1.1                          A bill for an act 
  1.2             relating to human services; allowing for an adjustment 
  1.3             in a nursing facility's rental per diem; amending 
  1.4             Minnesota Statutes 1994, section 256B.431, subdivision 
  1.5             17. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section. 1.  Minnesota Statutes 1994, section 256B.431, 
  1.8   subdivision 17, is amended to read: 
  1.9      Subd. 17.  [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.] 
  1.10  (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3, 
  1.11  for rate periods beginning on October 1, 1992, and for rate 
  1.12  years beginning after June 30, 1993, a nursing facility that has 
  1.13  completed a renovation, replacement, or upgrading project 
  1.14  approved under the moratorium exception process in section 
  1.15  144A.073 shall be reimbursed for costs directly identified to 
  1.16  that project as provided in subdivision 16 and this subdivision. 
  1.17     (b) Notwithstanding Minnesota Rules, part 9549.0060, 
  1.18  subparts 5, item A, subitems (1) and (3), and 7, item D, 
  1.19  allowable interest expense on debt shall include: 
  1.20     (1) interest expense on debt related to the cost of 
  1.21  purchasing or replacing depreciable equipment, excluding 
  1.22  vehicles, not to exceed six percent of the total historical cost 
  1.23  of the project; and 
  1.24     (2) interest expense on debt related to financing or 
  1.25  refinancing costs, including costs related to points, loan 
  2.1   origination fees, financing charges, legal fees, and title 
  2.2   searches; and issuance costs including bond discounts, bond 
  2.3   counsel, underwriter's counsel, corporate counsel, printing, and 
  2.4   financial forecasts.  Allowable debt related to items in this 
  2.5   clause shall not exceed seven percent of the total historical 
  2.6   cost of the project.  To the extent these costs are financed, 
  2.7   the straight-line amortization of the costs in this clause is 
  2.8   not an allowable cost; and 
  2.9      (3) interest on debt incurred for the establishment of a 
  2.10  debt reserve fund, net of the interest earned on the debt 
  2.11  reserve fund. 
  2.12     (c) Debt incurred for costs under paragraph (b) is not 
  2.13  subject to Minnesota Rules, part 9549.0060, subpart 5, item A, 
  2.14  subitem (5) or (6). 
  2.15     (d) The incremental increase in a nursing facility's rental 
  2.16  rate, determined under Minnesota Rules, parts 9549.0010 to 
  2.17  9549.0080, and this section, resulting from the acquisition of 
  2.18  allowable capital assets, and allowable debt and interest 
  2.19  expense under this subdivision shall be added to its 
  2.20  property-related payment rate and shall be effective on the 
  2.21  first day of the month following the month in which the 
  2.22  moratorium project was completed. 
  2.23     (e) Notwithstanding subdivision 3f, paragraph (a), for rate 
  2.24  periods beginning on October 1, 1992, and for rate years 
  2.25  beginning after June 30, 1993, the replacement-costs-new per bed 
  2.26  limit to be used in Minnesota Rules, part 9549.0060, subpart 4, 
  2.27  item B, for a nursing facility that has completed a renovation, 
  2.28  replacement, or upgrading project that has been approved under 
  2.29  the moratorium exception process in section 144A.073, or that 
  2.30  has completed an addition to or replacement of buildings, 
  2.31  attached fixtures, or land improvements for which the total 
  2.32  historical cost exceeds the lesser of $150,000 or ten percent of 
  2.33  the most recent appraised value, must be $47,500 per licensed 
  2.34  bed in multiple-bed rooms and $71,250 per licensed bed in a 
  2.35  single-bed room.  These amounts must be adjusted annually as 
  2.36  specified in subdivision 3f, paragraph (a), beginning January 1, 
  3.1   1993. 
  3.2      (f) A nursing facility that completes a project identified 
  3.3   in this subdivision and, as of April 17, 1992, has not been 
  3.4   mailed a rate notice with a special appraisal for a completed 
  3.5   project, or completes a project after April 17, 1992, but before 
  3.6   September 1, 1992, may elect either to request a special 
  3.7   reappraisal with the corresponding adjustment to the 
  3.8   property-related payment rate under the laws in effect on June 
  3.9   30, 1992, or to submit their capital asset and debt information 
  3.10  after that date and obtain the property-related payment rate 
  3.11  adjustment under this section, but not both. 
  3.12     (g) For purposes of this paragraph, a total replacement 
  3.13  means the complete replacement of the nursing facility's 
  3.14  physical plant through the construction of a new physical plant 
  3.15  or the transfer of the nursing facility's residents from one 
  3.16  physical plant location to another.  Upon completion of a total 
  3.17  replacement project, the commissioner shall compute the 
  3.18  incremental change in the nursing facility's rental per diem by 
  3.19  replacing its appraised value, including the historical capital 
  3.20  asset costs, and capital debt and interest costs with the new 
  3.21  nursing facility's physical plant allowable capital asset costs 
  3.22  and the related allowable capital debt and interest costs.  If 
  3.23  the new nursing facility has decreased its licensed capacity, 
  3.24  the aggregate investment per bed limit in subdivision 3a, 
  3.25  paragraph (d), shall apply.  In the case of either type of total 
  3.26  replacement, authorized under either section 144A.071 or 
  3.27  144A.073, the provisions of this subdivision shall also apply.