1.1                          A bill for an act 
  1.2             relating to state government; appropriating money and 
  1.3             reducing appropriations for educational, health, human 
  1.4             services, corrections, economic development, 
  1.5             transportation, public safety, environmental, natural 
  1.6             resources, agricultural, and state government 
  1.7             purposes; establishing and modifying certain programs; 
  1.8             providing for regulation of certain activities and 
  1.9             practices; providing for accounts, assessments, and 
  1.10            fees; providing for the payment of certain refunds; 
  1.11            amending Minnesota Statutes 2002, sections 124D.135, 
  1.12            subdivision 8; 124D.16, subdivision 6; 124D.20, by 
  1.13            adding subdivisions; 145A.13, subdivision 3; 240.155, 
  1.14            subdivision 1; 244.101, by adding a subdivision; 
  1.15            256.9657, subdivision 1; 256.969, subdivision 3a; 
  1.16            256B.0625, subdivisions 13, 24; 256B.19, subdivision 
  1.17            1d; 256B.195, subdivision 3; 256B.32, subdivision 1; 
  1.18            256B.431, subdivision 23, by adding a subdivision; 
  1.19            256B.75; 289A.50, subdivision 2a; 289A.56, subdivision 
  1.20            4; 297A.75, subdivisions 2, 4; 609.105, subdivisions 
  1.21            1, 3; 609.135, subdivision 7; 609.14, subdivision 3; 
  1.22            Laws 2002, chapter 220, article 10, section 3; Laws 
  1.23            2002, chapter 220, article 13, section 9, subdivision 
  1.24            2, as amended; proposing coding for new law in 
  1.25            Minnesota Statutes, chapter 609; repealing Minnesota 
  1.26            Statutes 2002, section 256B.0625, subdivision 5a. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28                             ARTICLE 1 
  1.29                              SUMMARY 
  1.30          (General Fund Only, After Forecast Adjustments)
  1.31  TRANSFERS FROM OTHER FUNDS                        $  97,295,000
  1.32  APPROPRIATIONS                                     
  1.33  E-12 Education                                       (4,787,000)
  1.34  Higher Education                                    (30,107,000)
  1.35  Health, Human Services
  1.36  and Corrections                                     (40,379,000)
  2.1   Environment    
  2.2   and Agriculture                                      (8,047,000)
  2.3   Economic Development                                 (1,953,000)
  2.4   Transportation                                          -0-     
  2.5   State Government                                    (10,160,589)
  2.6   Sales Tax Refunds                                   (50,000,000)
  2.7   Capital Projects                                     (2,018,274)
  2.8   SUBTOTAL APPROPRIATIONS                         $  (147,451,863)
  2.9   CANCELLATIONS                                      (130,000,000)
  2.10  TOTAL                                           $  (374,746,863)
  2.11                             ARTICLE 2 
  2.12                           E-12 EDUCATION 
  2.13  Section 1.  [E-12 EDUCATION APPROPRIATIONS AND REDUCTIONS.] 
  2.14     The dollar amounts in the columns under "APPROPRIATION 
  2.15  CHANGE" are added to or, if shown in parentheses, are subtracted 
  2.16  from the appropriations in Laws 2001, First Special Session 
  2.17  chapter 3 or 6, as amended, by Laws 2002, chapter 220 or 374, as 
  2.18  amended, or other law to the specified agencies.  The 
  2.19  appropriations are from the general fund or other named fund and 
  2.20  are available for the fiscal years indicated for each purpose.  
  2.21  The figure "2003" means that the addition to or subtraction from 
  2.22  the appropriations listed under the figure is for the fiscal 
  2.23  year ending June 30, 2003. 
  2.24                                                         2003 
  2.25  APPROPRIATION REDUCTIONS                         $   (4,787,000)
  2.26                                             APPROPRIATION CHANGE
  2.27  Sec. 2.  COMMISSIONER OF CHILDREN,
  2.28  FAMILIES AND LEARNING 
  2.29  Subdivision 1.  Total
  2.30  Appropriation Reductions                             (4,617,000)
  2.31  Subd. 2.  Agency Management                          (1,044,000)
  2.32  Subd. 3.  Aids and Grants                              (206,000)
  2.33  Subd. 4.  School Readiness                             (791,000)
  2.34  Subd. 5.  Early Childhood
  2.35  and Community Education                                (769,000)
  2.36  Subd. 6.  Community Education                        (1,807,000)
  2.37  Sec. 3.  PERPICH CENTER FOR 
  2.38  ARTS EDUCATION                                         (130,000)
  3.1   Sec. 4.  MINNESOTA STATE ACADEMIES                      (40,000)
  3.2      Sec. 5.  Minnesota Statutes 2002, section 124D.135, 
  3.3   subdivision 8, is amended to read: 
  3.4      Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
  3.5   the average balance, during the most recent three-year period in 
  3.6   a district's early childhood family education reserve account on 
  3.7   June 30 of each year, adjusted for any prior reductions under 
  3.8   this subdivision, must not be greater than 25 percent of the sum 
  3.9   of the district's maximum early childhood family education 
  3.10  annual revenue under subdivision 1, excluding adjustments under 
  3.11  this subdivision, plus any fees, grants, or other revenue 
  3.12  received by the district for early childhood family education 
  3.13  programs for the prior year. 
  3.14     (b) If a district's adjusted average early childhood family 
  3.15  education reserve over the three-year period is in excess of 25 
  3.16  percent of the prior year annual revenue the limit under 
  3.17  paragraph (a), the district's early childhood family education 
  3.18  state aid and levy authority for the current school year must be 
  3.19  reduced by the lesser of the current year revenue under 
  3.20  subdivision 1 or the excess reserve amount.  The aid reduction 
  3.21  equals the product of the lesser of the excess reserve amount or 
  3.22  the current year revenue under subdivision 1 times the ratio of 
  3.23  the district's aid for the prior current year under subdivision 
  3.24  4 to the district's revenue for the prior current year under 
  3.25  subdivision 1.  The levy reduction equals the excess reserve 
  3.26  amount minus the aid reduction.  The commissioner must 
  3.27  reallocate aid and levy reduced under this subdivision to other 
  3.28  eligible early childhood family education programs in proportion 
  3.29  to each district's revenue for the prior year under subdivision 
  3.30  1.  For purposes of this paragraph, if a district does not levy 
  3.31  the entire amount permitted under subdivision 3, the revenue 
  3.32  under subdivision 1 must be reduced in proportion to the actual 
  3.33  amount levied.  
  3.34     (b) (c) Notwithstanding paragraph (a), for fiscal year 
  3.35  2003, the excess reserve amount shall be computed using the 
  3.36  balance in a district's early childhood family education reserve 
  4.1   account on June 30, 2002.  For fiscal year 2004, the excess 
  4.2   reserve amount shall be computed using the adjusted average 
  4.3   balance in a district's early childhood family education reserve 
  4.4   account on June 30, 2002, and June 30, 2003. 
  4.5      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
  4.6   fiscal year 2003. 
  4.7      Sec. 6.  Minnesota Statutes 2002, section 124D.16, 
  4.8   subdivision 6, is amended to read: 
  4.9      Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
  4.10  the average balance, during the most recent three-year period, 
  4.11  in a district's school readiness reserve account on June 30 of 
  4.12  each year, adjusted for any prior reductions under this 
  4.13  subdivision, must not be greater than 25 percent of the 
  4.14  district's school readiness annual revenue for the prior year, 
  4.15  excluding adjustments under this subdivision.  
  4.16     (b) If a district's adjusted average school readiness 
  4.17  reserve over the three-year period is in excess of 25 percent of 
  4.18  the prior year annual revenue the limit under paragraph (a), the 
  4.19  district's current year school readiness state aid must be 
  4.20  reduced by the lesser of the excess reserve amount or the 
  4.21  current year aid.  The commissioner must reallocate aid reduced 
  4.22  under this subdivision to other eligible school readiness 
  4.23  programs in proportion to each district's aid for the prior year 
  4.24  under subdivision 2.  
  4.25     (b) (c) Notwithstanding paragraph (a), for fiscal year 
  4.26  2003, the excess reserve amount shall be computed using the 
  4.27  balance in a district's school readiness reserve account on June 
  4.28  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
  4.29  be computed using the adjusted average balance in a district's 
  4.30  school readiness reserve account on June 30, 2002, and June 30, 
  4.31  2003. 
  4.32     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
  4.33  fiscal year 2003. 
  4.34     Sec. 7.  Minnesota Statutes 2002, section 124D.20, is 
  4.35  amended by adding a subdivision to read: 
  4.36     Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
  5.1   the sum of the average balances during the most recent 
  5.2   three-year period in a district's community education reserve 
  5.3   account and unreserved/undesignated community service fund 
  5.4   account on June 30 of each year, adjusted for any prior 
  5.5   reductions under this subdivision, must not be greater than 25 
  5.6   percent of the sum of the district's maximum total community 
  5.7   education revenue under subdivision 1, excluding adjustments 
  5.8   under this subdivision, plus the district's additional community 
  5.9   education levy under section 124D.21, plus any fees, grants, or 
  5.10  other revenue received by the district for community education 
  5.11  programs for the prior year.  For purposes of this paragraph, 
  5.12  "community education programs" means programs according to 
  5.13  subdivisions 8, paragraph (a), and 9, and section 124D.19, 
  5.14  subdivision 12, excluding early childhood family education 
  5.15  programs under section 124D.13, school readiness programs under 
  5.16  sections 124D.15 and 124D.17, and adult basic education programs 
  5.17  under section 124D.52. 
  5.18     (b) If the sum of the average balances during the most 
  5.19  recent three-year period in a district's community education 
  5.20  reserve account and unreserved/undesignated community service 
  5.21  fund account on June 30 of each year, adjusted for any prior 
  5.22  reductions under this subdivision, is in excess of the limit 
  5.23  under paragraph (a), the district's community education state 
  5.24  aid and levy authority for the current school year must be 
  5.25  reduced by the lesser of the current year revenue under 
  5.26  subdivision 1 or the excess reserve amount.  The aid reduction 
  5.27  equals the product of the lesser of the excess reserve amount or 
  5.28  the current year revenue under subdivision 1 times the ratio of 
  5.29  the district's aid for the current year under subdivision 7 to 
  5.30  the district's revenue for the current year under subdivision 
  5.31  1.  The levy reduction equals the excess reserve amount minus 
  5.32  the aid reduction.  For purposes of this paragraph, if a 
  5.33  district does not levy the entire amount permitted under 
  5.34  subdivision 5 or 6, the revenue under subdivision 1 must be 
  5.35  reduced in proportion to the actual amount levied. 
  5.36     (c) Notwithstanding paragraph (a), for fiscal year 2003, 
  6.1   the excess reserve amount shall be computed using the balances 
  6.2   in a district's community education reserve account and 
  6.3   unreserved/undesignated community service fund account on June 
  6.4   30, 2002.  For fiscal year 2004, the excess reserve amount shall 
  6.5   be computed using the adjusted average balances in a district's 
  6.6   community education reserve account and unreserved/undesignated 
  6.7   community service fund account on June 30, 2002, and June 30, 
  6.8   2003. 
  6.9      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
  6.10  fiscal year 2003. 
  6.11     Sec. 8.  Minnesota Statutes 2002, section 124D.20, is 
  6.12  amended by adding a subdivision to read: 
  6.13     Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
  6.14  reserve account may exceed the 25 percent limit established 
  6.15  under subdivision 11 because of extenuating circumstances, prior 
  6.16  approval to exceed the limit must be obtained in writing from 
  6.17  the commissioner. 
  6.18     (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
  6.19  district may submit a waiver request within 30 days of the date 
  6.20  of final enactment. 
  6.21     Sec. 9.  [DISTRICTS IN STATUTORY OPERATING DEBT.] 
  6.22     For taxes payable in 2003, the fund balance limitation 
  6.23  under Minnesota Statutes, section 124D.20, subdivision 11, 
  6.24  paragraph (a), is not effective for any school district that is 
  6.25  in statutory operating debt under Minnesota Statutes, section 
  6.26  123B.81, and, notwithstanding Minnesota Statutes, section 
  6.27  124D.20, subdivision 11, paragraph (b), the levy reduction is 
  6.28  not effective for any school district that is in statutory 
  6.29  operating debt. 
  6.30     Sec. 10.  [EFFECTIVE DATE.] 
  6.31     Sections 1 to 9 are effective the day following final 
  6.32  enactment, unless otherwise specified. 
  6.33                             ARTICLE 3
  6.34                          HIGHER EDUCATION 
  6.35  Section 1.  [HIGHER EDUCATION REDUCTIONS.] 
  6.36     The dollar amounts in the column under "APPROPRIATION 
  7.1   CHANGE" are added to or, if shown in parentheses, are subtracted 
  7.2   from the appropriations in Laws 2001, First Special Session 
  7.3   chapter 1, as amended, by Laws 2002, chapter 220 or 374, as 
  7.4   amended, or other law to the specified agencies.  The 
  7.5   appropriations are from the general fund or other named fund and 
  7.6   are available for the fiscal years indicated for each purpose.  
  7.7   The figure "2003" means that the addition to or subtraction from 
  7.8   the appropriations listed under the figure is for the fiscal 
  7.9   year ending June 30, 2003. 
  7.10                                                         2003 
  7.11  TRANSFERS FROM OTHER FUNDS                       $   30,000,000 
  7.12  APPROPRIATION REDUCTIONS                            (30,107,000)
  7.13                                             APPROPRIATION CHANGE
  7.14  Sec. 2.  [BOARD OF TRUSTEES OF
  7.15  THE MINNESOTA STATE COLLEGES
  7.16  AND UNIVERSITIES.]
  7.17  Total appropriation changes.                    $ (20,000,000)
  7.18  The reduction in this section
  7.19  is a onetime reduction and does
  7.20  not reduce the budget base for the
  7.21  2004-2005 biennium.
  7.22  Sec. 3.  [BOARD OF REGENTS OF
  7.23  THE UNIVERSITY OF MINNESOTA.]
  7.24  Total appropriation changes.                      (20,000,000)
  7.25  The reduction in this section
  7.26  is a onetime reduction and does
  7.27  not reduce the budget base for the
  7.28  2004-2005 biennium.
  7.29  Sec. 4.  [HIGHER EDUCATION
  7.30  SERVICES OFFICE.]
  7.31  Subdivision 1. Total
  7.32  appropriation changes.                               9,893,000
  7.33  Subd. 2.  State grant program.                      10,000,000
  7.34  This is a onetime appropriation
  7.35  and is not added to the budget base
  7.36  for the 2004-2005 biennium.
  7.37  Subd. 3.  This amount is
  7.38  subtracted from the general fund
  7.39  appropriations for operating
  7.40  purposes.                                             (107,000)
  7.41  Sec. 5.  [SELF LOAN RESERVE
  7.42  FUND TRANSFER.]
  7.43  Notwithstanding Minnesota
  7.44  Statutes, section 136A.171, or any
  7.45  other law to the contrary, the
  7.46  higher education services office
  8.1   shall transfer $30,000,000 of
  8.2   uncommitted balances in the SELF
  8.3   loan reserve fund to the general
  8.4   fund.
  8.5      Sec. 6.  [EFFECTIVE DATE.] 
  8.6      Sections 1 to 5 are effective the day following final 
  8.7   enactment. 
  8.8                              ARTICLE 4
  8.9        HEALTH, HUMAN SERVICES AND CORRECTIONS APPROPRIATIONS 
  8.10  Section 1.  [HEALTH, HUMAN SERVICES AND CORRECTIONS 
  8.11  APPROPRIATIONS.] 
  8.12     The dollar amounts shown in the columns marked 
  8.13  "APPROPRIATIONS" are added to or, if shown in parentheses, are 
  8.14  subtracted from the appropriations in Laws 2001, First Special 
  8.15  Session chapter 9, Laws 2002, chapters 220 and 374, or other 
  8.16  law, and are appropriated from the general fund, or any other 
  8.17  fund named, to the agencies and for the purposes specified in 
  8.18  this article, to be available for the fiscal years indicated for 
  8.19  each purpose.  The figure "2003" used in this article mean that 
  8.20  the appropriation or appropriations listed under them are 
  8.21  available for the fiscal year ending June 30, 2003.  
  8.22                          SUMMARY BY FUND
  8.23                                                          2003
  8.24  TRANSFERS FROM OTHER FUNDS                         $ 10,094,000
  8.25  APPROPRIATIONS 
  8.26  General Fund 
  8.27  Forecast Adjustments                                113,841,000
  8.28  General Fund 
  8.29  Nonforecast                                         (40,379,000)
  8.30  Health Care
  8.31  Access                                                4,613,000
  8.32  Federal TANF                                         20,741,000
  8.33                                             APPROPRIATIONS 
  8.34                                         Available for the Year 
  8.35                                             Ending June 30 
  8.36                                                         2003 
  8.37  Sec. 2.  COMMISSIONER OF
  8.38  HUMAN SERVICES
  8.39  Subdivision 1.  Total
  8.40  Appropriation                                     $ 108,558,000
  8.41                Summary by Fund
  9.1   General                            83,204,000
  9.2   Health Care
  9.3   Access                              4,613,000 
  9.4   Federal TANF                       20,741,000
  9.5   Transfers from
  9.6   Other Funds                         6,094,000 
  9.7   Subd. 2.  Agency Management
  9.8   General                            (2,000,000)
  9.9   [SPECIAL REVENUE FUND TRANSFERS.] 
  9.10  Notwithstanding any other law to the 
  9.11  contrary, the commissioner shall 
  9.12  transfer the following amounts to the 
  9.13  general fund from the special revenue 
  9.14  fund identified: 
  9.15  (1) $500,000 from the revenue 
  9.16  maximization account; 
  9.17  (2) $400,000 from the MinnesotaCare 
  9.18  outreach account; 
  9.19  (3) $39,000 from the communications 
  9.20  systems account; 
  9.21  (4) $70,000 from the child 
  9.22  welfare-targeted case management 
  9.23  account; 
  9.24  (5) $160,000 from the local 
  9.25  collaborative time study account; and 
  9.26  (6) $225,000 from the child support 
  9.27  recoupment account. 
  9.28  Subd. 3.  Revenue and Pass-through
  9.29  Expenditures
  9.30  Federal TANF                          423,000
  9.31  Subd. 4.  Children's
  9.32  Grants 
  9.33  General                           (16,286,000)
  9.34  [GRANT REDUCTIONS.] The fiscal year 
  9.35  2003 appropriations for the following 
  9.36  grants are reduced by the amounts 
  9.37  indicated: 
  9.38  (1) adoption assistance/relative 
  9.39  custody grants by $584,000; 
  9.40  (2) criminal justice grants by $5,000; 
  9.41  (3) fetal alcohol syndrome grants by 
  9.42  $106,000; and 
  9.43  (4) foster care and adoptive parent 
  9.44  recoupment by $55,000. 
  9.45  The balance of the reduction, 
  9.46  $3,811,000 in family preservation and 
  9.47  $11,725,000 in children's mental health 
  9.48  grants are due to changes in payment 
  9.49  allocations. 
 10.1   Subd. 5.  Basic Health Care
 10.2   Grants
 10.3   General                            58,897,000
 10.4   Health Care
 10.5   Access                              4,613,000 
 10.6   The amounts that may be spent from this 
 10.7   appropriation for each purpose are as 
 10.8   follows: 
 10.9   (a) MinnesotaCare Grants
 10.10  Health Care
 10.11  Access                              4,613,000
 10.12  (b) MA Basic Health Care
 10.13  Grants - Families and Children
 10.14  General                            20,280,000 
 10.15  (c) MA Basic Health Care
 10.16  Grants - Elderly and Disabled
 10.17  General                             2,114,000
 10.18  [CRITICAL ACCESS PHARMACY PROVIDERS.] 
 10.19  Of this appropriation, $500,000 is to 
 10.20  the commissioner to increase pharmacy 
 10.21  dispensing fees to critical access 
 10.22  pharmacies as authorized under 
 10.23  Minnesota Statutes, section 256B.0625, 
 10.24  subdivision 13, paragraph (d), and 
 10.25  $25,000 is for related administrative 
 10.26  costs.  Any unspent portion of the 
 10.27  $500,000 appropriation shall not cancel 
 10.28  but shall be available for this purpose 
 10.29  until June 30, 2004.  Base level 
 10.30  funding for this activity for the 
 10.31  biennium beginning July 1, 2003, shall 
 10.32  be $2,000,000 each fiscal year to 
 10.33  increase pharmacy dispensing fees and 
 10.34  $100,000 each fiscal year for 
 10.35  administrative costs. 
 10.36  (d) General Assistance
 10.37  Medical Care Grants
 10.38  General                            36,846,000
 10.39  (e) Health Care Grants -
 10.40  Other Assistance
 10.41  General                              (200,000)
 10.42  [COUNTY PREPAID MEDICAL ASSISTANCE 
 10.43  PROGRAM ADMINISTRATIVE GRANTS.] The 
 10.44  fiscal year 2003 appropriation for 
 10.45  county prepaid medical assistance 
 10.46  program administrative grants is 
 10.47  reduced by $200,000. 
 10.48  (f) Prescription 
 10.49  Drug Program
 10.50  General                              (143,000) 
 10.51  Subd. 6.  Health Care
 10.52  Management
 11.1   General                                20,000
 11.2   Health Care Policy
 11.3   Administration
 11.4   General                                20,000
 11.5   Subd. 7.  State-Operated
 11.6   Services
 11.7   General                               -0-    
 11.8   [ONETIME REDUCTION TO DEDICATED 
 11.9   REVENUES.] For fiscal year 2003 only, 
 11.10  the commissioner shall transfer 
 11.11  $4,700,000 of state-operated services 
 11.12  fund balances from the accounts 
 11.13  indicated to the general fund as 
 11.14  follows: 
 11.15  (1) $3,200,000 from traumatic brain 
 11.16  injury enterprises; 
 11.17  (2) $1,000,000 from lease income; and 
 11.18  (3) $500,000 from ICF/MR depreciation. 
 11.19  Subd. 8.  Continuing Care 
 11.20  Grants
 11.21  [USE OF CERTAIN APPROPRIATIONS.] 
 11.22  Notwithstanding the provisions of Laws 
 11.23  2002, chapter 374, article 9, section 
 11.24  2, subdivision 5, up to 100 percent of 
 11.25  the fiscal year 2004 appropriations for 
 11.26  family preservation grants, 
 11.27  developmental disability 
 11.28  semi-independent living services, 
 11.29  developmental disability family 
 11.30  support, adult mental health grants, 
 11.31  and children's mental health grants 
 11.32  shall be paid in July 2003 and may be 
 11.33  used to fund calendar year 2003 
 11.34  allocations for these programs, with 
 11.35  the resulting calendar year funding 
 11.36  pattern continuing into the future.  
 11.37  Appropriation reductions associated 
 11.38  with this shift are one time only. 
 11.39  General                            49,255,000
 11.40  The amounts that may be spent from this 
 11.41  appropriation for each purpose are as 
 11.42  follows: 
 11.43  (a) Aging and Adult Services
 11.44  General                              (701,000)
 11.45  [APPROPRIATION REDUCTION.] The fiscal 
 11.46  year 2003 appropriations for the 
 11.47  following grants are reduced by the 
 11.48  amount indicated: 
 11.49  (1) community service grants by 
 11.50  $440,000; 
 11.51  (2) home share grants by $156,000; 
 11.52  (3) community service development 
 11.53  grants by $39,000; 
 12.1   (4) senior's agenda for independent 
 12.2   living grants by $28,000; and 
 12.3   (5) information and assistance grants 
 12.4   by $38,000. 
 12.5   (b) Mental Health Grants
 12.6   General                            7,006,000
 12.7   [LOAN FOR CASH FLOW PURPOSES.] Of this 
 12.8   appropriation, $21,000,000 is to 
 12.9   establish a loan program for counties 
 12.10  that experience cash flow problems as a 
 12.11  result of the shift of payment dates 
 12.12  authorized in this subdivision.  A 
 12.13  county may apply for a loan under this 
 12.14  paragraph.  The commissioner may 
 12.15  approve a loan to a county that 
 12.16  demonstrates need under criteria 
 12.17  established by the commissioner.  The 
 12.18  commissioner is exempt from the 
 12.19  rulemaking requirements of chapter 14 
 12.20  for the purposes of this paragraph.  A 
 12.21  county that receives a loan under this 
 12.22  paragraph must repay the loan by July 
 12.23  31, 2003.  By August 15, 2003, the 
 12.24  commissioner of human services shall 
 12.25  transfer $21,000,000 to the 
 12.26  commissioner of finance for 
 12.27  cancellation to the general fund. 
 12.28  [PAYMENT SHIFT.] Of this appropriation, 
 12.29  a reduction of $13,994,000 is due to 
 12.30  the shift of payment dates authorized 
 12.31  in this subdivision. 
 12.32  (c) Community Support Grants
 12.33  General                            (5,176,000)
 12.34  [APPROPRIATION REDUCTION.] The fiscal 
 12.35  year 2003 appropriation for public 
 12.36  guardianship grants is reduced by 
 12.37  $250,000. 
 12.38  (d) Medical Assistance
 12.39  Long-Term Care Waivers and
 12.40  Home Care Grants
 12.41  General                            39,798,000
 12.42  [TARGETED CASE MANAGEMENT FOR HOME CARE 
 12.43  RECIPIENTS.] Implementation of the 
 12.44  targeted case management benefit for 
 12.45  home care recipients, pursuant to Laws 
 12.46  2001, First Special Session chapter 9, 
 12.47  article 3, sections 20, 21, 23 to 25, 
 12.48  27, and 28 (Minnesota Statutes, section 
 12.49  256B.0621, subdivisions 2, 3, 5 to 7, 
 12.50  9, and 10) will be delayed until July 
 12.51  1, 2003. 
 12.52  [COMMON SERVICE MENU.] Implementation 
 12.53  of the common service menu option 
 12.54  within the home- and community-based 
 12.55  waivers, pursuant to Laws 2001, First 
 12.56  Special Session chapter 9, article 3, 
 12.57  section 63 (Minnesota Statutes, section 
 12.58  256B.49, subdivision 16) will be 
 12.59  delayed until July 1, 2003. 
 13.1   (e) Medical Assistance
 13.2   Long-Term Care Facilities
 13.3   Grants
 13.4   General                            10,078,000 
 13.5   (f) Alternative Care
 13.6   Grants
 13.7   General                              (300,000)
 13.8   (g) Group Residential
 13.9   Housing Grants
 13.10  General                            (1,450,000)
 13.11  Subd. 9.  Economic
 13.12  Support Grants
 13.13  General                            (6,682,000)
 13.14  Federal TANF                       20,318,000
 13.15  The amounts that may be spent from the 
 13.16  appropriation for each purpose are as 
 13.17  follows: 
 13.18  (a) Assistance to Families
 13.19  Grants
 13.20  General                            (8,923,000)
 13.21  Federal TANF                       20,318,000
 13.22  (b) Economic Support
 13.23  Grants - Other Assistance
 13.24  General                               (64,000)
 13.25  [APPROPRIATION REDUCTION.] The fiscal 
 13.26  year 2003 appropriation for fraud 
 13.27  prevention grants is reduced by $64,000.
 13.28  (c) General Assistance
 13.29  Grants
 13.30  General                             3,193,000
 13.31  (d) Minnesota Supplemental
 13.32  Aid Grants
 13.33  General                              (888,000)
 13.34  Sec. 3.  COMMISSIONER OF HEALTH
 13.35  Subdivision 1.  Total Appropriation                  (3,578,000)
 13.36                Summary by Fund
 13.37  General                            (3,578,000) 
 13.38  Transfers from 
 13.39  Other Funds                         4,000,000 
 13.40  Subd. 2.  Health Improvement
 13.41  General                            (2,183,000)
 13.42  [APPROPRIATION REDUCTION.] The fiscal 
 13.43  year 2003 appropriations for the 
 13.44  following grants are reduced by the 
 14.1   amounts indicated: 
 14.2   (1) Indian health grants by $8,000; 
 14.3   (2) migrant health grants by $10,000; 
 14.4   (3) family planning grants by $55,000; 
 14.5   (4) home visiting grants by $4,000; 
 14.6   (5) infant mortality grants by 
 14.7   $100,000; and 
 14.8   (6) health disparities grants by 
 14.9   $268,000. 
 14.10  [CARRYFORWARD.] $57,000 in carryforward 
 14.11  for the occupational respiratory 
 14.12  disease information system is canceled 
 14.13  to the general fund. 
 14.14  [TOBACCO USE PREVENTION.] $4,000,000 
 14.15  previously appropriated for tobacco use 
 14.16  prevention activities in Minnesota 
 14.17  Statutes, section 144.395, subdivision 
 14.18  2, is transferred to the commissioner 
 14.19  of finance for cancellation to the 
 14.20  general fund. 
 14.21  Subd. 3.  Health Quality Access 
 14.22  General                              (720,000)
 14.23  [APPROPRIATION REDUCTION.] The 
 14.24  following fiscal year 2003 
 14.25  appropriations are reduced as indicated:
 14.26  (1) local quality and demonstration 
 14.27  grants by $500,000; 
 14.28  (2) transitional planning grants by 
 14.29  $135,000; and 
 14.30  (3) case mix review study grants by 
 14.31  $85,000. 
 14.32  Subd. 4.  Management Support
 14.33  Services 
 14.34  General                              (675,000)
 14.35  Sec. 4.  VETERANS HOMES
 14.36  BOARD
 14.37  Total Appropriation                                    (124,000)
 14.38                Summary by Fund
 14.39  General                              (124,000)
 14.40  [APPROPRIATION REDUCTION.] The fiscal 
 14.41  year 2003 general fund appropriation to 
 14.42  the veterans homes board is reduced by 
 14.43  $124,000. 
 14.44  Sec. 5.  DEPARTMENT 
 14.45  OF CORRECTIONS
 14.46  Subdivision 1.  Total Appropriation                  (6,040,000)
 14.47  Subd. 2.  Institutions 
 15.1   General                              (900,000)
 15.2   Subd. 3.  Community Services
 15.3   General                            (4,640,000)
 15.4   [CARRYFORWARD.] $50,000 in fiscal year 
 15.5   2002 carryforward to fiscal year 2003 
 15.6   in sex-offender grants is canceled to 
 15.7   the general fund. 
 15.8   [APPROPRIATION REDUCTION.] The fiscal 
 15.9   year 2003 appropriations for the 
 15.10  following grants are reduced by the 
 15.11  amounts indicated: 
 15.12  (1) intensive community supervision 
 15.13  grants by $61,000; 
 15.14  (2) adult women grants by $21,000; 
 15.15  (3) juvenile female grants by $3,000; 
 15.16  (4) adult felony caseload grants by 
 15.17  $12,000; 
 15.18  (5) juvenile restitution grants by 
 15.19  $30,000; 
 15.20  (6) juvenile continuum of care grants 
 15.21  by $62,000; 
 15.22  (7) repeat DWI grants by $9,000; 
 15.23  (8) sex offender in community grants by 
 15.24  $114,000; 
 15.25  (9) restorative justice grants by 
 15.26  $21,000; and 
 15.27  (10) adult felony supervision grants by 
 15.28  $60,000. 
 15.29  [GRANTS TO COUNTIES.] $425,000 is 
 15.30  appropriated from the general fund for 
 15.31  the county grants described in article 
 15.32  6, section 8. 
 15.33  [UNALLOCATED COMMUNITY CORRECTIONS ACT 
 15.34  GRANT MONEY CANCELED; APPROPRIATION FOR 
 15.35  GRANTS TO COUNTIES.] Notwithstanding 
 15.36  any other law to the contrary, any 
 15.37  money appropriated to the commissioner 
 15.38  of corrections for Community 
 15.39  Corrections Act grants that is not 
 15.40  encumbered or obligated as of January 
 15.41  13, 2003, is canceled to the general 
 15.42  fund and is appropriated from that fund 
 15.43  for the county grants described in 
 15.44  article 6, section 8.  
 15.45     Sec. 6.  [SUNSET OF UNCODIFIED LANGUAGE.] 
 15.46     All uncodified language contained in this article expires 
 15.47  June 30, 2003, unless a different expiration date is explicit. 
 15.48     Sec. 7.  [EFFECTIVE DATE.] 
 15.49     Except as otherwise provided in this article, this article 
 16.1   is effective the day following final enactment. 
 16.2                              ARTICLE 5 
 16.3                            HUMAN SERVICES
 16.4      Section 1.  Minnesota Statutes 2002, section 145A.13, 
 16.5   subdivision 3, is amended to read: 
 16.6      Subd. 3.  [PAYMENT.] When a community health board meets 
 16.7   the requirements prescribed in section 145A.09, subdivision 2, 
 16.8   the state commissioner of health shall pay the amount of subsidy 
 16.9   to the community health board or its designee according to 
 16.10  applicable rules from the money appropriated for the purpose and 
 16.11  according to the following: 
 16.12     (a) The commissioner of health shall make payments for 
 16.13  community health services to each community health board or its 
 16.14  designee in 12 installments a year;. 
 16.15     (b) The commissioner shall ensure that the pertinent 
 16.16  payment of the allotment for each month is made on the first 
 16.17  working day after the end of each month of the calendar year, 
 16.18  except for the last month of the calendar year; months of May 
 16.19  and December. 
 16.20     (c) The commissioner shall ensure that each community 
 16.21  health board or its designee receives its payment of the 
 16.22  allotment for that the month of May on the first working day of 
 16.23  July and for the month of December no later than the last 
 16.24  working day of that month.  The payment described in this 
 16.25  subdivision for services rendered during June, 1985, shall be 
 16.26  made on the first working day of July, 1985; and 
 16.27     (d) (c) The commissioner shall make payment to a human 
 16.28  services board organized and operating under section 145A.09, 
 16.29  subdivision 5, or to its designee, as prescribed in section 
 16.30  402.02, subdivision 4. 
 16.31     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 16.32  following final enactment. 
 16.33     Sec. 2.  Minnesota Statutes 2002, section 256.9657, 
 16.34  subdivision 1, is amended to read: 
 16.35     Subdivision 1.  [NURSING HOME LICENSE SURCHARGE.] (a) 
 16.36  Effective July 1, 1993, each non-state-operated 
 17.1   nonstate-operated nursing home licensed under chapter 144A shall 
 17.2   pay to the commissioner an annual surcharge according to the 
 17.3   schedule in subdivision 4.  The surcharge shall be calculated as 
 17.4   $620 per licensed bed.  If the number of licensed beds is 
 17.5   reduced, the surcharge shall be based on the number of remaining 
 17.6   licensed beds the second month following the receipt of timely 
 17.7   notice by the commissioner of human services that beds have been 
 17.8   delicensed.  The nursing home must notify the commissioner of 
 17.9   health in writing when beds are delicensed.  The commissioner of 
 17.10  health must notify the commissioner of human services within ten 
 17.11  working days after receiving written notification.  If the 
 17.12  notification is received by the commissioner of human services 
 17.13  by the 15th of the month, the invoice for the second following 
 17.14  month must be reduced to recognize the delicensing of beds.  
 17.15  Beds on layaway status continue to be subject to the surcharge.  
 17.16  The commissioner of human services must acknowledge a medical 
 17.17  care surcharge appeal within 30 days of receipt of the written 
 17.18  appeal from the provider. 
 17.19     (b) Effective July 1, 1994, the surcharge in paragraph (a) 
 17.20  shall be increased to $625. 
 17.21     (c) Effective August 15, 2002, the surcharge under 
 17.22  paragraph (b) shall be increased to $990. 
 17.23     (d) Effective April 15, 2003, the surcharge under paragraph 
 17.24  (c) shall be increased to $1,632. 
 17.25     (e) Between April 1, 2002, and August 15, 2003, a facility 
 17.26  governed by this subdivision may elect to assume full 
 17.27  participation in the medical assistance program by agreeing to 
 17.28  comply with all of the requirements of the medical assistance 
 17.29  program, including the rate equalization law in section 256B.48, 
 17.30  subdivision 1, paragraph (a), and all other requirements 
 17.31  established in law or rule, and to begin intake of new medical 
 17.32  assistance recipients.  Rates will be determined under Minnesota 
 17.33  Rules, parts 9549.0010 to 9549.0080.  Notwithstanding section 
 17.34  256B.431, subdivision 27, paragraph (i), rate calculations will 
 17.35  be subject to limits as prescribed in rule and law.  Other than 
 17.36  the adjustments in sections 256B.431, subdivisions 30 and 32; 
 18.1   256B.437, subdivision 3, paragraph (b), Minnesota Rules, part 
 18.2   9549.0057, and any other applicable legislation enacted prior to 
 18.3   the finalization of rates, facilities assuming full 
 18.4   participation in medical assistance under this paragraph are not 
 18.5   eligible for any rate adjustments until the July 1 following 
 18.6   their settle-up period. 
 18.7      <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 18.8      Sec. 3.  Minnesota Statutes 2002, section 256.969, 
 18.9   subdivision 3a, is amended to read: 
 18.10     Subd. 3a.  [PAYMENTS.] (a) Acute care hospital billings 
 18.11  under the medical assistance program must not be submitted until 
 18.12  the recipient is discharged.  However, the commissioner shall 
 18.13  establish monthly interim payments for inpatient hospitals that 
 18.14  have individual patient lengths of stay over 30 days regardless 
 18.15  of diagnostic category.  Except as provided in section 256.9693, 
 18.16  medical assistance reimbursement for treatment of mental illness 
 18.17  shall be reimbursed based on diagnostic classifications.  
 18.18  Individual hospital payments established under this section and 
 18.19  sections 256.9685, 256.9686, and 256.9695, in addition to third 
 18.20  party and recipient liability, for discharges occurring during 
 18.21  the rate year shall not exceed, in aggregate, the charges for 
 18.22  the medical assistance covered inpatient services paid for the 
 18.23  same period of time to the hospital.  This payment limitation 
 18.24  shall be calculated separately for medical assistance and 
 18.25  general assistance medical care services.  The limitation on 
 18.26  general assistance medical care shall be effective for 
 18.27  admissions occurring on or after July 1, 1991.  Services that 
 18.28  have rates established under subdivision 11 or 12, must be 
 18.29  limited separately from other services.  After consulting with 
 18.30  the affected hospitals, the commissioner may consider related 
 18.31  hospitals one entity and may merge the payment rates while 
 18.32  maintaining separate provider numbers.  The operating and 
 18.33  property base rates per admission or per day shall be derived 
 18.34  from the best Medicare and claims data available when rates are 
 18.35  established.  The commissioner shall determine the best Medicare 
 18.36  and claims data, taking into consideration variables of recency 
 19.1   of the data, audit disposition, settlement status, and the 
 19.2   ability to set rates in a timely manner.  The commissioner shall 
 19.3   notify hospitals of payment rates by December 1 of the year 
 19.4   preceding the rate year.  The rate setting data must reflect the 
 19.5   admissions data used to establish relative values.  Base year 
 19.6   changes from 1981 to the base year established for the rate year 
 19.7   beginning January 1, 1991, and for subsequent rate years, shall 
 19.8   not be limited to the limits ending June 30, 1987, on the 
 19.9   maximum rate of increase under subdivision 1.  The commissioner 
 19.10  may adjust base year cost, relative value, and case mix index 
 19.11  data to exclude the costs of services that have been 
 19.12  discontinued by the October 1 of the year preceding the rate 
 19.13  year or that are paid separately from inpatient services.  
 19.14  Inpatient stays that encompass portions of two or more rate 
 19.15  years shall have payments established based on payment rates in 
 19.16  effect at the time of admission unless the date of admission 
 19.17  preceded the rate year in effect by six months or more.  In this 
 19.18  case, operating payment rates for services rendered during the 
 19.19  rate year in effect and established based on the date of 
 19.20  admission shall be adjusted to the rate year in effect by the 
 19.21  hospital cost index. 
 19.22     (b) For fee-for-service admissions occurring on or after 
 19.23  July 1, 2002, the total payment, before third-party liability 
 19.24  and spenddown, made to hospitals for inpatient services is 
 19.25  reduced by .5 percent from the current statutory rates. 
 19.26     (c) The last fee-for-service payments that would otherwise 
 19.27  be made in June shall be paid on the first scheduled payment 
 19.28  date in the following fiscal year.  The provisions of section 
 19.29  16A.124 shall not apply to these delayed payments. 
 19.30     <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 19.31     Sec. 4.  Minnesota Statutes 2002, section 256B.0625, 
 19.32  subdivision 13, is amended to read: 
 19.33     Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
 19.34  except for fertility drugs when specifically used to enhance 
 19.35  fertility, if prescribed by a licensed practitioner and 
 19.36  dispensed by a licensed pharmacist, by a physician enrolled in 
 20.1   the medical assistance program as a dispensing physician, or by 
 20.2   a physician or a nurse practitioner employed by or under 
 20.3   contract with a community health board as defined in section 
 20.4   145A.02, subdivision 5, for the purposes of communicable disease 
 20.5   control.  The commissioner, after receiving recommendations from 
 20.6   professional medical associations and professional pharmacist 
 20.7   associations, shall designate a formulary committee to advise 
 20.8   the commissioner on the names of drugs for which payment is 
 20.9   made, recommend a system for reimbursing providers on a set fee 
 20.10  or charge basis rather than the present system, and develop 
 20.11  methods encouraging use of generic drugs when they are less 
 20.12  expensive and equally effective as trademark drugs.  The 
 20.13  formulary committee shall consist of nine members, four of whom 
 20.14  shall be physicians who are not employed by the department of 
 20.15  human services, and a majority of whose practice is for persons 
 20.16  paying privately or through health insurance, three of whom 
 20.17  shall be pharmacists who are not employed by the department of 
 20.18  human services, and a majority of whose practice is for persons 
 20.19  paying privately or through health insurance, a consumer 
 20.20  representative, and a nursing home representative.  Committee 
 20.21  members shall serve three-year terms and shall serve without 
 20.22  compensation.  Members may be reappointed once.  
 20.23     (b) The commissioner shall establish a drug formulary.  Its 
 20.24  establishment and publication shall not be subject to the 
 20.25  requirements of the Administrative Procedure Act, but the 
 20.26  formulary committee shall review and comment on the formulary 
 20.27  contents.  
 20.28     The formulary shall not include:  
 20.29     (i) drugs or products for which there is no federal 
 20.30  funding; 
 20.31     (ii) over-the-counter drugs, except for antacids, 
 20.32  acetaminophen, family planning products, aspirin, insulin, 
 20.33  products for the treatment of lice, vitamins for adults with 
 20.34  documented vitamin deficiencies, vitamins for children under the 
 20.35  age of seven and pregnant or nursing women, and any other 
 20.36  over-the-counter drug identified by the commissioner, in 
 21.1   consultation with the drug formulary committee, as necessary, 
 21.2   appropriate, and cost-effective for the treatment of certain 
 21.3   specified chronic diseases, conditions or disorders, and this 
 21.4   determination shall not be subject to the requirements of 
 21.5   chapter 14; 
 21.6      (iii) anorectics, except that medically necessary 
 21.7   anorectics shall be covered for a recipient previously diagnosed 
 21.8   as having pickwickian syndrome and currently diagnosed as having 
 21.9   diabetes and being morbidly obese; 
 21.10     (iv) drugs for which medical value has not been 
 21.11  established; and 
 21.12     (v) drugs from manufacturers who have not signed a rebate 
 21.13  agreement with the Department of Health and Human Services 
 21.14  pursuant to section 1927 of title XIX of the Social Security Act.
 21.15     The commissioner shall publish conditions for prohibiting 
 21.16  payment for specific drugs after considering the formulary 
 21.17  committee's recommendations.  An honorarium of $100 per meeting 
 21.18  and reimbursement for mileage shall be paid to each committee 
 21.19  member in attendance.  
 21.20     (c) The basis for determining the amount of payment shall 
 21.21  be the lower of the actual acquisition costs of the drugs plus a 
 21.22  fixed dispensing fee; the maximum allowable cost set by the 
 21.23  federal government or by the commissioner plus the fixed 
 21.24  dispensing fee; or the usual and customary price charged to the 
 21.25  public.  The amount of payment basis must be reduced to reflect 
 21.26  all discount amounts applied to the charge by any 
 21.27  provider/insurer agreement or contract for submitted charges to 
 21.28  medical assistance programs.  The net submitted charge may not 
 21.29  be greater than the patient liability for the service.  The 
 21.30  pharmacy dispensing fee shall be $3.65, except that the 
 21.31  dispensing fee for intravenous solutions which must be 
 21.32  compounded by the pharmacist shall be $8 per bag, $14 per bag 
 21.33  for cancer chemotherapy products, and $30 per bag for total 
 21.34  parenteral nutritional products dispensed in one liter 
 21.35  quantities, or $44 per bag for total parenteral nutritional 
 21.36  products dispensed in quantities greater than one liter.  Actual 
 22.1   acquisition cost includes quantity and other special discounts 
 22.2   except time and cash discounts.  The actual acquisition cost of 
 22.3   a drug shall be estimated by the commissioner, at average 
 22.4   wholesale price minus nine 14 percent, except that where a drug 
 22.5   has had its wholesale price reduced as a result of the actions 
 22.6   of the National Association of Medicaid Fraud Control Units, the 
 22.7   estimated actual acquisition cost shall be the reduced average 
 22.8   wholesale price, without the nine 14 percent deduction.  The 
 22.9   maximum allowable cost of a multisource drug may be set by the 
 22.10  commissioner and it shall be comparable to, but no higher than, 
 22.11  the maximum amount paid by other third-party payors in this 
 22.12  state who have maximum allowable cost programs.  The 
 22.13  commissioner shall set maximum allowable costs for multisource 
 22.14  drugs that are not on the federal upper limit list as described 
 22.15  in United States Code, title 42, chapter 7, section 1396r-8(e), 
 22.16  the Social Security Act, and Code of Federal Regulations, title 
 22.17  42, part 447, section 447.332.  Establishment of the amount of 
 22.18  payment for drugs shall not be subject to the requirements of 
 22.19  the Administrative Procedure Act.  An additional dispensing fee 
 22.20  of $.30 may be added to the dispensing fee paid to pharmacists 
 22.21  for legend drug prescriptions dispensed to residents of 
 22.22  long-term care facilities when a unit dose blister card system, 
 22.23  approved by the department, is used.  Under this type of 
 22.24  dispensing system, the pharmacist must dispense a 30-day supply 
 22.25  of drug.  The National Drug Code (NDC) from the drug container 
 22.26  used to fill the blister card must be identified on the claim to 
 22.27  the department.  The unit dose blister card containing the drug 
 22.28  must meet the packaging standards set forth in Minnesota Rules, 
 22.29  part 6800.2700, that govern the return of unused drugs to the 
 22.30  pharmacy for reuse.  The pharmacy provider will be required to 
 22.31  credit the department for the actual acquisition cost of all 
 22.32  unused drugs that are eligible for reuse.  Over-the-counter 
 22.33  medications must be dispensed in the manufacturer's unopened 
 22.34  package.  The commissioner may permit the drug clozapine to be 
 22.35  dispensed in a quantity that is less than a 30-day supply.  
 22.36  Whenever a generically equivalent product is available, payment 
 23.1   shall be on the basis of the actual acquisition cost of the 
 23.2   generic drug, unless the prescriber specifically indicates 
 23.3   "dispense as written - brand necessary" on the prescription as 
 23.4   required by section 151.21, subdivision 2. 
 23.5      (d) For purposes of this subdivision, "multisource drugs" 
 23.6   means covered outpatient drugs, excluding innovator multisource 
 23.7   drugs for which there are two or more drug products, which: 
 23.8      (1) are related as therapeutically equivalent under the 
 23.9   Food and Drug Administration's most recent publication of 
 23.10  "Approved Drug Products with Therapeutic Equivalence 
 23.11  Evaluations"; 
 23.12     (2) are pharmaceutically equivalent and bioequivalent as 
 23.13  determined by the Food and Drug Administration; and 
 23.14     (3) are sold or marketed in Minnesota. 
 23.15  "Innovator multisource drug" means a multisource drug that was 
 23.16  originally marketed under an original new drug application 
 23.17  approved by the Food and Drug Administration.  Effective for 
 23.18  prescriptions dispensed on or after March 1, 2003, the 
 23.19  commissioner may, within the limits of available appropriation, 
 23.20  increase the dispensing fee described in paragraph (c) to 
 23.21  pharmacies deemed by the commissioner to be a critical-access 
 23.22  pharmacy.  In determining whether a pharmacy shall be deemed a 
 23.23  critical-access pharmacy, the commissioner shall consider the 
 23.24  following criteria: 
 23.25     (1) for pharmacies located outside the seven-county 
 23.26  metropolitan area: 
 23.27     (i) the total annual sum of the pharmacy's fee-for-service 
 23.28  medical assistance payments for the previous year in all 
 23.29  locations, excluding payments for prescriptions dispensed to 
 23.30  residents residing in nursing homes.  The pharmacy's total 
 23.31  annual sum must be no greater than $300,000; and 
 23.32     (ii) the proximity of the pharmacy to other medical 
 23.33  assistance pharmacy providers in a specified geographic area; 
 23.34  and 
 23.35     (2) for pharmacies located within the seven-county 
 23.36  metropolitan area: 
 24.1      (i) the percentage of the pharmacy's annual fee-for-service 
 24.2   medical assistance payments in that location, excluding payments 
 24.3   for prescriptions dispensed to residents in nursing homes 
 24.4   compared to the pharmacy's total annual prescription drug 
 24.5   sales.  The pharmacy's percentage must be greater than the 
 24.6   average percentage for pharmacies enrolled as a medical 
 24.7   assistance provider; and 
 24.8      (ii) the proximity of the pharmacy to other medical 
 24.9   assistance pharmacy providers in a specified geographic area. 
 24.10     The commissioner may establish regions within the state for 
 24.11  purposes of applying this criteria and may assign different 
 24.12  weights to the criteria depending on the region.  The 
 24.13  commissioner is exempt from chapter 14 for the purpose of 
 24.14  determining whether a pharmacy shall be deemed a critical access 
 24.15  pharmacy. 
 24.16     (e) The formulary committee shall review and recommend 
 24.17  drugs which require prior authorization.  The formulary 
 24.18  committee may recommend drugs for prior authorization directly 
 24.19  to the commissioner, as long as opportunity for public input is 
 24.20  provided.  Prior authorization may be requested by the 
 24.21  commissioner based on medical and clinical criteria and on cost 
 24.22  before certain drugs are eligible for payment.  Before a drug 
 24.23  may be considered for prior authorization at the request of the 
 24.24  commissioner: 
 24.25     (1) the drug formulary committee must develop criteria to 
 24.26  be used for identifying drugs; the development of these criteria 
 24.27  is not subject to the requirements of chapter 14, but the 
 24.28  formulary committee shall provide opportunity for public input 
 24.29  in developing criteria; 
 24.30     (2) the drug formulary committee must hold a public forum 
 24.31  and receive public comment for an additional 15 days; 
 24.32     (3) the drug formulary committee must consider data from 
 24.33  the state Medicaid program if such data is available; and 
 24.34     (4) the commissioner must provide information to the 
 24.35  formulary committee on the impact that placing the drug on prior 
 24.36  authorization will have on the quality of patient care and on 
 25.1   program costs, and information regarding whether the drug is 
 25.2   subject to clinical abuse or misuse.  
 25.3      Prior authorization may be required by the commissioner 
 25.4   before certain formulary drugs are eligible for payment.  If 
 25.5   prior authorization of a drug is required by the commissioner, 
 25.6   the commissioner must provide a 30-day notice period before 
 25.7   implementing the prior authorization.  If a prior authorization 
 25.8   request is denied by the department, the recipient may appeal 
 25.9   the denial in accordance with section 256.045.  If an appeal is 
 25.10  filed, the drug must be provided without prior authorization 
 25.11  until a decision is made on the appeal.  
 25.12     (f) The basis for determining the amount of payment for 
 25.13  drugs administered in an outpatient setting shall be the lower 
 25.14  of the usual and customary cost submitted by the provider; the 
 25.15  average wholesale price minus five percent; or the maximum 
 25.16  allowable cost set by the federal government under United States 
 25.17  Code, title 42, chapter 7, section 1396r-8(e), and Code of 
 25.18  Federal Regulations, title 42, section 447.332, or by the 
 25.19  commissioner under paragraph (c). 
 25.20     (g) Prior authorization shall not be required or utilized 
 25.21  for any antipsychotic drug prescribed for the treatment of 
 25.22  mental illness where there is no generically equivalent drug 
 25.23  available unless the commissioner determines that prior 
 25.24  authorization is necessary for patient safety.  This paragraph 
 25.25  applies to any supplemental drug rebate program established or 
 25.26  administered by the commissioner. 
 25.27     (h) Prior authorization shall not be required or utilized 
 25.28  for any antihemophilic factor drug prescribed for the treatment 
 25.29  of hemophilia and blood disorders where there is no generically 
 25.30  equivalent drug available unless the commissioner determines 
 25.31  that prior authorization is necessary for patient safety.  This 
 25.32  paragraph applies to any supplemental drug rebate program 
 25.33  established or administered by the commissioner.  This paragraph 
 25.34  expires July 1, 2003. 
 25.35     <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 25.36     Sec. 5.  Minnesota Statutes 2002, section 256B.0625, 
 26.1   subdivision 24, is amended to read: 
 26.2      Subd. 24.  [OTHER MEDICAL OR REMEDIAL CARE.] (a) Medical 
 26.3   assistance covers any other medical or remedial care licensed 
 26.4   and recognized under state law unless otherwise prohibited by 
 26.5   law, except: 
 26.6      (1) chiropractic services; 
 26.7      (2) podiatric services; and 
 26.8      (3) licensed chemical dependency treatment programs or 
 26.9   primary treatment or extended care treatment units in hospitals 
 26.10  that are covered under chapter 254B.  The commissioner shall 
 26.11  include chemical dependency services in the state medical 
 26.12  assistance plan for federal reporting purposes, but payment must 
 26.13  be made under chapter 254B.  
 26.14     (b) The commissioner shall publish in the State Register a 
 26.15  list of elective surgeries that require a second medical opinion 
 26.16  before medical assistance reimbursement, and the criteria and 
 26.17  standards for deciding whether an elective surgery should 
 26.18  require a second medical opinion.  The list and criteria and 
 26.19  standards are not subject to the requirements of sections 14.01 
 26.20  to 14.69.  
 26.21     <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003, 
 26.22  for services provided on or after that date. 
 26.23     Sec. 6.  Minnesota Statutes 2002, section 256B.19, 
 26.24  subdivision 1d, is amended to read: 
 26.25     Subd. 1d.  [PORTION OF NONFEDERAL SHARE TO BE PAID BY 
 26.26  CERTAIN COUNTIES.] (a) In addition to the percentage 
 26.27  contribution paid by a county under subdivision 1, the 
 26.28  governmental units designated in this subdivision shall be 
 26.29  responsible for an additional portion of the nonfederal share of 
 26.30  medical assistance cost.  For purposes of this subdivision, 
 26.31  "designated governmental unit" means the counties of Becker, 
 26.32  Beltrami, Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, 
 26.33  Pennington, Pipestone, Ramsey, St. Louis, Steele, Todd, 
 26.34  Traverse, and Wadena. 
 26.35     (b) Beginning in 1994, each of the governmental units 
 26.36  designated in this subdivision shall transfer before noon on May 
 27.1   31 to the state Medicaid agency an amount equal to the number of 
 27.2   licensed beds in any nursing home owned and operated by the 
 27.3   county on that date, with the county named as licensee, 
 27.4   multiplied by $5,723. If two or more counties own and operate a 
 27.5   nursing home, the payment shall be prorated.  These sums shall 
 27.6   be part of the designated governmental unit's portion of the 
 27.7   nonfederal share of medical assistance costs. 
 27.8      (c) Beginning in 2002, in addition to any transfer under 
 27.9   paragraph (b), each of the governmental units designated in this 
 27.10  subdivision shall transfer before noon on May 31 to the state 
 27.11  Medicaid agency an amount equal to the number of licensed beds 
 27.12  in any nursing home owned and operated by the county on that 
 27.13  date, with the county named as licensee, multiplied by $10,784.  
 27.14  The provisions of paragraph (b) apply to transfers under this 
 27.15  paragraph. 
 27.16     (d) Beginning in 2003, in addition to any transfers under 
 27.17  paragraphs (b) and (c), each of the governmental units 
 27.18  designated in this subdivision shall transfer before noon on May 
 27.19  31 to the state Medicaid agency an amount equal to the number of 
 27.20  licensed beds in any nursing home owned and operated by the 
 27.21  county on that date, with the county named as licensee, 
 27.22  multiplied by $2,230.  The provisions of paragraph (b) apply to 
 27.23  transfers under this paragraph. 
 27.24     (e) The commissioner may reduce the intergovernmental 
 27.25  transfers under paragraph paragraphs (c) and (d) based on the 
 27.26  commissioner's determination of the payment rate in section 
 27.27  256B.431, subdivision 23, paragraphs (c) and, (d), and (e).  Any 
 27.28  adjustments must be made on a per-bed basis and must result in 
 27.29  an amount equivalent to the total amount resulting from the rate 
 27.30  adjustment in section 256B.431, subdivision 23, paragraphs 
 27.31  (c) and, (d), and (e). 
 27.32     <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 27.33     Sec. 7.  Minnesota Statutes 2002, section 256B.195, 
 27.34  subdivision 3, is amended to read: 
 27.35     Subd. 3.  [PAYMENTS TO CERTAIN SAFETY NET PROVIDERS.] (a) 
 27.36  Effective July 15, 2001, the commissioner shall make the 
 28.1   following payments to the hospitals indicated after noon on the 
 28.2   15th of each month: 
 28.3      (1) to Hennepin County Medical Center, any federal matching 
 28.4   funds available to match the payments received by the medical 
 28.5   center under subdivision 2, to increase payments for medical 
 28.6   assistance admissions and to recognize higher medical assistance 
 28.7   costs in institutions that provide high levels of charity care; 
 28.8   and 
 28.9      (2) to Regions hospital, any federal matching funds 
 28.10  available to match the payments received by the hospital under 
 28.11  subdivision 2, to increase payments for medical assistance 
 28.12  admissions and to recognize higher medical assistance costs in 
 28.13  institutions that provide high levels of charity care.  
 28.14     (b) Effective July 15, 2001, the following percentages of 
 28.15  the transfers under subdivision 2 shall be retained by the 
 28.16  commissioner for deposit each month into the general fund: 
 28.17     (1) 18 percent, plus any federal matching funds, shall be 
 28.18  allocated for the following purposes: 
 28.19     (i) during the fiscal year beginning July 1, 2001, of the 
 28.20  amount available under this clause, 39.7 percent shall be 
 28.21  allocated to make increased hospital payments under section 
 28.22  256.969, subdivision 26; 34.2 percent shall be allocated to fund 
 28.23  the amounts due from small rural hospitals, as defined in 
 28.24  section 144.148, for overpayments under section 256.969, 
 28.25  subdivision 5a, resulting from a determination that medical 
 28.26  assistance and general assistance payments exceeded the charge 
 28.27  limit during the period from 1994 to 1997; and 26.1 percent 
 28.28  shall be allocated to the commissioner of health for rural 
 28.29  hospital capital improvement grants under section 144.148; and 
 28.30     (ii) during fiscal years beginning on or after July 1, 
 28.31  2002, of the amount available under this clause, 55 percent 
 28.32  shall be allocated to make increased hospital payments under 
 28.33  section 256.969, subdivision 26, and 45 percent shall be 
 28.34  allocated to the commissioner of health for rural hospital 
 28.35  capital improvement grants under section 144.148; and 
 28.36     (2) 11 percent shall be allocated to the commissioner of 
 29.1   health to fund community clinic grants under section 145.9268. 
 29.2   Effective July 1, 2003, the allocations under this clause shall 
 29.3   remain at the dollar amounts paid during March 2003 for the 
 29.4   purposes indicated.  Any additional amounts available under this 
 29.5   clause shall be allocated to increase medical assistance 
 29.6   payments to the children's hospitals by a percentage based on 
 29.7   each facility's proportion of medical assistance inpatient 
 29.8   revenues, subject to hospital-specific charge limits and limits 
 29.9   on disproportionate share hospital payments. 
 29.10     (c) This subdivision shall apply to fee-for-service 
 29.11  payments only and shall not increase capitation payments or 
 29.12  payments made based on average rates. 
 29.13     (d) Medical assistance rate or payment changes, including 
 29.14  those required to obtain federal financial participation under 
 29.15  section 62J.692, subdivision 8, shall precede the determination 
 29.16  of intergovernmental transfer amounts determined in this 
 29.17  subdivision.  Participation in the intergovernmental transfer 
 29.18  program shall not result in the offset of any health care 
 29.19  provider's receipt of medical assistance payment increases other 
 29.20  than limits resulting from hospital-specific charge limits and 
 29.21  limits on disproportionate share hospital payments. 
 29.22     <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 29.23     Sec. 8.  Minnesota Statutes 2002, section 256B.32, 
 29.24  subdivision 1, is amended to read: 
 29.25     Subdivision 1.  [FACILITY FEE PAYMENT.] (a) The 
 29.26  commissioner shall establish a facility fee payment mechanism 
 29.27  that will pay a facility fee to all enrolled outpatient 
 29.28  hospitals for each emergency room or outpatient clinic visit 
 29.29  provided on or after July 1, 1989.  This payment mechanism may 
 29.30  not result in an overall increase in outpatient payment rates.  
 29.31  This section does not apply to federally mandated maximum 
 29.32  payment limits, department approved program packages, or 
 29.33  services billed using a nonoutpatient hospital provider number. 
 29.34     (b) For fee-for-service services provided on or after July 
 29.35  1, 2002, the total payment, before third-party liability and 
 29.36  spenddown, made to hospitals for outpatient hospital facility 
 30.1   services is reduced by .5 percent from the current statutory 
 30.2   rates. 
 30.3      (c) The last fee-for-service payments that would otherwise 
 30.4   be made in June shall be paid on the first scheduled payment 
 30.5   date in the following fiscal year.  The provisions of section 
 30.6   16A.124 shall not apply to these delayed payments. 
 30.7      <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 30.8      Sec. 9.  Minnesota Statutes 2002, section 256B.431, 
 30.9   subdivision 23, is amended to read: 
 30.10     Subd. 23.  [COUNTY NURSING HOME PAYMENT ADJUSTMENTS.] (a) 
 30.11  Beginning in 1994, the commissioner shall pay a nursing home 
 30.12  payment adjustment on May 31 after noon to a county in which is 
 30.13  located a nursing home that, on that date, was county-owned and 
 30.14  operated, with the county named as licensee by the commissioner 
 30.15  of health, and had over 40 beds and medical assistance occupancy 
 30.16  in excess of 50 percent during the reporting year ending 
 30.17  September 30, 1991.  The adjustment shall be an amount equal to 
 30.18  $16 per calendar day multiplied by the number of beds licensed 
 30.19  in the facility as of September 30, 1991 on that date. 
 30.20     (b) Payments under paragraph (a) are excluded from medical 
 30.21  assistance per diem rate calculations.  These payments are 
 30.22  required notwithstanding any rule prohibiting medical assistance 
 30.23  payments from exceeding payments from private pay residents.  A 
 30.24  facility receiving a payment under paragraph (a) may not 
 30.25  increase charges to private pay residents by an amount 
 30.26  equivalent to the per diem amount payments under paragraph (a) 
 30.27  would equal if converted to a per diem. 
 30.28     (c) Beginning in 2002, in addition to any payment under 
 30.29  paragraph (a), the commissioner shall pay to a nursing facility 
 30.30  described in paragraph (a) an adjustment in an amount equal to 
 30.31  $29.55 per calendar day multiplied by the number of beds 
 30.32  licensed in the facility on that date.  The provisions of 
 30.33  paragraphs (a) and (b) apply to payments under this paragraph.  
 30.34     (d) Beginning in 2003, in addition to any payment under 
 30.35  paragraphs (a) and (c), the commissioner shall pay to a nursing 
 30.36  facility described in paragraph (a) an adjustment in an amount 
 31.1   equal to $6.11 per calendar day multiplied by the number of beds 
 31.2   licensed in the facility on that date.  The provisions of 
 31.3   paragraphs (a) and (b) apply to payments under this paragraph. 
 31.4      (e) The commissioner may reduce payments under paragraph 
 31.5   paragraphs (c) and (d) based on the commissioner's determination 
 31.6   of Medicare upper payment limits.  Any adjustments must be 
 31.7   proportional to adjustments made under section 256B.19, 
 31.8   subdivision 1d, paragraph (d) (e). 
 31.9      <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 31.10     Sec. 10.  Minnesota Statutes 2002, section 256B.431, is 
 31.11  amended by adding a subdivision to read: 
 31.12     Subd. 38.  [NURSING HOME RATE INCREASES EFFECTIVE MARCH 1, 
 31.13  2003.] For the rate period beginning March 1, 2003, and rate 
 31.14  years beginning on or after July 1, 2003, the commissioner shall 
 31.15  provide to each nursing home reimbursed under this section or 
 31.16  section 256B.434 an increase in each case mix payment rate equal 
 31.17  to the increase in the per-bed surcharge paid under section 
 31.18  256.9657, subdivision 1, paragraph (d), divided by 365 and 
 31.19  further divided by .88.  The increase under this subdivision 
 31.20  shall be added following the determination of the payment rate 
 31.21  for the home under this chapter.  The increase shall not be 
 31.22  subject to any annual percentage increase.  The 30-day advance 
 31.23  notice requirement in section 256B.47, subdivision 2, shall not 
 31.24  apply to rate increases resulting from this section. 
 31.25     <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 31.26     Sec. 11.  Minnesota Statutes 2002, section 256B.75, is 
 31.27  amended to read: 
 31.28     256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
 31.29     (a) For outpatient hospital facility fee payments for 
 31.30  services rendered on or after October 1, 1992, the commissioner 
 31.31  of human services shall pay the lower of (1) submitted charge, 
 31.32  or (2) 32 percent above the rate in effect on June 30, 1992, 
 31.33  except for those services for which there is a federal maximum 
 31.34  allowable payment.  Effective for services rendered on or after 
 31.35  January 1, 2000, payment rates for nonsurgical outpatient 
 31.36  hospital facility fees and emergency room facility fees shall be 
 32.1   increased by eight percent over the rates in effect on December 
 32.2   31, 1999, except for those services for which there is a federal 
 32.3   maximum allowable payment.  Services for which there is a 
 32.4   federal maximum allowable payment shall be paid at the lower of 
 32.5   (1) submitted charge, or (2) the federal maximum allowable 
 32.6   payment.  Total aggregate payment for outpatient hospital 
 32.7   facility fee services shall not exceed the Medicare upper 
 32.8   limit.  If it is determined that a provision of this section 
 32.9   conflicts with existing or future requirements of the United 
 32.10  States government with respect to federal financial 
 32.11  participation in medical assistance, the federal requirements 
 32.12  prevail.  The commissioner may, in the aggregate, prospectively 
 32.13  reduce payment rates to avoid reduced federal financial 
 32.14  participation resulting from rates that are in excess of the 
 32.15  Medicare upper limitations. 
 32.16     (b) Notwithstanding paragraph (a), payment for outpatient, 
 32.17  emergency, and ambulatory surgery hospital facility fee services 
 32.18  for critical access hospitals designated under section 144.1483, 
 32.19  clause (11), shall be paid on a cost-based payment system that 
 32.20  is based on the cost-finding methods and allowable costs of the 
 32.21  Medicare program. 
 32.22     (c) Effective for services provided on or after July 1, 
 32.23  2003, rates that are based on the Medicare outpatient 
 32.24  prospective payment system shall be replaced by a budget neutral 
 32.25  prospective payment system that is derived using medical 
 32.26  assistance data.  The commissioner shall provide a proposal to 
 32.27  the 2003 legislature to define and implement this provision. 
 32.28     (d) For fee-for-service services provided on or after July 
 32.29  1, 2002, the total payment, before third-party liability and 
 32.30  spenddown, made to hospitals for outpatient hospital facility 
 32.31  services is reduced by .5 percent from the current statutory 
 32.32  rate. 
 32.33     (e) The last fee-for-service payments that would otherwise 
 32.34  be made in June shall be paid on the first scheduled payment 
 32.35  date in the following fiscal year.  The provisions of section 
 32.36  16A.124 shall not apply to these delayed payments. 
 33.1      <b>[EFFECTIVE DATE.]</b> This section is effective March 1, 2003. 
 33.2      Sec. 12.  [REPEALER.] 
 33.3      Minnesota Statutes 2002, section 256B.0625, subdivision 5a, 
 33.4   is repealed. 
 33.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 33.6   following final enactment. 
 33.7                              ARTICLE 6 
 33.8                      CORRECTIONS POLICY CHANGES
 33.9      Section 1.  Minnesota Statutes 2002, section 244.101, is 
 33.10  amended by adding a subdivision to read: 
 33.11     Subd. 5.  [NONAPPLICABILITY.] This section does not apply 
 33.12  to offenders described in section 609.112 or 609.14, subdivision 
 33.13  3, paragraph (c). 
 33.14     Sec. 2.  Minnesota Statutes 2002, section 609.105, 
 33.15  subdivision 1, is amended to read: 
 33.16     Subdivision 1.  A felony sentence to imprisonment for more 
 33.17  than one year 18 months after adjusting for credit for prior 
 33.18  imprisonment shall commit the defendant to the custody of the 
 33.19  commissioner of corrections.  
 33.20     Sec. 3.  Minnesota Statutes 2002, section 609.105, 
 33.21  subdivision 3, is amended to read: 
 33.22     Subd. 3.  A sentence to imprisonment for a period of one 
 33.23  year 18 months or any lesser period after adjusting for credit 
 33.24  for prior imprisonment shall be to a workhouse, work farm, 
 33.25  county jail, or other place authorized by law.  
 33.26     Sec. 4.  [609.112] [MANDATORY LOCAL INCARCERATION FOR 
 33.27  CERTAIN OFFENDERS.] 
 33.28     Subdivision 1.  [DEFINITION.] For purposes of this section: 
 33.29     (1) "executed sentence" means the total period of time for 
 33.30  which an offender is sentenced; and 
 33.31     (2) "term of imprisonment" means the period of time equal 
 33.32  to two-thirds of the offender's executed sentence.  
 33.33     Subd. 2.  [SENTENCE.] If a court imposes and executes a 
 33.34  felony sentence for an offender and the duration of the 
 33.35  offender's term of imprisonment after adjusting for credit for 
 33.36  prior imprisonment is more than eight months but not more than 
 34.1   one year, the court shall require the offender to serve the term 
 34.2   of imprisonment incarcerated in a county jail, county regional 
 34.3   jail, county work farm, county workhouse, or other local 
 34.4   correctional facility.  
 34.5      Subd. 3.  [DISCIPLINARY CONFINEMENT TIME.] A jailer, 
 34.6   workhouse or work farm superintendent, or person similarly in 
 34.7   custody of an offender incarcerated under this section, pursuant 
 34.8   to a prisoner discipline plan and subject to the length of time 
 34.9   remaining in the offender's executed sentence, may impose an 
 34.10  additional confinement period upon the offender for a violation 
 34.11  of a disciplinary rule of the facility.  The imposition of a 
 34.12  confinement period shall be considered to be a disciplinary 
 34.13  sanction imposed upon the offender, and the procedure for 
 34.14  imposing the confinement period and the rights of the offender 
 34.15  in the procedure shall be those in effect for the imposition of 
 34.16  other disciplinary sanctions at the facility.  
 34.17     Subd. 4.  [RELEASE TERM.] (a) An offender incarcerated 
 34.18  under this section shall serve a release term upon completion of 
 34.19  the offender's term of imprisonment and any additional 
 34.20  confinement period imposed.  The offender's release term shall 
 34.21  be equal in length to the amount of time remaining in the 
 34.22  offender's executed sentence after the offender has served the 
 34.23  term of imprisonment and any confinement period imposed.  An 
 34.24  offender who violates a disciplinary rule may not be placed on a 
 34.25  release term until the offender has served the confinement 
 34.26  period for that disciplinary sanction.  
 34.27     (b) The head of the facility releasing the offender shall 
 34.28  set release term conditions for the offender.  
 34.29     Subd. 5.  [NONAPPLICABILITY.] Sections 244.101 and 643.29 
 34.30  do not apply to offenders sentenced and incarcerated under this 
 34.31  section.  
 34.32     Subd. 6.  [SUPERVISION OF OFFENDERS ON RELEASE TERM.] (a) 
 34.33  Offenders serving a release term under this section shall be 
 34.34  supervised in the same manner as offenders on supervised release 
 34.35  except that the sentencing court has jurisdiction over the 
 34.36  offender's compliance with conditions of the release term and 
 35.1   any sanctions for their violation.  
 35.2      (b) If an offender violates the conditions of the 
 35.3   offender's release term, the court may: 
 35.4      (1) continue the release term, with or without modifying or 
 35.5   enlarging the conditions imposed on the offender; or 
 35.6      (2) revoke the offender's release and reincarcerate the 
 35.7   offender for an appropriate period of time not to exceed the 
 35.8   period of time remaining in the offender's sentence.  
 35.9      Sec. 5.  Minnesota Statutes 2002, section 609.135, 
 35.10  subdivision 7, is amended to read: 
 35.11     Subd. 7.  [DEMAND OF EXECUTION OF SENTENCE.] An offender 
 35.12  may not demand execution of sentence in lieu of a stay of 
 35.13  imposition or execution of sentence if the offender will serve 
 35.14  less than nine 12 months at the state institution.  This 
 35.15  subdivision does not apply to an offender who will be serving 
 35.16  the sentence consecutively or concurrently with a previously 
 35.17  imposed executed felony sentence. 
 35.18     Sec. 6.  Minnesota Statutes 2002, section 609.14, 
 35.19  subdivision 3, is amended to read: 
 35.20     Subd. 3.  [SENTENCE.] (a) If any of such grounds are found 
 35.21  to exist the court may: 
 35.22     (1) if imposition of sentence was previously stayed, again 
 35.23  stay sentence or impose sentence and stay the execution thereof, 
 35.24  and in either event place the defendant on probation or order 
 35.25  intermediate sanctions pursuant to section 609.135, or impose 
 35.26  sentence and order execution thereof; or 
 35.27     (2) if sentence was previously imposed and execution 
 35.28  thereof stayed, continue such stay and place the defendant on 
 35.29  probation or order intermediate sanctions in accordance with the 
 35.30  provisions of section 609.135, or order execution of the 
 35.31  sentence previously imposed. 
 35.32     (b) If the court orders execution of the defendant's 
 35.33  sentence and the duration of the defendant's term of 
 35.34  imprisonment as defined in section 609.112, subdivision 1, after 
 35.35  adjusting for credit for prior imprisonment is one year or less, 
 35.36  the defendant is not committed to the custody of the 
 36.1   commissioner of corrections.  In this case, the court retains 
 36.2   jurisdiction over the defendant's custody and except as provided 
 36.3   in paragraph (c), shall place the defendant on probation or 
 36.4   order intermediate sanctions in accordance with the provisions 
 36.5   of section 609.135.  
 36.6      (c) If the duration of the defendant's term of imprisonment 
 36.7   after adjusting for credit for prior imprisonment is more than 
 36.8   eight months but not more than one year, the court shall require 
 36.9   the defendant to serve the term of imprisonment incarcerated in 
 36.10  a county jail, county regional jail, county work farm, county 
 36.11  workhouse, or other local correctional facility.  Section 
 36.12  609.112, subdivisions 3 to 6, apply to defendants incarcerated 
 36.13  under this paragraph.  
 36.14     Sec. 7.  [CONSTRUCTION OF PROVISIONS.] 
 36.15     Nothing in sections 1 to 6 may be construed as modifying 
 36.16  what offenses are classified as felonies or as affecting a 
 36.17  felony offender's constitutional rights, including, but not 
 36.18  limited to, the right to a 12-person jury. 
 36.19     Sec. 8.  [GRANTS TO COUNTIES; REPORTS REQUIRED.] 
 36.20     Subdivision 1.  [GRANTS TO COUNTIES.] (a) The commissioner 
 36.21  of corrections shall make grants to counties to assist them to 
 36.22  incarcerate offenders.  The commissioner shall make the grants 
 36.23  in an equitable manner based on the total amount available for 
 36.24  the grants, each county's proportionate share of offenders 
 36.25  affected by this article, and the actual number of bed days used 
 36.26  by each county to incarcerate these offenders. 
 36.27     (b) The commissioner shall make the grants described in 
 36.28  this subdivision within a month of receiving the reports from 
 36.29  counties described in subdivision 2.  
 36.30     (c) Grants under this section may not exceed the actual 
 36.31  cost per bed day incurred by a county. 
 36.32     (d) The commissioner may carry forward money appropriated 
 36.33  for these grants but not used in fiscal year 2003 to the fiscal 
 36.34  biennium ending June 30, 2005. 
 36.35     Subd. 2.  [REPORTS TO COMMISSIONER OF CORRECTIONS.] A 
 36.36  county seeking a grant under this section shall report to the 
 37.1   commissioner of corrections on offenders affected by this 
 37.2   article.  The report must include the number of these offenders 
 37.3   for the reporting period, the actual number of bed days used for 
 37.4   these offenders, the costs associated with this, and any other 
 37.5   information requested by the commissioner.  
 37.6      Subd. 3.  [DUE DATE FOR REPORTS.] Reports under subdivision 
 37.7   2 are due on May 15, 2003, September 15, 2003, December 15, 
 37.8   2003, March 15, 2004, June 15, 2004, September 15, 2004, 
 37.9   December 15, 2004, March 15, 2005, and June 15, 2005. 
 37.10     Sec. 9.  [DELAY OF PROBATION OFFICER REIMBURSEMENTS.] 
 37.11     The commissioner of corrections shall delay fiscal year 
 37.12  2003 reimbursement payments to counties for probation officers 
 37.13  under Minnesota Statutes, section 244.19, by making them in 
 37.14  fiscal year 2004.  The commissioner shall delay future payments 
 37.15  in the same manner.  
 37.16     Sec. 10.  [EFFECTIVE DATE.] 
 37.17     Sections 1 to 9 are effective the day following final 
 37.18  enactment and apply to persons sentenced or whose probation is 
 37.19  revoked on or after that date. 
 37.20                             ARTICLE 7 
 37.21                    ENVIRONMENT AND AGRICULTURE
 37.22  Section 1.  [ENVIRONMENT AND AGRICULTURE REDUCTIONS.] 
 37.23     The dollar amounts in the columns under "APPROPRIATION 
 37.24  CHANGE" are added to or, if shown in parentheses, are subtracted 
 37.25  from the appropriations in Laws 2001, First Special Session 
 37.26  chapter 2, as amended, by Laws 2002, chapter 220 or 374, as 
 37.27  amended, or other law to the specified agencies.  The 
 37.28  appropriations are from the general fund or other named fund and 
 37.29  are available for the fiscal years indicated for each purpose.  
 37.30  The figure "2003" means that the addition to or subtraction from 
 37.31  the appropriations listed under the figure is for the fiscal 
 37.32  year ending June 30, 2003. 
 37.33     It is the legislature's intent that reductions in an 
 37.34  agency's funding be distributed across the agency's accounts 
 37.35  without a disproportionate reduction from a single program.  
 37.36  Additionally, all budget reductions should be made with an 
 38.1   emphasis on cutting administration and overhead expenses, and as 
 38.2   little impact as possible on programs and services. 
 38.3                                                          2003
 38.4   TRANSFERS FROM OTHER FUNDS                          $11,000,000
 38.5   APPROPRIATION REDUCTIONS                             (8,047,000)
 38.6                                              APPROPRIATION CHANGE
 38.7   Sec. 2.  POLLUTION CONTROL AGENCY                      (422,000)
 38.8   This is a onetime appropriation 
 38.9   reduction. 
 38.10  Sec. 3.  OFFICE OF 
 38.11  ENVIRONMENTAL ASSISTANCE                               (199,000)
 38.12  This is a onetime appropriation 
 38.13  reduction. 
 38.14  Sec. 4.  MINNESOTA ZOO                                 (270,000)
 38.15  This is a onetime appropriation 
 38.16  reduction. 
 38.17  Sec. 5.  NATURAL RESOURCES                           (3,844,000)
 38.18  This is a onetime appropriation 
 38.19  reduction. 
 38.20  Of this amount, $25,000 is from the 
 38.21  appropriation made in Laws 2002, 
 38.22  chapter 220, article 8, section 5, 
 38.23  subdivision 5, for a grant to the city 
 38.24  of Taylors Falls for fire and rescue 
 38.25  operations in support of Interstate 
 38.26  park. 
 38.27  Sec. 6.  BOARD OF WATER
 38.28  AND SOIL RESOURCES                                     (130,000)
 38.29  This is a onetime appropriation 
 38.30  reduction. 
 38.31  Sec. 7.  DEPARTMENT OF AGRICULTURE                   (3,079,000)
 38.32  Notwithstanding Minnesota Statutes, 
 38.33  section 41A.09, subdivision 3a, an 
 38.34  ethanol plant located in a city of the 
 38.35  first class, that has been in violation 
 38.36  of state law, and was subject to a 
 38.37  lawsuit brought by the city, is not 
 38.38  eligible for ethanol producer payments 
 38.39  for ethanol production from October 1, 
 38.40  2002, through June 30, 2003.  The 
 38.41  appropriation in section 41A.09, 
 38.42  subdivision 3a, is reduced by 
 38.43  $2,250,000.  
 38.44  Appropriations for the agriculture in 
 38.45  the classroom program and for grants to 
 38.46  the Minnesota institute for sustainable 
 38.47  agriculture in fiscal year 2003 may not 
 38.48  be reduced. 
 38.49  This is a onetime appropriation 
 38.50  reduction. 
 39.1   Sec. 8.  BOARD OF ANIMAL HEALTH                        (103,000)
 39.2   This is a onetime appropriation 
 39.3   reduction. 
 39.4      Sec. 9.  [SOLID WASTE FUND TRANSFER.] 
 39.5      The commissioner of the pollution control agency shall 
 39.6   transfer $11,000,000 from the unreserved balance of the solid 
 39.7   waste fund to the general fund. 
 39.8      Sec. 10.  [EFFECTIVE DATE.] 
 39.9      Sections 1 to 9 are effective the day following final 
 39.10  enactment. 
 39.11                             ARTICLE 8 
 39.12                        ECONOMIC DEVELOPMENT
 39.13  Section 1.  [ECONOMIC DEVELOPMENT REDUCTIONS.] 
 39.14     The dollar amounts in the columns under "APPROPRIATION 
 39.15  CHANGE" are added to or, if shown in parentheses, are subtracted 
 39.16  from the appropriations in Laws 2001, First Special Session 
 39.17  chapter 4 or 10, as amended, by Laws 2002, chapter 220 or 374, 
 39.18  as amended, or other law to the specified agencies.  The 
 39.19  appropriations are from the general fund or other named fund and 
 39.20  are available for the fiscal years indicated for each purpose.  
 39.21  The figure "2003" means that the addition to or subtraction from 
 39.22  the appropriations listed under the figure is for the fiscal 
 39.23  year ending June 30, 2003. 
 39.24     It is the legislature's intent that reductions in an 
 39.25  agency's funding be distributed across the agency's accounts 
 39.26  without a disproportionate reduction from a single program.  
 39.27  Additionally, all budget reductions should be made with an 
 39.28  emphasis on cutting administration and overhead expenses, and 
 39.29  with as little impact as possible on programs and services. 
 39.30                                                         2003 
 39.31  TRANSFERS FROM OTHER FUNDS                       $   15,000,000 
 39.32  APPROPRIATION REDUCTIONS                             (1,953,000)
 39.33                                              APPROPRIATION CHANGE 
 39.34  Sec. 2.  TRADE AND ECONOMIC DEVELOPMENT                (713,000)
 39.35  This is a onetime appropriation 
 39.36  reduction. 
 39.37  Of this amount, $35,000 is from the 
 40.1   appropriation made in Laws 2001, First 
 40.2   Special Session chapter 4, article 1, 
 40.3   section 2, subdivision 2, for a onetime 
 40.4   grant for a pilot project incubated by 
 40.5   Blue Earth county named the Rural 
 40.6   Advanced Business Facilitation Program. 
 40.7   Sec. 3.  ECONOMIC SECURITY                              (65,000)
 40.8   This includes a onetime appropriation 
 40.9   reduction of $189,000 and an additional 
 40.10  appropriation of $124,000 for state 
 40.11  services for the blind. 
 40.12  Sec. 4.  HOUSING FINANCE AGENCY                        (350,000)
 40.13  This is a onetime appropriation 
 40.14  reduction. 
 40.15  Sec. 5.  LABOR AND INDUSTRY                            (118,000)
 40.16  This is a onetime appropriation 
 40.17  reduction. 
 40.18  Sec. 6.  BUREAU OF MEDIATION SERVICES                   (75,000)
 40.19  This is a onetime appropriation 
 40.20  reduction. 
 40.21  Sec. 7.  MINNESOTA HISTORICAL SOCIETY                  (488,000)
 40.22  This is a onetime appropriation 
 40.23  reduction. 
 40.24  Sec. 8.  BOARD OF THE ARTS                             (104,000)
 40.25  This is a onetime appropriation 
 40.26  reduction, of which $64,000 is from 
 40.27  appropriations for folk arts. 
 40.28  Sec. 9.  HUMANITIES COMMISSION                          (40,000)
 40.29  This is a onetime appropriation 
 40.30  reduction. 
 40.31     Sec. 10.  Laws 2002, chapter 220, article 13, section 9, 
 40.32  subdivision 2, as amended by Laws 2002, chapter 374, article 8, 
 40.33  section 6, is amended to read: 
 40.34     Subd. 2.  [SPECIAL COMPENSATION FUND.] After June 1, 2003, 
 40.35  but no later than June 30, 2003, the commissioner of finance 
 40.36  shall transfer $250,000,000 $265,000,000 in assets of the excess 
 40.37  surplus account of the special compensation fund created under 
 40.38  Minnesota Statutes, section 176.129, to the general fund. 
 40.39     Sec. 11.  [EFFECTIVE DATE.] 
 40.40     Sections 1 to 10 are effective the day following final 
 40.41  enactment, unless otherwise specified. 
 40.42                             ARTICLE 9
 40.43                           TRANSPORTATION
 41.1   Section 1.  [TRANSPORTATION APPROPRIATIONS AND REDUCTIONS.] 
 41.2      The dollar amounts in the columns under "APPROPRIATION 
 41.3   CHANGE" are added to or, if shown in parentheses, are subtracted 
 41.4   from the appropriations in Laws 2001, First Special Session 
 41.5   chapter 8, as amended, or other law to the specified agencies.  
 41.6   The appropriations are from the general fund or other named fund 
 41.7   and are available for the fiscal years indicated for each 
 41.8   purpose.  The figure "2003" means that the addition to or 
 41.9   subtraction from the appropriations listed under the figure is 
 41.10  for the fiscal year ending June 30, 2003. 
 41.11                                                         2003 
 41.12  TRANSFERS FROM OTHER FUNDS                        $  15,000,000
 41.13  CANCELLATIONS - GENERAL FUND                       (130,000,000)
 41.14  TRUNK HIGHWAY BOND PROCEEDS ACCOUNT -
 41.15  TRUNK HIGHWAY FUND                                  130,130,000
 41.16                                              APPROPRIATION CHANGE
 41.17  Sec. 2.  TRANSPORTATION                             130,000,000 
 41.18  This appropriation is from the trunk 
 41.19  highway bond proceeds account in the 
 41.20  trunk highway fund and is available for 
 41.21  expenditure beginning the day following 
 41.22  final enactment.  It is for the same 
 41.23  purposes as specified in Laws 2000, 
 41.24  chapter 479, article 1, section 2, 
 41.25  subdivision 3.  
 41.26  Of the general fund appropriation in 
 41.27  Laws 2000, chapter 479, article 1, 
 41.28  section 2, subdivision 3, $130,000,000 
 41.29  cancels to the general fund.  This 
 41.30  cancellation is effective the day 
 41.31  following final enactment. 
 41.32  By June 30, 2003, the commissioner of 
 41.33  finance shall transfer $15,000,000 of 
 41.34  the cash balance in the state airports 
 41.35  fund established in Minnesota Statutes, 
 41.36  section 360.017, to the general fund. 
 41.37  Sec. 3.  BOND SALE EXPENSES                             130,000 
 41.38  To the commissioner of finance for bond 
 41.39  sale expenses under Minnesota Statutes, 
 41.40  section 16A.641, subdivision 8.  This 
 41.41  appropriation is from the trunk highway 
 41.42  bond proceeds account in the trunk 
 41.43  highway fund. 
 41.44  Sec. 4.  BOND SALE AUTHORIZATION 
 41.45  To provide the money appropriated in 
 41.46  this act from the trunk highway bond 
 41.47  proceeds account in the trunk highway 
 41.48  fund, the commissioner of finance shall 
 41.49  sell and issue bonds of the state in an 
 42.1   amount up to $130,130,000 in the 
 42.2   manner, upon the terms, and with the 
 42.3   effect prescribed by Minnesota 
 42.4   Statutes, sections 167.50 to 167.52, 
 42.5   and by the Minnesota Constitution, 
 42.6   article XIV, section 11, at the times 
 42.7   and in the amount requested by the 
 42.8   commissioner of transportation.  The 
 42.9   proceeds of the bonds, except accrued 
 42.10  interest and any premium received on 
 42.11  the sale of the bonds, must be credited 
 42.12  to the trunk highway bond proceeds 
 42.13  account in the trunk highway fund. 
 42.14  Sec. 5.  SALE OF AIRPLANE      
 42.15  The commissioner of transportation 
 42.16  shall sell the airplane described in 
 42.17  Laws 1997, chapter 159, article 1, 
 42.18  section 2, subdivision 2, clause (c).  
 42.19  Any proceeds from the sale of the 
 42.20  airplane must be deposited in the 
 42.21  general fund. 
 42.22     Sec. 6.  [EFFECTIVE DATE.] 
 42.23     Sections 1 to 5 are effective the day following final 
 42.24  enactment, unless otherwise specified. 
 42.25                             ARTICLE 10
 42.26                          STATE GOVERNMENT 
 42.27  Section 1.  [STATE GOVERNMENT REDUCTIONS.] 
 42.28     The dollar amounts in the columns under "APPROPRIATION 
 42.29  CHANGE" are added to or, if shown in parentheses, are subtracted 
 42.30  from the appropriations in Laws 2001, First Special Session 
 42.31  chapter 10, as amended, by Laws 2002, chapter 220 or 374, as 
 42.32  amended, or other law to the specified agencies.  The 
 42.33  appropriations are from the general fund or other named fund and 
 42.34  are available for the fiscal years indicated for each purpose.  
 42.35  The reductions in sections 3 to 7 are from base funding.  For 
 42.36  all other sections in this article, the figure "2003" means that 
 42.37  the addition to or subtraction from the appropriations listed 
 42.38  under the figure is a onetime addition or subtraction for the 
 42.39  fiscal year ending June 30, 2003. 
 42.40  Sec. 2.  LEGISLATIVE INTENT
 42.41  It is the legislature's intent that, 
 42.42  unless provided otherwise in this 
 42.43  article, reductions in an agency's 
 42.44  funding be distributed across the 
 42.45  agency's accounts without a 
 42.46  disproportionate reduction from a 
 42.47  single program.  Additionally, all 
 42.48  budget reductions should be made with 
 42.49  an emphasis on cutting administration 
 43.1   and overhead expenses and with as 
 43.2   little impact as possible on programs 
 43.3   and services. 
 43.4                                                          2003
 43.5   TRANSFERS FROM OTHER FUNDS                         $ 16,201,000
 43.6   APPROPRIATION REDUCTIONS                            (10,488,589)
 43.7                 Summary by Fund
 43.8   General Fund                      (10,160,589)
 43.9   Workers' Compensation
 43.10  Fund                                 (328,000)
 43.11                                             APPROPRIATION CHANGE
 43.12  Sec. 3.  LEGISLATURE                                 (2,561,000)
 43.13  Of this reduction, $1,130,000 is to 
 43.14  appropriations for the house of 
 43.15  representatives, $845,000 is to 
 43.16  appropriations for the senate, and 
 43.17  $586,000 is to appropriations for the 
 43.18  legislative coordinating commission. 
 43.19  Sec. 4.  SECRETARY OF STATE                            (291,000)
 43.20  Sec. 5.  GOVERNOR'S OFFICE                             (162,000)
 43.21  Sec. 6.  STATE AUDITOR                                 (390,000)
 43.22  Sec. 7.  ATTORNEY GENERAL                            (1,038,000)
 43.23  Sec. 8.  OFFICE OF STRATEGIC
 43.24  AND LONG-RANGE PLANNING                                (169,000)
 43.25  Sec. 9.  ADMINISTRATION                              (1,410,589)
 43.26  This amount includes a $950,289 
 43.27  reduction from onetime funding for the 
 43.28  voting equipment grant account, and a 
 43.29  $300 reduction from funding for the 
 43.30  state employees' band. 
 43.31  Sec. 10.  DEPRECIATION FUND TRANSFER 
 43.32  $5,000,000 of the balance of rent 
 43.33  credited to a segregated account in a 
 43.34  special revenue fund under Minnesota 
 43.35  Statutes, section 16B.24, subdivision 
 43.36  5, paragraph (e), to recover 
 43.37  depreciation costs is transferred to 
 43.38  the general fund. 
 43.39  Sec. 11.  FINANCE                                      (639,000)
 43.40  This amount includes a $65,000 
 43.41  reduction in the operations of state 
 43.42  treasurer, which were assumed by 
 43.43  finance on January 6, 2003. 
 43.44  Sec. 12.  EMPLOYEE RELATIONS                           (305,000)
 43.45  Sec. 13.  INSURANCE TRUST  
 43.46  FUND TRANSFER 
 43.47  $11,201,000 of the contingency reserve 
 43.48  within the employee insurance trust 
 44.1   fund maintained under Minnesota 
 44.2   Statutes, section 43A.30, subdivision 
 44.3   6, is transferred to the general fund 
 44.4   to reimburse the general fund for all 
 44.5   or part of the appropriations made in 
 44.6   Laws 1988, chapter 686, article 1, 
 44.7   section 9, and Laws 1999, chapter 250, 
 44.8   article 1, section 15. 
 44.9   Sec. 14.  REVENUE                                    (1,810,000)
 44.10  Sec. 15.  AMATEUR SPORTS COMMISSION                     (25,000)
 44.11  Sec. 16.  MILITARY AFFAIRS                             (301,000)
 44.12  This amount includes a reduction of 
 44.13  $40,000 for the Minnesota national 
 44.14  guard youth camp at Camp Ripley. 
 44.15  Sec. 17.  CAMPAIGN FINANCE AND
 44.16  PUBLIC DISCLOSURE BOARD                                 (25,000)
 44.17  Sec. 18.  INVESTMENT BOARD                              (90,000)
 44.18  Sec. 19.  CAPITOL AREA ARCHITECTURAL
 44.19  AND PLANNING BOARD                                       (6,000)
 44.20  Sec. 20.  VETERANS AFFAIRS                             (186,000)
 44.21  Sec. 21.  LAWFUL GAMBLING CONTROL BOARD                 (89,000)
 44.22  Sec. 22.  RACING COMMISSION                             (16,000)
 44.23  Sec. 23.  HUMAN RIGHTS                                 (146,000)
 44.24  Sec. 24.  UNIFORM LAWS COMMISSION                        (2,000)
 44.25  Sec. 25.  PRIVATE DETECTIVE BOARD                        (6,000)
 44.26  Sec. 26.  COMMERCE                                     (434,000)
 44.27  Sec. 27.  OFFICE OF ADMINISTRATIVE
 44.28  HEARINGS                                               (328,000)
 44.29  This onetime appropriation reduction is 
 44.30  from the workers' compensation fund and 
 44.31  is a technical correction associated 
 44.32  with previous judicial salary increases.
 44.33  Sec. 28.  BOARD OF ACCOUNTANCY                          (24,000)
 44.34  Sec. 29.  ARCHITECTURE AND ENGINEERING
 44.35  BOARD                                                   (29,000)
 44.36  Sec. 30.  BOARD OF BARBERS                               (6,000)
 44.37  Sec. 31.  PUBLIC SAFETY 
 44.38  $295,000 is appropriated to the 
 44.39  commissioner of public safety to make 
 44.40  payments to public employers that were 
 44.41  denied reimbursement under Minnesota 
 44.42  Statutes, section 299A.465, subdivision 
 44.43  4, in fiscal year 2002.  The 
 44.44  commissioner must reduce other 
 44.45  appropriations to the department of 
 44.46  public safety for fiscal year 2003 by 
 44.47  the same amount in order to balance the 
 44.48  new appropriation with reductions in 
 44.49  past appropriations. 
 45.1      Sec. 32.  Minnesota Statutes 2002, section 240.155, 
 45.2   subdivision 1, is amended to read: 
 45.3      Subdivision 1.  [REIMBURSEMENT ACCOUNT CREDIT.] Money 
 45.4   received by the commission as reimbursement for the costs of 
 45.5   services provided by assistant veterinarians, stewards, and 
 45.6   medical testing of horses must be deposited in the state 
 45.7   treasury and credited to a racing reimbursement account, except 
 45.8   as provided under subdivision 2.  Receipts are appropriated to 
 45.9   the commission to pay the costs of providing the services. 
 45.10     Sec. 33.  Laws 2002, chapter 220, article 10, section 3, is 
 45.11  amended to read: 
 45.12  Sec. 3.  SECRETARY OF
 45.13  STATE                                      -0-         (199,000)
 45.14  Budget reductions shall not come from 
 45.15  revenue producing programs or elections.
 45.16     Sec. 34.  [EFFECTIVE DATE.] 
 45.17     Sections 1 to 33 are effective the day following final 
 45.18  enactment, unless otherwise specified. 
 45.19                             ARTICLE 11
 45.20                         SALES TAX REFUNDS
 45.21     Section 1.  Minnesota Statutes 2002, section 289A.50, 
 45.22  subdivision 2a, is amended to read: 
 45.23     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 
 45.24  has collected from a purchaser a tax on a transaction that is 
 45.25  not subject to the tax imposed by chapter 297A, the purchaser 
 45.26  may apply directly to the commissioner for a refund under this 
 45.27  section if: 
 45.28     (a) the purchaser is currently registered to collect and 
 45.29  remit the sales tax or to remit the use tax; and 
 45.30     (b) the amount of the refund applied for exceeds $500. 
 45.31     The purchaser may not file more than two applications for 
 45.32  refund under this subdivision in a calendar year.  The refund 
 45.33  under this subdivision must not be paid until 90 days after the 
 45.34  refund claim is filed with the commissioner. 
 45.35     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 45.36  claims filed on or after the day following final enactment. 
 45.37     Sec. 2.  Minnesota Statutes 2002, section 289A.56, 
 46.1   subdivision 4, is amended to read: 
 46.2      Subd. 4.  [CAPITAL EQUIPMENT AND CERTAIN BUILDING MATERIALS 
 46.3   REFUNDS; REFUNDS TO PURCHASERS.] Notwithstanding subdivision 3, 
 46.4   for refunds payable under section 297A.75, subdivision 1, 
 46.5   clauses (1), (2), (3), and (5), interest is computed from the 
 46.6   date the refund claim is filed with the commissioner.  For 
 46.7   refunds payable under section 289A.50, subdivision 2a, interest 
 46.8   is computed from the 20th day of the month following the month 
 46.9   of the invoice date for the purchase which is the subject of the 
 46.10  refund, if the refund claim includes a detailed schedule of 
 46.11  purchases made during each of the periods in the claim.  If the 
 46.12  refund claim submitted does not contain a schedule reflecting 
 46.13  purchases made in each period, interest is computed from the 
 46.14  date the claim was filed For refunds payable under sections 
 46.15  289A.50, subdivision 2a, and 297A.75, subdivision 1, clause (1), 
 46.16  interest is computed from 90 days after the refund claim is 
 46.17  filed with the commissioner. 
 46.18     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 46.19  claims filed on or after the day following final enactment. 
 46.20     Sec. 3.  Minnesota Statutes 2002, section 297A.75, 
 46.21  subdivision 2, is amended to read: 
 46.22     Subd. 2.  [REFUND; ELIGIBLE PERSONS.] Upon application on 
 46.23  forms prescribed by the commissioner, a refund equal to the tax 
 46.24  paid on the gross receipts of the exempt items must be paid to 
 46.25  the applicant, but refunds for taxes paid under subdivision 1, 
 46.26  clause (1), must not be paid until 90 days after the refund 
 46.27  claim is filed with the commissioner.  Only the following 
 46.28  persons may apply for the refund: 
 46.29     (1) for subdivision 1, clauses (1) to (3), the applicant 
 46.30  must be the purchaser; 
 46.31     (2) for subdivision 1, clauses (4), (7), and (8), the 
 46.32  applicant must be the governmental subdivision; 
 46.33     (3) for subdivision 1, clause (5), the applicant must be 
 46.34  the recipient of the benefits provided in United States Code, 
 46.35  title 38, chapter 21; 
 46.36     (4) for subdivision 1, clause (6), the applicant must be 
 47.1   the owner of the homestead property; and 
 47.2      (5) for subdivision 1, clause (9), the owner of the 
 47.3   qualified low-income housing project. 
 47.4      <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 47.5   claims filed on or after the day following final enactment. 
 47.6      Sec. 4.  Minnesota Statutes 2002, section 297A.75, 
 47.7   subdivision 4, is amended to read: 
 47.8      Subd. 4.  [INTEREST.] Interest must be paid on the refund 
 47.9   at the rate in section 270.76 from the date the refund claim is 
 47.10  filed for taxes paid under subdivision 1, clauses (1) 
 47.11  to (2), (3), and (5), and; from 60 days after the date the 
 47.12  refund claim is filed with the commissioner for claims filed 
 47.13  under subdivision 1, clauses (4), (6), (7), (8), and (9); and 
 47.14  from 90 days after the refund claim is filed with the 
 47.15  commissioner for taxes paid under subdivision 1, clause (1). 
 47.16     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 47.17  claims filed on or after the day following final enactment. 
 47.18                             ARTICLE 12
 47.19                          CAPITAL PROJECTS
 47.20  Section 1.  [CAPITAL PROJECT CANCELLATIONS.] 
 47.21     The capital projects and the general fund appropriations 
 47.22  for them listed in this article are canceled in whole or in 
 47.23  part, as specified in section 2.  The balances are canceled and 
 47.24  returned to the general fund in the fiscal year ending June 30, 
 47.25  2003. 
 47.26                                                         2003
 47.27  Sec. 2.  CAPITAL PROJECTS                         $  (2,018,274)
 47.28  The unencumbered balance of the 
 47.29  appropriation in Laws 1998, chapter 
 47.30  404, section 7, subdivision 26, as 
 47.31  amended twice by identical amendments 
 47.32  in Laws 1999, chapter 231, section 195, 
 47.33  and Laws 1999, chapter 240, article 1, 
 47.34  section 21 (and not affected by an 
 47.35  appropriation for a similar purpose 
 47.36  from the natural resources fund in Laws 
 47.37  2001, First Special Session chapter 2, 
 47.38  section 5, as amended by Laws 2002, 
 47.39  chapter 376, section 12), to the 
 47.40  commissioner of natural resources for 
 47.41  local initiative grants, estimated to 
 47.42  be $2,018,274, is canceled to the 
 47.43  general fund.