9   percent of the fair market value of the fund on the preceding 
 13.10  July 1 shall be spent for medical education and research 
 13.11  activities in the state of Minnesota.  
 13.12     (b) Beginning July 1, 2000, and on July 1 of each year 
 13.13  thereafter, 50 percent of the amount in paragraph (a) is 
 13.14  appropriated from the fund to the commissioner of health to be 
 13.15  distributed for medical education in accordance with section 
 13.16  62J.69.  
 13.17     (c) Beginning July 1, 2000, and July 1 of each year 
 13.18  thereafter, 25 percent of the amount in paragraph (a) is 
 13.19  appropriated from the fund to the commissioner of health to be 
 13.20  distributed for medical research in accordance with the 
 13.21  recommendations submitted in accordance with section 62J.692.  
 13.22     (d) Beginning July 1, 2000, and on July 1 of each year 
 13.23  thereafter, 25 percent of the amount in paragraph (a) is to be 
 13.24  appropriated for the instructional costs of health professional 
 13.25  programs at publicly funded academic health centers.  These 
 13.26  earnings shall not be spent except under appropriation by law.  
 13.27     Subd. 3.  [AUDITS REQUIRED.] The legislative auditor shall 
 13.28  audit endowment fund expenditures to ensure that the money is 
 13.29  spent for the purposes set out in this section. 
 13.30     Subd. 4.  [SUNSET.] The medical education and research 
 13.31  endowment fund expires June 30, 2015.  Upon expiration, the 
 13.32  commissioner of finance shall transfer the principal and any 
 13.33  remaining interest to the general fund. 
 13.34     Sec. 4.  [62J.692] [MEDICAL RESEARCH.] 
 13.35     The commissioner of health, in consultation with the 
 13.36  medical education and research costs advisory committee, shall 
 14.1   make recommendations for a process for the submission, review, 
 14.2   and approval of research grant applications.  The process shall 
 14.3   give priority for grants to applications that are intended to 
 14.4   gather preliminary data for submission for a subsequent proposal 
 14.5   for funding from a federal agency or foundation, which awards 
 14.6   research money on a competitive, peer reviewed basis.  Grant 
 14.7   recipients must be able to demonstrate the ability to comply 
 14.8   with federal regulations on human subjects research in 
 14.9   accordance with Code of Federal Regulations, title 45, section 
 14.10  46, and shall conduct the proposed research.  Grants may be 
 14.11  awarded to the University of Minnesota, the Mayo clinic, or any 
 14.12  other public or private organization in the state involved in 
 14.13  medical research.  The commissioner shall report to the 
 14.14  legislature by January 15, 2000, with recommendations. 
 14.15     Sec. 5.  [62J.82] [HEALTH CARE FUND.] 
 14.16     The health care fund is created as an account in the state 
 14.17  treasury.  The commissioner of finance shall credit to the fund 
 14.18  $38,000,000 of each tobacco settlement payment received by the 
 14.19  state in the month of December beginning December of 2003 as a 
 14.20  result of the settlement of the lawsuit styled as State of 
 14.21  Minnesota v. Philip Morris Incorporated, No. C1-94-8565.  The 
 14.22  state board of investment shall invest the fund under section 
 14.23  11A.24.  All earnings of the fund must be credited to the fund. 
 14.24     Sec. 6.  [137.44] [HEALTH PROFESSIONAL EDUCATION BUDGET 
 14.25  PLAN.] 
 14.26     The board of regents is requested to adopt a biennial 
 14.27  budget plan for making expenditures from the medical education 
 14.28  and research endowment fund dedicated for the instructional 
 14.29  costs of health professional programs at publicly funded 
 14.30  academic health centers.  The budget plan may be submitted as 
 14.31  part of the University of Minnesota's biennial budget request. 
 14.32     Sec. 7.  [144.395] [TOBACCO PREVENTION ENDOWMENT FUND.] 
 14.33     Subdivision 1.  [CREATION.] The tobacco prevention 
 14.34  endowment fund is created as an account in the state treasury.  
 14.35  The commissioner of finance shall credit to the fund 50 percent 
 14.36  of the tobacco settlement payments received by the state on 
 15.1   January 3, 2000, January 2, 2001, January 2, 2002, and January 
 15.2   2, 2003, as a result of the settlement of the lawsuit styled as 
 15.3   State v. Philip Morris Incorporated, No. C1-94-8565.  The state 
 15.4   board of investment shall invest the fund under section 11A.24.  
 15.5   All earnings of the fund must be credited to the fund.  The 
 15.6   principle of the fund must be maintained inviolate.  
 15.7      Subd. 2.  [ENDOWMENT FUND EXPENDITURES.] Earnings from the 
 15.8   fund shall be spent to reduce the human and economic 
 15.9   consequences of tobacco use through tobacco prevention 
 15.10  measures.  Beginning July 1, 2000, and on July 1 of each year 
 15.11  thereafter, up to five percent of the fair market value of the 
 15.12  fund on the preceding July 1 and up to a prorated five percent 
 15.13  of deposits received during the preceding year are appropriated 
 15.14  from the fund to the commissioner of health, who shall pay that 
 15.15  amount to the Minnesota partnership for action against tobacco.  
 15.16  Minnesota partnership for action against tobacco shall use the 
 15.17  amounts received for tobacco use prevention measures, except 
 15.18  that a maximum of $200,000 of the first year's appropriation and 
 15.19  $300,000 of each annual appropriation thereafter may be used for 
 15.20  staffing and other expenses relating to this section.  Members 
 15.21  of the board of directors of the partnership, and members of any 
 15.22  advisory committees appointed by the board to make 
 15.23  recommendations for implementing tobacco use prevention efforts, 
 15.24  may be reimbursed for reasonable expenses actually incurred in 
 15.25  connection with activities relating to carrying out this 
 15.26  section, but not for expenses reimbursed from any other source.  
 15.27  The Minnesota partnership for action against tobacco shall not 
 15.28  award any grants from the annual appropriations received under 
 15.29  this subdivision to any project where a partnership board member 
 15.30  or staff has a substantial financial interest. 
 15.31     Subd. 3.  [AUDITS REQUIRED.] The legislative auditor shall 
 15.32  audit endowment fund expenditures to ensure that the money is 
 15.33  spent for tobacco prevention measures.  
 15.34     Subd. 4.  [REPORT.] (a) The Minnesota partnership for 
 15.35  action against tobacco must submit an annual report to the 
 15.36  legislature by January 15 of each year, beginning in 2001, on 
 16.1   prevention measures and initiatives undertaken during the 
 16.2   preceding year.  The report must include: 
 16.3      (1) an accounting of expenses, detailing the amounts and 
 16.4   purposes for which money was spent; 
 16.5      (2) a list of grant awards; 
 16.6      (3) a report on the results of the tobacco prevention 
 16.7   measures; 
 16.8      (4) a copy of the legislative auditor's report; and 
 16.9      (5) how the statewide prevention efforts have been 
 16.10  coordinated and delivered through local public health agencies. 
 16.11     (b) The initial report submitted under this subdivision 
 16.12  must include a copy of the partnership's bylaws and tobacco 
 16.13  prevention policies or plans adopted by the board of directors. 
 16.14     Subd. 5.  [SUNSET.] The tobacco prevention endowment fund 
 16.15  expires on June 30, 2010.  Upon expiration, the commissioner of 
 16.16  finance shall transfer the principal and any remaining interest 
 16.17  to the general fund. 
 16.18     Sec. 8.  [256.956] [SENIOR PRESCRIPTION DRUG ENDOWMENT 
 16.19  FUND.] 
 16.20     Subdivision 1.  [CREATION.] The senior prescription drug 
 16.21  endowment fund is created as an account in the state treasury.  
 16.22  The commissioner of finance shall credit to the fund 6.75 
 16.23  percent of the tobacco settlement payments received by the state 
 16.24  on January 3, 2000, January 2, 2001, January 2, 2002, and 
 16.25  January 2, 2003, as a result of the settlement of the lawsuit 
 16.26  styled as State of Minnesota v. Philip Morris Incorporated, No. 
 16.27  C1-94-8565.  The state board of investment shall invest the fund 
 16.28  under section 11A.24.  All earnings of the fund must be credited 
 16.29  to the fund.  
 16.30     Subd. 2.  [EXPENDITURES.] (a) As part of each biennial and 
 16.31  supplemental budget, the commissioner of finance shall forecast 
 16.32  the cost of providing coverage to the enrollees of the senior 
 16.33  citizen drug program under section 256.955 whose income is 
 16.34  between 120 percent and 200 percent of the federal poverty 
 16.35  guidelines and the cost of eliminating the annual premium.  The 
 16.36  commissioner of finance shall recognize the projected costs of 
 17.1   the program in the fund balance. 
 17.2      (b) Beginning July 1, 2000, and on July 1 of each year 
 17.3   thereafter, a sum equal to the projected costs as determined in 
 17.4   paragraph (a) for the following fiscal year is appropriated from 
 17.5   the fund to the commissioner of human services to be used for 
 17.6   the senior citizen drug program. 
 17.7      Sec. 9.  [APPROPRIATIONS.] 
 17.8      $93,312,000 is appropriated from the general fund to the 
 17.9   commissioner of finance for transfer to the medical education 
 17.10  and research endowment fund in the fiscal year ending June 30, 
 17.11  1999. 
 17.12     $105,984,000 is appropriated from the general fund to the 
 17.13  commissioner of finance for payment to the Minnesota families 
 17.14  foundation in the fiscal year ending June 30, 1999. 
 17.15     $230,400,000 is appropriated from the general fund to the 
 17.16  commissioner of finance for transfer to the tobacco prevention 
 17.17  endowment fund in the fiscal year ending June 30, 1999. 
 17.18     $31,104,000 is appropriated from the general fund to the 
 17.19  commissioner of finance for transfer to the senior prescription 
 17.20  drug endowment fund in the fiscal year ending June 30, 1999. 
 17.21     Of the tobacco settlement payments received by the state on 
 17.22  January 3, 2000, January 2, 2001, January 2, 2002, and January 
 17.23  2, 2003, as a result of the settlement of the lawsuit styled as 
 17.24  State v. Philip Morris Incorporated, No. C1-94-8565, 23 percent 
 17.25  is appropriated to the commissioner of finance for payment to 
 17.26  the Minnesota families foundation. 
 17.27     Sec. 10.  [EFFECTIVE DATE.] 
 17.28     Sections 1 to 9 are effective the day following final 
 17.29  enactment.