1.1                          A bill for an act 
  1.2             relating to human services; modifying medical 
  1.3             assistance estate recovery provisions; eliminating 
  1.4             recoveries for alternative care costs; removing liens 
  1.5             against life estates and joint tenant interests; 
  1.6             appropriating money; amending Minnesota Statutes 2003 
  1.7             Supplement, sections 256B.15, subdivisions 1, 1a, 2, 
  1.8             3, 4; 514.981, subdivision 6; 524.3-805; repealing 
  1.9             Minnesota Statutes 2003 Supplement, sections 256B.15, 
  1.10            subdivisions 1c, 1d, 1e, 1f, 1g, 1h, 1i, 1j, 1k; 
  1.11            514.991; 514.992; 514.993; 514.994; 514.995.  
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.14  256B.15, subdivision 1, is amended to read: 
  1.15     Subdivision 1.  [POLICY, APPLICABILITY, PURPOSE, AND 
  1.16  CONSTRUCTION; DEFINITION.] (a) It is the policy of this state 
  1.17  that individuals or couples, either or both of whom participate 
  1.18  in the medical assistance program, use their own assets to pay 
  1.19  their share of the total cost of their care during or after 
  1.20  their enrollment in the program according to applicable federal 
  1.21  law and the laws of this state.  The following provisions apply: 
  1.22     (1) subdivisions 1c to 1k shall not apply to claims arising 
  1.23  under this section which are presented under section 525.313; 
  1.24     (2) the provisions of subdivisions 1c to 1k expanding the 
  1.25  interests included in an estate for purposes of recovery under 
  1.26  this section give effect to the provisions of United States 
  1.27  Code, title 42, section 1396p, governing recoveries, but do not 
  1.28  give rise to any express or implied liens in favor of any other 
  2.1   parties not named in these provisions; 
  2.2      (3) the continuation of a recipient's life estate or joint 
  2.3   tenancy interest in real property after the recipient's death 
  2.4   for the purpose of recovering medical assistance under this 
  2.5   section modifies common law principles holding that these 
  2.6   interests terminate on the death of the holder; 
  2.7      (4) all laws, rules, and regulations governing or involved 
  2.8   with a recovery of medical assistance shall be liberally 
  2.9   construed to accomplish their intended purposes; 
  2.10     (5) a deceased recipient's life estate and joint tenancy 
  2.11  interests continued under this section shall be owned by the 
  2.12  remaindermen or surviving joint tenants as their interests may 
  2.13  appear on the date of the recipient's death.  They shall not be 
  2.14  merged into the remainder interest or the interests of the 
  2.15  surviving joint tenants by reason of ownership.  They shall be 
  2.16  subject to the provisions of this section.  Any conveyance, 
  2.17  transfer, sale, assignment, or encumbrance by a remainderman, a 
  2.18  surviving joint tenant, or their heirs, successors, and assigns 
  2.19  shall be deemed to include all of their interest in the deceased 
  2.20  recipient's life estate or joint tenancy interest continued 
  2.21  under this section; and 
  2.22     (6) the provisions of subdivisions 1c to 1k continuing a 
  2.23  recipient's joint tenancy interests in real property after the 
  2.24  recipient's death do not apply to a homestead owned of record, 
  2.25  on the date the recipient dies, by the recipient and the 
  2.26  recipient's spouse as joint tenants with a right of 
  2.27  survivorship.  Homestead means the real property occupied by the 
  2.28  surviving joint tenant spouse as their sole residence on the 
  2.29  date the recipient dies and classified and taxed to the 
  2.30  recipient and surviving joint tenant spouse as homestead 
  2.31  property for property tax purposes in the calendar year in which 
  2.32  the recipient dies.  For purposes of this exemption, real 
  2.33  property the recipient and their surviving joint tenant spouse 
  2.34  purchase solely with the proceeds from the sale of their prior 
  2.35  homestead, own of record as joint tenants, and qualify as 
  2.36  homestead property under section 273.124 in the calendar year in 
  3.1   which the recipient dies and prior to the recipient's death 
  3.2   shall be deemed to be real property classified and taxed to the 
  3.3   recipient and their surviving joint tenant spouse as homestead 
  3.4   property in the calendar year in which the recipient dies.  The 
  3.5   surviving spouse, or any person with personal knowledge of the 
  3.6   facts, may provide an affidavit describing the homestead 
  3.7   property affected by this clause and stating facts showing 
  3.8   compliance with this clause.  The affidavit shall be prima facie 
  3.9   evidence of the facts it states. 
  3.10     (b) For purposes of this section, "medical assistance" 
  3.11  includes the medical assistance program under this chapter and 
  3.12  the general assistance medical care program under chapter 256D 
  3.13  and but does not include the alternative care program for 
  3.14  nonmedical assistance recipients under section 256B.0913. 
  3.15     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
  3.16  from July 1, 2003. 
  3.17     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  3.18  256B.15, subdivision 1a, is amended to read: 
  3.19     Subd. 1a.  [ESTATES SUBJECT TO CLAIMS.] If a person 
  3.20  receives any medical assistance hereunder, on the person's 
  3.21  death, if single, or on the death of the survivor of a married 
  3.22  couple, either or both of whom received medical assistance, or 
  3.23  as otherwise provided for in this section, the total amount paid 
  3.24  for medical assistance rendered for the person and spouse shall 
  3.25  be filed as a claim against the estate of the person or the 
  3.26  estate of the surviving spouse in the court having jurisdiction 
  3.27  to probate the estate or to issue a decree of descent according 
  3.28  to sections 525.31 to 525.313.  
  3.29     A claim shall be filed if medical assistance was rendered 
  3.30  for either or both persons under one of the following 
  3.31  circumstances: 
  3.32     (a) the person was over 55 years of age, and received 
  3.33  services under this chapter, excluding alternative care; 
  3.34     (b) the person resided in a medical institution for six 
  3.35  months or longer, received services under this chapter, 
  3.36  excluding alternative care, and, at the time of 
  4.1   institutionalization or application for medical assistance, 
  4.2   whichever is later, the person could not have reasonably been 
  4.3   expected to be discharged and returned home, as certified in 
  4.4   writing by the person's treating physician.  For purposes of 
  4.5   this section only, a "medical institution" means a skilled 
  4.6   nursing facility, intermediate care facility, intermediate care 
  4.7   facility for persons with mental retardation, nursing facility, 
  4.8   or inpatient hospital; or 
  4.9      (c) the person received general assistance medical care 
  4.10  services under chapter 256D.  
  4.11     The claim shall be considered an expense of the last 
  4.12  illness of the decedent for the purpose of section 524.3-805.  
  4.13  Any statute of limitations that purports to limit any county 
  4.14  agency or the state agency, or both, to recover for medical 
  4.15  assistance granted hereunder shall not apply to any claim made 
  4.16  hereunder for reimbursement for any medical assistance granted 
  4.17  hereunder.  Notice of the claim shall be given to all heirs and 
  4.18  devisees of the decedent whose identity can be ascertained with 
  4.19  reasonable diligence.  The notice must include procedures and 
  4.20  instructions for making an application for a hardship waiver 
  4.21  under subdivision 5; time frames for submitting an application 
  4.22  and determination; and information regarding appeal rights and 
  4.23  procedures.  Counties are entitled to one-half of the nonfederal 
  4.24  share of medical assistance collections from estates that are 
  4.25  directly attributable to county effort.  Counties are entitled 
  4.26  to ten percent of the collections for alternative care directly 
  4.27  attributable to county effort. 
  4.28     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
  4.29  from July 1, 2003. 
  4.30     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  4.31  256B.15, subdivision 2, is amended to read: 
  4.32     Subd. 2.  [LIMITATIONS ON CLAIMS.] The claim shall include 
  4.33  only the total amount of medical assistance rendered after age 
  4.34  55 or during a period of institutionalization described in 
  4.35  subdivision 1a, clause (b), and the total amount of general 
  4.36  assistance medical care rendered, and shall not include 
  5.1   interest.  Claims that have been allowed but not paid shall bear 
  5.2   interest according to section 524.3-806, paragraph (d).  A claim 
  5.3   against the estate of a surviving spouse who did not receive 
  5.4   medical assistance, for medical assistance rendered for the 
  5.5   predeceased spouse, is limited to the value of the assets of the 
  5.6   estate that were marital property or jointly owned property at 
  5.7   any time during the marriage.  Claims for alternative care shall 
  5.8   be net of all premiums paid under section 256B.0913, subdivision 
  5.9   12, on or after July 1, 2003, and shall be limited to services 
  5.10  provided on or after July 1, 2003. 
  5.11     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
  5.12  from July 1, 2003. 
  5.13     Sec. 4.  Minnesota Statutes 2003 Supplement, section 
  5.14  256B.15, subdivision 3, is amended to read: 
  5.15     Subd. 3.  [SURVIVING SPOUSE, MINOR, BLIND, OR DISABLED 
  5.16  CHILDREN.] If a decedent is survived by a spouse, or who was 
  5.17  single or who was the surviving spouse of a married couple and 
  5.18  is survived by a child who is under age 21 or blind or 
  5.19  permanently and totally disabled according to the supplemental 
  5.20  security income program criteria, a no claim shall be filed 
  5.21  against the estate according to this section. 
  5.22     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
  5.23  from July 1, 2003. 
  5.24     Sec. 5.  Minnesota Statutes 2003 Supplement, section 
  5.25  256B.15, subdivision 4, is amended to read: 
  5.26     Subd. 4.  [OTHER SURVIVORS.] If the decedent who was single 
  5.27  or the surviving spouse of a married couple is survived by one 
  5.28  of the following persons, a claim exists against the estate in 
  5.29  an amount not to exceed the value of the nonhomestead property 
  5.30  included in the estate and the personal representative shall 
  5.31  make, execute, and deliver to the county agency a lien against 
  5.32  the homestead property in the estate for any unpaid balance of 
  5.33  the claim to the claimant as provided under this section: 
  5.34     (a) a sibling who resided in the decedent medical 
  5.35  assistance recipient's home at least one year before the 
  5.36  decedent's institutionalization and continuously since the date 
  6.1   of institutionalization; or 
  6.2      (b) a son or daughter or a grandchild who resided in the 
  6.3   decedent medical assistance recipient's home for at least two 
  6.4   years immediately before the parent's or grandparent's 
  6.5   institutionalization and continuously since the date of 
  6.6   institutionalization, and who establishes by a preponderance of 
  6.7   the evidence having provided care to the parent or grandparent 
  6.8   who received medical assistance, that the care was provided 
  6.9   before institutionalization, and that the care permitted the 
  6.10  parent or grandparent to reside at home rather than in an 
  6.11  institution. 
  6.12     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
  6.13  from July 1, 2003. 
  6.14     Sec. 6.  Minnesota Statutes 2003 Supplement, section 
  6.15  514.981, subdivision 6, is amended to read: 
  6.16     Subd. 6.  [TIME LIMITS; CLAIM LIMITS; LIENS ON LIFE ESTATES 
  6.17  AND JOINT TENANCIES.] (a) A medical assistance lien is a lien on 
  6.18  the real property it describes for a period of ten years from 
  6.19  the date it attaches according to section 514.981, subdivision 
  6.20  2, paragraph (a), except as otherwise provided for in sections 
  6.21  514.980 to 514.985.  The agency may renew a medical assistance 
  6.22  lien for an additional ten years from the date it would 
  6.23  otherwise expire by recording or filing a certificate of renewal 
  6.24  before the lien expires.  The certificate shall be recorded or 
  6.25  filed in the office of the county recorder or registrar of 
  6.26  titles for the county in which the lien is recorded or filed.  
  6.27  The certificate must refer to the recording or filing data for 
  6.28  the medical assistance lien it renews.  The certificate need not 
  6.29  be attested, certified, or acknowledged as a condition for 
  6.30  recording or filing.  The registrar of titles or the recorder 
  6.31  shall file, record, index, and return the certificate of renewal 
  6.32  in the same manner as provided for medical assistance liens in 
  6.33  section 514.982, subdivision 2. 
  6.34     (b) A medical assistance lien is not enforceable against 
  6.35  the real property of an estate to the extent there is a 
  6.36  determination by a court of competent jurisdiction, or by an 
  7.1   officer of the court designated for that purpose, that there are 
  7.2   insufficient assets in the estate to satisfy the agency's 
  7.3   medical assistance lien in whole or in part because of the 
  7.4   homestead exemption under section 256B.15, subdivision 4, the 
  7.5   rights of the surviving spouse or minor children under section 
  7.6   524.2-403, paragraphs (a) and (b), or claims with a priority 
  7.7   under section 524.3-805, paragraph (a), clauses (1) to (4).  For 
  7.8   purposes of this section, the rights of the decedent's adult 
  7.9   children to exempt property under section 524.2-403, paragraph 
  7.10  (b), shall not be considered costs of administration under 
  7.11  section 524.3-805, paragraph (a), clause (1). 
  7.12     (c) Notwithstanding any law or rule to the contrary, the 
  7.13  provisions in clauses (1) to (7) apply if a life estate subject 
  7.14  to a medical assistance lien ends according to its terms, or if 
  7.15  a medical assistance recipient who owns a life estate or any 
  7.16  interest in real property as a joint tenant that is subject to a 
  7.17  medical assistance lien dies. 
  7.18     (1) The medical assistance recipient's life estate or joint 
  7.19  tenancy interest in the real property shall not end upon the 
  7.20  recipient's death but shall merge into the remainder interest or 
  7.21  other interest in real property the medical assistance recipient 
  7.22  owned in joint tenancy with others.  The medical assistance lien 
  7.23  shall attach to and run with the remainder or other interest in 
  7.24  the real property to the extent of the medical assistance 
  7.25  recipient's interest in the property at the time of the 
  7.26  recipient's death as determined under this section. 
  7.27     (2) If the medical assistance recipient's interest was a 
  7.28  life estate in real property, the lien shall be a lien against 
  7.29  the portion of the remainder equal to the percentage factor for 
  7.30  the life estate of a person the medical assistance recipient's 
  7.31  age on the date the life estate ended according to its terms or 
  7.32  the date of the medical assistance recipient's death as listed 
  7.33  in the Life Estate Mortality Table in the health care program's 
  7.34  manual. 
  7.35     (3) If the medical assistance recipient owned the interest 
  7.36  in real property in joint tenancy with others, the lien shall be 
  8.1   a lien against the portion of that interest equal to the 
  8.2   fractional interest the medical assistance recipient would have 
  8.3   owned in the jointly owned interest had the medical assistance 
  8.4   recipient and the other owners held title to that interest as 
  8.5   tenants in common on the date the medical assistance recipient 
  8.6   died. 
  8.7      (4) The medical assistance lien shall remain a lien against 
  8.8   the remainder or other jointly owned interest for the length of 
  8.9   time and be renewable as provided in paragraph (a). 
  8.10     (5) Subdivision 5, paragraph (a), clause (4), paragraph 
  8.11  (b), clauses (1) and (2); and subdivision 6, paragraph (b), do 
  8.12  not apply to medical assistance liens which attach to interests 
  8.13  in real property as provided under this subdivision. 
  8.14     (6) The continuation of a medical assistance recipient's 
  8.15  life estate or joint tenancy interest in real property after the 
  8.16  medical assistance recipient's death for the purpose of 
  8.17  recovering medical assistance provided for in sections 514.980 
  8.18  to 514.985 modifies common law principles holding that these 
  8.19  interests terminate on the death of the holder. 
  8.20     (7) Notwithstanding any law or rule to the contrary, no 
  8.21  release, satisfaction, discharge, or affidavit under section 
  8.22  256B.15 shall extinguish or terminate the life estate or joint 
  8.23  tenancy interest of a medical assistance recipient subject to a 
  8.24  lien under sections 514.980 to 514.985 on the date the recipient 
  8.25  dies. 
  8.26     (8) The provisions of clauses (1) to (7) do not apply to a 
  8.27  homestead owned of record, on the date the recipient dies, by 
  8.28  the recipient and the recipient's spouse as joint tenants with a 
  8.29  right of survivorship.  Homestead means the real property 
  8.30  occupied by the surviving joint tenant spouse as their sole 
  8.31  residence on the date the recipient dies and classified and 
  8.32  taxed to the recipient and surviving joint tenant spouse as 
  8.33  homestead property for property tax purposes in the calendar 
  8.34  year in which the recipient dies.  For purposes of this 
  8.35  exemption, real property the recipient and their surviving joint 
  8.36  tenant spouse purchase solely with the proceeds from the sale of 
  9.1   their prior homestead, own of record as joint tenants, and 
  9.2   qualify as homestead property under section 273.124 in the 
  9.3   calendar year in which the recipient dies and prior to the 
  9.4   recipient's death shall be deemed to be real property classified 
  9.5   and taxed to the recipient and their surviving joint tenant 
  9.6   spouse as homestead property in the calendar year in which the 
  9.7   recipient dies.  The surviving spouse, or any person with 
  9.8   personal knowledge of the facts, may provide an affidavit 
  9.9   describing the homestead property affected by this clause and 
  9.10  stating facts showing compliance with this clause.  The 
  9.11  affidavit shall be prima facie evidence of the facts it states. 
  9.12     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
  9.13  from July 1, 2003, and applies to medical assistance liens 
  9.14  recorded or filed on or after that date. 
  9.15     Sec. 7.  Minnesota Statutes 2003 Supplement, section 
  9.16  524.3-805, is amended to read: 
  9.17     524.3-805 [CLASSIFICATION OF CLAIMS.] 
  9.18     (a) If the applicable assets of the estate are insufficient 
  9.19  to pay all claims in full, the personal representative shall 
  9.20  make payment in the following order: 
  9.21     (1) costs and expenses of administration; 
  9.22     (2) reasonable funeral expenses; 
  9.23     (3) debts and taxes with preference under federal law; 
  9.24     (4) reasonable and necessary medical, hospital, or nursing 
  9.25  home expenses of the last illness of the decedent, including 
  9.26  compensation of persons attending the decedent, a claim filed 
  9.27  under section 256B.15 for recovery of expenditures for 
  9.28  alternative care for nonmedical assistance recipients under 
  9.29  section 256B.0913, and including a claim filed pursuant to 
  9.30  section 256B.15; 
  9.31     (5) reasonable and necessary medical, hospital, and nursing 
  9.32  home expenses for the care of the decedent during the year 
  9.33  immediately preceding death; 
  9.34     (6) debts with preference under other laws of this state, 
  9.35  and state taxes; 
  9.36     (7) all other claims. 
 10.1      (b) No preference shall be given in the payment of any 
 10.2   claim over any other claim of the same class, and a claim due 
 10.3   and payable shall not be entitled to a preference over claims 
 10.4   not due, except that if claims for expenses of the last illness 
 10.5   involve only claims filed under section 256B.15 for recovery of 
 10.6   expenditures for alternative care for nonmedical assistance 
 10.7   recipients under section 256B.0913, section 246.53 for costs of 
 10.8   state hospital care and claims filed under section 256B.15, 
 10.9   claims filed to recover expenditures for alternative care for 
 10.10  nonmedical assistance recipients under section 256B.0913 shall 
 10.11  have preference over claims filed under both sections 246.53 and 
 10.12  other claims filed under section 256B.15, and.  Claims filed 
 10.13  under section 246.53 have preference over claims filed under 
 10.14  section 256B.15 for recovery of amounts other than those for 
 10.15  expenditures for alternative care for nonmedical assistance 
 10.16  recipients under section 256B.0913. 
 10.17     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive 
 10.18  from July 1, 2003. 
 10.19     Sec. 8.  [APPROPRIATION.] 
 10.20     $....... is appropriated from the general fund to the 
 10.21  commissioner of human services for the fiscal year beginning 
 10.22  July 1, 2004, for the purposes of sections 1 to 7 and 9.  
 10.23     Sec. 9.  [REPEALER.] 
 10.24     (a) Minnesota Statutes 2003 Supplement, section 256B.15, 
 10.25  subdivisions 1c, 1d, 1e, 1f, 1g, 1h, 1i, 1j, and 1k, are 
 10.26  repealed retroactively from July 1, 2003. 
 10.27     (b) Minnesota Statutes 2003 Supplement, sections 514.991; 
 10.28  514.992; 514.993; 514.994; and 514.995, are repealed 
 10.29  retroactively from July 1, 2003.