1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to state government; appropriating money and 1.3 reducing appropriations for educational, health, human 1.4 services, corrections, economic development, 1.5 transportation, public safety, environmental, natural 1.6 resources, agricultural, and state government 1.7 purposes; establishing and modifying certain programs; 1.8 providing for regulation of certain activities and 1.9 practices; providing for accounts, assessments, and 1.10 fees; providing for the payment of certain refunds; 1.11 amending Minnesota Statutes 2002, sections 124D.135, 1.12 subdivision 8; 124D.16, subdivision 6; 124D.20, by 1.13 adding subdivisions; 145A.13, subdivision 3; 240.155, 1.14 subdivision 1; 244.101, by adding a subdivision; 1.15 256.9657, subdivision 1; 256.969, subdivision 3a; 1.16 256B.0625, subdivisions 13, 24; 256B.19, subdivision 1.17 1d; 256B.195, subdivision 3; 256B.32, subdivision 1; 1.18 256B.431, subdivision 23, by adding a subdivision; 1.19 256B.75; 289A.50, subdivision 2a; 289A.56, subdivision 1.20 4; 297A.75, subdivisions 2, 4; 609.105, subdivisions 1.21 1, 3; 609.135, subdivision 7; 609.14, subdivision 3; 1.22 Laws 2002, chapter 220, article 10, section 3; Laws 1.23 2002, chapter 220, article 13, section 9, subdivision 1.24 2, as amended; proposing coding for new law in 1.25 Minnesota Statutes, chapter 609; repealing Minnesota 1.26 Statutes 2002, section 256B.0625, subdivision 5a. 1.27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.28 ARTICLE 1 1.29 SUMMARY 1.30 (General Fund Only, After Forecast Adjustments) 1.31 TRANSFERS FROM OTHER FUNDS $ 76,295,000 1.32 APPROPRIATIONS 1.33 E-12 Education (4,787,000) 1.34 Higher Education (30,107,000) 1.35 Health, Human Services 1.36 and Corrections (63,337,000) 2.1 Environment 2.2 and Agriculture (8,022,000) 2.3 Economic Development (1,978,000) 2.4 Transportation -0- 2.5 State Government (10,160,589) 2.6 Sales Tax Refunds (50,000,000) 2.7 SUBTOTAL APPROPRIATIONS $ (168,391,589) 2.8 CANCELLATIONS (130,000,000) 2.9 TOTAL $ (374,686,589) 2.10 ARTICLE 2 2.11 E-12 EDUCATION 2.12 Section 1. [E-12 EDUCATION APPROPRIATIONS AND REDUCTIONS.] 2.13 The dollar amounts in the columns under "APPROPRIATION 2.14 CHANGE" are added to or, if shown in parentheses, are subtracted 2.15 from the appropriations in Laws 2001, First Special Session 2.16 chapter 3 or 6, as amended, by Laws 2002, chapter 220 or 374, as 2.17 amended, or other law to the specified agencies. The 2.18 appropriations are from the general fund or other named fund and 2.19 are available for the fiscal years indicated for each purpose. 2.20 The figure "2003" means that the addition to or subtraction from 2.21 the appropriations listed under the figure is for the fiscal 2.22 year ending June 30, 2003. 2.23 2003 2.24 APPROPRIATION REDUCTIONS $ (4,787,000) 2.25 APPROPRIATION CHANGE 2.26 Sec. 2. COMMISSIONER OF CHILDREN, 2.27 FAMILIES AND LEARNING 2.28 Subdivision 1. Total 2.29 Appropriation Reductions (4,617,000) 2.30 Subd. 2. Agency Management (1,044,000) 2.31 Subd. 3. Aids and Grants (206,000) 2.32 Subd. 4. School Readiness (791,000) 2.33 Subd. 5. Early Childhood 2.34 and Community Education (769,000) 2.35 Subd. 6. Community Education (1,807,000) 2.36 Sec. 3. PERPICH CENTER FOR 2.37 ARTS EDUCATION (130,000) 2.38 Sec. 4. MINNESOTA STATE ACADEMIES (40,000) 3.1 Sec. 5. Minnesota Statutes 2002, section 124D.135, 3.2 subdivision 8, is amended to read: 3.3 Subd. 8. [RESERVE ACCOUNT LIMIT.] (a) Under this section, 3.4 the average balance, during the most recent three-year period in 3.5 a district's early childhood family education reserve account on 3.6 June 30 of each year, adjusted for any prior reductions under 3.7 this subdivision, must not be greater than 25 percent of the sum 3.8 of the district's maximum early childhood family education 3.9 annual revenue under subdivision 1, excluding adjustments under 3.10 this subdivision, plus any fees, grants, or other revenue 3.11 received by the district for early childhood family education 3.12 programs for the prior year. 3.13 (b) If a district's adjusted average early childhood family 3.14 education reserve over the three-year period is in excess of253.15percent of the prior year annual revenuethe limit under 3.16 paragraph (a), the district's early childhood family education 3.17 state aid and levy authority for the current school year must be 3.18 reduced by the lesser of the current year revenue under 3.19 subdivision 1 or the excess reserve amount. The aid reduction 3.20 equals the product of the lesser of the excess reserve amount or 3.21 the current year revenue under subdivision 1 times the ratio of 3.22 the district's aid for thepriorcurrent year under subdivision 3.23 4 to the district's revenue for thepriorcurrent year under 3.24 subdivision 1. The levy reduction equals the excess reserve 3.25 amount minus the aid reduction.The commissioner must3.26reallocate aid and levy reduced under this subdivision to other3.27eligible early childhood family education programs in proportion3.28to each district's revenue for the prior year under subdivision3.291.For purposes of this paragraph, if a district does not levy 3.30 the entire amount permitted under subdivision 3, the revenue 3.31 under subdivision 1 must be reduced in proportion to the actual 3.32 amount levied. 3.33(b)(c) Notwithstanding paragraph (a), for fiscal year 3.34 2003, the excess reserve amount shall be computed using the 3.35 balance in a district's early childhood family education reserve 3.36 account on June 30, 2002. For fiscal year 2004, the excess 4.1 reserve amount shall be computed using the adjusted average 4.2 balance in a district's early childhood family education reserve 4.3 account on June 30, 2002, and June 30, 2003. 4.4 [EFFECTIVE DATE.] This section is effective for revenue for 4.5 fiscal year 2003. 4.6 Sec. 6. Minnesota Statutes 2002, section 124D.16, 4.7 subdivision 6, is amended to read: 4.8 Subd. 6. [RESERVE ACCOUNT LIMIT.] (a) Under this section, 4.9 the average balance, during the most recent three-year period, 4.10 in a district's school readiness reserve account on June 30 of 4.11 each year, adjusted for any prior reductions under this 4.12 subdivision, must not be greater than 25 percent of the 4.13 district's school readiness annual revenue for the prior year, 4.14 excluding adjustments under this subdivision. 4.15 (b) If a district's adjusted average school readiness 4.16 reserve over the three-year period is in excess of25 percent of4.17the prior year annual revenuethe limit under paragraph (a), the 4.18 district's current year school readiness state aid must be 4.19 reduced by the lesser of the excess reserve amount or the 4.20 current year aid.The commissioner must reallocate aid reduced4.21under this subdivision to other eligible school readiness4.22programs in proportion to each district's aid for the prior year4.23under subdivision 2.4.24(b)(c) Notwithstanding paragraph (a), for fiscal year 4.25 2003, the excess reserve amount shall be computed using the 4.26 balance in a district's school readiness reserve account on June 4.27 30, 2002. For fiscal year 2004, the excess reserve amount shall 4.28 be computed using the adjusted average balance in a district's 4.29 school readiness reserve account on June 30, 2002, and June 30, 4.30 2003. 4.31 [EFFECTIVE DATE.] This section is effective for revenue for 4.32 fiscal year 2003. 4.33 Sec. 7. Minnesota Statutes 2002, section 124D.20, is 4.34 amended by adding a subdivision to read: 4.35 Subd. 11. [RESERVE ACCOUNT LIMIT.] (a) Under this section, 4.36 the sum of the average balances during the most recent 5.1 three-year period in a district's community education reserve 5.2 account and unreserved/undesignated community service fund 5.3 account on June 30 of each year, adjusted for any prior 5.4 reductions under this subdivision, must not be greater than 25 5.5 percent of the sum of the district's maximum total community 5.6 education revenue under subdivision 1, excluding adjustments 5.7 under this subdivision, plus the district's additional community 5.8 education levy under section 124D.21, plus any fees, grants, or 5.9 other revenue received by the district for community education 5.10 programs for the prior year. For purposes of this paragraph, 5.11 "community education programs" means programs according to 5.12 subdivisions 8, paragraph (a), and 9, and section 124D.19, 5.13 subdivision 12, excluding early childhood family education 5.14 programs under section 124D.13, school readiness programs under 5.15 sections 124D.15 and 124D.17, and adult basic education programs 5.16 under section 124D.52. 5.17 (b) If the sum of the average balances during the most 5.18 recent three-year period in a district's community education 5.19 reserve account and unreserved/undesignated community service 5.20 fund account on June 30 of each year, adjusted for any prior 5.21 reductions under this subdivision, is in excess of the limit 5.22 under paragraph (a), the district's community education state 5.23 aid and levy authority for the current school year must be 5.24 reduced by the lesser of the current year revenue under 5.25 subdivision 1 or the excess reserve amount. The aid reduction 5.26 equals the product of the lesser of the excess reserve amount or 5.27 the current year revenue under subdivision 1 times the ratio of 5.28 the district's aid for the current year under subdivision 7 to 5.29 the district's revenue for the current year under subdivision 5.30 1. The levy reduction equals the excess reserve amount minus 5.31 the aid reduction. For purposes of this paragraph, if a 5.32 district does not levy the entire amount permitted under 5.33 subdivision 5 or 6, the revenue under subdivision 1 must be 5.34 reduced in proportion to the actual amount levied. 5.35 (c) Notwithstanding paragraph (a), for fiscal year 2003, 5.36 the excess reserve amount shall be computed using the balances 6.1 in a district's community education reserve account and 6.2 unreserved/undesignated community service fund account on June 6.3 30, 2002. For fiscal year 2004, the excess reserve amount shall 6.4 be computed using the adjusted average balances in a district's 6.5 community education reserve account and unreserved/undesignated 6.6 community service fund account on June 30, 2002, and June 30, 6.7 2003. 6.8 [EFFECTIVE DATE.] This section is effective for revenue for 6.9 fiscal year 2003. 6.10 Sec. 8. Minnesota Statutes 2002, section 124D.20, is 6.11 amended by adding a subdivision to read: 6.12 Subd. 12. [WAIVER.] (a) If a district anticipates that the 6.13 reserve account may exceed the 25 percent limit established 6.14 under subdivision 11 because of extenuating circumstances, prior 6.15 approval to exceed the limit must be obtained in writing from 6.16 the commissioner. 6.17 (b) Notwithstanding paragraph (a), for fiscal year 2003, a 6.18 district may submit a waiver request within 30 days of the date 6.19 of final enactment. 6.20 Sec. 9. [EFFECTIVE DATE.] 6.21 Sections 1 to 8 are effective the day following final 6.22 enactment, unless otherwise specified. 6.23 ARTICLE 3 6.24 HIGHER EDUCATION 6.25 Section 1. [HIGHER EDUCATION REDUCTIONS.] 6.26 The dollar amounts in the column under "APPROPRIATION 6.27 CHANGE" are added to or, if shown in parentheses, are subtracted 6.28 from the appropriations in Laws 2001, First Special Session 6.29 chapter 1, as amended, by Laws 2002, chapter 220 or 374, as 6.30 amended, or other law to the specified agencies. The 6.31 appropriations are from the general fund or other named fund and 6.32 are available for the fiscal years indicated for each purpose. 6.33 The figure "2003" means that the addition to or subtraction from 6.34 the appropriations listed under the figure is for the fiscal 6.35 year ending June 30, 2003. 6.36 2003 7.1 TRANSFERS FROM OTHER FUNDS $ 30,000,000 7.2 APPROPRIATION REDUCTIONS (30,107,000) 7.3 APPROPRIATION CHANGE 7.4 Sec. 2. [BOARD OF TRUSTEES OF 7.5 THE MINNESOTA STATE COLLEGES 7.6 AND UNIVERSITIES.] 7.7 Total appropriation changes. $ (20,000,000) 7.8 The reduction in this section 7.9 is a onetime reduction and does 7.10 not reduce the budget base for the 7.11 2004-2005 biennium. 7.12 Sec. 3. [BOARD OF REGENTS OF 7.13 THE UNIVERSITY OF MINNESOTA.] 7.14 Total appropriation changes. (20,000,000) 7.15 The reduction in this section 7.16 is a onetime reduction and does 7.17 not reduce the budget base for the 7.18 2004-2005 biennium. 7.19 Sec. 4. [HIGHER EDUCATION 7.20 SERVICES OFFICE.] 7.21 Subdivision 1. Total 7.22 appropriation changes. 9,893,000 7.23 Subd. 2. State grant program. 10,000,000 7.24 This is a onetime appropriation 7.25 and is not added to the budget base 7.26 for the 2004-2005 biennium. 7.27 Subd. 3. This amount is 7.28 subtracted from the general fund 7.29 appropriations for operating 7.30 purposes. (107,000) 7.31 Sec. 5. [SELF LOAN RESERVE 7.32 FUND TRANSFER.] 7.33 Notwithstanding Minnesota 7.34 Statutes, section 136A.171, or any 7.35 other law to the contrary, the 7.36 higher education services office 7.37 shall transfer $30,000,000 of 7.38 uncommitted balances in the SELF 7.39 loan reserve fund to the general 7.40 fund. 7.41 Sec. 6. [EFFECTIVE DATE.] 7.42 Sections 1 to 5 are effective the day following final 7.43 enactment. 7.44 ARTICLE 4 7.45 HEALTH, HUMAN SERVICES AND CORRECTIONS APPROPRIATIONS 7.46 Section 1. [HEALTH, HUMAN SERVICES AND CORRECTIONS 7.47 APPROPRIATIONS.] 7.48 The dollar amounts shown in the columns marked 8.1 "APPROPRIATIONS" are added to or, if shown in parentheses, are 8.2 subtracted from the appropriations in Laws 2001, First Special 8.3 Session chapter 9, Laws 2002, chapters 220 and 374, or other 8.4 law, and are appropriated from the general fund, or any other 8.5 fund named, to the agencies and for the purposes specified in 8.6 this article, to be available for the fiscal years indicated for 8.7 each purpose. The figure "2003" used in this article mean that 8.8 the appropriation or appropriations listed under them are 8.9 available for the fiscal year ending June 30, 2003. 8.10 SUMMARY BY FUND 8.11 2003 8.12 TRANSFERS FROM OTHER FUNDS $ 10,094,000 8.13 APPROPRIATIONS 8.14 General Fund 8.15 Forecast Adjustments 113,841,000 8.16 General Fund 8.17 Nonforecast (63,337,000) 8.18 Health Care 8.19 Access 4,613,000 8.20 Federal TANF 20,741,000 8.21 APPROPRIATIONS 8.22 Available for the Year 8.23 Ending June 30 8.24 2003 8.25 Sec. 2. COMMISSIONER OF 8.26 HUMAN SERVICES 8.27 Subdivision 1. Total 8.28 Appropriation $ 85,600,000 8.29 Summary by Fund 8.30 General 60,246,000 8.31 Health Care 8.32 Access 4,613,000 8.33 Federal TANF 20,741,000 8.34 Transfers from 8.35 Other Funds 6,094,000 8.36 Subd. 2. Agency Management 8.37 General (2,000,000) 8.38 [SPECIAL REVENUE FUND TRANSFERS.] 8.39 Notwithstanding any other law to the 8.40 contrary, the commissioner shall 8.41 transfer the following amounts to the 8.42 general fund from the special revenue 8.43 fund identified: 9.1 (1) $500,000 from the revenue 9.2 maximization account; 9.3 (2) $400,000 from the MinnesotaCare 9.4 outreach account; 9.5 (3) $39,000 from the communications 9.6 systems account; 9.7 (4) $70,000 from the child 9.8 welfare-targeted case management 9.9 account; 9.10 (5) $160,000 from the local 9.11 collaborative time study account; and 9.12 (6) $225,000 from the child support 9.13 recoupment account. 9.14 Subd. 3. Revenue and Pass-through 9.15 Expenditures 9.16 Federal TANF 423,000 9.17 Subd. 4. Children's 9.18 Grants 9.19 General (16,286,000) 9.20 [GRANT REDUCTIONS.] The fiscal year 9.21 2003 appropriations for the following 9.22 grants are reduced by the amounts 9.23 indicated: 9.24 (1) adoption assistance/relative 9.25 custody grants by $584,000; 9.26 (2) criminal justice grants by $5,000; 9.27 (3) fetal alcohol syndrome grants by 9.28 $106,000; and 9.29 (4) foster care and adoptive parent 9.30 recoupment by $55,000. 9.31 The balance of the reduction, 9.32 $3,811,000 in family preservation and 9.33 $11,725,000 in children's mental health 9.34 grants are due to changes in payment 9.35 allocations. 9.36 Subd. 5. Basic Health Care 9.37 Grants 9.38 General 58,897,000 9.39 Health Care 9.40 Access 4,613,000 9.41 The amounts that may be spent from this 9.42 appropriation for each purpose are as 9.43 follows: 9.44 (a) MinnesotaCare Grants 9.45 Health Care 9.46 Access 4,613,000 9.47 (b) MA Basic Health Care 9.48 Grants - Families and Children 10.1 General 20,280,000 10.2 (c) MA Basic Health Care 10.3 Grants - Elderly and Disabled 10.4 General 2,114,000 10.5 [CRITICAL ACCESS PHARMACY PROVIDERS.] 10.6 Of this appropriation, $500,000 is to 10.7 the commissioner to increase pharmacy 10.8 dispensing fees to critical access 10.9 pharmacies as authorized under 10.10 Minnesota Statutes, section 256B.0625, 10.11 subdivision 13, paragraph (d), and 10.12 $25,000 is for related administrative 10.13 costs. Any unspent portion of the 10.14 $500,000 appropriation shall not cancel 10.15 but shall be available for this purpose 10.16 until June 30, 2004. Base level 10.17 funding for this activity for the 10.18 biennium beginning July 1, 2003, shall 10.19 be $2,000,000 each fiscal year to 10.20 increase pharmacy dispensing fees and 10.21 $100,000 each fiscal year for 10.22 administrative costs. 10.23 (d) General Assistance 10.24 Medical Care Grants 10.25 General 36,846,000 10.26 (e) Health Care Grants - 10.27 Other Assistance 10.28 General (200,000) 10.29 [COUNTY PREPAID MEDICAL ASSISTANCE 10.30 PROGRAM ADMINISTRATIVE GRANTS.] The 10.31 fiscal year 2003 appropriation for 10.32 county prepaid medical assistance 10.33 program administrative grants is 10.34 reduced by $200,000. 10.35 (f) Prescription 10.36 Drug Program 10.37 General (143,000) 10.38 Subd. 6. Health Care 10.39 Management 10.40 General 20,000 10.41 Health Care Policy 10.42 Administration 10.43 General 20,000 10.44 Subd. 7. State-Operated 10.45 Services 10.46 General -0- 10.47 [ONETIME REDUCTION TO DEDICATED 10.48 REVENUES.] For fiscal year 2003 only, 10.49 the commissioner shall transfer 10.50 $4,700,000 of state-operated services 10.51 fund balances from the accounts 10.52 indicated to the general fund as 10.53 follows: 11.1 (1) $3,200,000 from traumatic brain 11.2 injury enterprises; 11.3 (2) $1,000,000 from lease income; and 11.4 (3) $500,000 from ICF/MR depreciation. 11.5 Subd. 8. Continuing Care 11.6 Grants 11.7 [USE OF CERTAIN APPROPRIATIONS.] 11.8 Notwithstanding the provisions of Laws 11.9 2002, chapter 374, article 9, section 11.10 2, subdivision 5, up to 100 percent of 11.11 the fiscal year 2004 appropriations for 11.12 family preservation grants, 11.13 developmental disability 11.14 semi-independent living services, 11.15 developmental disability family 11.16 support, adult mental health grants, 11.17 and children's mental health grants 11.18 shall be paid in July 2003 and may be 11.19 used to fund calendar year 2003 11.20 allocations for these programs, with 11.21 the resulting calendar year funding 11.22 pattern continuing into the future. 11.23 Appropriation reductions associated 11.24 with this shift are one time only. 11.25 General 26,297,000 11.26 The amounts that may be spent from this 11.27 appropriation for each purpose are as 11.28 follows: 11.29 (a) Aging and Adult Services 11.30 General (701,000) 11.31 [APPROPRIATION REDUCTION.] The fiscal 11.32 year 2003 appropriations for the 11.33 following grants are reduced by the 11.34 amount indicated: 11.35 (1) community service grants by 11.36 $440,000; 11.37 (2) home share grants by $156,000; 11.38 (3) community service development 11.39 grants by $39,000; 11.40 (4) senior's agenda for independent 11.41 living grants by $28,000; and 11.42 (5) information and assistance grants 11.43 by $38,000. 11.44 (b) Mental Health Grants 11.45 General (15,952,000) 11.46 (c) Community Support Grants 11.47 General (5,176,000) 11.48 [APPROPRIATION REDUCTION.] The fiscal 11.49 year 2003 appropriation for public 11.50 guardianship grants is reduced by 11.51 $250,000. 12.1 (d) Medical Assistance 12.2 Long-Term Care Waivers and 12.3 Home Care Grants 12.4 General 39,798,000 12.5 [TARGETED CASE MANAGEMENT FOR HOME CARE 12.6 RECIPIENTS.] Implementation of the 12.7 targeted case management benefit for 12.8 home care recipients, pursuant to Laws 12.9 2001, First Special Session chapter 9, 12.10 article 3, sections 20, 21, 23 to 25, 12.11 27, and 28 (Minnesota Statutes, section 12.12 256B.0621, subdivisions 2, 3, 5 to 7, 12.13 9, and 10) will be delayed until July 12.14 1, 2003. 12.15 [COMMON SERVICE MENU.] Implementation 12.16 of the common service menu option 12.17 within the home- and community-based 12.18 waivers, pursuant to Laws 2001, First 12.19 Special Session chapter 9, article 3, 12.20 section 63 (Minnesota Statutes, section 12.21 256B.49, subdivision 16) will be 12.22 delayed until July 1, 2003. 12.23 (e) Medical Assistance 12.24 Long-Term Care Facilities 12.25 Grants 12.26 General 10,078,000 12.27 (f) Alternative Care 12.28 Grants 12.29 General (300,000) 12.30 (g) Group Residential 12.31 Housing Grants 12.32 General (1,450,000) 12.33 Subd. 9. Economic 12.34 Support Grants 12.35 General (6,682,000) 12.36 Federal TANF 20,318,000 12.37 The amounts that may be spent from the 12.38 appropriation for each purpose are as 12.39 follows: 12.40 (a) Assistance to Families 12.41 Grants 12.42 General (8,923,000) 12.43 Federal TANF 20,318,000 12.44 (b) Economic Support 12.45 Grants - Other Assistance 12.46 General (64,000) 12.47 [APPROPRIATION REDUCTION.] The fiscal 12.48 year 2003 appropriation for fraud 12.49 prevention grants is reduced by $64,000. 12.50 (c) General Assistance 12.51 Grants 13.1 General 3,193,000 13.2 (d) Minnesota Supplemental 13.3 Aid Grants 13.4 General (888,000) 13.5 Sec. 3. COMMISSIONER OF HEALTH 13.6 Subdivision 1. Total Appropriation (3,578,000) 13.7 Summary by Fund 13.8 General (3,578,000) 13.9 Transfers from 13.10 Other Funds 4,000,000 13.11 Subd. 2. Health Improvement 13.12 General (2,183,000) 13.13 [APPROPRIATION REDUCTION.] The fiscal 13.14 year 2003 appropriations for the 13.15 following grants are reduced by the 13.16 amounts indicated: 13.17 (1) Indian health grants by $8,000; 13.18 (2) migrant health grants by $10,000; 13.19 (3) family planning grants by $55,000; 13.20 (4) home visiting grants by $4,000; 13.21 (5) infant mortality grants by 13.22 $100,000; and 13.23 (6) health disparities grants by 13.24 $268,000. 13.25 [CARRYFORWARD.] $57,000 in carryforward 13.26 for the occupational respiratory 13.27 disease information system is canceled 13.28 to the general fund. 13.29 [TOBACCO USE PREVENTION.] The 13.30 appropriation in Minnesota Statutes, 13.31 section 144.395, subdivision 2, for 13.32 tobacco use prevention activities is 13.33 reduced by $4,000,000 and the 13.34 commissioner of finance shall transfer 13.35 that amount from the tobacco use 13.36 prevention and local public health 13.37 endowment fund to the general fund. 13.38 Subd. 3. Health Quality Access 13.39 General (720,000) 13.40 [APPROPRIATION REDUCTION.] The 13.41 following fiscal year 2003 13.42 appropriations are reduced as indicated: 13.43 (1) local quality and demonstration 13.44 grants by $500,000; 13.45 (2) transitional planning grants by 13.46 $135,000; and 14.1 (3) case mix review study grants by 14.2 $85,000. 14.3 Subd. 4. Management Support 14.4 Services 14.5 General (675,000) 14.6 Sec. 4. VETERANS HOMES 14.7 BOARD 14.8 Total Appropriation (124,000) 14.9 Summary by Fund 14.10 General (124,000) 14.11 [APPROPRIATION REDUCTION.] The fiscal 14.12 year 2003 general fund appropriation to 14.13 the veterans homes board is reduced by 14.14 $124,000. 14.15 Sec. 5. DEPARTMENT 14.16 OF CORRECTIONS 14.17 Subdivision 1. Total Appropriation (6,040,000) 14.18 Subd. 2. Institutions 14.19 General (900,000) 14.20 Subd. 3. Community Services 14.21 General (4,640,000) 14.22 [CARRYFORWARD.] $50,000 in fiscal year 14.23 2002 carryforward to fiscal year 2003 14.24 in sex-offender grants is canceled to 14.25 the general fund. 14.26 [APPROPRIATION REDUCTION.] The fiscal 14.27 year 2003 appropriations for the 14.28 following grants are reduced by the 14.29 amounts indicated: 14.30 (1) intensive community supervision 14.31 grants by $61,000; 14.32 (2) adult women grants by $21,000; 14.33 (3) juvenile female grants by $3,000; 14.34 (4) adult felony caseload grants by 14.35 $12,000; 14.36 (5) juvenile restitution grants by 14.37 $30,000; 14.38 (6) juvenile continuum of care grants 14.39 by $62,000; 14.40 (7) repeat DWI grants by $9,000; 14.41 (8) sex offender in community grants by 14.42 $114,000; 14.43 (9) restorative justice grants by 14.44 $21,000; and 14.45 (10) adult felony supervision grants by 14.46 $60,000. 15.1 [GRANTS TO COUNTIES.] $425,000 is 15.2 appropriated from the general fund for 15.3 the county grants described in article 15.4 6, section 8. 15.5 [UNALLOCATED COMMUNITY CORRECTIONS ACT 15.6 GRANT MONEY CANCELED; APPROPRIATION FOR 15.7 GRANTS TO COUNTIES.] Notwithstanding 15.8 any other law to the contrary, any 15.9 money appropriated to the commissioner 15.10 of corrections for Community 15.11 Corrections Act grants that is not 15.12 encumbered or obligated as of January 15.13 13, 2003, is canceled to the general 15.14 fund and is appropriated from that fund 15.15 for the county grants described in 15.16 article 6, section 8. 15.17 Sec. 6. [SUNSET OF UNCODIFIED LANGUAGE.] 15.18 All uncodified language contained in this article expires 15.19 June 30, 2003, unless a different expiration date is explicit. 15.20 Sec. 7. [EFFECTIVE DATE.] 15.21 Except as otherwise provided in this article, this article 15.22 is effective the day following final enactment. 15.23 ARTICLE 5 15.24 HUMAN SERVICES 15.25 Section 1. Minnesota Statutes 2002, section 145A.13, 15.26 subdivision 3, is amended to read: 15.27 Subd. 3. [PAYMENT.] When a community health board meets 15.28 the requirements prescribed in section 145A.09, subdivision 2, 15.29 the state commissioner of health shall pay the amount of subsidy 15.30 to the community health board or its designee according to 15.31 applicable rules from the money appropriated for the purpose and 15.32 according to the following: 15.33 (a) The commissioner of health shall make payments for 15.34 community health services to each community health board or its 15.35 designee in 12 installments a year;. 15.36 (b) The commissioner shall ensure that the pertinent 15.37 payment of the allotment for each month is made on the first 15.38 working day after the end of each month of the calendar year, 15.39 except for thelast month of the calendar year;months of May 15.40 and December. 15.41(c)The commissioner shall ensure that each community 15.42 health board or its designee receives its payment of the 15.43 allotment forthatthe month of May on the first working day of 16.1 July and for the month of December no later than the last 16.2 working day of that month.The payment described in this16.3subdivision for services rendered during June, 1985, shall be16.4made on the first working day of July, 1985; and16.5(d)(c) The commissioner shall make payment to a human 16.6 services board organized and operating under section 145A.09, 16.7 subdivision 5, or to its designee, as prescribed in section 16.8 402.02, subdivision 4. 16.9 [EFFECTIVE DATE.] This section is effective the day 16.10 following final enactment. 16.11 Sec. 2. Minnesota Statutes 2002, section 256.9657, 16.12 subdivision 1, is amended to read: 16.13 Subdivision 1. [NURSING HOME LICENSE SURCHARGE.] (a) 16.14 Effective July 1, 1993, eachnon-state-operated16.15 nonstate-operated nursing home licensed under chapter 144A shall 16.16 pay to the commissioner an annual surcharge according to the 16.17 schedule in subdivision 4. The surcharge shall be calculated as 16.18 $620 per licensed bed. If the number of licensed beds is 16.19 reduced, the surcharge shall be based on the number of remaining 16.20 licensed beds the second month following the receipt of timely 16.21 notice by the commissioner of human services that beds have been 16.22 delicensed. The nursing home must notify the commissioner of 16.23 health in writing when beds are delicensed. The commissioner of 16.24 health must notify the commissioner of human services within ten 16.25 working days after receiving written notification. If the 16.26 notification is received by the commissioner of human services 16.27 by the 15th of the month, the invoice for the second following 16.28 month must be reduced to recognize the delicensing of beds. 16.29 Beds on layaway status continue to be subject to the surcharge. 16.30 The commissioner of human services must acknowledge a medical 16.31 care surcharge appeal within 30 days of receipt of the written 16.32 appeal from the provider. 16.33 (b) Effective July 1, 1994, the surcharge in paragraph (a) 16.34 shall be increased to $625. 16.35 (c) Effective August 15, 2002, the surcharge under 16.36 paragraph (b) shall be increased to $990. 17.1 (d) Effective April 15, 2003, the surcharge under paragraph 17.2 (c) shall be increased to $1,632. 17.3 (e) Between April 1, 2002, and August 15, 2003, a facility 17.4 governed by this subdivision may elect to assume full 17.5 participation in the medical assistance program by agreeing to 17.6 comply with all of the requirements of the medical assistance 17.7 program, including the rate equalization law in section 256B.48, 17.8 subdivision 1, paragraph (a), and all other requirements 17.9 established in law or rule, and to begin intake of new medical 17.10 assistance recipients. Rates will be determined under Minnesota 17.11 Rules, parts 9549.0010 to 9549.0080. Notwithstanding section 17.12 256B.431, subdivision 27, paragraph (i), rate calculations will 17.13 be subject to limits as prescribed in rule and law. Other than 17.14 the adjustments in sections 256B.431, subdivisions 30 and 32; 17.15 256B.437, subdivision 3, paragraph (b), Minnesota Rules, part 17.16 9549.0057, and any other applicable legislation enacted prior to 17.17 the finalization of rates, facilities assuming full 17.18 participation in medical assistance under this paragraph are not 17.19 eligible for any rate adjustments until the July 1 following 17.20 their settle-up period. 17.21 [EFFECTIVE DATE.] This section is effective March 1, 2003. 17.22 Sec. 3. Minnesota Statutes 2002, section 256.969, 17.23 subdivision 3a, is amended to read: 17.24 Subd. 3a. [PAYMENTS.] (a) Acute care hospital billings 17.25 under the medical assistance program must not be submitted until 17.26 the recipient is discharged. However, the commissioner shall 17.27 establish monthly interim payments for inpatient hospitals that 17.28 have individual patient lengths of stay over 30 days regardless 17.29 of diagnostic category. Except as provided in section 256.9693, 17.30 medical assistance reimbursement for treatment of mental illness 17.31 shall be reimbursed based on diagnostic classifications. 17.32 Individual hospital payments established under this section and 17.33 sections 256.9685, 256.9686, and 256.9695, in addition to third 17.34 party and recipient liability, for discharges occurring during 17.35 the rate year shall not exceed, in aggregate, the charges for 17.36 the medical assistance covered inpatient services paid for the 18.1 same period of time to the hospital. This payment limitation 18.2 shall be calculated separately for medical assistance and 18.3 general assistance medical care services. The limitation on 18.4 general assistance medical care shall be effective for 18.5 admissions occurring on or after July 1, 1991. Services that 18.6 have rates established under subdivision 11 or 12, must be 18.7 limited separately from other services. After consulting with 18.8 the affected hospitals, the commissioner may consider related 18.9 hospitals one entity and may merge the payment rates while 18.10 maintaining separate provider numbers. The operating and 18.11 property base rates per admission or per day shall be derived 18.12 from the best Medicare and claims data available when rates are 18.13 established. The commissioner shall determine the best Medicare 18.14 and claims data, taking into consideration variables of recency 18.15 of the data, audit disposition, settlement status, and the 18.16 ability to set rates in a timely manner. The commissioner shall 18.17 notify hospitals of payment rates by December 1 of the year 18.18 preceding the rate year. The rate setting data must reflect the 18.19 admissions data used to establish relative values. Base year 18.20 changes from 1981 to the base year established for the rate year 18.21 beginning January 1, 1991, and for subsequent rate years, shall 18.22 not be limited to the limits ending June 30, 1987, on the 18.23 maximum rate of increase under subdivision 1. The commissioner 18.24 may adjust base year cost, relative value, and case mix index 18.25 data to exclude the costs of services that have been 18.26 discontinued by the October 1 of the year preceding the rate 18.27 year or that are paid separately from inpatient services. 18.28 Inpatient stays that encompass portions of two or more rate 18.29 years shall have payments established based on payment rates in 18.30 effect at the time of admission unless the date of admission 18.31 preceded the rate year in effect by six months or more. In this 18.32 case, operating payment rates for services rendered during the 18.33 rate year in effect and established based on the date of 18.34 admission shall be adjusted to the rate year in effect by the 18.35 hospital cost index. 18.36 (b) For fee-for-service admissions occurring on or after 19.1 July 1, 2002, the total payment, before third-party liability 19.2 and spenddown, made to hospitals for inpatient services is 19.3 reduced by .5 percent from the current statutory rates. 19.4 (c) The last fee-for-service payments that would otherwise 19.5 be made in June shall be paid on the first scheduled payment 19.6 date in the following fiscal year. The provisions of section 19.7 16A.124 shall not apply to these delayed payments. 19.8 [EFFECTIVE DATE.] This section is effective March 1, 2003. 19.9 Sec. 4. Minnesota Statutes 2002, section 256B.0625, 19.10 subdivision 13, is amended to read: 19.11 Subd. 13. [DRUGS.] (a) Medical assistance covers drugs, 19.12 except for fertility drugs when specifically used to enhance 19.13 fertility, if prescribed by a licensed practitioner and 19.14 dispensed by a licensed pharmacist, by a physician enrolled in 19.15 the medical assistance program as a dispensing physician, or by 19.16 a physician or a nurse practitioner employed by or under 19.17 contract with a community health board as defined in section 19.18 145A.02, subdivision 5, for the purposes of communicable disease 19.19 control. The commissioner, after receiving recommendations from 19.20 professional medical associations and professional pharmacist 19.21 associations, shall designate a formulary committee to advise 19.22 the commissioner on the names of drugs for which payment is 19.23 made, recommend a system for reimbursing providers on a set fee 19.24 or charge basis rather than the present system, and develop 19.25 methods encouraging use of generic drugs when they are less 19.26 expensive and equally effective as trademark drugs. The 19.27 formulary committee shall consist of nine members, four of whom 19.28 shall be physicians who are not employed by the department of 19.29 human services, and a majority of whose practice is for persons 19.30 paying privately or through health insurance, three of whom 19.31 shall be pharmacists who are not employed by the department of 19.32 human services, and a majority of whose practice is for persons 19.33 paying privately or through health insurance, a consumer 19.34 representative, and a nursing home representative. Committee 19.35 members shall serve three-year terms and shall serve without 19.36 compensation. Members may be reappointed once. 20.1 (b) The commissioner shall establish a drug formulary. Its 20.2 establishment and publication shall not be subject to the 20.3 requirements of the Administrative Procedure Act, but the 20.4 formulary committee shall review and comment on the formulary 20.5 contents. 20.6 The formulary shall not include: 20.7 (i) drugs or products for which there is no federal 20.8 funding; 20.9 (ii) over-the-counter drugs, except for antacids, 20.10 acetaminophen, family planning products, aspirin, insulin, 20.11 products for the treatment of lice, vitamins for adults with 20.12 documented vitamin deficiencies, vitamins for children under the 20.13 age of seven and pregnant or nursing women, and any other 20.14 over-the-counter drug identified by the commissioner, in 20.15 consultation with the drug formulary committee, as necessary, 20.16 appropriate, and cost-effective for the treatment of certain 20.17 specified chronic diseases, conditions or disorders, and this 20.18 determination shall not be subject to the requirements of 20.19 chapter 14; 20.20 (iii) anorectics, except that medically necessary 20.21 anorectics shall be covered for a recipient previously diagnosed 20.22 as having pickwickian syndrome and currently diagnosed as having 20.23 diabetes and being morbidly obese; 20.24 (iv) drugs for which medical value has not been 20.25 established; and 20.26 (v) drugs from manufacturers who have not signed a rebate 20.27 agreement with the Department of Health and Human Services 20.28 pursuant to section 1927 of title XIX of the Social Security Act. 20.29 The commissioner shall publish conditions for prohibiting 20.30 payment for specific drugs after considering the formulary 20.31 committee's recommendations. An honorarium of $100 per meeting 20.32 and reimbursement for mileage shall be paid to each committee 20.33 member in attendance. 20.34 (c) The basis for determining the amount of payment shall 20.35 be the lower of the actual acquisition costs of the drugs plus a 20.36 fixed dispensing fee; the maximum allowable cost set by the 21.1 federal government or by the commissioner plus the fixed 21.2 dispensing fee; or the usual and customary price charged to the 21.3 public. The amount of payment basis must be reduced to reflect 21.4 all discount amounts applied to the charge by any 21.5 provider/insurer agreement or contract for submitted charges to 21.6 medical assistance programs. The net submitted charge may not 21.7 be greater than the patient liability for the service. The 21.8 pharmacy dispensing fee shall be $3.65, except that the 21.9 dispensing fee for intravenous solutions which must be 21.10 compounded by the pharmacist shall be $8 per bag, $14 per bag 21.11 for cancer chemotherapy products, and $30 per bag for total 21.12 parenteral nutritional products dispensed in one liter 21.13 quantities, or $44 per bag for total parenteral nutritional 21.14 products dispensed in quantities greater than one liter. Actual 21.15 acquisition cost includes quantity and other special discounts 21.16 except time and cash discounts. The actual acquisition cost of 21.17 a drug shall be estimated by the commissioner, at average 21.18 wholesale price minusnine14 percent, except that where a drug 21.19 has had its wholesale price reduced as a result of the actions 21.20 of the National Association of Medicaid Fraud Control Units, the 21.21 estimated actual acquisition cost shall be the reduced average 21.22 wholesale price, without thenine14 percent deduction. The 21.23 maximum allowable cost of a multisource drug may be set by the 21.24 commissioner and it shall be comparable to, but no higher than, 21.25 the maximum amount paid by other third-party payors in this 21.26 state who have maximum allowable cost programs.The21.27commissioner shall set maximum allowable costs for multisource21.28drugs that are not on the federal upper limit list as described21.29in United States Code, title 42, chapter 7, section 1396r-8(e),21.30the Social Security Act, and Code of Federal Regulations, title21.3142, part 447, section 447.332. Establishment of the amount of21.32payment for drugs shall not be subject to the requirements of21.33the Administrative Procedure Act.An additional dispensing fee 21.34 of $.30 may be added to the dispensing fee paid to pharmacists 21.35 for legend drug prescriptions dispensed to residents of 21.36 long-term care facilities when a unit dose blister card system, 22.1 approved by the department, is used. Under this type of 22.2 dispensing system, the pharmacist must dispense a 30-day supply 22.3 of drug. The National Drug Code (NDC) from the drug container 22.4 used to fill the blister card must be identified on the claim to 22.5 the department. The unit dose blister card containing the drug 22.6 must meet the packaging standards set forth in Minnesota Rules, 22.7 part 6800.2700, that govern the return of unused drugs to the 22.8 pharmacy for reuse. The pharmacy provider will be required to 22.9 credit the department for the actual acquisition cost of all 22.10 unused drugs that are eligible for reuse. Over-the-counter 22.11 medications must be dispensed in the manufacturer's unopened 22.12 package. The commissioner may permit the drug clozapine to be 22.13 dispensed in a quantity that is less than a 30-day supply. 22.14 Whenever a generically equivalent product is available, payment 22.15 shall be on the basis of the actual acquisition cost of the 22.16 generic drug, unless the prescriber specifically indicates 22.17 "dispense as written - brand necessary" on the prescription as 22.18 required by section 151.21, subdivision 2. 22.19 (d)For purposes of this subdivision, "multisource drugs"22.20means covered outpatient drugs, excluding innovator multisource22.21drugs for which there are two or more drug products, which:22.22(1) are related as therapeutically equivalent under the22.23Food and Drug Administration's most recent publication of22.24"Approved Drug Products with Therapeutic Equivalence22.25Evaluations";22.26(2) are pharmaceutically equivalent and bioequivalent as22.27determined by the Food and Drug Administration; and22.28(3) are sold or marketed in Minnesota.22.29"Innovator multisource drug" means a multisource drug that was22.30originally marketed under an original new drug application22.31approved by the Food and Drug Administration.Effective for 22.32 prescriptions dispensed on or after March 1, 2003, the 22.33 commissioner may, within the limits of available appropriation, 22.34 increase the dispensing fee described in paragraph (c) to 22.35 pharmacies deemed by the commissioner to be a critical-access 22.36 pharmacy. In determining whether a pharmacy shall be deemed a 23.1 critical-access pharmacy, the commissioner shall consider the 23.2 following criteria: 23.3 (1) for pharmacies located outside the seven-county 23.4 metropolitan area: 23.5 (i) the total annual sum of the pharmacy's fee-for-service 23.6 medical assistance payments for the previous year in all 23.7 locations, excluding payments for prescriptions dispensed to 23.8 residents residing in nursing homes. The pharmacy's total 23.9 annual sum must be no greater than $300,000; and 23.10 (ii) the proximity of the pharmacy to other medical 23.11 assistance pharmacy providers in a specified geographic area; 23.12 and 23.13 (2) for pharmacies located within the seven-county 23.14 metropolitan area: 23.15 (i) the percentage of the pharmacy's annual fee-for-service 23.16 medical assistance payments in that location, excluding payments 23.17 for prescriptions dispensed to residents in nursing homes 23.18 compared to the pharmacy's total annual prescription drug 23.19 sales. The pharmacy's percentage must be greater than the 23.20 average percentage for pharmacies enrolled as a medical 23.21 assistance provider; and 23.22 (ii) the proximity of the pharmacy to other medical 23.23 assistance pharmacy providers in a specified geographic area. 23.24 The commissioner may establish regions within the state for 23.25 purposes of applying this criteria and may assign different 23.26 weights to the criteria depending on the region. The 23.27 commissioner is exempt from chapter 14 for the purpose of 23.28 determining whether a pharmacy shall be deemed a critical access 23.29 pharmacy. 23.30 (e) The formulary committee shall review and recommend 23.31 drugs which require prior authorization. The formulary 23.32 committee may recommend drugs for prior authorization directly 23.33 to the commissioner, as long as opportunity for public input is 23.34 provided. Prior authorization may be requested by the 23.35 commissioner based on medical and clinical criteria and on cost 23.36 before certain drugs are eligible for payment. Before a drug 24.1 may be considered for prior authorization at the request of the 24.2 commissioner: 24.3 (1) the drug formulary committee must develop criteria to 24.4 be used for identifying drugs; the development of these criteria 24.5 is not subject to the requirements of chapter 14, but the 24.6 formulary committee shall provide opportunity for public input 24.7 in developing criteria; 24.8 (2) the drug formulary committee must hold a public forum 24.9 and receive public comment for an additional 15 days; 24.10 (3) the drug formulary committee must consider data from 24.11 the state Medicaid program if such data is available; and 24.12 (4) the commissioner must provide information to the 24.13 formulary committee on the impact that placing the drug on prior 24.14 authorization will have on the quality of patient care and on 24.15 program costs, and information regarding whether the drug is 24.16 subject to clinical abuse or misuse. 24.17 Prior authorization may be required by the commissioner 24.18 before certain formulary drugs are eligible for payment. If 24.19 prior authorization of a drug is required by the commissioner, 24.20 the commissioner must provide a 30-day notice period before 24.21 implementing the prior authorization. If a prior authorization 24.22 request is denied by the department, the recipient may appeal 24.23 the denial in accordance with section 256.045. If an appeal is 24.24 filed, the drug must be provided without prior authorization 24.25 until a decision is made on the appeal. 24.26 (f) The basis for determining the amount of payment for 24.27 drugs administered in an outpatient setting shall be the lower 24.28 of the usual and customary cost submitted by the provider; the 24.29 average wholesale price minus five percent; or the maximum 24.30 allowable cost set by the federal government under United States 24.31 Code, title 42, chapter 7, section 1396r-8(e), and Code of 24.32 Federal Regulations, title 42, section 447.332, or by the 24.33 commissioner under paragraph (c). 24.34 (g) Prior authorization shall not be required or utilized 24.35 for any antipsychotic drug prescribed for the treatment of 24.36 mental illness where there is no generically equivalent drug 25.1 available unless the commissioner determines that prior 25.2 authorization is necessary for patient safety. This paragraph 25.3 applies to any supplemental drug rebate program established or 25.4 administered by the commissioner. 25.5 (h) Prior authorization shall not be required or utilized 25.6 for any antihemophilic factor drug prescribed for the treatment 25.7 of hemophilia and blood disorders where there is no generically 25.8 equivalent drug available unless the commissioner determines 25.9 that prior authorization is necessary for patient safety. This 25.10 paragraph applies to any supplemental drug rebate program 25.11 established or administered by the commissioner. This paragraph 25.12 expires July 1, 2003. 25.13 [EFFECTIVE DATE.] This section is effective March 1, 2003. 25.14 Sec. 5. Minnesota Statutes 2002, section 256B.0625, 25.15 subdivision 24, is amended to read: 25.16 Subd. 24. [OTHER MEDICAL OR REMEDIAL CARE.] (a) Medical 25.17 assistance covers any other medical or remedial care licensed 25.18 and recognized under state law unless otherwise prohibited by 25.19 law, except: 25.20 (1) chiropractic services; 25.21 (2) podiatric services; and 25.22 (3) licensed chemical dependency treatment programs or 25.23 primary treatment or extended care treatment units in hospitals 25.24 that are covered under chapter 254B. The commissioner shall 25.25 include chemical dependency services in the state medical 25.26 assistance plan for federal reporting purposes, but payment must 25.27 be made under chapter 254B. 25.28 (b) The commissioner shall publish in the State Register a 25.29 list of elective surgeries that require a second medical opinion 25.30 before medical assistance reimbursement, and the criteria and 25.31 standards for deciding whether an elective surgery should 25.32 require a second medical opinion. The list and criteria and 25.33 standards are not subject to the requirements of sections 14.01 25.34 to 14.69. 25.35 [EFFECTIVE DATE.] This section is effective March 1, 2003, 25.36 for services provided on or after that date. 26.1 Sec. 6. Minnesota Statutes 2002, section 256B.19, 26.2 subdivision 1d, is amended to read: 26.3 Subd. 1d. [PORTION OF NONFEDERAL SHARE TO BE PAID BY 26.4 CERTAIN COUNTIES.] (a) In addition to the percentage 26.5 contribution paid by a county under subdivision 1, the 26.6 governmental units designated in this subdivision shall be 26.7 responsible for an additional portion of the nonfederal share of 26.8 medical assistance cost. For purposes of this subdivision, 26.9 "designated governmental unit" means the counties of Becker, 26.10 Beltrami, Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, 26.11 Pennington, Pipestone, Ramsey, St. Louis, Steele, Todd, 26.12 Traverse, and Wadena. 26.13 (b) Beginning in 1994, each of the governmental units 26.14 designated in this subdivision shall transfer before noon on May 26.15 31 to the state Medicaid agency an amount equal to the number of 26.16 licensed beds in any nursing home owned and operated by the 26.17 county on that date, with the county named as licensee, 26.18 multiplied by $5,723. If two or more counties own and operate a 26.19 nursing home, the payment shall be prorated. These sums shall 26.20 be part of the designated governmental unit's portion of the 26.21 nonfederal share of medical assistance costs. 26.22 (c) Beginning in 2002, in addition to any transfer under 26.23 paragraph (b), each of the governmental units designated in this 26.24 subdivision shall transfer before noon on May 31 to the state 26.25 Medicaid agency an amount equal to the number of licensed beds 26.26 in any nursing home owned and operated by the county on that 26.27 date, with the county named as licensee, multiplied by $10,784. 26.28 The provisions of paragraph (b) apply to transfers under this 26.29 paragraph. 26.30 (d) Beginning in 2003, in addition to any transfers under 26.31 paragraphs (b) and (c), each of the governmental units 26.32 designated in this subdivision shall transfer before noon on May 26.33 31 to the state Medicaid agency an amount equal to the number of 26.34 licensed beds in any nursing home owned and operated by the 26.35 county on that date, with the county named as licensee, 26.36 multiplied by $2,230. The provisions of paragraph (b) apply to 27.1 transfers under this paragraph. 27.2 (e) The commissioner may reduce the intergovernmental 27.3 transfers underparagraphparagraphs (c) and (d) based on the 27.4 commissioner's determination of the payment rate in section 27.5 256B.431, subdivision 23, paragraphs (c)and, (d), and (e). Any 27.6 adjustments must be made on a per-bed basis and must result in 27.7 an amount equivalent to the total amount resulting from the rate 27.8 adjustment in section 256B.431, subdivision 23, paragraphs 27.9 (c)and, (d), and (e). 27.10 [EFFECTIVE DATE.] This section is effective March 1, 2003. 27.11 Sec. 7. Minnesota Statutes 2002, section 256B.195, 27.12 subdivision 3, is amended to read: 27.13 Subd. 3. [PAYMENTS TO CERTAIN SAFETY NET PROVIDERS.] (a) 27.14 Effective July 15, 2001, the commissioner shall make the 27.15 following payments to the hospitals indicated after noon on the 27.16 15th of each month: 27.17 (1) to Hennepin County Medical Center, any federal matching 27.18 funds available to match the payments received by the medical 27.19 center under subdivision 2, to increase payments for medical 27.20 assistance admissions and to recognize higher medical assistance 27.21 costs in institutions that provide high levels of charity care; 27.22 and 27.23 (2) to Regions hospital, any federal matching funds 27.24 available to match the payments received by the hospital under 27.25 subdivision 2, to increase payments for medical assistance 27.26 admissions and to recognize higher medical assistance costs in 27.27 institutions that provide high levels of charity care. 27.28 (b) Effective July 15, 2001, the following percentages of 27.29 the transfers under subdivision 2 shall be retained by the 27.30 commissioner for deposit each month into the general fund: 27.31 (1) 18 percent, plus any federal matching funds, shall be 27.32 allocated for the following purposes: 27.33 (i) during the fiscal year beginning July 1, 2001, of the 27.34 amount available under this clause, 39.7 percent shall be 27.35 allocated to make increased hospital payments under section 27.36 256.969, subdivision 26; 34.2 percent shall be allocated to fund 28.1 the amounts due from small rural hospitals, as defined in 28.2 section 144.148, for overpayments under section 256.969, 28.3 subdivision 5a, resulting from a determination that medical 28.4 assistance and general assistance payments exceeded the charge 28.5 limit during the period from 1994 to 1997; and 26.1 percent 28.6 shall be allocated to the commissioner of health for rural 28.7 hospital capital improvement grants under section 144.148; and 28.8 (ii) during fiscal years beginning on or after July 1, 28.9 2002, of the amount available under this clause, 55 percent 28.10 shall be allocated to make increased hospital payments under 28.11 section 256.969, subdivision 26, and 45 percent shall be 28.12 allocated to the commissioner of health for rural hospital 28.13 capital improvement grants under section 144.148; and 28.14 (2) 11 percent shall be allocated to the commissioner of 28.15 health to fund community clinic grants under section 145.9268. 28.16 Effective July 1, 2003, the allocations under this clause shall 28.17 remain at the dollar amounts paid during March 2003 for the 28.18 purposes indicated. Any additional amounts available under this 28.19 clause shall be allocated to increase medical assistance 28.20 payments to the children's hospitals by a percentage based on 28.21 each facility's proportion of medical assistance inpatient 28.22 revenues, subject to hospital-specific charge limits and limits 28.23 on disproportionate share hospital payments. 28.24 (c) This subdivision shall apply to fee-for-service 28.25 payments only and shall not increase capitation payments or 28.26 payments made based on average rates. 28.27 (d) Medical assistance rate or payment changes, including 28.28 those required to obtain federal financial participation under 28.29 section 62J.692, subdivision 8, shall precede the determination 28.30 of intergovernmental transfer amounts determined in this 28.31 subdivision. Participation in the intergovernmental transfer 28.32 program shall not result in the offset of any health care 28.33 provider's receipt of medical assistance payment increases other 28.34 than limits resulting from hospital-specific charge limits and 28.35 limits on disproportionate share hospital payments. 28.36 [EFFECTIVE DATE.] This section is effective March 1, 2003. 29.1 Sec. 8. Minnesota Statutes 2002, section 256B.32, 29.2 subdivision 1, is amended to read: 29.3 Subdivision 1. [FACILITY FEE PAYMENT.] (a) The 29.4 commissioner shall establish a facility fee payment mechanism 29.5 that will pay a facility fee to all enrolled outpatient 29.6 hospitals for each emergency room or outpatient clinic visit 29.7 provided on or after July 1, 1989. This payment mechanism may 29.8 not result in an overall increase in outpatient payment rates. 29.9 This section does not apply to federally mandated maximum 29.10 payment limits, department approved program packages, or 29.11 services billed using a nonoutpatient hospital provider number. 29.12 (b) For fee-for-service services provided on or after July 29.13 1, 2002, the total payment, before third-party liability and 29.14 spenddown, made to hospitals for outpatient hospital facility 29.15 services is reduced by .5 percent from the current statutory 29.16 rates. 29.17 (c) The last fee-for-service payments that would otherwise 29.18 be made in June shall be paid on the first scheduled payment 29.19 date in the following fiscal year. The provisions of section 29.20 16A.124 shall not apply to these delayed payments. 29.21 [EFFECTIVE DATE.] This section is effective March 1, 2003. 29.22 Sec. 9. Minnesota Statutes 2002, section 256B.431, 29.23 subdivision 23, is amended to read: 29.24 Subd. 23. [COUNTY NURSING HOME PAYMENT ADJUSTMENTS.] (a) 29.25 Beginning in 1994, the commissioner shall pay a nursing home 29.26 payment adjustment on May 31 after noon to a county in which is 29.27 located a nursing home that, on that date, was county-owned and 29.28 operated, with the county named as licensee by the commissioner 29.29 of health, and had over 40 beds and medical assistance occupancy 29.30 in excess of 50 percent during the reporting year ending 29.31 September 30, 1991. The adjustment shall be an amount equal to 29.32 $16 per calendar day multiplied by the number of beds licensed 29.33 in the facilityas of September 30, 1991on that date. 29.34 (b) Payments under paragraph (a) are excluded from medical 29.35 assistance per diem rate calculations. These payments are 29.36 required notwithstanding any rule prohibiting medical assistance 30.1 payments from exceeding payments from private pay residents. A 30.2 facility receiving a payment under paragraph (a) may not 30.3 increase charges to private pay residents by an amount 30.4 equivalent to the per diem amount payments under paragraph (a) 30.5 would equal if converted to a per diem. 30.6 (c) Beginning in 2002, in addition to any payment under 30.7 paragraph (a), the commissioner shall pay to a nursing facility 30.8 described in paragraph (a) an adjustment in an amount equal to 30.9 $29.55 per calendar day multiplied by the number of beds 30.10 licensed in the facility on that date. The provisions of 30.11 paragraphs (a) and (b) apply to payments under this paragraph. 30.12 (d) Beginning in 2003, in addition to any payment under 30.13 paragraphs (a) and (c), the commissioner shall pay to a nursing 30.14 facility described in paragraph (a) an adjustment in an amount 30.15 equal to $6.11 per calendar day multiplied by the number of beds 30.16 licensed in the facility on that date. The provisions of 30.17 paragraphs (a) and (b) apply to payments under this paragraph. 30.18 (e) The commissioner may reduce payments underparagraph30.19 paragraphs (c) and (d) based on the commissioner's determination 30.20 of Medicare upper payment limits. Any adjustments must be 30.21 proportional to adjustments made under section 256B.19, 30.22 subdivision 1d, paragraph(d)(e). 30.23 [EFFECTIVE DATE.] This section is effective March 1, 2003. 30.24 Sec. 10. Minnesota Statutes 2002, section 256B.431, is 30.25 amended by adding a subdivision to read: 30.26 Subd. 38. [NURSING HOME RATE INCREASES EFFECTIVE MARCH 1, 30.27 2003.] For the rate period beginning March 1, 2003, and rate 30.28 years beginning on or after July 1, 2003, the commissioner shall 30.29 provide to each nursing home reimbursed under this section or 30.30 section 256B.434 an increase in each case mix payment rate equal 30.31 to the increase in the per-bed surcharge paid under section 30.32 256.9657, subdivision 1, paragraph (d), divided by 365 and 30.33 further divided by .88. The increase under this subdivision 30.34 shall be added following the determination of the payment rate 30.35 for the home under this chapter. The increase shall not be 30.36 subject to any annual percentage increase. The 30-day advance 31.1 notice requirement in section 256B.47, subdivision 2, shall not 31.2 apply to rate increases resulting from this section. 31.3 [EFFECTIVE DATE.] This section is effective March 1, 2003. 31.4 Sec. 11. Minnesota Statutes 2002, section 256B.75, is 31.5 amended to read: 31.6 256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 31.7 (a) For outpatient hospital facility fee payments for 31.8 services rendered on or after October 1, 1992, the commissioner 31.9 of human services shall pay the lower of (1) submitted charge, 31.10 or (2) 32 percent above the rate in effect on June 30, 1992, 31.11 except for those services for which there is a federal maximum 31.12 allowable payment. Effective for services rendered on or after 31.13 January 1, 2000, payment rates for nonsurgical outpatient 31.14 hospital facility fees and emergency room facility fees shall be 31.15 increased by eight percent over the rates in effect on December 31.16 31, 1999, except for those services for which there is a federal 31.17 maximum allowable payment. Services for which there is a 31.18 federal maximum allowable payment shall be paid at the lower of 31.19 (1) submitted charge, or (2) the federal maximum allowable 31.20 payment. Total aggregate payment for outpatient hospital 31.21 facility fee services shall not exceed the Medicare upper 31.22 limit. If it is determined that a provision of this section 31.23 conflicts with existing or future requirements of the United 31.24 States government with respect to federal financial 31.25 participation in medical assistance, the federal requirements 31.26 prevail. The commissioner may, in the aggregate, prospectively 31.27 reduce payment rates to avoid reduced federal financial 31.28 participation resulting from rates that are in excess of the 31.29 Medicare upper limitations. 31.30 (b) Notwithstanding paragraph (a), payment for outpatient, 31.31 emergency, and ambulatory surgery hospital facility fee services 31.32 for critical access hospitals designated under section 144.1483, 31.33 clause (11), shall be paid on a cost-based payment system that 31.34 is based on the cost-finding methods and allowable costs of the 31.35 Medicare program. 31.36 (c) Effective for services provided on or after July 1, 32.1 2003, rates that are based on the Medicare outpatient 32.2 prospective payment system shall be replaced by a budget neutral 32.3 prospective payment system that is derived using medical 32.4 assistance data. The commissioner shall provide a proposal to 32.5 the 2003 legislature to define and implement this provision. 32.6 (d) For fee-for-service services provided on or after July 32.7 1, 2002, the total payment, before third-party liability and 32.8 spenddown, made to hospitals for outpatient hospital facility 32.9 services is reduced by .5 percent from the current statutory 32.10 rate. 32.11 (e) The last fee-for-service payments that would otherwise 32.12 be made in June shall be paid on the first scheduled payment 32.13 date in the following fiscal year. The provisions of section 32.14 16A.124 shall not apply to these delayed payments. 32.15 [EFFECTIVE DATE.] This section is effective March 1, 2003. 32.16 Sec. 12. [REPEALER.] 32.17 Minnesota Statutes 2002, section 256B.0625, subdivision 5a, 32.18 is repealed. 32.19 [EFFECTIVE DATE.] This section is effective the day 32.20 following final enactment. 32.21 ARTICLE 6 32.22 CORRECTIONS POLICY CHANGES 32.23 Section 1. Minnesota Statutes 2002, section 244.101, is 32.24 amended by adding a subdivision to read: 32.25 Subd. 5. [NONAPPLICABILITY.] This section does not apply 32.26 to offenders described in section 609.112 or 609.14, subdivision 32.27 3, paragraph (c). 32.28 Sec. 2. Minnesota Statutes 2002, section 609.105, 32.29 subdivision 1, is amended to read: 32.30 Subdivision 1. A felony sentence to imprisonment for more 32.31 thanone year18 months after adjusting for credit for prior 32.32 imprisonment shall commit the defendant to the custody of the 32.33 commissioner of corrections. 32.34 Sec. 3. Minnesota Statutes 2002, section 609.105, 32.35 subdivision 3, is amended to read: 32.36 Subd. 3. A sentence to imprisonment for a period ofone33.1year18 months or any lesser period after adjusting for credit 33.2 for prior imprisonment shall be to a workhouse, work farm, 33.3 county jail, or other place authorized by law. 33.4 Sec. 4. [609.112] [MANDATORY LOCAL INCARCERATION FOR 33.5 CERTAIN OFFENDERS.] 33.6 Subdivision 1. [DEFINITION.] For purposes of this section: 33.7 (1) "executed sentence" means the total period of time for 33.8 which an offender is sentenced; and 33.9 (2) "term of imprisonment" means the period of time equal 33.10 to two-thirds of the offender's executed sentence. 33.11 Subd. 2. [SENTENCE.] If a court imposes and executes a 33.12 felony sentence for an offender and the duration of the 33.13 offender's term of imprisonment after adjusting for credit for 33.14 prior imprisonment is more than eight months but not more than 33.15 one year, the court shall require the offender to serve the term 33.16 of imprisonment incarcerated in a county jail, county regional 33.17 jail, county work farm, county workhouse, or other local 33.18 correctional facility. 33.19 Subd. 3. [DISCIPLINARY CONFINEMENT TIME.] A jailer, 33.20 workhouse or work farm superintendent, or person similarly in 33.21 custody of an offender incarcerated under this section, pursuant 33.22 to a prisoner discipline plan and subject to the length of time 33.23 remaining in the offender's executed sentence, may impose an 33.24 additional confinement period upon the offender for a violation 33.25 of a disciplinary rule of the facility. The imposition of a 33.26 confinement period shall be considered to be a disciplinary 33.27 sanction imposed upon the offender, and the procedure for 33.28 imposing the confinement period and the rights of the offender 33.29 in the procedure shall be those in effect for the imposition of 33.30 other disciplinary sanctions at the facility. 33.31 Subd. 4. [RELEASE TERM.] (a) An offender incarcerated 33.32 under this section shall serve a release term upon completion of 33.33 the offender's term of imprisonment and any additional 33.34 confinement period imposed. The offender's release term shall 33.35 be equal in length to the amount of time remaining in the 33.36 offender's executed sentence after the offender has served the 34.1 term of imprisonment and any confinement period imposed. An 34.2 offender who violates a disciplinary rule may not be placed on a 34.3 release term until the offender has served the confinement 34.4 period for that disciplinary sanction. 34.5 (b) The head of the facility releasing the offender shall 34.6 set release term conditions for the offender. 34.7 Subd. 5. [NONAPPLICABILITY.] Sections 244.101 and 643.29 34.8 do not apply to offenders sentenced and incarcerated under this 34.9 section. 34.10 Subd. 6. [SUPERVISION OF OFFENDERS ON RELEASE TERM.] (a) 34.11 Offenders serving a release term under this section shall be 34.12 supervised in the same manner as offenders on supervised release 34.13 except that the sentencing court has jurisdiction over the 34.14 offender's compliance with conditions of the release term and 34.15 any sanctions for their violation. 34.16 (b) If an offender violates the conditions of the 34.17 offender's release term, the court may: 34.18 (1) continue the release term, with or without modifying or 34.19 enlarging the conditions imposed on the offender; or 34.20 (2) revoke the offender's release and reincarcerate the 34.21 offender for an appropriate period of time not to exceed the 34.22 period of time remaining in the offender's sentence. 34.23 Sec. 5. Minnesota Statutes 2002, section 609.135, 34.24 subdivision 7, is amended to read: 34.25 Subd. 7. [DEMAND OF EXECUTION OF SENTENCE.] An offender 34.26 may not demand execution of sentence in lieu of a stay of 34.27 imposition or execution of sentence if the offender will serve 34.28 less thannine12 months at the state institution. This 34.29 subdivision does not apply to an offender who will be serving 34.30 the sentence consecutively or concurrently with a previously 34.31 imposed executed felony sentence. 34.32 Sec. 6. Minnesota Statutes 2002, section 609.14, 34.33 subdivision 3, is amended to read: 34.34 Subd. 3. [SENTENCE.] (a) If any of such grounds are found 34.35 to exist the court may: 34.36 (1) if imposition of sentence was previously stayed, again 35.1 stay sentence or impose sentence and stay the execution thereof, 35.2 and in either event place the defendant on probation or order 35.3 intermediate sanctions pursuant to section 609.135, or impose 35.4 sentence and order execution thereof; or 35.5 (2) if sentence was previously imposed and execution 35.6 thereof stayed, continue such stay and place the defendant on 35.7 probation or order intermediate sanctions in accordance with the 35.8 provisions of section 609.135, or order execution of the 35.9 sentence previously imposed. 35.10 (b) If the court orders execution of the defendant's 35.11 sentence and the duration of the defendant's term of 35.12 imprisonment as defined in section 609.112, subdivision 1, after 35.13 adjusting for credit for prior imprisonment is one year or less, 35.14 the defendant is not committed to the custody of the 35.15 commissioner of corrections. In this case, the court retains 35.16 jurisdiction over the defendant's custody and except as provided 35.17 in paragraph (c), shall place the defendant on probation or 35.18 order intermediate sanctions in accordance with the provisions 35.19 of section 609.135. 35.20 (c) If the duration of the defendant's term of imprisonment 35.21 after adjusting for credit for prior imprisonment is more than 35.22 eight months but not more than one year, the court shall require 35.23 the defendant to serve the term of imprisonment incarcerated in 35.24 a county jail, county regional jail, county work farm, county 35.25 workhouse, or other local correctional facility. Section 35.26 609.112, subdivisions 3 to 6, apply to defendants incarcerated 35.27 under this paragraph. 35.28 Sec. 7. [CONSTRUCTION OF PROVISIONS.] 35.29 Nothing in sections 1 to 6 may be construed as modifying 35.30 what offenses are classified as felonies or as affecting a 35.31 felony offender's constitutional rights, including, but not 35.32 limited to, the right to a 12-person jury. 35.33 Sec. 8. [GRANTS TO COUNTIES; REPORTS REQUIRED.] 35.34 Subdivision 1. [GRANTS TO COUNTIES.] (a) The commissioner 35.35 of corrections shall make grants to counties to assist them to 35.36 incarcerate offenders. The commissioner shall make the grants 36.1 in an equitable manner based on the total amount available for 36.2 the grants, each county's proportionate share of offenders 36.3 affected by this article, and the number of bed days used by 36.4 each county to incarcerate these offenders. 36.5 (b) The commissioner shall make the grants described in 36.6 this subdivision within a month of receiving the reports from 36.7 counties described in subdivision 2. 36.8 Subd. 2. [REPORTS TO COMMISSIONER OF CORRECTIONS.] A 36.9 county seeking a grant under this section shall report to the 36.10 commissioner of corrections on offenders affected by this 36.11 article. The report must include the number of these offenders 36.12 for the reporting period, the number of bed days used for these 36.13 offenders, the costs associated with this, and any other 36.14 information requested by the commissioner. 36.15 Subd. 3. [DUE DATE FOR REPORTS.] Reports under subdivision 36.16 2 are due on May 15, 2003, September 15, 2003, December 15, 36.17 2003, March 15, 2004, June 15, 2004, September 15, 2004, 36.18 December 15, 2004, March 15, 2005, and June 15, 2005. 36.19 Sec. 9. [DELAY OF PROBATION OFFICER REIMBURSEMENTS.] 36.20 The commissioner of corrections shall delay fiscal year 36.21 2003 reimbursement payments to counties for probation officers 36.22 under Minnesota Statutes, section 244.19, by making them in 36.23 fiscal year 2004. The commissioner shall delay future payments 36.24 in the same manner. 36.25 Sec. 10. [EFFECTIVE DATE.] 36.26 Sections 1 to 9 are effective the day following final 36.27 enactment and apply to persons sentenced or whose probation is 36.28 revoked on or after that date. 36.29 ARTICLE 7 36.30 ENVIRONMENT AND AGRICULTURE 36.31 Section 1. [ENVIRONMENT AND AGRICULTURE REDUCTIONS.] 36.32 The dollar amounts in the columns under "APPROPRIATION 36.33 CHANGE" are added to or, if shown in parentheses, are subtracted 36.34 from the appropriations in Laws 2001, First Special Session 36.35 chapter 2, as amended, by Laws 2002, chapter 220 or 374, as 36.36 amended, or other law to the specified agencies. The 37.1 appropriations are from the general fund or other named fund and 37.2 are available for the fiscal years indicated for each purpose. 37.3 The figure "2003" means that the addition to or subtraction from 37.4 the appropriations listed under the figure is for the fiscal 37.5 year ending June 30, 2003. 37.6 It is the legislature's intent that reductions in an 37.7 agency's funding be distributed across the agency's accounts 37.8 without a disproportionate reduction from a single program. 37.9 Additionally, all budget reductions should be made with an 37.10 emphasis on cutting administration and overhead expenses, and as 37.11 little impact as possible on programs and services. 37.12 2003 37.13 TRANSFERS FROM OTHER FUNDS $5,000,000 37.14 APPROPRIATION REDUCTIONS (8,022,000) 37.15 APPROPRIATION CHANGE 37.16 Sec. 2. POLLUTION CONTROL AGENCY (422,000) 37.17 This is a onetime appropriation 37.18 reduction. 37.19 Sec. 3. OFFICE OF 37.20 ENVIRONMENTAL ASSISTANCE (199,000) 37.21 This is a onetime appropriation 37.22 reduction. 37.23 Sec. 4. MINNESOTA ZOO (270,000) 37.24 This is a onetime appropriation 37.25 reduction. 37.26 Sec. 5. NATURAL RESOURCES (3,819,000) 37.27 This is a onetime appropriation 37.28 reduction. 37.29 Sec. 6. BOARD OF WATER 37.30 AND SOIL RESOURCES (130,000) 37.31 This is a onetime appropriation 37.32 reduction. 37.33 Sec. 7. DEPARTMENT OF AGRICULTURE (3,079,000) 37.34 Notwithstanding Minnesota Statutes, 37.35 section 41A.09, subdivision 3a, an 37.36 ethanol plant located in a city of the 37.37 first class, that has been in violation 37.38 of state law, and was subject to a 37.39 lawsuit brought by the city, is not 37.40 eligible for ethanol producer payments 37.41 for ethanol production from October 1, 37.42 2002, through June 30, 2003. The 37.43 appropriation in section 41A.09, 37.44 subdivision 3a, is reduced by 37.45 $2,250,000. 38.1 Appropriations for the agriculture in 38.2 the classroom program and for grants to 38.3 the Minnesota institute for sustainable 38.4 agriculture in fiscal year 2003 may not 38.5 be reduced. 38.6 This is a onetime appropriation 38.7 reduction. 38.8 Sec. 8. BOARD OF ANIMAL HEALTH (103,000) 38.9 This is a onetime appropriation 38.10 reduction. 38.11 Sec. 9. [SOLID WASTE FUND TRANSFER.] 38.12 The commissioner of the pollution control agency shall 38.13 transfer $5,000,000 from the unreserved balance of the solid 38.14 waste fund to the general fund. 38.15 Sec. 10. [EFFECTIVE DATE.] 38.16 Sections 1 to 9 are effective the day following final 38.17 enactment. 38.18 ARTICLE 8 38.19 ECONOMIC DEVELOPMENT 38.20 Section 1. [ECONOMIC DEVELOPMENT REDUCTIONS.] 38.21 The dollar amounts in the columns under "APPROPRIATION 38.22 CHANGE" are added to or, if shown in parentheses, are subtracted 38.23 from the appropriations in Laws 2001, First Special Session 38.24 chapter 4 or 10, as amended, by Laws 2002, chapter 220 or 374, 38.25 as amended, or other law to the specified agencies. The 38.26 appropriations are from the general fund or other named fund and 38.27 are available for the fiscal years indicated for each purpose. 38.28 The figure "2003" means that the addition to or subtraction from 38.29 the appropriations listed under the figure is for the fiscal 38.30 year ending June 30, 2003. 38.31 It is the legislature's intent that reductions in an 38.32 agency's funding be distributed across the agency's accounts 38.33 without a disproportionate reduction from a single program. 38.34 Additionally, all budget reductions should be made with an 38.35 emphasis on cutting administration and overhead expenses, and 38.36 with as little impact as possible on programs and services. 38.37 2003 38.38 TRANSFERS FROM OTHER FUNDS $ 15,000,000 38.39 APPROPRIATION REDUCTIONS (1,978,000) 39.1 APPROPRIATION CHANGE 39.2 Sec. 2. TRADE AND ECONOMIC DEVELOPMENT (678,000) 39.3 This is a onetime appropriation 39.4 reduction. 39.5 Sec. 3. ECONOMIC SECURITY (189,000) 39.6 This is a onetime appropriation 39.7 reduction. 39.8 Sec. 4. HOUSING FINANCE AGENCY (350,000) 39.9 This is a onetime appropriation 39.10 reduction. 39.11 Sec. 5. LABOR AND INDUSTRY (118,000) 39.12 This is a onetime appropriation 39.13 reduction. 39.14 Sec. 6. BUREAU OF MEDIATION SERVICES (75,000) 39.15 This is a onetime appropriation 39.16 reduction. 39.17 Sec. 7. MINNESOTA HISTORICAL SOCIETY (488,000) 39.18 This is a onetime appropriation 39.19 reduction. 39.20 Sec. 8. BOARD OF THE ARTS (40,000) 39.21 This is a onetime appropriation 39.22 reduction. 39.23 Sec. 9. HUMANITIES COMMISSION (40,000) 39.24 This is a onetime appropriation 39.25 reduction. 39.26 Sec. 10. Laws 2002, chapter 220, article 13, section 9, 39.27 subdivision 2, as amended by Laws 2002, chapter 374, article 8, 39.28 section 6, is amended to read: 39.29 Subd. 2. [SPECIAL COMPENSATION FUND.] After June 1, 2003, 39.30 but no later than June 30, 2003, the commissioner of finance 39.31 shall transfer$250,000,000$265,000,000 in assets of the excess 39.32 surplus account of the special compensation fund created under 39.33 Minnesota Statutes, section 176.129, to the general fund. 39.34 Sec. 11. [EFFECTIVE DATE.] 39.35 Sections 1 to 10 are effective the day following final 39.36 enactment, unless otherwise specified. 39.37 ARTICLE 9 39.38 TRANSPORTATION 39.39 Section 1. [TRANSPORTATION APPROPRIATIONS AND REDUCTIONS.] 39.40 The dollar amounts in the columns under "APPROPRIATION 40.1 CHANGE" are added to or, if shown in parentheses, are subtracted 40.2 from the appropriations in Laws 2001, First Special Session 40.3 chapter 8, as amended, or other law to the specified agencies. 40.4 The appropriations are from the general fund or other named fund 40.5 and are available for the fiscal years indicated for each 40.6 purpose. The figure "2003" means that the addition to or 40.7 subtraction from the appropriations listed under the figure is 40.8 for the fiscal year ending June 30, 2003. 40.9 2003 40.10 CANCELLATIONS - GENERAL FUND $(130,000,000) 40.11 TRUNK HIGHWAY BOND PROCEEDS ACCOUNT - 40.12 TRUNK HIGHWAY FUND 130,130,000 40.13 APPROPRIATION CHANGE 40.14 Sec. 2. TRANSPORTATION 130,000,000 40.15 This appropriation is from the trunk 40.16 highway bond proceeds account in the 40.17 trunk highway fund and is available for 40.18 expenditure beginning the day following 40.19 final enactment. It is for the same 40.20 purposes as specified in Laws 2000, 40.21 chapter 479, article 1, section 2, 40.22 subdivision 3. 40.23 Of the general fund appropriation in 40.24 Laws 2000, chapter 479, article 1, 40.25 section 2, subdivision 3, $130,000,000 40.26 cancels to the general fund. This 40.27 cancellation is effective the day 40.28 following final enactment. 40.29 Sec. 3. BOND SALE EXPENSES 130,000 40.30 To the commissioner of finance for bond 40.31 sale expenses under Minnesota Statutes, 40.32 section 16A.641, subdivision 8. This 40.33 appropriation is from the trunk highway 40.34 bond proceeds account in the trunk 40.35 highway fund. 40.36 Sec. 4. BOND SALE AUTHORIZATION 40.37 To provide the money appropriated in 40.38 this act from the trunk highway bond 40.39 proceeds account in the trunk highway 40.40 fund, the commissioner of finance shall 40.41 sell and issue bonds of the state in an 40.42 amount up to $130,130,000 in the 40.43 manner, upon the terms, and with the 40.44 effect prescribed by Minnesota 40.45 Statutes, sections 167.50 to 167.52, 40.46 and by the Minnesota Constitution, 40.47 article XIV, section 11, at the times 40.48 and in the amount requested by the 40.49 commissioner of transportation. The 40.50 proceeds of the bonds, except accrued 40.51 interest and any premium received on 40.52 the sale of the bonds, must be credited 40.53 to the trunk highway bond proceeds 41.1 account in the trunk highway fund. 41.2 Sec. 5. SALE OF AIRPLANE 41.3 The commissioner of transportation 41.4 shall sell the airplane described in 41.5 Laws 1997, chapter 159, article 1, 41.6 section 2, subdivision 2, clause (c). 41.7 Any proceeds from the sale of the 41.8 airplane must be deposited in the 41.9 general fund. 41.10 Sec. 6. [EFFECTIVE DATE.] 41.11 Sections 1 to 5 are effective the day following final 41.12 enactment, unless otherwise specified. 41.13 ARTICLE 10 41.14 STATE GOVERNMENT 41.15 Section 1. [STATE GOVERNMENT REDUCTIONS.] 41.16 The dollar amounts in the columns under "APPROPRIATION 41.17 CHANGE" are added to or, if shown in parentheses, are subtracted 41.18 from the appropriations in Laws 2001, First Special Session 41.19 chapter 10, as amended, by Laws 2002, chapter 220 or 374, as 41.20 amended, or other law to the specified agencies. The 41.21 appropriations are from the general fund or other named fund and 41.22 are available for the fiscal years indicated for each purpose. 41.23 The reductions in sections 3 to 7 are from base funding. For 41.24 all other sections in this article, the figure "2003" means that 41.25 the addition to or subtraction from the appropriations listed 41.26 under the figure is a onetime addition or subtraction for the 41.27 fiscal year ending June 30, 2003. 41.28 Sec. 2. LEGISLATIVE INTENT 41.29 It is the legislature's intent that, 41.30 unless provided otherwise in this 41.31 article, reductions in an agency's 41.32 funding be distributed across the 41.33 agency's accounts without a 41.34 disproportionate reduction from a 41.35 single program. Additionally, all 41.36 budget reductions should be made with 41.37 an emphasis on cutting administration 41.38 and overhead expenses and with as 41.39 little impact as possible on programs 41.40 and services. 41.41 2003 41.42 TRANSFERS FROM OTHER FUNDS $ 16,201,000 41.43 APPROPRIATION REDUCTIONS (10,488,589) 41.44 Summary by Fund 42.1 General Fund (10,160,589) 42.2 Workers' Compensation 42.3 Fund (328,000) 42.4 APPROPRIATION CHANGE 42.5 Sec. 3. LEGISLATURE (2,561,000) 42.6 Sec. 4. SECRETARY OF STATE (291,000) 42.7 Sec. 5. GOVERNOR'S OFFICE (162,000) 42.8 Sec. 6. STATE AUDITOR (390,000) 42.9 Sec. 7. ATTORNEY GENERAL (1,038,000) 42.10 Sec. 8. OFFICE OF STRATEGIC 42.11 AND LONG-RANGE PLANNING (169,000) 42.12 Sec. 9. ADMINISTRATION (1,410,589) 42.13 This amount includes a $950,289 42.14 reduction from onetime funding for the 42.15 voting equipment grant account, and a 42.16 $300 reduction from funding for the 42.17 state employees' band. 42.18 Sec. 10. DEPRECIATION FUND TRANSFER 42.19 $5,000,000 of the balance of rent 42.20 credited to a segregated account in a 42.21 special revenue fund under Minnesota 42.22 Statutes, section 16B.24, subdivision 42.23 5, paragraph (e), to recover 42.24 depreciation costs is transferred to 42.25 the general fund. 42.26 Sec. 11. FINANCE (639,000) 42.27 This amount includes a $65,000 42.28 reduction in the operations of state 42.29 treasurer, which were assumed by 42.30 finance on January 6, 2003. 42.31 Sec. 12. EMPLOYEE RELATIONS (305,000) 42.32 Sec. 13. INSURANCE TRUST 42.33 FUND TRANSFER 42.34 $11,201,000 of the contingency reserve 42.35 within the employee insurance trust 42.36 fund maintained under Minnesota 42.37 Statutes, section 43A.30, subdivision 42.38 6, is transferred to the general fund 42.39 to reimburse the general fund for all 42.40 or part of the appropriations made in 42.41 Laws 1988, chapter 686, article 1, 42.42 section 9, and Laws 1999, chapter 250, 42.43 article 1, section 15. 42.44 Sec. 14. REVENUE (1,810,000) 42.45 Sec. 15. AMATEUR SPORTS COMMISSION (25,000) 42.46 Sec. 16. MILITARY AFFAIRS (301,000) 42.47 This amount includes a reduction of 42.48 $40,000 for the Minnesota national 42.49 guard youth camp at Camp Ripley. 43.1 Sec. 17. CAMPAIGN FINANCE AND 43.2 PUBLIC DISCLOSURE BOARD (25,000) 43.3 Sec. 18. INVESTMENT BOARD (90,000) 43.4 Sec. 19. CAPITOL AREA ARCHITECTURAL 43.5 AND PLANNING BOARD (6,000) 43.6 Sec. 20. VETERANS AFFAIRS (186,000) 43.7 This amount includes the greater amount 43.8 of the unobligated balance or $114,000 43.9 in grant funding for the Vinland Center. 43.10 Sec. 21. LAWFUL GAMBLING CONTROL BOARD (89,000) 43.11 Sec. 22. RACING COMMISSION (16,000) 43.12 Sec. 23. HUMAN RIGHTS (146,000) 43.13 Sec. 24. UNIFORM LAWS COMMISSION (2,000) 43.14 Sec. 25. PRIVATE DETECTIVE BOARD (6,000) 43.15 Sec. 26. COMMERCE (434,000) 43.16 Sec. 27. OFFICE OF ADMINISTRATIVE 43.17 HEARINGS (328,000) 43.18 This onetime appropriation reduction is 43.19 from the workers' compensation fund and 43.20 is a technical correction associated 43.21 with previous judicial salary increases. 43.22 Sec. 28. BOARD OF ACCOUNTANCY (24,000) 43.23 Sec. 29. ARCHITECTURE AND ENGINEERING 43.24 BOARD (29,000) 43.25 Sec. 30. BOARD OF BARBERS (6,000) 43.26 Sec. 31. Minnesota Statutes 2002, section 240.155, 43.27 subdivision 1, is amended to read: 43.28 Subdivision 1. [REIMBURSEMENT ACCOUNT CREDIT.] Money 43.29 received by the commission as reimbursement for the costs of 43.30 services provided byassistantveterinarians, stewards, and 43.31 medical testing of horses must be deposited in the state 43.32 treasury and credited to a racing reimbursement account, except 43.33 as provided under subdivision 2. Receipts are appropriated to 43.34 the commission to pay the costs of providing the services. 43.35 Sec. 32. Laws 2002, chapter 220, article 10, section 3, is 43.36 amended to read: 43.37 Sec. 3. SECRETARY OF 43.38 STATE -0- (199,000) 43.39Budget reductions shall not come from43.40revenue producing programs or elections.43.41 Sec. 33. [EFFECTIVE DATE.] 44.1 Sections 1 to 32 are effective the day following final 44.2 enactment, unless otherwise specified. 44.3 ARTICLE 11 44.4 SALES TAX REFUNDS 44.5 Section 1. Minnesota Statutes 2002, section 289A.50, 44.6 subdivision 2a, is amended to read: 44.7 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 44.8 has collected from a purchaser a tax on a transaction that is 44.9 not subject to the tax imposed by chapter 297A, the purchaser 44.10 may apply directly to the commissioner for a refund under this 44.11 section if: 44.12 (a) the purchaser is currently registered to collect and 44.13 remit the sales tax or to remit the use tax; and 44.14 (b) the amount of the refund applied for exceeds $500. 44.15 The purchaser may not file more than two applications for 44.16 refund under this subdivision in a calendar year. The refund 44.17 under this subdivision must not be paid until 90 days after the 44.18 refund claim is filed with the commissioner. 44.19 [EFFECTIVE DATE.] This section is effective for refund 44.20 claims filed on or after the day following final enactment. 44.21 Sec. 2. Minnesota Statutes 2002, section 289A.56, 44.22 subdivision 4, is amended to read: 44.23 Subd. 4. [CAPITAL EQUIPMENT AND CERTAIN BUILDING MATERIALS 44.24 REFUNDS; REFUNDS TO PURCHASERS.] Notwithstanding subdivision 3, 44.25 for refunds payable under section 297A.75, subdivision 1, 44.26 clauses(1),(2), (3), and (5), interest is computed from the 44.27 date the refund claim is filed with the commissioner.For44.28refunds payable under section 289A.50, subdivision 2a, interest44.29is computed from the 20th day of the month following the month44.30of the invoice date for the purchase which is the subject of the44.31refund, if the refund claim includes a detailed schedule of44.32purchases made during each of the periods in the claim. If the44.33refund claim submitted does not contain a schedule reflecting44.34purchases made in each period, interest is computed from the44.35date the claim was filedFor refunds payable under sections 44.36 289A.50, subdivision 2a, and 297A.75, subdivision 1, clause (1), 45.1 interest is computed from 90 days after the refund claim is 45.2 filed with the commissioner. 45.3 [EFFECTIVE DATE.] This section is effective for refund 45.4 claims filed on or after the day following final enactment. 45.5 Sec. 3. Minnesota Statutes 2002, section 297A.75, 45.6 subdivision 2, is amended to read: 45.7 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 45.8 forms prescribed by the commissioner, a refund equal to the tax 45.9 paid on the gross receipts of the exempt items must be paid to 45.10 the applicant, but refunds for taxes paid under subdivision 1, 45.11 clause (1), must not be paid until 90 days after the refund 45.12 claim is filed with the commissioner. Only the following 45.13 persons may apply for the refund: 45.14 (1) for subdivision 1, clauses (1) to (3), the applicant 45.15 must be the purchaser; 45.16 (2) for subdivision 1, clauses (4), (7), and (8), the 45.17 applicant must be the governmental subdivision; 45.18 (3) for subdivision 1, clause (5), the applicant must be 45.19 the recipient of the benefits provided in United States Code, 45.20 title 38, chapter 21; 45.21 (4) for subdivision 1, clause (6), the applicant must be 45.22 the owner of the homestead property; and 45.23 (5) for subdivision 1, clause (9), the owner of the 45.24 qualified low-income housing project. 45.25 [EFFECTIVE DATE.] This section is effective for refund 45.26 claims filed on or after the day following final enactment. 45.27 Sec. 4. Minnesota Statutes 2002, section 297A.75, 45.28 subdivision 4, is amended to read: 45.29 Subd. 4. [INTEREST.] Interest must be paid on the refund 45.30 at the rate in section 270.76 from the date the refund claim is 45.31 filed for taxes paid under subdivision 1, clauses(1)45.32to(2), (3), and (5), and; from 60 days after the date the 45.33 refund claim is filed with the commissioner for claims filed 45.34 under subdivision 1, clauses (4), (6), (7), (8), and (9); and 45.35 from 90 days after the refund claim is filed with the 45.36 commissioner for taxes paid under subdivision 1, clause (1). 46.1 [EFFECTIVE DATE.] This section is effective for refund 46.2 claims filed on or after the day following final enactment.