1.1                          A bill for an act 
  1.2             relating to human services; establishing a long-term 
  1.3             care family loan program pilot project; authorizing 
  1.4             the sale of revenue bonds; providing a sunset; 
  1.5             proposing coding for new law in Minnesota Statutes, 
  1.6             chapter 256B. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [256B.451] [DEFINITIONS.] 
  1.9      Subdivision 1.  [SCOPE.] For purposes of sections 256B.451 
  1.10  to 256B.457, the terms defined in this section have the meanings 
  1.11  given them. 
  1.12     Subd. 2.  [ELIGIBLE CONTRACTOR.] "Eligible contractor" 
  1.13  means an entity that is a private financial services business 
  1.14  with experience marketing, reviewing, approving, and 
  1.15  administering line-of-credit loans. 
  1.16     Subd. 3.  [ELIGIBLE PERSON.] "Eligible person" means a 
  1.17  person who is aged 65 or older and has resided in Minnesota for 
  1.18  at least 60 days. 
  1.19     Subd. 4.  [ELIGIBLE LONG-TERM CARE COSTS.] "Eligible 
  1.20  long-term care costs" means costs for nursing home care, 
  1.21  assisted-living facility care, and care that would be 
  1.22  reimbursable under the elderly waiver or alternative care 
  1.23  programs. 
  1.24     Subd. 5.  [FAMILY MEMBER.] "Family member" means a child, 
  1.25  stepchild, brother, sister, or other extended family member of 
  1.26  the borrower by blood, marriage, or adoption. 
  2.1      Sec. 2.  [256B.452] [POWERS AND DUTIES.] 
  2.2      Subdivision 1.  [COMMISSIONER TO ESTABLISH LOAN 
  2.3   PROGRAMS.] Notwithstanding chapter 16C, the commissioner is 
  2.4   designated as the administrative agency for carrying out the 
  2.5   purposes and terms of sections 256B.451 to 256B.457.  The 
  2.6   commissioner may establish one or more long-term care family 
  2.7   loan programs to help pay long-term care costs for eligible 
  2.8   persons. 
  2.9      Subd. 2.  [POLICIES AND RULES.] The commissioner may adopt 
  2.10  policies and rules to carry out the purposes of sections 
  2.11  256B.451 to 256B.457. 
  2.12     Subd. 3.  [LOANS.] The commissioner may make loans in 
  2.13  amounts not to exceed the limits established in section 
  2.14  256B.454, subdivision 3.  The commissioner may establish 
  2.15  procedures determining the loan amounts for which eligible 
  2.16  persons may qualify. 
  2.17     Subd. 4.  [CONTRACTS WITH LENDERS.] The commissioner may 
  2.18  contract with or enter into agreements with eligible lenders for 
  2.19  the purpose of making loans to eligible persons according to the 
  2.20  policies and rules of the lender's office. 
  2.21     Subd. 5.  [OTHER CONTRACTS.] The commissioner may contract 
  2.22  with guarantee agencies, insurance agencies, collection 
  2.23  agencies, or any private lenders to carry out the purposes of 
  2.24  sections 256B.451 to 256B.457. 
  2.25     Subd. 6.  [PREMIUM CHARGES.] The commissioner may charge 
  2.26  for insurance on each loan a premium, payable each year in 
  2.27  advance.  Premium fees are available to the commissioner without 
  2.28  fiscal year limitation for the purposes of making loans and 
  2.29  meeting expenses of administering the loan programs. 
  2.30     Subd. 7.  [FEDERAL FUNDS.] The commissioner may apply for, 
  2.31  receive, accept, and disburse federal funds, as well as funds 
  2.32  from other public and private sources, made available to the 
  2.33  state for loans or as administrative money to operate loan 
  2.34  programs.  In making application for funds, the commissioner may 
  2.35  comply with all requirements of state and federal laws, rules 
  2.36  and regulations, and enter into the contracts necessary to 
  3.1   enable the commissioner to receive, accept, and administer the 
  3.2   funds. 
  3.3      Subd. 8.  [INVESTMENTS.] Money made available to the 
  3.4   commissioner that is not immediately needed for the purposes of 
  3.5   sections 256B.451 to 256B.457 may be invested by the 
  3.6   commissioner.  The money must be invested in bonds, certificates 
  3.7   of indebtedness, and other fixed income securities, except 
  3.8   preferred stocks.  The money may also be invested in prime 
  3.9   quality commercial paper that is eligible for investment in the 
  3.10  state employees retirement fund.  All interest and profits from 
  3.11  the investments must be pledged to finance the long-term care 
  3.12  family loan program. 
  3.13     Subd. 9.  [CONTRACTOR TO ADMINISTER LOAN PROGRAMS.] The 
  3.14  commissioner shall contract with an eligible contractor to 
  3.15  administer the loan programs established under sections 256B.451 
  3.16  to 256B.457.  The commissioner shall delegate to the contractor 
  3.17  the responsibility to operate the loan programs. 
  3.18     Subd. 10.  [SALE OF NOTES.] The commissioner may sell at 
  3.19  public or private sale, at the price or prices determined by the 
  3.20  commissioner, any note or other instrument or obligation 
  3.21  evidencing or securing a loan made by the commissioner. 
  3.22     Subd. 11.  [INSURANCE; LETTERS OF CREDIT; OTHER 
  3.23  AGREEMENTS.] The commissioner may obtain municipal bond 
  3.24  insurance, letters of credit, surety obligations, or similar 
  3.25  agreements from financial institutions. 
  3.26     Sec. 3.  [256B.453] [CLASSIFICATION OF DATA.] 
  3.27     All data on applicants for financial assistance collected 
  3.28  and used by the commissioner for long-term care loan programs 
  3.29  administered by the commissioner is classified as private data 
  3.30  on individuals under section 13.02, subdivision 12.  Exceptions 
  3.31  to this classification are that:  
  3.32     (1) the names and addresses of program recipients or 
  3.33  participants are public data; and 
  3.34     (2) the following data collected in the long-term care loan 
  3.35  program under sections 256B.451 to 256B.457 may be disclosed to 
  3.36  a consumer credit reporting agency only if the borrower and the 
  4.1   cosigners give informed consent, according to section 13.05, 
  4.2   subdivision 4, at the time of application for a loan: 
  4.3      (i) the lender-assigned borrower identification number; 
  4.4      (ii) the name and address of borrower; 
  4.5      (iii) the name and address of cosigner; 
  4.6      (iv) the date the account is opened; 
  4.7      (v) the outstanding account balance; 
  4.8      (vi) the dollar amount past due; 
  4.9      (vii) the number of payments past due; 
  4.10     (viii) the number of late payments in the previous 12 
  4.11  months; 
  4.12     (ix) the type of account; 
  4.13     (x) the responsibility for the account; and 
  4.14     (xi) the status or remarks code. 
  4.15     Sec. 4.  [256B.454] [LONG-TERM CARE FAMILY LOANS.] 
  4.16     Subdivision 1.  [ESTABLISHMENT OF PROGRAM.] The 
  4.17  commissioner may establish one or more long-term care loan 
  4.18  programs. 
  4.19     Subd. 2.  [PURPOSE OF PROGRAM.] The purpose of the loan 
  4.20  programs under this section is to provide financial assistance 
  4.21  for the eligible long-term care costs of eligible persons to 
  4.22  enable persons to delay or avoid becoming a recipient of the 
  4.23  medical assistance program in order to pay long-term care costs. 
  4.24     Loans granted to eligible persons may be used solely for 
  4.25  eligible long-term care costs. 
  4.26     Subd. 3.  [TERMS AND CONDITIONS OF LOANS.] The commissioner 
  4.27  may loan money upon the terms and conditions the commissioner 
  4.28  may prescribe.  The principal amount of a loan to an eligible 
  4.29  person must not exceed $30,000 per 12 months.  The aggregate 
  4.30  principal amount of all loans made under this section to an 
  4.31  eligible person must not exceed $60,000.  Each loan must include 
  4.32  as a cosigner at least one but not more than five family members 
  4.33  of the eligible person. 
  4.34     Subd. 4.  [RATE OF INTEREST.] The commissioner shall 
  4.35  determine the rate of interest to be charged on loans.  The rate 
  4.36  shall be set at a level designed to minimize interest charged 
  5.1   while providing sufficient revenue to reimburse the contractor 
  5.2   and keep the programs self-sustaining.  The rate of interest on 
  5.3   long-term care loans however computed is not subject to any 
  5.4   provision of state law limiting the rate of interest to be 
  5.5   charged for a loan of money.  
  5.6      Subd. 5.  [REPAYMENT OF LOANS.] The commissioner shall 
  5.7   establish repayment procedures for loans made under this 
  5.8   section, but in no event shall the period of permitted repayment 
  5.9   exceed ten years from the date the eligible person stops use of 
  5.10  long-term care services financed wholly or partially by loans 
  5.11  from the program. 
  5.12     Subd. 6.  [VARIABLE REPAYMENT SCHEDULES.] The commissioner 
  5.13  may establish variable loan repayment schedules consistent with 
  5.14  the need and anticipated income streams of borrowers and 
  5.15  cosigners.  
  5.16     Subd. 7.  [APPEALS.] The commissioner shall develop an 
  5.17  appeals process for recipients of loans made under this section 
  5.18  who believe there is an unresolved error in the servicing of the 
  5.19  loan.  The commissioner shall provide recipients with a 
  5.20  description of the appeals process. 
  5.21     Subd. 8.  [SUNSET; REPORT.] (a) The long-term care family 
  5.22  loan program sunsets on June 30, 2006.  The commissioner shall 
  5.23  not approve a loan under the program after that date. 
  5.24     (b) The commissioner shall report to the legislature by 
  5.25  January 15, 2006, regarding the loan program, including 
  5.26  recommendations on whether the program should be extended beyond 
  5.27  June 30, 2006. 
  5.28     Sec. 5.  [256B.455] [PROGRAM FINANCING.] 
  5.29     Subdivision 1.  [REVENUE BONDS; ISSUANCE; PROCEEDS.] The 
  5.30  commissioner may issue revenue bonds to obtain funds for loans 
  5.31  made under sections 256B.451 to 256B.457.  The aggregate amount 
  5.32  of revenue bonds issued directly by the commissioner outstanding 
  5.33  at any one time, not including refunded bonds or otherwise 
  5.34  defeased or discharged bonds, must not exceed $25,000,000.  
  5.35  Proceeds from the issuance of bonds may be held and invested by 
  5.36  the commissioner pending disbursement in the form of loans.  All 
  6.1   interest and profits from the investments must inure to the 
  6.2   benefit of the loan program and shall be available to the 
  6.3   commissioner for the same purposes as the proceeds from the sale 
  6.4   of revenue bonds including, but not limited to, costs incurred 
  6.5   in administering loans under sections 256B.451 to 256B.457, and 
  6.6   loan reserve funds. 
  6.7      Subd. 2.  [NEGOTIABLE NOTES; ISSUANCE; CONDITIONS.] The 
  6.8   commissioner may from time to time issue negotiable notes for 
  6.9   the purpose of sections 256B.451 to 256B.457, and may from time 
  6.10  to time renew any notes by the issuance of new notes, whether 
  6.11  the notes to be renewed have or have not matured.  The 
  6.12  commissioner may issue notes partly to renew notes or to 
  6.13  discharge other obligations then outstanding and partly for any 
  6.14  other purpose.  The notes may be authorized, sold, executed, and 
  6.15  delivered in the same manner as bonds.  Any resolution or 
  6.16  resolutions authorizing notes of the commissioner or any notes 
  6.17  issued by the commissioner may contain any provisions the 
  6.18  commissioner is authorized to include in any resolution or 
  6.19  resolutions authorizing revenue bonds of the commissioner or any 
  6.20  notes issued, and the commissioner may include in any notes any 
  6.21  terms, covenants, or conditions that the commissioner is 
  6.22  authorized to include in any bonds.  All notes must be payable 
  6.23  solely from the revenue of the commissioner, subject only to any 
  6.24  contractual rights of the holders of any of its notes or other 
  6.25  obligations then outstanding. 
  6.26     Sec. 6.  [256B.456] [NEGOTIABILITY; BOND ANTICIPATION 
  6.27  NOTES; PAYMENT; CONDITIONS.] 
  6.28     Subdivision 1.  [ISSUANCE.] All revenue bonds, notes, bond 
  6.29  anticipation notes, or other obligations of the commissioner 
  6.30  issued under sections 256B.451 to 256B.457, are negotiable for 
  6.31  all purposes, notwithstanding their payment from a limited 
  6.32  source and without regard to any other law or laws.  In 
  6.33  anticipation of the sale of revenue bonds, the commissioner may 
  6.34  issue negotiable bond anticipation notes and may renew the same 
  6.35  from time to time, but the maximum maturity of any note, 
  6.36  including renewals, must not exceed five years from the date of 
  7.1   issue of the original note.  Notes must be paid from any 
  7.2   revenues of the commissioner available and not otherwise 
  7.3   pledged, or from the proceeds of sale of the revenue bonds of 
  7.4   the commissioner in anticipation of which they were issued.  The 
  7.5   notes must be issued in the same manner as the revenue bonds.  
  7.6   The notes and the resolution or resolutions authorizing them may 
  7.7   contain any provisions, conditions, or limitations that a bond 
  7.8   resolution of the commissioner may contain. 
  7.9      Subd. 2.  [BONDS PAYABLE OUT OF REVENUES.] The revenue 
  7.10  bonds and notes of every issue are payable solely out of 
  7.11  revenues of the commissioner, subject only to any agreements 
  7.12  with the holders of particular revenue bonds or notes pledging 
  7.13  any particular revenues.  Notwithstanding that revenue bonds and 
  7.14  notes may be payable from a special fund, they are, for all 
  7.15  purposes, negotiable instruments, subject only to the provisions 
  7.16  of the revenue bonds. 
  7.17     Subd. 3.  [SERIAL AND TERM BONDS PERMITTED.] The revenue 
  7.18  bonds may be issued as serial bonds or as term bonds, or the 
  7.19  commissioner, at the commissioner's discretion, may issue bonds 
  7.20  of both types.  The revenue bonds must be authorized by 
  7.21  resolution of the commissioner and must bear the date or dates, 
  7.22  mature at the time or times, not exceeding 50 years from their 
  7.23  respective dates, bear interest at the rate or rates, payable at 
  7.24  the time or times, be in denominations, be in the form, either 
  7.25  coupon or registered, carry the registration privileges, be 
  7.26  executed in the manner, be payable in lawful money of the United 
  7.27  States of America at the place or places, and be subject to the 
  7.28  terms of redemption, as the resolution or resolutions may 
  7.29  provide.  The revenue bonds or notes may be sold at public or 
  7.30  private sale for the price or prices the commissioner determines.
  7.31  Pending preparation of the definitive bonds, the commissioner 
  7.32  may issue interim receipts or certificates, which must be 
  7.33  exchanged for definite bonds. 
  7.34     Subd. 4.  [CONTRACT PROVISIONS.] Any resolution or 
  7.35  resolutions authorizing any revenue bonds or any issue of 
  7.36  revenue bonds may contain provisions that are part of the 
  8.1   contract with the holders of the revenue bonds to be authorized 
  8.2   as to: 
  8.3      (1) the setting aside of reserves or sinking funds, and 
  8.4   their regulation and disposition; 
  8.5      (2) limitations on the purpose to which the proceeds of 
  8.6   sale of any issue of revenue bonds then or thereafter to be 
  8.7   issued may be applied and pledging the proceeds to secure the 
  8.8   payment of the revenue bonds or any issue of the revenue bonds; 
  8.9      (3) limitations on the issuance of additional bonds, the 
  8.10  terms upon which additional bonds may be issued and secured, and 
  8.11  the refunding of outstanding bonds; 
  8.12     (4) the procedure, if any, by which the terms of any 
  8.13  contract with bondholders may be amended or abrogated, the 
  8.14  amount of bonds the holders of which must consent thereto, and 
  8.15  the manner in which consent may be given; and 
  8.16     (5) definition of the acts or omissions to act that 
  8.17  constitute a default in the duties of the commissioner to 
  8.18  holders of obligations and providing the rights and remedies of 
  8.19  the holders in the event of a default. 
  8.20     Subd. 5.  [LIABILITY.] Neither the commissioner nor any 
  8.21  person executing the revenue bonds or notes is liable personally 
  8.22  on the revenue bonds or notes or subject to any personal 
  8.23  liability or accountability by reason of their issuance. 
  8.24     Subd. 6.  [PURCHASE OF BONDS OR NOTES.] The commissioner 
  8.25  out of any money available may purchase the bonds or notes.  The 
  8.26  commissioner may hold, pledge, cancel, or resell the bonds, 
  8.27  subject to and in accordance with agreements with bondholders. 
  8.28     Sec. 7.  [256B.457] [BONDS.] 
  8.29     Subdivision 1.  [SECURITY FOR BONDS.] In the discretion of 
  8.30  the commissioner, any revenue bonds issued under sections 
  8.31  256B.451 to 256B.457, may be secured by a trust agreement by and 
  8.32  between the commissioner and a corporate trustee or trustees, 
  8.33  which may be any trust company or bank having the powers of a 
  8.34  trust company within the state.  The trust agreement or the 
  8.35  resolution providing for the issuance of the revenue bonds may 
  8.36  pledge or assign the revenues to be received or proceeds of any 
  9.1   contract or contracts pledged or any portion thereof.  The trust 
  9.2   agreement or resolution providing for the issuance of the 
  9.3   revenue bonds may contain provisions for protecting and 
  9.4   enforcing the rights and remedies of the bondholders, including 
  9.5   particularly provisions specifically authorized to be included 
  9.6   in any resolution or resolutions of the commissioner authorizing 
  9.7   revenue bonds.  Any bank or trust company incorporated under the 
  9.8   laws of the state that may act as depository of the proceeds of 
  9.9   bonds or of revenues or other money may furnish indemnifying 
  9.10  bonds or pledge securities as may be required by the 
  9.11  commissioner.  Any trust agreement may set forth the rights and 
  9.12  remedies of the bondholders and of the trustee or trustees and 
  9.13  may restrict the individual right of action by bondholders.  In 
  9.14  addition to the foregoing, any trust agreement or resolution may 
  9.15  contain other provisions that the commissioner deems reasonable 
  9.16  and proper for the security of the bondholders. 
  9.17     Subd. 2.  [REFUNDING REVENUE BONDS.] The commissioner may 
  9.18  issue revenue bonds to refund revenue bonds of the commissioner 
  9.19  then outstanding, including the payment of any redemption 
  9.20  premium thereon and any interest accrued or to accrue to the 
  9.21  earliest or any subsequent date of redemption, purchase, or 
  9.22  maturity of the revenue bonds. 
  9.23     Subd. 3.  [PROCEEDS.] The proceeds of any revenue bonds 
  9.24  issued to refund outstanding revenue bonds may, in the 
  9.25  discretion of the commissioner, be applied to the purchase or 
  9.26  retirement at maturity or redemption of outstanding revenue 
  9.27  bonds either on their earliest or any subsequent redemption date 
  9.28  or upon their purchase or at their maturity and may, pending 
  9.29  this application, be placed in escrow to the purchase or 
  9.30  retirement at maturity or redemption on a date determined by the 
  9.31  commissioner. 
  9.32     Subd. 4.  [INVESTMENT.] Any escrowed proceeds, pending 
  9.33  their use, may be invested and reinvested in direct obligations 
  9.34  of the United States of America, or in certificates of deposit 
  9.35  or time deposits secured by direct obligations of the United 
  9.36  States of America, maturing at a time or times as may be 
 10.1   appropriate to insure the prompt payment of principal, interest, 
 10.2   and redemption premium, if any, of the outstanding revenue bonds 
 10.3   to be refunded.  The interest, income, and profits, if any, 
 10.4   earned or realized on any investment may also be applied to the 
 10.5   payment of the outstanding revenue bonds to be refunded.  After 
 10.6   the terms of the escrow have been fully satisfied and carried 
 10.7   out, any balance of proceeds and interest, income, and profits, 
 10.8   if any, earned or realized on the investments thereof may be 
 10.9   returned to the commissioner for use in any lawful manner. 
 10.10     Subd. 5.  [BONDS NOT STATE OBLIGATIONS.] Bonds issued under 
 10.11  sections 256B.451 to 256B.457 do not, and must state that they 
 10.12  do not, represent or constitute a debt or pledge of the faith 
 10.13  and credit of the state, grant to their owners or holders any 
 10.14  right to have the state levy any taxes, or appropriate any funds 
 10.15  for the payment of principal or interest on the bonds.  The 
 10.16  bonds are payable and must state that they are payable solely 
 10.17  from the rentals, revenues, and other income, charges, and money 
 10.18  pledged for their payment in accordance with the bond 
 10.19  proceedings.  The legislature intends not to appropriate money 
 10.20  from the general fund to pay for these bonds. 
 10.21     Subd. 6.  [RIGHTS OF BONDHOLDERS.] Any holder of revenue 
 10.22  bonds issued under sections 256B.451 to 256B.457, or any of the 
 10.23  coupons appertaining thereto, and the trustee or trustees under 
 10.24  any trust agreement, except to the extent the rights herein 
 10.25  given may be restricted by any resolution authorizing the 
 10.26  issuance of, or any trust agreement securing these bonds, may, 
 10.27  either at law or in equity, by suit, action, mandamus, or other 
 10.28  proceedings, protect and enforce any and all rights under the 
 10.29  laws of the state or granted hereunder or under the resolution 
 10.30  or trust agreement, and may enforce and compel the performance 
 10.31  of all duties required by sections 256B.451 to 256B.457, or by 
 10.32  resolution or trust agreement to be performed by the 
 10.33  commissioner or by any officer, employee, or agent, including 
 10.34  the fixing, charging, and collecting of the rates, rents, fees, 
 10.35  and charges authorized and required by the provisions of the 
 10.36  resolution or trust agreement to be fixed, established, and 
 11.1   collected. 
 11.2      Subd. 7.  [LEGAL INVESTMENTS; AUTHORIZED SECURITIES.] Bonds 
 11.3   issued under sections 256B.451 to 256B.457 are securities in 
 11.4   which all public officers and public bodies of the state and its 
 11.5   political subdivisions, all insurance companies, trust 
 11.6   companies, banking associations, investment companies, 
 11.7   executors, administrators, trustees, and other fiduciaries may 
 11.8   properly and legally invest funds, including capital in their 
 11.9   control or belonging to them.  This subdivision authorizes the 
 11.10  investment in these bonds of all sinking, insurance, retirement, 
 11.11  compensation, pension, and trust funds, whether owned or 
 11.12  controlled by private or public persons or officers, except that 
 11.13  the assets of pension funds of public employees of the state of 
 11.14  Minnesota or any of its agencies, boards, or subdivisions, 
 11.15  whether publicly or privately administered, must not be invested 
 11.16  in bonds issued under sections 256B.451 to 256B.457.  This 
 11.17  subdivision does not relieve any person, firm, or corporation 
 11.18  from any duty of exercising due care in selecting securities for 
 11.19  purchase or investment.  These bonds are "authorized securities" 
 11.20  within the meaning and for the purposes of section 50.14.  These 
 11.21  bonds are securities that may properly and legally be deposited 
 11.22  with and received by any state or municipal officer or any 
 11.23  agency or political subdivision of the state for any purpose for 
 11.24  which the deposit of bonds or obligations of the state now or 
 11.25  later may be authorized by law.