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 16A.17, by 
  1.12            adding a subdivision; 16B.47; 16B.48, subdivision 2; 
  1.13            16B.49; 16C.08, subdivisions 2, 3; 16C.09; 116P.05, 
  1.14            subdivision 2; 116P.09, subdivisions 4, 5, 7; 116P.10; 
  1.15            116P.14, subdivision 2; 124D.135, subdivision 8; 
  1.16            124D.16, subdivision 6; 124D.20, by adding 
  1.17            subdivisions; 136A.121, subdivision 7; 256.9657, 
  1.18            subdivision 1; 256.969, subdivision 3a; 256B.0625, 
  1.19            subdivision 13; 256B.19, subdivision 1d; 256B.195, 
  1.20            subdivision 4; 256B.32, subdivision 1; 256B.431, 
  1.21            subdivision 23, by adding a subdivision; 256B.75; 
  1.22            268.186; 289A.50, subdivision 2a; 289A.56, subdivision 
  1.23            4; 297A.75, subdivisions 2, 4; 297F.10, subdivision 1; 
  1.24            Laws 2002, chapter 220, article 13, section 9, 
  1.25            subdivision 2, as amended; repealing Minnesota 
  1.26            Statutes 2002, sections 1.31; 16B.50; 16C.07; 43A.047; 
  1.27            115A.908, subdivision 2; 116P.13; 256.973; 256B.195, 
  1.28            subdivision 5. 
  1.29  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.30                             ARTICLE 1 
  1.31                           E-12 EDUCATION 
  1.32  Section 1.  [E-12 EDUCATION APPROPRIATIONS AND REDUCTIONS.] 
  1.33     The dollar amounts in the columns under "APPROPRIATION 
  1.34  CHANGE" are added to or, if shown in parentheses, are subtracted 
  1.35  from the appropriations in Laws 2001, First Special Session 
  1.36  chapter 3 or 6, as amended, by Laws 2002, chapter 220 or 374, as 
  1.37  amended, or other law to the specified agencies.  The 
  2.1   appropriations are from the general fund or other named fund and 
  2.2   are available for the fiscal years indicated for each purpose.  
  2.3   The figure "2003" means that the addition to or subtraction from 
  2.4   the appropriations listed under the figure is for the fiscal 
  2.5   year ending June 30, 2003. 
  2.6                                                          2003 
  2.7   APPROPRIATION REDUCTIONS                         $   (4,787,000)
  2.8      Sec. 2.  Minnesota Statutes 2002, section 124D.135, 
  2.9   subdivision 8, is amended to read: 
  2.10     Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
  2.11  the average balance, during the most recent three-year period in 
  2.12  a district's early childhood family education reserve account on 
  2.13  June 30 of each year, adjusted for any prior reductions under 
  2.14  this subdivision, must not be greater than 25 percent of the sum 
  2.15  of the district's maximum early childhood family education 
  2.16  annual revenue under subdivision 1, excluding adjustments under 
  2.17  this subdivision, plus any fees, grants or other revenue 
  2.18  received by the district for early childhood family education 
  2.19  programs for the prior year. 
  2.20     (b) If a district's adjusted average early childhood family 
  2.21  education reserve over the three-year period is in excess of 25 
  2.22  percent of the prior year annual revenue the limit under 
  2.23  paragraph (a), the district's early childhood family education 
  2.24  state aid and levy authority for the current school year must be 
  2.25  reduced by the lesser of the current year revenue under 
  2.26  subdivision 1 or the excess reserve amount.  The aid reduction 
  2.27  equals the product of the lesser of the excess reserve amount or 
  2.28  the current year revenue under subdivision 1 times the ratio of 
  2.29  the district's aid for the prior current year under subdivision 
  2.30  4 to the district's revenue for the prior current year under 
  2.31  subdivision 1.  The levy reduction equals the excess reserve 
  2.32  amount minus the aid reduction.  The commissioner must 
  2.33  reallocate aid and levy reduced under this subdivision to other 
  2.34  eligible early childhood family education programs in proportion 
  2.35  to each district's revenue for the prior year under subdivision 
  2.36  1.  For purposes of this paragraph, if a district does not levy 
  3.1   the entire amount permitted under subdivision 3, the revenue 
  3.2   under subdivision 1 must be reduced in proportion to the actual 
  3.3   amount levied.  
  3.4      (b) (c) Notwithstanding paragraph (a), for fiscal year 
  3.5   2003, the excess reserve amount shall be computed using the 
  3.6   balance in a district's early childhood family education reserve 
  3.7   account on June 30, 2002.  For fiscal year 2004, the excess 
  3.8   reserve amount shall be computed using the adjusted average 
  3.9   balance in a district's early childhood family education reserve 
  3.10  account on June 30, 2002, and June 30, 2003. 
  3.11     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
  3.12  fiscal year 2003. 
  3.13     Sec. 3.  Minnesota Statutes 2002, section 124D.16, 
  3.14  subdivision 6, is amended to read: 
  3.15     Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
  3.16  the average balance, during the most recent three-year period, 
  3.17  in a district's school readiness reserve account on June 30 of 
  3.18  each year, adjusted for any prior reductions under this 
  3.19  subdivision, must not be greater than 25 percent of the 
  3.20  district's school readiness annual revenue for the prior year, 
  3.21  excluding adjustments under this subdivision.  
  3.22     (b) If a district's adjusted average school readiness 
  3.23  reserve over the three-year period is in excess of 25 percent of 
  3.24  the prior year annual revenue the limit under paragraph (a), the 
  3.25  district's current year school readiness state aid must be 
  3.26  reduced by the lesser of the excess reserve amount or the 
  3.27  current year aid.  The commissioner must reallocate aid reduced 
  3.28  under this subdivision to other eligible school readiness 
  3.29  programs in proportion to each district's aid for the prior year 
  3.30  under subdivision 2.  
  3.31     (b) (c) Notwithstanding paragraph (a), for fiscal year 
  3.32  2003, the excess reserve amount shall be computed using the 
  3.33  balance in a district's school readiness reserve account on June 
  3.34  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
  3.35  be computed using the adjusted average balance in a district's 
  3.36  school readiness reserve account on June 30, 2002, and June 30, 
  4.1   2003. 
  4.2      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
  4.3   fiscal year 2003. 
  4.4      Sec. 4.  Minnesota Statutes 2002, section 124D.20, is 
  4.5   amended by adding a subdivision to read: 
  4.6      Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
  4.7   the sum of the average balances during the most recent 
  4.8   three-year period in a district's community education reserve 
  4.9   account and unreserved/undesignated community service fund 
  4.10  account on June 30 of each year, adjusted for any prior 
  4.11  reductions under this subdivision, must not be greater than 25 
  4.12  percent of the sum of the district's maximum total community 
  4.13  education revenue under subdivision 1, excluding adjustments 
  4.14  under this subdivision, plus the district's additional community 
  4.15  education levy under section 124D.21, plus any fees, grants, or 
  4.16  other revenue received by the district for community education 
  4.17  programs for the prior year.  For purposes of this paragraph, 
  4.18  "community education programs" means programs according to 
  4.19  subdivisions 8, paragraph (a), and 9, and section 124D.19, 
  4.20  subdivision 12, excluding early childhood family education 
  4.21  programs under section 124D.13, school readiness programs under 
  4.22  sections 124D.15 and 124D.17, and adult basic education programs 
  4.23  under section 124D.52. 
  4.24     (b) If the sum of the average balances during the most 
  4.25  recent three-year period in a district's community education 
  4.26  reserve account and unreserved/undesignated community service 
  4.27  fund account on June 30 of each year, adjusted for any prior 
  4.28  reductions under this subdivision, is in excess of the limit 
  4.29  under paragraph (a), the district's community education state 
  4.30  aid and levy authority for the current school year must be 
  4.31  reduced by the lesser of the current year revenue under 
  4.32  subdivision 1 or the excess reserve amount.  The aid reduction 
  4.33  equals the product of the lesser of the excess reserve amount or 
  4.34  the current year revenue under subdivision 1 times the ratio of 
  4.35  the district's aid for the current year under subdivision 7 to 
  4.36  the district's revenue for the current year under subdivision 
  5.1   1.  The levy reduction equals the excess reserve amount minus 
  5.2   the aid reduction.  For purposes of this paragraph, if a 
  5.3   district does not levy the entire amount permitted under 
  5.4   subdivision 5 or 6, the revenue under subdivision 1 must be 
  5.5   reduced in proportion to the actual amount levied. 
  5.6      (c) Notwithstanding paragraph (a), for fiscal year 2003, 
  5.7   the excess reserve amount shall be computed using the balances 
  5.8   in a district's community education reserve account and 
  5.9   unreserved/undesignated community service fund account on June 
  5.10  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
  5.11  be computed using the adjusted average balances in a district's 
  5.12  community education reserve account and unreserved/undesignated 
  5.13  community service fund account on June 30, 2002, and June 30, 
  5.14  2003. 
  5.15     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
  5.16  fiscal year 2003. 
  5.17     Sec. 5.  Minnesota Statutes 2002, section 124D.20, is 
  5.18  amended by adding a subdivision to read: 
  5.19     Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
  5.20  reserve account may exceed the 25 percent limit established 
  5.21  under subdivision 11 because of extenuating circumstances, prior 
  5.22  approval to exceed the limit must be obtained in writing from 
  5.23  the commissioner. 
  5.24     (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
  5.25  district may submit a waiver request within 30 days of the date 
  5.26  of final enactment. 
  5.27                        APPROPRIATION CHANGE 
  5.28                                2003 
  5.29  Sec. 6.  APPROPRIATIONS; DEPARTMENT OF
  5.30  CHILDREN, FAMILIES, AND LEARNING 
  5.31  Subdivision 1.  The sums in this 
  5.32  subdivision are subtracted from the 
  5.33  general fund appropriations to the 
  5.34  department of children, families, and 
  5.35  learning for operating purposes. 
  5.36       (1,044,000)    .....     2003 
  5.37  Subd. 2.  Department 
  5.38  The sums in this subdivision are 
  5.39  subtracted from the general fund 
  6.1   appropriation to the department of 
  6.2   children, families, and learning for 
  6.3   aids and grants. 
  6.4          (206,000)    .....     2003 
  6.5   Subd. 3.  School Readiness 
  6.6          (791,000)    .....     2003 
  6.7   Subd. 4.  Early Childhood and Community 
  6.8   Education 
  6.9          (769,000)    .....     2003 
  6.10  Subd. 5.  Community Education 
  6.11       (1,807,000)    .....     2003 
  6.12  Sec. 7.  APPROPRIATIONS; PERPICH CENTER
  6.13  FOR ARTS EDUCATION 
  6.14         (130,000)    .....     2003 
  6.15  Sec. 8.  APPROPRIATIONS; MINNESOTA STATE ACADEMIES 
  6.16          (40,000)    .....     2003 
  6.17     Sec. 9.  [EFFECTIVE DATE.] 
  6.18     Sections 1 to 8 are effective the day following final 
  6.19  enactment, unless otherwise specified. 
  6.20                             ARTICLE 2 
  6.21                          HIGHER EDUCATION 
  6.22  Section 1.  [HIGHER EDUCATION REDUCTIONS.] 
  6.23     The dollar amounts in the columns under "APPROPRIATION 
  6.24  CHANGE" are added to or, if shown in parentheses, are subtracted 
  6.25  from the appropriations in Laws 2001, First Special Session 
  6.26  chapter 1, as amended, by Laws 2002, chapter 220 or 374, as 
  6.27  amended, or other law to the specified agencies.  The 
  6.28  appropriations are from the general fund or other named fund and 
  6.29  are available for the fiscal years indicated for each purpose.  
  6.30  The figure "2003" means that the addition to or subtraction from 
  6.31  the appropriations listed under the figure is for the fiscal 
  6.32  year ending June 30, 2003. 
  6.33                                                         2003 
  6.34  TRANSFERS FROM OTHER FUNDS                       $   30,000,000 
  6.35  APPROPRIATION REDUCTIONS                            (50,107,000)
  6.36                                             APPROPRIATION CHANGE
  6.37  Sec. 2.  BOARD OF REGENTS
  6.38  OF THE UNIVERSITY OF MINNESOTA                      (25,000,000)
  7.1   Sec. 3.  BOARD OF TRUSTEES OF
  7.2   THE MINNESOTA STATE COLLEGES AND UNIVERSITIES       (25,000,000)
  7.3   Sec. 4.  HIGHER EDUCATION
  7.4   SERVICES OFFICE                                        (107,000)
  7.5   This amount is subtracted from the 
  7.6   general fund appropriations to the 
  7.7   higher education services office for 
  7.8   operating purposes. 
  7.9      Sec. 5.  Minnesota Statutes 2002, section 136A.121, 
  7.10  subdivision 7, is amended to read: 
  7.11     Subd. 7.  [INSUFFICIENT APPROPRIATION.] If the amount 
  7.12  appropriated is determined by the office to be insufficient to 
  7.13  make full awards to applicants under subdivision 5, before any 
  7.14  award for that year has been disbursed, awards must be reduced 
  7.15  by: 
  7.16     (1) adding a surcharge to the applicant's assigned family 
  7.17  responsibility, as defined in section 136A.101, subdivision 5a; 
  7.18  and 
  7.19     (2) a percentage increase in the applicant's assigned 
  7.20  student responsibility, as defined in subdivision 5; and 
  7.21     (3) eliminating state grant funding for summer school 
  7.22  programs.  
  7.23     Sec. 6.  [SELF LOAN RESERVE FUND TRANSFER.] 
  7.24     Notwithstanding any law to the contrary, the higher 
  7.25  education services office shall transfer $30,000,000 of 
  7.26  uncommitted balances in the SELF loan reserve fund to the 
  7.27  general fund.  
  7.28     Sec. 7.  [EFFECTIVE DATE.] 
  7.29     Sections 1 to 6 are effective the day following final 
  7.30  enactment, unless otherwise specified. 
  7.31                             ARTICLE 3 
  7.32                     HEALTH AND HUMAN SERVICES 
  7.33  Section 1.  [HEALTH AND HUMAN SERVICES REDUCTIONS.] 
  7.34     The dollar amounts in the columns under "APPROPRIATION 
  7.35  CHANGE" are added to or, if shown in parentheses, are subtracted 
  7.36  from the appropriations in Laws 2001, First Special Session 
  7.37  chapter 9, as amended, by Laws 2002, chapter 220 or 374, as 
  7.38  amended, or other law to the specified agencies.  The 
  8.1   appropriations are from the general fund or other named fund and 
  8.2   are available for the fiscal years indicated for each purpose.  
  8.3   The figure "2003" means that the addition to or subtraction from 
  8.4   the appropriations listed under the figure is for the fiscal 
  8.5   year ending June 30, 2003. 
  8.6                                                          2003
  8.7   TRANSFERS FROM OTHER FUNDS                       $    9,900,000 
  8.8   APPROPRIATION REDUCTIONS                            (16,938,000)
  8.9                                              APPROPRIATION CHANGE
  8.10  Sec. 2.  COMMISSIONER OF HUMAN SERVICES 
  8.11  Subdivision 1.  Total
  8.12  Appropriation Reductions                            (11,212,000)
  8.13                Summary by Fund
  8.14  General                           (11,212,000)
  8.15  Subd. 2.  Agency Management 
  8.16  General                                              (3,333,000)
  8.17  [ADMINISTRATION REDUCTION.] The 
  8.18  department's general fund fiscal year 
  8.19  2003 administrative appropriation is 
  8.20  reduced by $3,333,000. 
  8.21  [SPECIAL REVENUE FUND TRANSFER.] 
  8.22  Notwithstanding any law to the 
  8.23  contrary, excluding accounts authorized 
  8.24  under Minnesota Statutes, section 
  8.25  16A.1286 and chapter 254B, the 
  8.26  commissioner shall transfer $1,200,000 
  8.27  of uncommitted special revenue fund 
  8.28  balances to the general fund upon final 
  8.29  enactment.  The actual transfers shall 
  8.30  be identified within the standard 
  8.31  information provided to the chairs of 
  8.32  the house health and human services 
  8.33  finance committee and the senate 
  8.34  health, human services, and corrections 
  8.35  budget division in December 2003. 
  8.36  [STATE-OPERATED SERVICES TRANSFER.] The 
  8.37  commissioner shall transfer $3,200,000 
  8.38  from the TBI enterprise, $1,000,000 
  8.39  from lease income, and $500,000 from 
  8.40  the ICF/MR depreciation accounts to the 
  8.41  general fund upon final enactment. 
  8.42  Subd. 3.  Administrative
  8.43  Reimbursement/Pass-through
  8.44  Federal TANF                                            894,000 
  8.45  [TANF INDIRECT COSTS.] The fiscal year 
  8.46  2003 federal TANF appropriation for 
  8.47  TANF indirect costs is increased by 
  8.48  $894,000.  Notwithstanding Minnesota 
  8.49  Statutes, section 256J.02, subdivision 
  8.50  5, the limit on TANF indirect cost 
  8.51  liability for fiscal year 2003 shall be 
  9.1   $2,929,000.  For the calendar quarter 
  9.2   starting October 1, 2002, and until the 
  9.3   indirect cost liability limit is 
  9.4   reached, the commissioner shall 
  9.5   reimburse the general fund a rate of 
  9.6   100 percent of TANF-allowable indirect 
  9.7   costs. 
  9.8   Subd. 4.  Children's Services Grants 
  9.9   General                                                (750,000)
  9.10  [CRIMINAL JUSTICE TRAINING GRANT.] The 
  9.11  fiscal year 2003 appropriation for the 
  9.12  criminal justice training grant is 
  9.13  reduced by $5,000. 
  9.14  [FETAL ALCOHOL SYNDROME GRANT.] The 
  9.15  fiscal year 2003 appropriation for the 
  9.16  fetal alcohol syndrome grant is reduced 
  9.17  by $106,000. 
  9.18  [FOSTER AND ADOPT RECRUITMENT GRANT.] 
  9.19  The fiscal year 2003 appropriation for 
  9.20  the foster and adopt recruitment grant 
  9.21  is reduced by $55,000. 
  9.22  [ADOPTION ASSISTANCE AND RELATIVE 
  9.23  CUSTODY ASSISTANCE GRANTS.] The fiscal 
  9.24  year 2003 appropriation for the 
  9.25  adoption assistance and relative 
  9.26  custody assistance grants is reduced by 
  9.27  $584,000. 
  9.28  Subd. 5.  MA Basic Health Care Grants -
  9.29  Families and Children 
  9.30  General                                              (1,007,000)
  9.31  Subd. 6.  MA Basic Health Care Grants -  
  9.32  Elderly and Disabled
  9.33  General                                              (2,686,000)
  9.34  Subd. 7.  General Assistance Medical 
  9.35  Care Grants
  9.36  General                                                (457,000)
  9.37  Subd. 8.  Prescription Drug Program 
  9.38  General                                                (143,000)
  9.39  Subd. 9.  Aging and Adult Service Grants 
  9.40  General                                                (671,000)
  9.41  [HOME SHARE GRANT.] The fiscal year 
  9.42  2003 appropriation for the home share 
  9.43  grant is reduced by $156,000. 
  9.44  [COMMUNITY SERVICE GRANT.] The fiscal 
  9.45  year 2003 appropriation for the 
  9.46  community service grant is reduced by 
  9.47  $515,000. 
  9.48  Subd. 10.  Medical Assistance Long-term Care
  9.49  Waivers and Home Care Grants 
  9.50  General                                                 66,000 
 10.1   [TARGETED CASE MANAGEMENT FOR HOME CARE 
 10.2   RECIPIENTS.] Implementation of the 
 10.3   targeted case management benefit for 
 10.4   home care recipients, pursuant to Laws 
 10.5   2001, First Special Session chapter 9, 
 10.6   article 3, sections 20, 21, 23 to 25, 
 10.7   27, and 28 (Minnesota Statutes, section 
 10.8   256B.0621, subdivisions 2, 3, 5 to 7, 
 10.9   and 9, and 10) will be delayed until 
 10.10  July 1, 2005. 
 10.11  [COMMON SERVICE MENU.] Implementation 
 10.12  of the common service menu option 
 10.13  within the home- and community-based 
 10.14  waivers, pursuant to Laws 2001, First 
 10.15  Special Session chapter 9, article 3, 
 10.16  section 63 (Minnesota Statutes, section 
 10.17  256B.49, subdivision 16) will be 
 10.18  delayed until July 1, 2005. 
 10.19  Subd. 11.  Medical Assistance Long-term
 10.20  Care Facilities Grants
 10.21  General                                                (199,000)
 10.22  [ICF/MR SPECIAL RATE PROVISIONS FOR 
 10.23  OCCUPANCY.] Notwithstanding Minnesota 
 10.24  Statutes, section 256B.5013, 
 10.25  subdivision 4, the commissioner will 
 10.26  suspend new authorizations of rate 
 10.27  adjustments to ICF/MR facilities for 
 10.28  the purposes of addressing occupancy.  
 10.29  This suspension will take effect as of 
 10.30  April 1, 2003, and will sunset on July 
 10.31  1, 2005. 
 10.32  Subd. 12.  Alternative Care Grants 
 10.33  General                                              (1,700,000)
 10.34  [ALTERNATIVE CARE TARGETED FUNDS 
 10.35  REDUCTION.] The commissioner shall 
 10.36  adjust the allocation of targeted 
 10.37  alternative care funds to reduce net 
 10.38  general fund expenditures by $1,000,000 
 10.39  in fiscal year 2003.  The reduction 
 10.40  shall be achieved by delaying 
 10.41  implementation of common service menu 
 10.42  provisions and by working with counties 
 10.43  to create efficiencies, including 
 10.44  moving medical assistance eligible 
 10.45  persons from alternative care to the 
 10.46  elderly waiver more quickly. 
 10.47  Subd. 13.  Chemical Dependency
 10.48  Nonentitlement Grants 
 10.49  General                                                (268,000)
 10.50  [CD NONENTITLEMENT GRANTS.] The fiscal 
 10.51  year 2003 appropriation for chemical 
 10.52  health nonentitlement grants shall be 
 10.53  reduced by $268,000.  This reduction 
 10.54  affects only the chemical use 
 10.55  assessment of minors authorized under 
 10.56  Minnesota Statutes, section 260B.157, 
 10.57  subdivision 1, and the statewide 
 10.58  detoxification transportation program 
 10.59  authorized under Minnesota Statutes, 
 10.60  section 254A.17, subdivision 3. 
 11.1   Subd. 14.  Work Grants 
 11.2   Federal TANF                                           (894,000)
 11.3   [SUPPORTIVE WORK GRANTS.] The fiscal 
 11.4   year 2003 federal TANF appropriation 
 11.5   for supportive work grants is reduced 
 11.6   by $894,000. 
 11.7   Subd. 15.  Economic Support Grants -
 11.8   Other Assistance 
 11.9   General                                                 (64,000)
 11.10  [FRAUD PREVENTION INVESTIGATION 
 11.11  GRANTS.] The fiscal year 2003 general 
 11.12  fund appropriation for fraud prevention 
 11.13  investigation grants is reduced by 
 11.14  $64,000. 
 11.15  Sec. 3.  COMMISSIONER OF HEALTH 
 11.16  Subdivision 1.  Total General Fund
 11.17  Appropriation Reductions                             (5,446,000)
 11.18                Summary by Fund
 11.19  General                            (5,446,000)
 11.20  Transfers from
 11.21  Other Funds                        (4,000,000)
 11.22  $500,000 of the appropriation reduction 
 11.23  is from long-term care quality 
 11.24  demonstration grants authorized in Laws 
 11.25  2001, First Special Session chapter 9, 
 11.26  article 17, section 3. 
 11.27  $500,000 of the appropriation reduction 
 11.28  is from long-term care transition 
 11.29  planning grants authorized in Laws 
 11.30  2001, First Special Session chapter 9, 
 11.31  article 17, section 3. 
 11.32  $3,557,549 of the appropriation 
 11.33  reduction is from WIC grants 
 11.34  administration authorized in Laws 2001, 
 11.35  First Special Session chapter 9, 
 11.36  article 17, section 3. 
 11.37  $4,000,000 of the appropriation for 
 11.38  tobacco use and prevention is 
 11.39  transferred to the commissioner of 
 11.40  finance for cancellation to the general 
 11.41  fund. 
 11.42  Sec. 4.  EMERGENCY MEDICAL SERVICES BOARD               (45,000)
 11.43  Sec. 5.  COUNCIL ON DISABILITY                          (29,000) 
 11.44  Sec. 6.  OMBUDSMAN FOR MENTAL HEALTH
 11.45  AND MENTAL RETARDATION                                  (73,000)
 11.46  [CANCELLATION.] $14,500 of the amount 
 11.47  for crime victims oversight is canceled 
 11.48  to the general fund. 
 11.49  Sec. 7.  OMBUDSMAN FOR FAMILIES                          (9,000)
 11.50  Sec. 8.  VETERANS HOME BOARD                           (124,000)
 12.1      Sec. 9.  Minnesota Statutes 2002, section 256.9657, 
 12.2   subdivision 1, is amended to read: 
 12.3      Subdivision 1.  [NURSING HOME LICENSE SURCHARGE.] (a) 
 12.4   Effective July 1, 1993, each non-state-operated nursing home 
 12.5   licensed under chapter 144A shall pay to the commissioner an 
 12.6   annual surcharge according to the schedule in subdivision 4.  
 12.7   The surcharge shall be calculated as $620 per licensed bed.  If 
 12.8   the number of licensed beds is reduced, the surcharge shall be 
 12.9   based on the number of remaining licensed beds the second month 
 12.10  following the receipt of timely notice by the commissioner of 
 12.11  human services that beds have been delicensed.  The nursing home 
 12.12  must notify the commissioner of health in writing when beds are 
 12.13  delicensed.  The commissioner of health must notify the 
 12.14  commissioner of human services within ten working days after 
 12.15  receiving written notification.  If the notification is received 
 12.16  by the commissioner of human services by the 15th of the month, 
 12.17  the invoice for the second following month must be reduced to 
 12.18  recognize the delicensing of beds.  Beds on layaway status 
 12.19  continue to be subject to the surcharge.  The commissioner of 
 12.20  human services must acknowledge a medical care surcharge appeal 
 12.21  within 30 days of receipt of the written appeal from the 
 12.22  provider. 
 12.23     (b) Effective July 1, 1994, the surcharge in paragraph (a) 
 12.24  shall be increased to $625. 
 12.25     (c) Effective August 15, 2002, the surcharge under 
 12.26  paragraph (b) shall be increased to $990. 
 12.27     (d) Effective April 15, 2003, the surcharge under paragraph 
 12.28  (c) shall be increased to $2,741. 
 12.29     (e) Between April 1, 2002, and August 15, 2003 2004, a 
 12.30  facility governed by this subdivision may elect to assume full 
 12.31  participation in the medical assistance program by agreeing to 
 12.32  comply with all of the requirements of the medical assistance 
 12.33  program, including the rate equalization law in section 256B.48, 
 12.34  subdivision 1, paragraph (a), and all other requirements 
 12.35  established in law or rule, and to begin intake of new medical 
 12.36  assistance recipients.  Rates will be determined under Minnesota 
 13.1   Rules, parts 9549.0010 to 9549.0080.  Notwithstanding section 
 13.2   256B.431, subdivision 27, paragraph (i), rate calculations will 
 13.3   be subject to limits as prescribed in rule and law.  Other than 
 13.4   the adjustments in sections 256B.431, subdivisions 30 and 32; 
 13.5   256B.437, subdivision 3, paragraph (b), Minnesota Rules, part 
 13.6   9549.0057, and any other applicable legislation enacted prior to 
 13.7   the finalization of rates, facilities assuming full 
 13.8   participation in medical assistance under this paragraph are not 
 13.9   eligible for any rate adjustments until the July 1 following 
 13.10  their settle-up period. 
 13.11     <b>[EFFECTIVE DATE.]</b> This section is effective February 28, 
 13.12  2003. 
 13.13     Sec. 10.  Minnesota Statutes 2002, section 256.969, 
 13.14  subdivision 3a, is amended to read: 
 13.15     Subd. 3a.  [PAYMENTS.] (a) Acute care hospital billings 
 13.16  under the medical assistance program must not be submitted until 
 13.17  the recipient is discharged.  However, the commissioner shall 
 13.18  establish monthly interim payments for inpatient hospitals that 
 13.19  have individual patient lengths of stay over 30 days regardless 
 13.20  of diagnostic category.  Except as provided in section 256.9693, 
 13.21  medical assistance reimbursement for treatment of mental illness 
 13.22  shall be reimbursed based on diagnostic classifications.  
 13.23  Individual hospital payments established under this section and 
 13.24  sections 256.9685, 256.9686, and 256.9695, in addition to third 
 13.25  party and recipient liability, for discharges occurring during 
 13.26  the rate year shall not exceed, in aggregate, the charges for 
 13.27  the medical assistance covered inpatient services paid for the 
 13.28  same period of time to the hospital.  This payment limitation 
 13.29  shall be calculated separately for medical assistance and 
 13.30  general assistance medical care services.  The limitation on 
 13.31  general assistance medical care shall be effective for 
 13.32  admissions occurring on or after July 1, 1991.  Services that 
 13.33  have rates established under subdivision 11 or 12, must be 
 13.34  limited separately from other services.  After consulting with 
 13.35  the affected hospitals, the commissioner may consider related 
 13.36  hospitals one entity and may merge the payment rates while 
 14.1   maintaining separate provider numbers.  The operating and 
 14.2   property base rates per admission or per day shall be derived 
 14.3   from the best Medicare and claims data available when rates are 
 14.4   established.  The commissioner shall determine the best Medicare 
 14.5   and claims data, taking into consideration variables of recency 
 14.6   of the data, audit disposition, settlement status, and the 
 14.7   ability to set rates in a timely manner.  The commissioner shall 
 14.8   notify hospitals of payment rates by December 1 of the year 
 14.9   preceding the rate year.  The rate setting data must reflect the 
 14.10  admissions data used to establish relative values.  Base year 
 14.11  changes from 1981 to the base year established for the rate year 
 14.12  beginning January 1, 1991, and for subsequent rate years, shall 
 14.13  not be limited to the limits ending June 30, 1987, on the 
 14.14  maximum rate of increase under subdivision 1.  The commissioner 
 14.15  may adjust base year cost, relative value, and case mix index 
 14.16  data to exclude the costs of services that have been 
 14.17  discontinued by the October 1 of the year preceding the rate 
 14.18  year or that are paid separately from inpatient services.  
 14.19  Inpatient stays that encompass portions of two or more rate 
 14.20  years shall have payments established based on payment rates in 
 14.21  effect at the time of admission unless the date of admission 
 14.22  preceded the rate year in effect by six months or more.  In this 
 14.23  case, operating payment rates for services rendered during the 
 14.24  rate year in effect and established based on the date of 
 14.25  admission shall be adjusted to the rate year in effect by the 
 14.26  hospital cost index. 
 14.27     (b) For fee-for-service admissions occurring on or after 
 14.28  July 1, 2002, the total payment, before third-party liability 
 14.29  and spenddown, made to hospitals for inpatient services is 
 14.30  reduced by .5 percent from the current statutory rates. 
 14.31     (c) For fee-for-service admissions occurring on or after 
 14.32  March 1, 2003, the total payment, before third-party liability 
 14.33  and spenddown, made to hospitals for inpatient services is 
 14.34  reduced five percent from the current statutory rates.  Mental 
 14.35  health services within diagnosis related groups 424 to 432 and 
 14.36  facilities defined under subdivision 16 are excluded from this 
 15.1   paragraph. 
 15.2      Sec. 11.  Minnesota Statutes 2002, section 256B.0625, 
 15.3   subdivision 13, is amended to read: 
 15.4      Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
 15.5   except for fertility drugs when specifically used to enhance 
 15.6   fertility, if prescribed by a licensed practitioner and 
 15.7   dispensed by a licensed pharmacist, by a physician enrolled in 
 15.8   the medical assistance program as a dispensing physician, or by 
 15.9   a physician or a nurse practitioner employed by or under 
 15.10  contract with a community health board as defined in section 
 15.11  145A.02, subdivision 5, for the purposes of communicable disease 
 15.12  control.  The commissioner, after receiving recommendations from 
 15.13  professional medical associations and professional pharmacist 
 15.14  associations, shall designate a formulary committee to advise 
 15.15  the commissioner on the names of drugs for which payment is 
 15.16  made, recommend a system for reimbursing providers on a set fee 
 15.17  or charge basis rather than the present system, and develop 
 15.18  methods encouraging use of generic drugs when they are less 
 15.19  expensive and equally effective as trademark drugs.  The 
 15.20  formulary committee shall consist of nine members, four of whom 
 15.21  shall be physicians who are not employed by the department of 
 15.22  human services, and a majority of whose practice is for persons 
 15.23  paying privately or through health insurance, three of whom 
 15.24  shall be pharmacists who are not employed by the department of 
 15.25  human services, and a majority of whose practice is for persons 
 15.26  paying privately or through health insurance, a consumer 
 15.27  representative, and a nursing home representative.  Committee 
 15.28  members shall serve three-year terms and shall serve without 
 15.29  compensation.  Members may be reappointed once.  
 15.30     (b) The commissioner shall establish a drug formulary.  Its 
 15.31  establishment and publication shall not be subject to the 
 15.32  requirements of the Administrative Procedure Act, but the 
 15.33  formulary committee shall review and comment on the formulary 
 15.34  contents.  
 15.35     The formulary shall not include:  
 15.36     (i) drugs or products for which there is no federal 
 16.1   funding; 
 16.2      (ii) over-the-counter drugs, except for antacids, 
 16.3   acetaminophen, family planning products, aspirin, insulin, 
 16.4   products for the treatment of lice, vitamins for adults with 
 16.5   documented vitamin deficiencies, vitamins for children under the 
 16.6   age of seven and pregnant or nursing women, and any other 
 16.7   over-the-counter drug identified by the commissioner, in 
 16.8   consultation with the drug formulary committee, as necessary, 
 16.9   appropriate, and cost-effective for the treatment of certain 
 16.10  specified chronic diseases, conditions or disorders, and this 
 16.11  determination shall not be subject to the requirements of 
 16.12  chapter 14; 
 16.13     (iii) anorectics, except that medically necessary 
 16.14  anorectics shall be covered for a recipient previously diagnosed 
 16.15  as having pickwickian syndrome and currently diagnosed as having 
 16.16  diabetes and being morbidly obese; 
 16.17     (iv) drugs for which medical value has not been 
 16.18  established; and 
 16.19     (v) drugs from manufacturers who have not signed a rebate 
 16.20  agreement with the Department of Health and Human Services 
 16.21  pursuant to section 1927 of title XIX of the Social Security Act.
 16.22     The commissioner shall publish conditions for prohibiting 
 16.23  payment for specific drugs after considering the formulary 
 16.24  committee's recommendations.  An honorarium of $100 per meeting 
 16.25  and reimbursement for mileage shall be paid to each committee 
 16.26  member in attendance.  
 16.27     (c) The basis for determining the amount of payment shall 
 16.28  be the lower of the actual acquisition costs of the drugs plus a 
 16.29  fixed dispensing fee; the maximum allowable cost set by the 
 16.30  federal government or by the commissioner plus the fixed 
 16.31  dispensing fee; or the usual and customary price charged to the 
 16.32  public.  The amount of payment basis must be reduced to reflect 
 16.33  all discount amounts applied to the charge by any 
 16.34  provider/insurer agreement or contract for submitted charges to 
 16.35  medical assistance programs.  The net submitted charge may not 
 16.36  be greater than the patient liability for the service.  The 
 17.1   pharmacy dispensing fee shall be $3.65, except that the 
 17.2   dispensing fee for intravenous solutions which must be 
 17.3   compounded by the pharmacist shall be $8 per bag, $14 per bag 
 17.4   for cancer chemotherapy products, and $30 per bag for total 
 17.5   parenteral nutritional products dispensed in one liter 
 17.6   quantities, or $44 per bag for total parenteral nutritional 
 17.7   products dispensed in quantities greater than one liter.  Actual 
 17.8   acquisition cost includes quantity and other special discounts 
 17.9   except time and cash discounts.  The actual acquisition cost of 
 17.10  a drug shall be estimated by the commissioner, at average 
 17.11  wholesale price minus nine percent, except that where a drug has 
 17.12  had its wholesale price reduced as a result of the actions of 
 17.13  the National Association of Medicaid Fraud Control Units, the 
 17.14  estimated actual acquisition cost shall be the reduced average 
 17.15  wholesale price, without the nine percent deduction.  The 
 17.16  maximum allowable cost of a multisource drug may be set by the 
 17.17  commissioner and it shall be comparable to, but no higher than, 
 17.18  the maximum amount paid by other third-party payors in this 
 17.19  state who have maximum allowable cost programs.  The 
 17.20  commissioner shall set maximum allowable costs for multisource 
 17.21  drugs that are not on the federal upper limit list as described 
 17.22  in United States Code, title 42, chapter 7, section 1396r-8(e), 
 17.23  the Social Security Act, and Code of Federal Regulations, title 
 17.24  42, part 447, section 447.332.  Establishment of the amount of 
 17.25  payment for drugs shall not be subject to the requirements of 
 17.26  the Administrative Procedure Act.  An additional dispensing fee 
 17.27  of $.30 may be added to the dispensing fee paid to pharmacists 
 17.28  for legend drug prescriptions dispensed to residents of 
 17.29  long-term care facilities when a unit dose blister card system, 
 17.30  approved by the department, is used.  Under this type of 
 17.31  dispensing system, the pharmacist must dispense a 30-day supply 
 17.32  of drug.  The National Drug Code (NDC) from the drug container 
 17.33  used to fill the blister card must be identified on the claim to 
 17.34  the department.  The unit dose blister card containing the drug 
 17.35  must meet the packaging standards set forth in Minnesota Rules, 
 17.36  part 6800.2700, that govern the return of unused drugs to the 
 18.1   pharmacy for reuse.  The pharmacy provider will be required to 
 18.2   credit the department for the actual acquisition cost of all 
 18.3   unused drugs that are eligible for reuse.  Over-the-counter 
 18.4   medications must be dispensed in the manufacturer's unopened 
 18.5   package.  The commissioner may permit the drug clozapine to be 
 18.6   dispensed in a quantity that is less than a 30-day supply.  
 18.7   Whenever a generically equivalent product is available, payment 
 18.8   shall be on the basis of the actual acquisition cost of the 
 18.9   generic drug, unless the prescriber specifically indicates 
 18.10  "dispense as written - brand necessary" on the prescription as 
 18.11  required by section 151.21, subdivision 2. 
 18.12     (d) For purposes of this subdivision, "multisource drugs" 
 18.13  means covered outpatient drugs, excluding innovator multisource 
 18.14  drugs for which there are two or more drug products, which: 
 18.15     (1) are related as therapeutically equivalent under the 
 18.16  Food and Drug Administration's most recent publication of 
 18.17  "Approved Drug Products with Therapeutic Equivalence 
 18.18  Evaluations"; 
 18.19     (2) are pharmaceutically equivalent and bioequivalent as 
 18.20  determined by the Food and Drug Administration; and 
 18.21     (3) are sold or marketed in Minnesota. 
 18.22  "Innovator multisource drug" means a multisource drug that was 
 18.23  originally marketed under an original new drug application 
 18.24  approved by the Food and Drug Administration. 
 18.25     (e) The formulary committee shall review and recommend 
 18.26  drugs which require prior authorization.  The formulary 
 18.27  committee may recommend drugs for prior authorization directly 
 18.28  to the commissioner, as long as opportunity for public input is 
 18.29  provided.  Prior authorization may be requested by the 
 18.30  commissioner based on medical and clinical criteria and on cost 
 18.31  before certain drugs are eligible for payment.  Before a drug 
 18.32  may be considered for prior authorization at the request of the 
 18.33  commissioner: 
 18.34     (1) the drug formulary committee must develop criteria to 
 18.35  be used for identifying drugs; the development of these criteria 
 18.36  is not subject to the requirements of chapter 14, but the 
 19.1   formulary committee shall provide opportunity for public input 
 19.2   in developing criteria; 
 19.3      (2) the drug formulary committee must hold a public forum 
 19.4   and receive public comment for an additional 15 days; 
 19.5      (3) the drug formulary committee must consider data from 
 19.6   the state Medicaid program if such data is available; and 
 19.7      (4) the commissioner must provide information to the 
 19.8   formulary committee on the impact that placing the drug on prior 
 19.9   authorization will have on the quality of patient care and on 
 19.10  program costs, and information regarding whether the drug is 
 19.11  subject to clinical abuse or misuse.  
 19.12     Prior authorization may be required by the commissioner 
 19.13  before certain formulary drugs are eligible for payment.  If 
 19.14  prior authorization of a drug is required by the commissioner, 
 19.15  the commissioner must provide a 30-day notice period before 
 19.16  implementing the prior authorization.  If a prior authorization 
 19.17  request is denied by the department, the recipient may appeal 
 19.18  the denial in accordance with section 256.045.  If an appeal is 
 19.19  filed, the drug must be provided without prior authorization 
 19.20  until a decision is made on the appeal.  
 19.21     (f) (e) The basis for determining the amount of payment for 
 19.22  drugs administered in an outpatient setting shall be the lower 
 19.23  of the usual and customary cost submitted by the provider; the 
 19.24  average wholesale price minus five percent; or the maximum 
 19.25  allowable cost set by the federal government under United States 
 19.26  Code, title 42, chapter 7, section 1396r-8(e), and Code of 
 19.27  Federal Regulations, title 42, section 447.332, or by the 
 19.28  commissioner under paragraph (c). 
 19.29     (g) (f) Prior authorization shall not be required or 
 19.30  utilized for any antipsychotic drug prescribed for the treatment 
 19.31  of mental illness where there is no generically equivalent drug 
 19.32  available unless the commissioner determines that prior 
 19.33  authorization is necessary for patient safety.  This paragraph 
 19.34  applies to any supplemental drug rebate program established or 
 19.35  administered by the commissioner. 
 19.36     (h) (g) Prior authorization shall not be required or 
 20.1   utilized for any antihemophilic factor drug prescribed for the 
 20.2   treatment of hemophilia and blood disorders where there is no 
 20.3   generically equivalent drug available unless the commissioner 
 20.4   determines that prior authorization is necessary for patient 
 20.5   safety.  This paragraph applies to any supplemental drug rebate 
 20.6   program established or administered by the commissioner.  This 
 20.7   paragraph expires July 1, 2003. 
 20.8      <b>[EFFECTIVE DATE.]</b> This section is effective April 1, 2003. 
 20.9      Sec. 12.  Minnesota Statutes 2002, section 256B.19, 
 20.10  subdivision 1d, is amended to read: 
 20.11     Subd. 1d.  [PORTION OF NONFEDERAL SHARE TO BE PAID BY 
 20.12  CERTAIN COUNTIES.] (a) In addition to the percentage 
 20.13  contribution paid by a county under subdivision 1, the 
 20.14  governmental units designated in this subdivision shall be 
 20.15  responsible for an additional portion of the nonfederal share of 
 20.16  medical assistance cost.  For purposes of this subdivision, 
 20.17  "designated governmental unit" means the counties of Becker, 
 20.18  Beltrami, Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, 
 20.19  Pennington, Pipestone, Ramsey, St. Louis, Steele, Todd, 
 20.20  Traverse, and Wadena. 
 20.21     (b) Beginning in 1994, each of the governmental units 
 20.22  designated in this subdivision shall transfer before noon on May 
 20.23  31 to the state Medicaid agency an amount equal to the number of 
 20.24  licensed beds in any nursing home owned and operated by the 
 20.25  county on that date, with the county named as licensee, 
 20.26  multiplied by $5,723. If two or more counties own and operate a 
 20.27  nursing home, the payment shall be prorated.  These sums shall 
 20.28  be part of the designated governmental unit's portion of the 
 20.29  nonfederal share of medical assistance costs. 
 20.30     (c) Beginning in 2002, in addition to any transfer under 
 20.31  paragraph (b), each of the governmental units designated in this 
 20.32  subdivision shall transfer before noon on May 31 to the state 
 20.33  Medicaid agency an amount equal to the number of licensed beds 
 20.34  in any nursing home owned and operated by the county on that 
 20.35  date, with the county named as licensee, multiplied by $10,784.  
 20.36  The provisions of paragraph (b) apply to transfers under this 
 21.1   paragraph. 
 21.2      (d) Beginning in 2003, in addition to any transfer under 
 21.3   paragraphs (b) and (c), each of the governmental units 
 21.4   designated in this subdivision shall transfer before noon on May 
 21.5   31 to the state Medicaid agency an amount equal to the number of 
 21.6   licensed beds in any nursing home owned and operated by the 
 21.7   county on that date, with the county named as licensee, 
 21.8   multiplied by $2,230.  The provisions of paragraph (b) apply to 
 21.9   transfers under this paragraph. 
 21.10     (e) The commissioner may reduce the intergovernmental 
 21.11  transfers under paragraph paragraphs (c) and (d) based on the 
 21.12  commissioner's determination of the payment rate in section 
 21.13  256B.431, subdivision 23, paragraphs (c) and, (d), and (e).  Any 
 21.14  adjustments must be made on a per-bed basis and must result in 
 21.15  an amount equivalent to the total amount resulting from the rate 
 21.16  adjustment in section 256B.431, subdivision 23, paragraphs (c) 
 21.17  and, (d), and (e). 
 21.18     <b>[EFFECTIVE DATE.]</b> This section is effective February 28, 
 21.19  2003. 
 21.20     Sec. 13.  Minnesota Statutes 2002, section 256B.195, 
 21.21  subdivision 4, is amended to read: 
 21.22     Subd. 4.  [ADJUSTMENTS PERMITTED.] (a) The commissioner may 
 21.23  adjust the intergovernmental transfers under subdivision 2 and 
 21.24  the payments under subdivision 3, and payments and transfers 
 21.25  under subdivision 5, based on the commissioner's determination 
 21.26  of Medicare upper payment limits, hospital-specific charge 
 21.27  limits, and hospital-specific limitations on disproportionate 
 21.28  share payments.  Any adjustments must be made on a proportional 
 21.29  basis.  If participation by a particular hospital under this 
 21.30  section is limited, the commissioner shall adjust the payments 
 21.31  that relate to that hospital under subdivisions 2, and 3, and 5 
 21.32  on a proportional basis in order to allow the hospital to 
 21.33  participate under this section to the fullest extent possible 
 21.34  and shall increase other payments under subdivisions 2, and 3, 
 21.35  and 5 to the extent allowable to maintain the overall level of 
 21.36  payments under this section.  The commissioner may make 
 22.1   adjustments under this subdivision only after consultation with 
 22.2   the counties and hospitals identified in subdivisions 2 and 3, 
 22.3   and, if subdivision 5 receives federal approval, with the 
 22.4   hospital and educational institution identified in subdivision 5.
 22.5      (b) The ratio of medical assistance payments specified in 
 22.6   subdivision 3 to the intergovernmental transfers specified in 
 22.7   subdivision 2 shall not be reduced except as provided under 
 22.8   paragraph (a). 
 22.9      (c) The increase in intergovernmental transfers and 
 22.10  payments that result from section 256.969, subdivision 3a, 
 22.11  paragraph (c), shall be paid to the general fund. 
 22.12     Sec. 14.  Minnesota Statutes 2002, section 256B.32, 
 22.13  subdivision 1, is amended to read: 
 22.14     Subdivision 1.  [FACILITY FEE PAYMENT.] (a) The 
 22.15  commissioner shall establish a facility fee payment mechanism 
 22.16  that will pay a facility fee to all enrolled outpatient 
 22.17  hospitals for each emergency room or outpatient clinic visit 
 22.18  provided on or after July 1, 1989.  This payment mechanism may 
 22.19  not result in an overall increase in outpatient payment rates.  
 22.20  This section does not apply to federally mandated maximum 
 22.21  payment limits, department approved program packages, or 
 22.22  services billed using a nonoutpatient hospital provider number. 
 22.23     (b) For fee-for-service services provided on or after July 
 22.24  1, 2002, the total payment, before third-party liability and 
 22.25  spenddown, made to hospitals for outpatient hospital facility 
 22.26  services is reduced by .5 percent from the current statutory 
 22.27  rates. 
 22.28     (c) For fee-for-service services provided on or after March 
 22.29  1, 2003, the total payment before third-party liability and 
 22.30  spenddown, made to hospitals for outpatient hospital facility 
 22.31  services is reduced five percent from the current statutory 
 22.32  rates.  Facilities defined under section 256.969, subdivision 
 22.33  16, are excluded from this paragraph. 
 22.34     Sec. 15.  Minnesota Statutes 2002, section 256B.431, 
 22.35  subdivision 23, is amended to read: 
 22.36     Subd. 23.  [COUNTY NURSING HOME PAYMENT ADJUSTMENTS.] (a) 
 23.1   Beginning in 1994, the commissioner shall pay a nursing home 
 23.2   payment adjustment on May 31 after noon to a county in which is 
 23.3   located a nursing home that, on that date, was county-owned and 
 23.4   operated, with the county named as licensee by the commissioner 
 23.5   of health, and had over 40 beds and medical assistance occupancy 
 23.6   in excess of 50 percent during the reporting year ending 
 23.7   September 30, 1991.  The adjustment shall be an amount equal to 
 23.8   $16 per calendar day multiplied by the number of beds licensed 
 23.9   in the facility as of September 30, 1991 on that date. 
 23.10     (b) Payments under paragraph (a) are excluded from medical 
 23.11  assistance per diem rate calculations.  These payments are 
 23.12  required notwithstanding any rule prohibiting medical assistance 
 23.13  payments from exceeding payments from private pay residents.  A 
 23.14  facility receiving a payment under paragraph (a) may not 
 23.15  increase charges to private pay residents by an amount 
 23.16  equivalent to the per diem amount payments under paragraph (a) 
 23.17  would equal if converted to a per diem. 
 23.18     (c) Beginning in 2002, in addition to any payment under 
 23.19  paragraph (a), the commissioner shall pay to a nursing facility 
 23.20  described in paragraph (a) an adjustment in an amount equal to 
 23.21  $29.55 per calendar day multiplied by the number of beds 
 23.22  licensed in the facility on that date.  The provisions of 
 23.23  paragraphs (a) and (b) apply to payments under this paragraph. 
 23.24     (d) Beginning in 2003, in addition to any payment under 
 23.25  paragraphs (a) and (c), the commissioner shall pay to a nursing 
 23.26  facility described in paragraph (a) an adjustment in an amount 
 23.27  equal to $6.11 per calendar day multiplied by the number of beds 
 23.28  licensed in the facility on that date.  The provisions of 
 23.29  paragraphs (a) and (b) apply to payments under this paragraph.  
 23.30     (e) The commissioner may reduce payments under 
 23.31  paragraph paragraphs (c) and (d) based on the commissioner's 
 23.32  determination of Medicare upper payment limits.  Any adjustments 
 23.33  must be proportional to adjustments made under section 256B.19, 
 23.34  subdivision 1d, paragraph (d) (e). 
 23.35     <b>[EFFECTIVE DATE.]</b> This section is effective February 28, 
 23.36  2003. 
 24.1      Sec. 16.  Minnesota Statutes 2002, section 256B.431, is 
 24.2   amended by adding a subdivision to read: 
 24.3      Subd. 38.  [NURSING HOME RATE INCREASES EFFECTIVE IN FISCAL 
 24.4   YEAR 2003.] Effective the first day of the month after notice is 
 24.5   published in the state register, the commissioner shall provide 
 24.6   to each nursing home reimbursed under this section or section 
 24.7   256B.434, an increase in each case mix payment rate equal to the 
 24.8   increase in the per-bed surcharge paid under section 256.9657, 
 24.9   subdivision 1, paragraph (d), divided by 365 and further divided 
 24.10  by .80.  The increase shall not be subject to any annual 
 24.11  percentage increase.  The 30-day advance notice requirement in 
 24.12  section 256B.47, subdivision 2, shall not apply to rate 
 24.13  increases resulting from this section. 
 24.14     <b>[EFFECTIVE DATE.]</b> This section is effective February 28, 
 24.15  2003. 
 24.16     Sec. 17.  Minnesota Statutes 2002, section 256B.75, is 
 24.17  amended to read: 
 24.18     256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
 24.19     (a) For outpatient hospital facility fee payments for 
 24.20  services rendered on or after October 1, 1992, the commissioner 
 24.21  of human services shall pay the lower of (1) submitted charge, 
 24.22  or (2) 32 percent above the rate in effect on June 30, 1992, 
 24.23  except for those services for which there is a federal maximum 
 24.24  allowable payment.  Effective for services rendered on or after 
 24.25  January 1, 2000, payment rates for nonsurgical outpatient 
 24.26  hospital facility fees and emergency room facility fees shall be 
 24.27  increased by eight percent over the rates in effect on December 
 24.28  31, 1999, except for those services for which there is a federal 
 24.29  maximum allowable payment.  Services for which there is a 
 24.30  federal maximum allowable payment shall be paid at the lower of 
 24.31  (1) submitted charge, or (2) the federal maximum allowable 
 24.32  payment.  Total aggregate payment for outpatient hospital 
 24.33  facility fee services shall not exceed the Medicare upper 
 24.34  limit.  If it is determined that a provision of this section 
 24.35  conflicts with existing or future requirements of the United 
 24.36  States government with respect to federal financial 
 25.1   participation in medical assistance, the federal requirements 
 25.2   prevail.  The commissioner may, in the aggregate, prospectively 
 25.3   reduce payment rates to avoid reduced federal financial 
 25.4   participation resulting from rates that are in excess of the 
 25.5   Medicare upper limitations. 
 25.6      (b) Notwithstanding paragraph (a), payment for outpatient, 
 25.7   emergency, and ambulatory surgery hospital facility fee services 
 25.8   for critical access hospitals designated under section 144.1483, 
 25.9   clause (11), shall be paid on a cost-based payment system that 
 25.10  is based on the cost-finding methods and allowable costs of the 
 25.11  Medicare program. 
 25.12     (c) Effective for services provided on or after July 1, 
 25.13  2003, rates that are based on the Medicare outpatient 
 25.14  prospective payment system shall be replaced by a budget neutral 
 25.15  prospective payment system that is derived using medical 
 25.16  assistance data.  The commissioner shall provide a proposal to 
 25.17  the 2003 legislature to define and implement this provision. 
 25.18     (d) For fee-for-service services provided on or after July 
 25.19  1, 2002, the total payment, before third-party liability and 
 25.20  spenddown, made to hospitals for outpatient hospital facility 
 25.21  services is reduced by .5 percent from the current statutory 
 25.22  rate. 
 25.23     (e) For fee-for-service services provided on or after March 
 25.24  1, 2003, the total payment before third-party liability and 
 25.25  spenddown, made to hospitals for outpatient hospital facility 
 25.26  services is reduced five percent from the current statutory 
 25.27  rates.  Facilities defined under section 256.969, subdivision 
 25.28  16, are excluded from this paragraph. 
 25.29     Sec. 18.  Laws 2001, First Special Session chapter 9, 
 25.30  article 2, section 31, the effective date, is amended to read: 
 25.31     <b>[EFFECTIVE DATE.]</b> This section is effective January July 1, 
 25.32  2003. 
 25.33     Sec. 19.  [REPEALER.] 
 25.34     Minnesota Statutes 2002, sections 256.973 and 256B.195, 
 25.35  subdivision 5, are repealed effective July 1, 2003. 
 25.36     Sec. 20.  [EFFECTIVE DATE.] 
 26.1      Sections 1 to 19 are effective the day following final 
 26.2   enactment, unless otherwise specified. 
 26.3                              ARTICLE 4 
 26.4                     ENVIRONMENT AND AGRICULTURE 
 26.5   Section 1.  [ENVIRONMENT AND AGRICULTURE REDUCTIONS.] 
 26.6      The dollar amounts in the columns under "APPROPRIATION 
 26.7   CHANGE" are added to or, if shown in parentheses, are subtracted 
 26.8   from the appropriations in Laws 2001, First Special Session 
 26.9   chapter 2, as amended, by Laws 2002, chapter 220 or 374, as 
 26.10  amended, or other law to the specified agencies.  The 
 26.11  appropriations are from the general fund or other named fund and 
 26.12  are available for the fiscal years indicated for each purpose.  
 26.13  The figure "2003" means that the addition to or subtraction from 
 26.14  the appropriations listed under the figure is for the fiscal 
 26.15  year ending June 30, 2003. 
 26.16                                                         2003
 26.17  TRANSFERS FROM OTHER FUNDS                         $ 11,000,000 
 26.18  APPROPRIATION REDUCTIONS                            (37,087,000)
 26.19                                             APPROPRIATION CHANGE
 26.20  Sec. 2.  POLLUTION CONTROL AGENCY                    (1,901,000)
 26.21  Of this amount, $993,623 is from the 
 26.22  appropriation made in Laws 2002, 
 26.23  chapter 220, article 8, section 2, 
 26.24  subdivision 2, for clean water 
 26.25  partnership grants. 
 26.26  $468,000 is from that portion of grants 
 26.27  appropriated in Laws 2001, First 
 26.28  Special Session chapter 2, section 2, 
 26.29  subdivision 2, for county 
 26.30  administration of the feedlot permit 
 26.31  program that is transferred to the 
 26.32  board of water and soil resources. 
 26.33  $17,000 is from the amount appropriated 
 26.34  in Laws 2001, First Special Session 
 26.35  chapter 2, section 2, subdivision 2, 
 26.36  for individual sewage treatment system 
 26.37  (ISTS) administration that is 
 26.38  transferred to the board of water and 
 26.39  soil resources. 
 26.40  Sec. 3.  OFFICE OF 
 26.41  ENVIRONMENTAL ASSISTANCE                               (409,000)
 26.42  Of this amount, $209,680 is from the 
 26.43  appropriation made in Laws 2002, 
 26.44  chapter 220, article 8, section 3, for 
 26.45  office of environmental assistance 
 26.46  operation grants. 
 27.1   Sec. 4.  MINNESOTA ZOO                                 (270,000)
 27.2   Sec. 5.  NATURAL RESOURCES                           (4,022,000)
 27.3   Of this amount, $25,000 is from the 
 27.4   appropriation made in Laws 2002, 
 27.5   chapter 220, article 8, section 5, 
 27.6   subdivision 5, for a grant to the city 
 27.7   of Taylors Falls for fire and rescue 
 27.8   operations in support of Interstate 
 27.9   park. 
 27.10  $171,323 is from the balance of the 
 27.11  appropriation made in Laws 2001, First 
 27.12  Special Session chapter 2, section 5, 
 27.13  subdivision 11, for grants to assist 
 27.14  local government units and 
 27.15  organizations in the metropolitan area 
 27.16  to acquire and develop natural areas 
 27.17  and greenways. 
 27.18  $6,657 is from the balance of the 
 27.19  appropriation made in Laws 1997, 
 27.20  chapter 216, section 5, subdivision 6, 
 27.21  for the Taconite Harbor safe harbor 
 27.22  project. 
 27.23  Sec. 6.  BOARD OF WATER
 27.24  AND SOIL RESOURCES                                   (1,297,000)
 27.25  Of this amount, $1,167,000 is from the 
 27.26  appropriation made in Laws 2001, First 
 27.27  Special Session chapter 2, section 6, 
 27.28  for natural resources block grants to 
 27.29  local governments. 
 27.30  Sec. 7.  DEPARTMENT OF AGRICULTURE                  (28,198,000)
 27.31  Of this amount, $357,000 is from the 
 27.32  appropriation made in Laws 2001, First 
 27.33  Special Session chapter 2, section 9, 
 27.34  subdivision 4, for grants to 
 27.35  agricultural societies and associations.
 27.36  $26,812,271 is from the balance of the 
 27.37  appropriation made in Minnesota 
 27.38  Statutes, section 41A.09, subdivision 
 27.39  3a, for a 19 cents per gallon subsidy 
 27.40  for each gallon of ethanol produced 
 27.41  within the state. 
 27.42  $140,000 is from the balance of the 
 27.43  appropriation made in Laws 2001, First 
 27.44  Special Session chapter 2, section 9, 
 27.45  subdivision 3, for grants to farmers 
 27.46  for demonstration projects involving 
 27.47  sustainable agriculture as authorized 
 27.48  in Minnesota Statutes, section 17.116. 
 27.49  $60,000 is from the balance of the 
 27.50  appropriation made in Laws 2000, 
 27.51  chapter 488, article 3, section 5, for 
 27.52  grants to one or more cooperative 
 27.53  associations organized under Minnesota 
 27.54  Statutes, chapter 308A, primarily for 
 27.55  the purpose of facilitating the 
 27.56  production and marketing of short 
 27.57  rotation woody crops. 
 27.58  Any refunds received by the state from 
 27.59  the appropriation in Laws 2000, chapter 
 28.1   488, article 3, section 5, for short 
 28.2   rotation woody crops cancel to the 
 28.3   general fund. 
 28.4   Sec. 8.  BOARD OF ANIMAL HEALTH                        (103,000)
 28.5   Sec. 9.  AGRICULTURAL
 28.6   UTILIZATION RESEARCH INSTITUTE                         (887,000)
 28.7      Sec. 10.  [TRANSFER AND APPROPRIATION REDUCTION.] 
 28.8      Subdivision 1.  [TRANSFER.] The commissioner of the 
 28.9   pollution control agency shall transfer $11,000,000 from the 
 28.10  unreserved balance of the solid waste fund to the commissioner 
 28.11  of finance for cancellation to the general fund. 
 28.12     Subd. 2.  [APPROPRIATION REDUCTION.] After consultation 
 28.13  with the chair of the legislative commission on Minnesota 
 28.14  resources, the commissioner of finance shall reduce $2,400,000 
 28.15  from appropriations in the future resources fund in accordance 
 28.16  with Minnesota Statutes, section 16A.152, subdivision 4, 
 28.17  paragraph (c). 
 28.18     Sec. 11.  Minnesota Statutes 2002, section 116P.05, 
 28.19  subdivision 2, is amended to read: 
 28.20     Subd. 2.  [DUTIES.] (a) The commission shall recommend a 
 28.21  budget plan for expenditures from the environment and natural 
 28.22  resources trust fund and shall adopt a strategic plan as 
 28.23  provided in section 116P.08.  
 28.24     (b) The commission shall recommend expenditures to the 
 28.25  legislature from the Minnesota future resources fund under 
 28.26  section 116P.13.  
 28.27     (c) It is a condition of acceptance of the appropriations 
 28.28  made from the Minnesota future resources fund, Minnesota 
 28.29  environment and natural resources trust fund, and oil overcharge 
 28.30  money under section 4.071, subdivision 2, that the agency or 
 28.31  entity receiving the appropriation must submit a work program 
 28.32  and semiannual progress reports in the form determined by the 
 28.33  legislative commission on Minnesota resources.  None of the 
 28.34  money provided may be spent unless the commission has approved 
 28.35  the pertinent work program. 
 28.36     (d) (c) The peer review panel created under section 116P.08 
 28.37  must also review, comment, and report to the commission on 
 29.1   research proposals applying for an appropriation from the 
 29.2   Minnesota resources fund and from oil overcharge money under 
 29.3   section 4.071, subdivision 2. 
 29.4      (e) (d) The commission may adopt operating procedures to 
 29.5   fulfill its duties under sections section 116P.01 to 116P.13. 
 29.6      Sec. 12.  Minnesota Statutes 2002, section 116P.09, 
 29.7   subdivision 4, is amended to read: 
 29.8      Subd. 4.  [PERSONNEL.] Persons who are employed by a state 
 29.9   agency to work on a project and are paid by an appropriation 
 29.10  from the trust fund or Minnesota future resources fund are in 
 29.11  the unclassified civil service, and their continued employment 
 29.12  is contingent upon the availability of money from the 
 29.13  appropriation.  When the appropriation has been spent, their 
 29.14  positions must be canceled and the approved complement of the 
 29.15  agency reduced accordingly.  Part-time employment of persons for 
 29.16  a project is authorized.  The use of classified employees is 
 29.17  authorized when approved as part of the work program required by 
 29.18  section 116P.05, subdivision 2, paragraph (c) (b). 
 29.19     Sec. 13.  Minnesota Statutes 2002, section 116P.09, 
 29.20  subdivision 5, is amended to read: 
 29.21     Subd. 5.  [ADMINISTRATIVE EXPENSE.] The administrative 
 29.22  expenses of the commission shall be paid from the various funds 
 29.23  administered by the commission as follows: 
 29.24     (1) Through June 30, 1993, the administrative expenses of 
 29.25  the commission and the advisory committee shall be paid from the 
 29.26  Minnesota future resources fund.  After that time, the prorated 
 29.27  expenses related to administration of the trust fund shall be 
 29.28  paid from the earnings of the trust fund. 
 29.29     (2) After June 30, 1993, the prorated expenses related to 
 29.30  administration of the trust fund may not exceed an amount equal 
 29.31  to four percent of the projected earnings of the trust fund for 
 29.32  the biennium. 
 29.33     Sec. 14.  Minnesota Statutes 2002, section 116P.09, 
 29.34  subdivision 7, is amended to read: 
 29.35     Subd. 7.  [REPORT REQUIRED.] The commission shall, by 
 29.36  January 15 of each odd-numbered year, submit a report to the 
 30.1   governor, the chairs of the house appropriations and senate 
 30.2   finance committees, and the chairs of the house and senate 
 30.3   committees on environment and natural resources.  Copies of the 
 30.4   report must be available to the public.  The report must include:
 30.5      (1) a copy of the current strategic plan; 
 30.6      (2) a description of each project receiving money from the 
 30.7   trust fund and Minnesota future resources fund during the 
 30.8   preceding biennium; 
 30.9      (3) a summary of any research project completed in the 
 30.10  preceding biennium; 
 30.11     (4) recommendations to implement successful projects and 
 30.12  programs into a state agency's standard operations; 
 30.13     (5) to the extent known by the commission, descriptions of 
 30.14  the projects anticipated to be supported by the trust fund and 
 30.15  Minnesota future resources account during the next biennium; 
 30.16     (6) the source and amount of all revenues collected and 
 30.17  distributed by the commission, including all administrative and 
 30.18  other expenses; 
 30.19     (7) a description of the assets and liabilities of the 
 30.20  trust fund and the Minnesota future resources fund; 
 30.21     (8) any findings or recommendations that are deemed proper 
 30.22  to assist the legislature in formulating legislation; 
 30.23     (9) a list of all gifts and donations with a value over 
 30.24  $1,000; 
 30.25     (10) a comparison of the amounts spent by the state for 
 30.26  environment and natural resources activities through the most 
 30.27  recent fiscal year; and 
 30.28     (11) a copy of the most recent compliance audit. 
 30.29     Sec. 15.  Minnesota Statutes 2002, section 116P.10, is 
 30.30  amended to read: 
 30.31     116P.10 [ROYALTIES, COPYRIGHTS, PATENTS.] 
 30.32     This section applies to projects supported by the trust 
 30.33  fund, the Minnesota future resources fund, and the oil 
 30.34  overcharge money referred to in section 4.071, subdivision 2, 
 30.35  each of which is referred to in this section as a "fund."  The 
 30.36  fund owns and shall take title to the percentage of a royalty, 
 31.1   copyright, or patent resulting from a project supported by the 
 31.2   fund equal to the percentage of the project's total funding 
 31.3   provided by the fund.  Cash receipts resulting from a royalty, 
 31.4   copyright, or patent, or the sale of the fund's rights to a 
 31.5   royalty, copyright, or patent, must be credited immediately to 
 31.6   the principal of the fund.  Before a project is included in the 
 31.7   budget plan, the commission may vote to relinquish the ownership 
 31.8   or rights to a royalty, copyright, or patent resulting from a 
 31.9   project supported by the fund to the project's proposer when the 
 31.10  amount of the original grant or loan, plus interest, has been 
 31.11  repaid to the fund. 
 31.12     Sec. 16.  Minnesota Statutes 2002, section 116P.14, 
 31.13  subdivision 2, is amended to read: 
 31.14     Subd. 2.  [STATE LAND AND WATER CONSERVATION ACCOUNT; 
 31.15  CREATION.] A state land and water conservation account is 
 31.16  created in the Minnesota future natural resources fund.  All of 
 31.17  the money made available to the state from funds granted under 
 31.18  subdivision 1 shall be deposited in the state land and water 
 31.19  conservation account. 
 31.20     Sec. 17.  Minnesota Statutes 2002, section 297F.10, 
 31.21  subdivision 1, is amended to read: 
 31.22     Subdivision 1.  [TAX AND USE TAX ON CIGARETTES.] Revenue 
 31.23  received from cigarette taxes, as well as related penalties, 
 31.24  interest, license fees, and miscellaneous sources of revenue 
 31.25  shall be deposited by the commissioner in the state treasury and 
 31.26  credited as follows: 
 31.27     (a) first to the general obligation special tax bond debt 
 31.28  service account in each fiscal year the amount required to 
 31.29  increase the balance on hand in the account on each December 1 
 31.30  to an amount equal to the full amount of principal and interest 
 31.31  to come due on all outstanding bonds whose debt service is 
 31.32  payable primarily from the proceeds of the tax to and including 
 31.33  the second following July 1; and 
 31.34     (b) after the requirements of paragraph (a) have been met:, 
 31.35     (1) the revenue produced by one mill of the tax on 
 31.36  cigarettes weighing not more than three pounds a thousand and 
 32.1   two mills of the tax on cigarettes weighing more than three 
 32.2   pounds a thousand must be credited to the Minnesota future 
 32.3   resources fund; and 
 32.4      (2) the balance of the revenues derived from taxes, 
 32.5   penalties, and interest (under this chapter) and from license 
 32.6   fees and miscellaneous sources of revenue shall be credited to 
 32.7   the general fund. 
 32.8      Sec. 18.  [REPEALER.] 
 32.9      Minnesota Statutes 2002, sections 1.31; 115A.908, 
 32.10  subdivision 2; and 116P.13, are repealed. 
 32.11     Sec. 19.  [EFFECTIVE DATE.] 
 32.12     Sections 1 to 9 are effective the day following final 
 32.13  enactment.  Sections 10 to 18 are effective March 1, 2003. 
 32.14                             ARTICLE 5 
 32.15                        ECONOMIC DEVELOPMENT 
 32.16  Section 1.  [ECONOMIC DEVELOPMENT REDUCTIONS.] 
 32.17     The dollar amounts in the columns under "APPROPRIATION 
 32.18  CHANGE" are added to or, if shown in parentheses, are subtracted 
 32.19  from the appropriations in Laws 2001, First Special Session 
 32.20  chapter 4 or 10, as amended, by Laws 2002, chapter 220 or 374, 
 32.21  as amended, or other law to the specified agencies.  The 
 32.22  appropriations are from the general fund or other named fund and 
 32.23  are available for the fiscal years indicated for each purpose.  
 32.24  The figure "2003" means that the addition to or subtraction from 
 32.25  the appropriations listed under the figure is for the fiscal 
 32.26  year ending June 30, 2003. 
 32.27                                                         2003 
 32.28  TRANSFERS FROM OTHER FUNDS                       $   54,000,000 
 32.29  APPROPRIATION REDUCTIONS                             (9,579,000)
 32.30                                              APPROPRIATION CHANGE 
 32.31  Sec. 2.  TRADE AND ECONOMIC DEVELOPMENT              (3,831,000)
 32.32  Of this amount $1,323,964 is from the 
 32.33  appropriation made in Laws 2001, First 
 32.34  Special Session chapter 4, article 1, 
 32.35  section 2, subdivision 2, for 
 32.36  contaminated site grants. 
 32.37  Of this amount, $35,000 is from the 
 32.38  appropriation made in Laws 2001, First 
 32.39  Special Session chapter 4, article 1, 
 33.1   section 2, subdivision 2, for a onetime 
 33.2   grant for a pilot project incubated by 
 33.3   Blue Earth county named the Rural 
 33.4   Advanced Business Facilitation Program. 
 33.5   Of this amount, $1,314,000 is from the 
 33.6   appropriation made in Laws 2001, First 
 33.7   Special Session chapter 4, article 1, 
 33.8   section 2, subdivision 2, for Minnesota 
 33.9   investment fund grants. 
 33.10  Of this amount, $480,000 is from the 
 33.11  appropriation made in Laws 2001, First 
 33.12  Special Session chapter 4, article 1, 
 33.13  section 2, subdivision 5, for grants to 
 33.14  the Minnesota Film Board for a film 
 33.15  production jobs fund to stimulate film 
 33.16  production in Minnesota. 
 33.17  Sec. 3.  MINNESOTA TECHNOLOGY, INC.                  (1,071,000)
 33.18  Sec. 4.  ECONOMIC SECURITY                             (189,000)
 33.19  Sec. 5.  HOUSING FINANCE AGENCY                      (2,205,000)
 33.20  Sec. 6.  COMMERCE                                      (434,000)
 33.21  Sec. 7.  BOARD OF ACCOUNTANCY                           (24,000)
 33.22  Sec. 8.  BOARD OF ARCHITECTURE, 
 33.23  ENGINEERING, LAND SURVEYING, LANDSCAPE
 33.24  ARCHITECTURE, GEOSCIENCE, AND INTERIOR DESIGN           (29,000)
 33.25  Sec. 9.  BOARD OF BARBERS EXAMINERS                      (6,000)
 33.26  Sec. 10.  LABOR AND INDUSTRY                           (118,000)
 33.27  Sec. 11.  BUREAU OF MEDIATION SERVICES                 (122,000)
 33.28  Of this amount, $47,000 is from 
 33.29  labor-management cooperation grants 
 33.30  made to area labor-management 
 33.31  committees. 
 33.32  Sec. 12.  MINNESOTA HISTORICAL SOCIETY               (1,066,000)
 33.33  Sec. 13.  COUNCIL ON BLACK MINNESOTANS                  (13,000)
 33.34  Sec. 14.  COUNCIL ON CHICANO-LATINO AFFAIRS             (13,000)
 33.35  Sec. 15.  COUNCIL ON ASIAN-PACIFIC MINNESOTANS          (11,000)
 33.36  Sec. 16.  INDIAN AFFAIRS COUNCIL                        (23,000)
 33.37  Sec. 17.  BOARD OF THE ARTS                            (384,000)
 33.38  Of this amount, $344,000 is from the 
 33.39  appropriation made in Laws 2001, First 
 33.40  Special Session chapter 10, article 1, 
 33.41  section 24, subdivision 3, for grants 
 33.42  programs. 
 33.43  Sec. 18.  HUMANITIES COMMISSION                          (40,000)
 33.44     Sec. 19.  Laws 2002, chapter 220, article 13, section 9, 
 33.45  subdivision 2, as amended by Laws 2002, chapter 374, article 8, 
 33.46  section 6, is amended to read: 
 33.47     Subd. 2.  [SPECIAL COMPENSATION FUND.] After June 1, 2003, 
 34.1   but no later than June 30, 2003, the commissioner of finance 
 34.2   shall transfer $250,000,000 $265,000,000 in assets of the excess 
 34.3   surplus account of the special compensation fund created under 
 34.4   Minnesota Statutes, section 176.129, to the general fund. 
 34.5      Sec. 20.  [MINNESOTA MINERALS 21ST CENTURY FUND.] 
 34.6      By June 30, 2003, the commissioner of finance shall 
 34.7   transfer $39,000,000 from the Minnesota minerals 21st century 
 34.8   fund established under Minnesota Statutes, section 116J.423, to 
 34.9   the commissioner of finance for cancellation to the general fund.
 34.10     Sec. 21.  [EFFECTIVE DATE.] 
 34.11     Sections 1 to 20 are effective the day following final 
 34.12  enactment, unless otherwise specified. 
 34.13                             ARTICLE 6
 34.14                           TRANSPORTATION
 34.15  Section 1.  [TRANSPORTATION APPROPRIATIONS AND REDUCTIONS.] 
 34.16     The dollar amounts in the columns under "APPROPRIATION 
 34.17  CHANGE" are added to or, if shown in parentheses, are subtracted 
 34.18  from the appropriations in Laws 2001, First Special Session 
 34.19  chapter 8, as amended, or other law to the specified agencies.  
 34.20  The appropriations are from the general fund or other named fund 
 34.21  and are available for the fiscal years indicated for each 
 34.22  purpose.  The figure "2003" means that the addition to or 
 34.23  subtraction from the appropriations listed under the figure is 
 34.24  for the fiscal year ending June 30, 2003. 
 34.25                                                         2003 
 34.26  TRANSFERS FROM OTHER FUNDS                       $   15,000,000 
 34.27  APPROPRIATION REDUCTIONS - GENERAL FUND              (2,615,000)
 34.28  CANCELLATIONS - GENERAL FUND                       (130,000,000)
 34.29  TRUNK HIGHWAY BOND PROCEEDS ACCOUNT -
 34.30  TRUNK HIGHWAY FUND                                  130,130,000
 34.31                                              APPROPRIATION CHANGE
 34.32  Sec. 2.  TRANSPORTATION                             130,000,000 
 34.33  This appropriation is from the trunk 
 34.34  highway bond proceeds account in the 
 34.35  trunk highway fund and is available for 
 34.36  expenditure beginning the day following 
 34.37  final enactment.  It is for the same 
 34.38  purposes as specified in Laws 2000, 
 34.39  chapter 479, article 1, section 2, 
 34.40  subdivision 3.  
 35.1   Of the general fund appropriation in 
 35.2   Laws 2000, chapter 479, article 1, 
 35.3   section 2, subdivision 3, $130,000,000 
 35.4   cancels to the general fund.  This 
 35.5   cancellation is effective the day 
 35.6   following final enactment. 
 35.7   By June 30, 2003, the commissioner of 
 35.8   finance shall transfer $15,000,000 of 
 35.9   the cash balance in the state airports 
 35.10  fund established in Minnesota Statutes, 
 35.11  section 360.017, to the general fund. 
 35.12  Sec. 3.  BOND SALE EXPENSES                             130,000 
 35.13  To the commissioner of finance for bond 
 35.14  sale expenses under Minnesota Statutes, 
 35.15  section 16A.641, subdivision 8.  This 
 35.16  appropriation is from the trunk highway 
 35.17  bond proceeds account in the trunk 
 35.18  highway fund. 
 35.19  Sec. 4.  BOND SALE AUTHORIZATION 
 35.20  To provide the money appropriated in 
 35.21  this act from the trunk highway bond 
 35.22  proceeds account in the trunk highway 
 35.23  fund, the commissioner of finance shall 
 35.24  sell and issue bonds of the state in an 
 35.25  amount up to $130,130,000 in the 
 35.26  manner, upon the terms, and with the 
 35.27  effect prescribed by Minnesota 
 35.28  Statutes, sections 167.50 to 167.52, 
 35.29  and by the Minnesota Constitution, 
 35.30  article XIV, section 11, at the times 
 35.31  and in the amount requested by the 
 35.32  commissioner of transportation.  The 
 35.33  proceeds of the bonds, except accrued 
 35.34  interest and any premium received on 
 35.35  the sale of the bonds, must be credited 
 35.36  to the trunk highway bond proceeds 
 35.37  account in the trunk highway fund. 
 35.38  Sec. 5.  METROPOLITAN COUNCIL TRANSIT                (2,615,000)
 35.39     Sec. 6.  [EFFECTIVE DATE.] 
 35.40     Sections 1 to 5 are effective the day following final 
 35.41  enactment, unless otherwise specified. 
 35.42                             ARTICLE 7
 35.43                          CRIMINAL JUSTICE
 35.44  Section 1.  [CRIMINAL JUSTICE REDUCTIONS.] 
 35.45     The dollar amounts in the columns under "APPROPRIATION 
 35.46  CHANGE" are added to or, if shown in parentheses, are subtracted 
 35.47  from the appropriations in Laws 2001, First Special Session 
 35.48  chapter 8 or 9, as amended, by Laws 2002, chapter 220 or 374, as 
 35.49  amended, or other law to the specified agencies.  The 
 35.50  appropriations are from the general fund or other named fund and 
 35.51  are available for the fiscal years indicated for each purpose.  
 36.1   The figure "2003" means that the addition to or subtraction from 
 36.2   the appropriations listed under the figure is for the fiscal 
 36.3   year ending June 30, 2003. 
 36.4                                                          2003 
 36.5   APPROPRIATION REDUCTIONS                         $  (13,142,000)
 36.6                                              APPROPRIATION CHANGE
 36.7   Sec. 2.  BOARD OF PRIVATE DETECTIVE
 36.8   AND PROTECTIVE AGENT SERVICES                            (6,000)
 36.9   Sec. 3.  PUBLIC SAFETY                               (4,418,000)
 36.10  This amount includes a reduction of 
 36.11  $1,823,000 in agency operations; a 
 36.12  reduction of $2,500,000 in local 
 36.13  planning and implementation grants for 
 36.14  criminal justice information 
 36.15  integration under Minnesota Statutes, 
 36.16  section 299C.65, subdivisions 6 and 7; 
 36.17  a reduction of $56,000 in battered 
 36.18  women grants; and a reduction of 
 36.19  $39,000 for criminal gang strike force 
 36.20  grants under Minnesota Statutes, 
 36.21  section 299A.66. 
 36.22  Sec. 4.  SUPREME COURT                               (1,733,000)
 36.23  This amount includes a reduction of 
 36.24  $442,000 in civil legal services grants.
 36.25  Sec. 5.  COURT OF APPEALS                              (321,000)
 36.26  Sec. 6.  DISTRICT COURTS                             (3,844,000)
 36.27  Sec. 7.  BOARD OF PUBLIC DEFENSE                     (1,537,000)
 36.28  Sec. 8.  HUMAN RIGHTS                                  (146,000)
 36.29  Sec. 9.  CORRECTIONS                                 (1,108,000)
 36.30  Sec. 10.  CORRECTIONS OMBUDSMAN                          (7,000)
 36.31  Sec. 11.  SENTENCING GUIDELINES COMMISSION              (20,000)
 36.32  Sec. 12.  UNIFORM LAWS COMMISSION                        (2,000)
 36.33     Sec. 13.  [EFFECTIVE DATE.] 
 36.34     Sections 1 to 12 are effective the day following final 
 36.35  enactment, unless otherwise specified. 
 36.36                             ARTICLE 8 
 36.37                          STATE GOVERNMENT 
 36.38  Section 1.  [STATE GOVERNMENT REDUCTIONS.] 
 36.39     The dollar amounts in the columns under "APPROPRIATION 
 36.40  CHANGE" are added to or, if shown in parentheses, are subtracted 
 36.41  from the appropriations in Laws 2001, First Special Session 
 36.42  chapter 10, as amended, by Laws 2002, chapter 220 or 374, as 
 37.1   amended, or other law to the specified agencies.  The 
 37.2   appropriations are from the general fund or other named fund and 
 37.3   are available for the fiscal years indicated for each purpose.  
 37.4   The figure "2003" means that the addition to or subtraction from 
 37.5   the appropriations listed under the figure is for the fiscal 
 37.6   year ending June 30, 2003. 
 37.7                                                          2003
 37.8   APPROPRIATION REDUCTIONS                           $(10,100,000)
 37.9                                              APPROPRIATION CHANGE
 37.10  Sec. 2.  LEGISLATURE                                 (2,561,000)
 37.11  Sec. 3.  SECRETARY OF STATE                            (291,000)
 37.12  Sec. 4.  GOVERNOR'S OFFICE                             (162,000)
 37.13  Sec. 5.  STATE AUDITOR                                 (390,000)
 37.14  Sec. 6.  ATTORNEY GENERAL                            (1,038,000)
 37.15  Sec. 7.  OFFICE OF STRATEGIC
 37.16  AND LONG-RANGE PLANNING                                (338,000)
 37.17  Sec. 8.  ADMINISTRATION                              (1,828,000)
 37.18  This amount includes a reduction of 
 37.19  $418,100 for grants and contracts with 
 37.20  the senate and house of representatives 
 37.21  for public information television, 
 37.22  Internet, Intranet, and other 
 37.23  transmission of legislative activities; 
 37.24  $950,289 reduction from onetime funding 
 37.25  for the voting equipment grant account; 
 37.26  and $300 reduction from funding for the 
 37.27  state employees' band. 
 37.28  Sec. 9.  FINANCE                                       (639,000)
 37.29  This amount includes a $65,000 
 37.30  reduction in the operations of state 
 37.31  treasurer, which were assumed by 
 37.32  finance on January 6, 2003. 
 37.33  Sec. 10.  EMPLOYEE RELATIONS                           (305,000)
 37.34  Sec. 11.  REVENUE                                    (1,810,000)
 37.35  This amount includes a reduction of 
 37.36  $34,138 for taxpayer assistance grants 
 37.37  authorized under Laws 2001, First 
 37.38  Special Session chapter 5, article 9, 
 37.39  section 29. 
 37.40  Sec. 12.  AMATEUR SPORTS COMMISSION                     (25,000)
 37.41  Sec. 13.  MILITARY AFFAIRS                             (301,000)
 37.42  This amount includes a reduction of 
 37.43  $40,000 for the Minnesota national 
 37.44  guard youth camp at Camp Ripley. 
 37.45  Sec. 14.  CAMPAIGN FINANCE AND
 37.46  PUBLIC DISCLOSURE BOARD                                 (25,000)
 38.1   Sec. 15.  INVESTMENT BOARD                              (90,000)
 38.2   Sec. 16.  CAPITOL AREA ARCHITECTURAL
 38.3   AND PLANNING BOARD                                       (6,000)
 38.4   Sec. 17.  VETERANS AFFAIRS                             (186,000)
 38.5   This amount includes the greater amount 
 38.6   of the unobligated balance or $114,000 
 38.7   in grant funding for the Vinland Center.
 38.8   Sec. 18.  LAWFUL GAMBLING CONTROL BOARD                 (89,000)
 38.9   Sec. 19.  RACING COMMISSION                             (16,000)
 38.10     Sec. 20.  [EFFECTIVE DATE.] 
 38.11     Sections 1 to 19 are effective the day following final 
 38.12  enactment, unless otherwise specified. 
 38.13                             ARTICLE 9 
 38.14                               TAXES 
 38.15     Section 1.  Minnesota Statutes 2002, section 289A.50, 
 38.16  subdivision 2a, is amended to read: 
 38.17     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 
 38.18  has collected from a purchaser a tax on a transaction that is 
 38.19  not subject to the tax imposed by chapter 297A, the purchaser 
 38.20  may apply directly to the commissioner for a refund under this 
 38.21  section if: 
 38.22     (a) the purchaser is currently registered to collect and 
 38.23  remit the sales tax or to remit the use tax; and 
 38.24     (b) the amount of the refund applied for exceeds $500. 
 38.25     The purchaser may not file more than two applications for 
 38.26  refund under this subdivision in a calendar year.  The refund 
 38.27  under this subdivision must not be paid until 90 days after the 
 38.28  refund claim is filed with the commissioner. 
 38.29     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 38.30  claims filed on or after the day following final enactment. 
 38.31     Sec. 2.  Minnesota Statutes 2002, section 289A.56, 
 38.32  subdivision 4, is amended to read: 
 38.33     Subd. 4.  [CAPITAL EQUIPMENT AND CERTAIN BUILDING MATERIALS 
 38.34  REFUNDS; REFUNDS TO PURCHASERS.] Notwithstanding subdivision 3, 
 38.35  for refunds payable under section 297A.75, subdivision 1, 
 38.36  clauses (1), (2), (3), and (5), interest is computed from the 
 38.37  date the refund claim is filed with the commissioner.  For 
 39.1   refunds payable under section 289A.50, subdivision 2a, interest 
 39.2   is computed from the 20th day of the month following the month 
 39.3   of the invoice date for the purchase which is the subject of the 
 39.4   refund, if the refund claim includes a detailed schedule of 
 39.5   purchases made during each of the periods in the claim.  If the 
 39.6   refund claim submitted does not contain a schedule reflecting 
 39.7   purchases made in each period, interest is computed from the 
 39.8   date the claim was filed For refunds payable under sections 
 39.9   289A.50, subdivision 2a, and 297A.75, subdivision 1, clause (1), 
 39.10  interest is computed from 90 days after the refund claim is 
 39.11  filed with the commissioner. 
 39.12     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 39.13  claims filed on or after the day following final enactment. 
 39.14     Sec. 3.  Minnesota Statutes 2002, section 297A.75, 
 39.15  subdivision 2, is amended to read: 
 39.16     Subd. 2.  [REFUND; ELIGIBLE PERSONS.] Upon application on 
 39.17  forms prescribed by the commissioner, a refund equal to the tax 
 39.18  paid on the gross receipts of the exempt items must be paid to 
 39.19  the applicant, but refunds for taxes paid under subdivision 1, 
 39.20  clause (1), must not be paid until 90 days after the refund 
 39.21  claim is filed with the commissioner.  Only the following 
 39.22  persons may apply for the refund: 
 39.23     (1) for subdivision 1, clauses (1) to (3), the applicant 
 39.24  must be the purchaser; 
 39.25     (2) for subdivision 1, clauses (4), (7), and (8), the 
 39.26  applicant must be the governmental subdivision; 
 39.27     (3) for subdivision 1, clause (5), the applicant must be 
 39.28  the recipient of the benefits provided in United States Code, 
 39.29  title 38, chapter 21; 
 39.30     (4) for subdivision 1, clause (6), the applicant must be 
 39.31  the owner of the homestead property; and 
 39.32     (5) for subdivision 1, clause (9), the owner of the 
 39.33  qualified low-income housing project. 
 39.34     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 39.35  claims filed on or after the day following final enactment. 
 39.36     Sec. 4.  Minnesota Statutes 2002, section 297A.75, 
 40.1   subdivision 4, is amended to read: 
 40.2      Subd. 4.  [INTEREST.] Interest must be paid on the refund 
 40.3   at the rate in section 270.76 from the date the refund claim is 
 40.4   filed for taxes paid under subdivision 1, clauses (1) 
 40.5   to (2), (3), and (5), and; from 60 days after the date the 
 40.6   refund claim is filed with the commissioner for claims filed 
 40.7   under subdivision 1, clauses (4), (6), (7), (8), and (9); and 
 40.8   from 90 days after the refund claim is filed with the 
 40.9   commissioner for taxes paid under subdivision 1, clause (1). 
 40.10     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 40.11  claims filed on or after the day following final enactment. 
 40.12                             ARTICLE 10 
 40.13                          CAPITAL PROJECTS 
 40.14  Section 1.  [CAPITAL PROJECT CANCELLATIONS.] 
 40.15     The capital projects and the general fund appropriations 
 40.16  for them listed in this article are canceled in whole or in 
 40.17  part, as specified in section 2.  The balances are canceled and 
 40.18  returned to the general fund in the fiscal year ending June 30, 
 40.19  2003. 
 40.20                                                         2003 
 40.21  Sec. 2.  CAPITAL PROJECTS                        $   (7,643,274)
 40.22  (a) The $1,000,000 appropriation in 
 40.23  Laws 1998, chapter 404, section 5, 
 40.24  subdivision 4, paragraph (i) (not 
 40.25  affected by the amendment to 
 40.26  subdivision 4 in Laws 1999, chapter 
 40.27  119, section 1), to the commissioner of 
 40.28  children, families, and learning for 
 40.29  the Hermantown community indoor sports 
 40.30  and physical education complex is 
 40.31  canceled to the general fund. 
 40.32  (b) The unencumbered balance of the 
 40.33  appropriation in Laws 1998, chapter 
 40.34  404, section 7, subdivision 26, as 
 40.35  amended twice by identical amendments 
 40.36  in Laws 1999, chapter 231, section 195, 
 40.37  and chapter 240, article 1, section 21 
 40.38  (and not affected by an appropriation 
 40.39  for a similar purpose from the natural 
 40.40  resources fund in Laws 2001, First 
 40.41  Special Session chapter 2, section 5, 
 40.42  as amended by Laws 2002, chapter 376, 
 40.43  section 12), to the commissioner of 
 40.44  natural resources for local initiative 
 40.45  grants, estimated to be $2,018,274, is 
 40.46  canceled to the general fund. 
 40.47  (c) The $500,000 appropriation in Laws 
 40.48  1998, chapter 404, section 7, 
 41.1   subdivision 33 (not affected by the 
 41.2   amendment to subdivision 33 in Laws 
 41.3   1998, First Special Session chapter 3, 
 41.4   section 9), to the commissioner of 
 41.5   administration for the Bald Eagle 
 41.6   Center in Wabasha, is canceled to the 
 41.7   general fund. 
 41.8   (d) The unencumbered balance of the 
 41.9   appropriation in Laws 1998, chapter 
 41.10  404, section 17, subdivision 3, 
 41.11  paragraph (c), clause (1) (not affected 
 41.12  by the amendment to subdivision 3 in 
 41.13  Laws 1999, chapter 230, section 43, or 
 41.14  Laws 1999, chapter 238, article 2, 
 41.15  section 79, and by the appropriation 
 41.16  added to Laws 1998, chapter 404, 
 41.17  section 17, subdivision 3, paragraph 
 41.18  (b), by Laws 1999, chapter 240, article 
 41.19  1, section 9, subdivision 5), to the 
 41.20  commissioner of transportation for the 
 41.21  Riverview corridor, estimated to be 
 41.22  $2,125,000, is canceled to the general 
 41.23  fund. 
 41.24  (e) The $2,000,000 appropriation in 
 41.25  Laws 1998, chapter 404, section 23, 
 41.26  subdivision 30 (not affected by the 
 41.27  amendment to subdivision 30 in Laws 
 41.28  2001, First Special Session chapter 12, 
 41.29  section 13), to the commissioner of 
 41.30  trade and economic development for the 
 41.31  Itasca county school-to-work technology 
 41.32  center is canceled to the general fund. 
 41.33     Sec. 3.  [EFFECTIVE DATE.] 
 41.34     This article is effective the day after final enactment. 
 41.35                             ARTICLE 11 
 41.36                           MISCELLANEOUS 
 41.37     Section 1.  Minnesota Statutes 2002, section 16A.17, is 
 41.38  amended by adding a subdivision to read: 
 41.39     Subd. 10.  [DIRECT DEPOSIT.] Notwithstanding section 
 41.40  177.23, the commissioner may require direct deposit for all 
 41.41  state employees who are being paid by the state payroll system. 
 41.42     Sec. 2.  Minnesota Statutes 2002, section 16B.47, is 
 41.43  amended to read: 
 41.44     16B.47 [MICROGRAPHICS.] 
 41.45     The commissioner shall may provide micrographics services 
 41.46  and products to meet agency needs.  Within available resources, 
 41.47  the commissioner may also provide micrographic services to 
 41.48  political subdivisions.  Agency plans and programs for 
 41.49  micrographics must be submitted to and receive the approval of 
 41.50  the commissioner prior to implementation.  Upon the 
 42.1   commissioner's approval, subsidiary or independent microfilm 
 42.2   operations may be implemented in other state agencies.  The 
 42.3   commissioner may direct that copies of official state documents 
 42.4   be distributed to official state depositories on microfilm.  
 42.5      Sec. 3.  Minnesota Statutes 2002, section 16B.48, 
 42.6   subdivision 2, is amended to read: 
 42.7      Subd. 2.  [PURPOSE OF FUNDS.] Money in the state treasury 
 42.8   credited to the general services revolving fund and money that 
 42.9   is deposited in the fund is appropriated annually to the 
 42.10  commissioner for the following purposes:  
 42.11     (1) to operate a central store and equipment service; 
 42.12     (2) to operate a central duplication and printing service; 
 42.13     (3) to operate the central mailing service, including 
 42.14  purchasing postage and related items and refunding postage 
 42.15  deposits; 
 42.16     (4) (3) to operate a documents service as prescribed by 
 42.17  section 16B.51; 
 42.18     (5) (4) to provide services for the maintenance, operation, 
 42.19  and upkeep of buildings and grounds managed by the commissioner 
 42.20  of administration; 
 42.21     (6) (5) to operate a materials handling service, including 
 42.22  interagency mail and product delivery, solid waste removal, 
 42.23  courier service, equipment rental, and vehicle and equipment 
 42.24  maintenance; 
 42.25     (7) (6) to provide analytical, statistical, and 
 42.26  organizational development services to state agencies, local 
 42.27  units of government, metropolitan and regional agencies, and 
 42.28  school districts; 
 42.29     (8) to operate a records center and provide micrographics 
 42.30  products and services; and 
 42.31     (9) (7) to perform services for any other agency.  Money 
 42.32  may be expended for this purpose only when directed by the 
 42.33  governor. The agency receiving the services shall reimburse the 
 42.34  fund for their cost, and the commissioner shall make the 
 42.35  appropriate transfers when requested.  The term "services" as 
 42.36  used in this clause means compensation paid officers and 
 43.1   employees of the state government; supplies, materials, 
 43.2   equipment, and other articles and things used by or furnished to 
 43.3   an agency; and utility services and other services for the 
 43.4   maintenance, operation, and upkeep of buildings and offices of 
 43.5   the state government. 
 43.6      Sec. 4.  Minnesota Statutes 2002, section 16B.49, is 
 43.7   amended to read: 
 43.8      16B.49 [CENTRAL MAILING SYSTEM.] 
 43.9      The commissioner shall may maintain and operate for state 
 43.10  agencies, departments, institutions, and offices a central mail 
 43.11  handling unit.  Official, outgoing mail for units in St. Paul 
 43.12  must may be required to be delivered unstamped to the unit.  The 
 43.13  unit shall may also operate an interoffice mail distribution 
 43.14  system.  The department may add personnel and acquire equipment 
 43.15  that may be necessary to operate the unit efficiently and 
 43.16  cost-effectively.  Account must be kept of the postage required 
 43.17  on that mail, which is then a proper charge against the agency 
 43.18  delivering the mail.  To provide funds for the payment of 
 43.19  postage, each agency shall may be required to make advance 
 43.20  payments to the commissioner sufficient to cover its postage 
 43.21  obligations for at least 60 days.  For purposes of this section, 
 43.22  the Minnesota state colleges and universities is a state agency. 
 43.23     Sec. 5.  Minnesota Statutes 2002, section 16C.08, 
 43.24  subdivision 2, is amended to read: 
 43.25     Subd. 2.  [DUTIES OF CONTRACTING AGENCY.] Before an agency 
 43.26  may seek approval of a professional or technical services 
 43.27  contract valued in excess of $5,000, it must certify to the 
 43.28  commissioner that: 
 43.29     (1) no current state employee is able and available to 
 43.30  perform the services called for by the contract; 
 43.31     (2) the normal competitive bidding mechanisms will not 
 43.32  provide for adequate performance of the services; 
 43.33     (3) (2) the contractor has certified that the product of 
 43.34  the services will be original in character; 
 43.35     (4) (3) reasonable efforts were made to publicize the 
 43.36  availability of the contract to the public; 
 44.1      (5) (4) the agency has received, reviewed, and accepted a 
 44.2   detailed work plan from the contractor for performance under the 
 44.3   contract, if applicable; 
 44.4      (6) (5) the agency has developed, and fully intends to 
 44.5   implement, a written plan providing for the assignment of 
 44.6   specific agency personnel to a monitoring and liaison function, 
 44.7   the periodic review of interim reports or other indications of 
 44.8   past performance, and the ultimate utilization of the final 
 44.9   product of the services; and 
 44.10     (7) (6) the agency will not allow the contractor to begin 
 44.11  work before funds are fully encumbered.  
 44.12     Sec. 6.  Minnesota Statutes 2002, section 16C.08, 
 44.13  subdivision 3, is amended to read: 
 44.14     Subd. 3.  [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 
 44.15  CONTRACTS.] Before approving a proposed contract for 
 44.16  professional or technical services, the commissioner must 
 44.17  determine, at least, that: 
 44.18     (1) all provisions of subdivision 2 and section 16C.16 have 
 44.19  been verified or complied with; 
 44.20     (2) the work to be performed under the contract is 
 44.21  necessary to the agency's achievement of its statutory 
 44.22  responsibilities and there is statutory authority to enter into 
 44.23  the contract; 
 44.24     (3) the contract will not establish an employment 
 44.25  relationship between the state or the agency and any persons 
 44.26  performing under the contract; 
 44.27     (4) the contractor and agents are not employees of the 
 44.28  state; 
 44.29     (5) no agency has previously performed or contracted for 
 44.30  the performance of tasks which would be substantially duplicated 
 44.31  under the proposed contract; 
 44.32     (6) the contracting agency has specified a satisfactory 
 44.33  method of evaluating and using the results of the work to be 
 44.34  performed; and 
 44.35     (7) (6) the combined contract and amendments will not 
 44.36  exceed five years, unless otherwise provided for by law.  The 
 45.1   term of the original contract must not exceed two years unless 
 45.2   the commissioner determines that a longer duration is in the 
 45.3   best interest of the state. 
 45.4      Sec. 7.  Minnesota Statutes 2002, section 16C.09, is 
 45.5   amended to read: 
 45.6      16C.09 [PROCEDURE FOR SERVICE CONTRACTS.] 
 45.7      (a) Before entering into or approving a service contract, 
 45.8   the commissioner must determine, at least, that: 
 45.9      (1) no current state employee is able and available to 
 45.10  perform the services called for by the contract; 
 45.11     (2) the work to be performed under the contract is 
 45.12  necessary to the agency's achievement of its statutory 
 45.13  responsibilities and there is statutory authority to enter into 
 45.14  the contract; 
 45.15     (3) (2) the contract will not establish an employment 
 45.16  relationship between the state or the agency and any persons 
 45.17  performing under the contract; 
 45.18     (4) (3) the contractor and agents are not employees of the 
 45.19  state; 
 45.20     (5) (4) the contracting agency has specified a satisfactory 
 45.21  method of evaluating and using the results of the work to be 
 45.22  performed; and 
 45.23     (6) (5) the combined contract and amendments will not 
 45.24  exceed five years without specific, written approval by the 
 45.25  commissioner according to established policy, procedures, and 
 45.26  standards, or unless otherwise provided for by law.  The term of 
 45.27  the original contract must not exceed two years, unless the 
 45.28  commissioner determines that a longer duration is in the best 
 45.29  interest of the state.  
 45.30     (b) For purposes of paragraph (a), clause (1), employees 
 45.31  are available if qualified and: 
 45.32     (1) are already doing the work in question; or 
 45.33     (2) are on layoff status in classes that can do the work in 
 45.34  question. 
 45.35  An employee is not available if the employee is doing other 
 45.36  work, is retired, or has decided not to do the work in question. 
 46.1      Sec. 8.  Minnesota Statutes 2002, section 268.186, is 
 46.2   amended to read: 
 46.3      268.186 [RECORDS.] 
 46.4      (a) Each employer shall keep true and accurate records for 
 46.5   the periods of time and containing the information the 
 46.6   commissioner may require.  For the purpose of administering this 
 46.7   chapter, the commissioner has the power to examine, or cause to 
 46.8   be supplied or copied, any books, correspondence, papers, 
 46.9   records, or memoranda that are relevant, whether the books, 
 46.10  correspondence, papers, records, or memoranda are the property 
 46.11  of or in the possession of the employer or any other person at 
 46.12  any reasonable time and as often as may be necessary. 
 46.13     (b) The commissioner may make summaries, compilations, 
 46.14  photographs, duplications, or reproductions of any records, or 
 46.15  reports that the commissioner considers advisable for the 
 46.16  preservation of the information contained therein.  Any 
 46.17  summaries, compilations, photographs, duplications, or 
 46.18  reproductions shall be admissible in any proceeding under this 
 46.19  chapter.  Regardless of any restrictions contained in section 
 46.20  16B.50, The commissioner may duplicate records, reports, 
 46.21  summaries, compilations, instructions, determinations, or any 
 46.22  other written or recorded matter pertaining to the 
 46.23  administration of this chapter. 
 46.24     (c) Regardless of any law to the contrary, the commissioner 
 46.25  may provide for the destruction of any records, reports, or 
 46.26  reproductions thereof, or other papers, that are more than two 
 46.27  years old, and that are no longer necessary for determining 
 46.28  employer liability or an applicant's unemployment benefit rights 
 46.29  or for the administration of this chapter, including any 
 46.30  required audit.  The commissioner may provide for the 
 46.31  destruction or disposition of any record, report, or other paper 
 46.32  that has been photographed, duplicated, or reproduced. 
 46.33     Sec. 9.  [SALARY SAVINGS.] 
 46.34     Each appointing authority in the executive, legislative, 
 46.35  and judicial branches of state government, the Minnesota state 
 46.36  retirement system, the teachers retirement system, the public 
 47.1   employees retirement system, the metropolitan council, and the 
 47.2   state historical society shall determine whether use of 
 47.3   mandatory unpaid leave is necessary to meet its budget reduction 
 47.4   goals.  Each appointing authority may require unpaid leave and 
 47.5   shall establish the number of hours to be used by its employees, 
 47.6   excluding intermittent and emergency appointments, which must 
 47.7   not exceed 80 hours for full-time employees and a proportional 
 47.8   share of 80 hours for less than full-time employees.  Employees 
 47.9   may request and appointing authorities may approve additional 
 47.10  hours of unpaid leave. 
 47.11     Unpaid leave must be used between the effective date of 
 47.12  this section and June 30, 2003.  Employees on unpaid leave under 
 47.13  this section shall continue to accrue vacation and sick leave, 
 47.14  seniority, and service credit in state retirement plans 
 47.15  permitting service credit for authorized leaves of absence and 
 47.16  shall be eligible for paid holidays and insurance benefits as if 
 47.17  the employee had worked the hours of unpaid leave.  For purposes 
 47.18  of overtime, hours of unpaid leave must be treated as paid 
 47.19  vacation leave.  For employees taking unpaid leave under this 
 47.20  section, any requirement to reduce vacation leave balances by 
 47.21  the end of the fiscal year is suspended for the year ending June 
 47.22  30, 2003.  Appointing authorities retain discretion to approve 
 47.23  or disapprove when leave is used and to schedule leave for 
 47.24  employees who have not arranged by April 1, 2003, to take the 
 47.25  required number of hours.  Unpaid leave under this section is 
 47.26  not subject to the provisions of collective bargaining 
 47.27  agreements and plans for unrepresented employees and is not 
 47.28  subject to collective bargaining under chapter 179A. 
 47.29     Sec. 10.  [SEGIP TRANSFER.] 
 47.30     The commissioner of finance, in consultation with the 
 47.31  commissioner of employee relations, may require the employee 
 47.32  insurance trust fund to reimburse the general fund for all or 
 47.33  part of the appropriations made in Laws 1988, chapter 686, 
 47.34  article 1, section 9, and Laws 1999, chapter 250, article 1, 
 47.35  section 15.  These funds are appropriated to the commissioner of 
 47.36  finance and are available for distribution to agencies to meet 
 48.1   budget reduction targets for fiscal year 2003. 
 48.2      Sec. 11.  [REPEALER.] 
 48.3      Minnesota Statutes 2002, sections 16B.50; 16C.07; and 
 48.4   43A.047, are repealed. 
 48.5      Sec. 12.  [EFFECTIVE DATE.] 
 48.6      Sections 1 to 11 are effective the day following final 
 48.7   enactment.